Good morning, everyone, and welcome to Elisa's fourth quarter 2021 conference call. I'm Vesa Sahivirta, Head of Investor Relations, and here together with me is again very familiar team, CEO Veli-Matti Mattila and CFO Jari Kinnunen. Following the normal practice, we start this conference call with a presentation followed by Q&A. In Q&A, we go straight to the conference call lines because now due to this pandemic, we don't have audience here in our headquarters. Veli-Matti will go through the main highlights of the report, and Jari will focus more on financials. Now we are ready to start, so I give word to Veli-Matti, please.
Thank you, Vesa, and welcome to Elisa's interim report, Q4 2021, announcement on my behalf as well. Let's get started by the highlights. Our revenue was growing by 8% and comparable EBITDA by 4%. Earnings per share was growing 8% as well. Mobile service revenue was increasing 6.1% year-on-year. In Finland, as we highlighted already in the third quarter reporting, the competitive situation in the fourth quarter is quite intense, and postpaid churn was increasing to 20.1%. Postpaid subscriptions net increase was a bit over 7,000, and the net increase machine to machine and IoT subscriptions contributed by 17,200. Fixed broadband subscription base is quite stable, slight decrease by 200, and the very good 5G momentum is continuing.
Elisa being really the leader on commercializing 5G. Now our network covering more than 70% of Finns in over 150 towns and cities. Our board has made the decision about the proposal to the AGM about EUR 2.05 per share dividend payout, being then the payout ratio being then 94%. We look at the full year 2021, revenue for the full year reached almost EUR 2 billion, slightly below EUR 2 billion, change 5.5%. EBITDA for the full year, EUR 706 million, increase of 3%. Our capital expenses per sales was 12%. As guided, mobile service revenue for the full year was growing 4.2%.
If we take a look at the drivers behind the performance in fourth quarter, the revenue increase of course came partly from the acquisitions and content partnership, but also mobile and fixed revenue services, as well as domestic digital services were growing. Equipment sales also had growth. Of course, since we have a revenue growth and also continuous productivity improvements, we saw a bit also growing. Mobile service revenue was driven very much, of course, by 5G upselling, but also with the different other upselling activities within the 4G domain and also some price changes, which we have made, contributed to the mobile service revenue growth.
The churn, 20.5%, of course, was very much due to the very intensive campaign season, November and December, but also, we saw a bit more decrease in this public subscription sector due to this one deal that is taking quite low ARPU customers and volume-wise, we saw a bit of customers or subscriptions leaving, as we have told earlier. When we look at the segments, consumer business was growing by 5% in revenues, familiar drivers behind the revenue growth and EBITDA was growing by 2%. In the corporate customer segment, there was a very strong quarter by 12% revenue growth, of course, fueled with some acquisitions, but also organic development was good.
Comparable EBITDA was growing by 9%. We continue to focus on the execution of our strategy with the three focus areas, each of them having a lot of potential for value creation in the future. In the mobile side now, 93% of customers use a smartphone in our network. That number of customers with a new type of smartphones is continuously increasing. 81% of the voice subscriptions are at 4G or 5G speeds. As we see, the lowest speed level for 4G is declining, meaning that we have more and more customers upgrading to higher speeds in their subscription. Upselling continues.
In 5G, Elisa is in the lead, and our coverage covers now more than 4 million Finns. The coverage is continuing to be larger and larger. Now nearly 90% of all the mobile phones that we sell are 5G devices, so the customers are taking 5G technology to their hands and some of them directly the 5G subscription, but also after the device sales, we get the opportunity to reach those customers with great offers for 5G subscription. We also have launched first sustainable 5G subscription in Finland, we're compensating the carbon footprint of the manufacturing and usage of the phone, as well as providing identity products protection.
Ericsson's ConsumerLab had a so-called Pacesetters report, where they categorized operators with their kind of deployment status of 5G. Elisa was highlighted as one of the few pacesetters that are really leading the consumer perception, satisfaction, and monetization with 5G. The Finnish Public Safety Network, Virve, is also transitioning now to broadband technology, and service will be using Elisa's nationwide 4G and 5G mobile networks. Also, the authorities with this public safety network have access to privileged subscriptions and new functions, for example, speech recognition, and those will improve the efficiency of incident management and communication. Elisa is the sole supplier for this multi Finnish government-owned network. In the digital services, there's a good momentum both in domestic and international services.
In our video entertainment services, for example, the original, high quality content production continues. We had, for example, second season of Arctic Circle, which broke all the records, being the most popular content in Elisa Viihde, Viaplay in the fourth quarter. IT services side, the automation that we are really pushing there improves our competitiveness, in that business domain. For example, OP Financial Group, end user workstation services are further developed by Elisa with automated solutions. Into the international domain, Elisa Industriq performs, and the business develops really well. CamLine and sedApta made a record quarter in revenues and orders, order intake. TenForce was opening U.S. market through acquisition, and CalcuQuote was having a strong SaaS revenue growth.
Elisa Polystar had also a solid quarter and very strong growth in order backlog. Same thing with Elisa Videra, fourth quarter order intake was really strong. Finally, about the outlook and guidance for 2022. The growth in the Finnish economy is expected to continue. However, there are some uncertainties such as inflation and changes in the geopolitical environment that may impact, especially through customers, impacts to us. Competition is expected to remain keen. The revenue will be at the same level or slightly higher than we had in 2021. Same thing with comparable EBITDA, at the same level or slightly higher than 2021. Our CapEx will be maximum 12% of revenues. Now I give the word to Jari, please.
Yes, thank you. Q4 continued with good growth trend as previous quarters, so that the whole financial year was a record year in terms of revenue and earnings. Also, Q4 was best ever Q4 in terms of revenue and earnings. Revenue growth 7.5%, and different components behind that. Interconnection and visitor roaming was slightly negative, -EUR 1 million. Equipment sales growth was EUR 6 million. Services growth in corporate segment EUR 20 million, coming from digital services as well as mobile and fixed services. In consumer segment, service revenue growth was EUR 12 million, and mobile services as well as digital services growing, fixed services declining.
EBITDA growth and comparable EBITDA growth was 4% or EUR 6.8 million to EUR 178 million, and reported EBITDA includes EUR 2.6 million restructuring charges relating to personnel reductions. EBIT growth was 7.6% to EUR 111 million, and EPS growth was 7.8% and was EUR 0.55. Also in Estonia growth continued both in revenue and EBITDA. Revenue growth 11%, equipment sales contributed as well as both mobile and fixed services growing. EBITDA growth in Estonia 3.6%, mobile post-paid base continued to develop positively and growth was 4,500, also prepaid subscriptions growing. Churn was at a fairly low level 9.2%.
CapEx, which continues to be in line with guidance. Reported CapEx in Q4 was EUR 82 million, and excluding licenses, lease agreements, and acquisitions, EUR 75 million. For the whole year, CapEx excluding licenses, lease agreements, and acquisitions was EUR 247 million, and in line with 12% CapEx to sales guidance. Main CapEx relates to 5G network rollout, other network and IT investments as well. Moving to cash flow. Reported cash flow in Q4 was EUR 85 million, comparable cash flow was EUR 87 million. Compared to a year ago, EUR 99 million positive impact through higher EBITDA. Negative contribution from higher CapEx and net working capital change, mainly due to higher inventory.
Net working capital change was positive, but it was less positive than year ago, so therefore the negative impact from there. For the whole year, comparable cash flow EUR 338 million positive contribution from higher EBITDA and higher CapEx impacting negatively as well as net working capital change. Also there for the whole year, net working capital change was slightly positive, but it was less positive than year before. Also there, the inventory levels higher in order to mitigate the possible supply chain challenges. Operating cash flow conversion in Q4 was 58%, slightly lower than previous quarters through higher CapEx in Q4.
For the whole year, cash conversion was 65%. Capital structure and returns. Capital structure continues to be according to targets and net debt-to- EBITDA was 1.7x. Equity ratio 39.9%. Return ratios at good level, and return on equity 29.3% and return on investments 17.2%. In terms of financial position, cash and committed facilities at the year-end were EUR 414 million, and debt maturities well-balanced, and average interest is below 1%.
Board of Directors proposal relating to distributions to AGM is proposed a dividend of EUR 2.05 per share, which is 5.1% growth against previous distribution and eighth consecutive year of growing dividends. Payout ratio is 94% and according to distribution policy, which is between 80% and 100%. Dividend yield against share price at the year-end is 3.8%. Total distribution amounts to EUR 328 million, and dividend payment date April 20, ex-dividend date 7th of April . Additionally, there is proposal for maximum 5 million share buyback authorization. All this shows continuing commitment for competitive shareholder remuneration.
Now I give word to Vesa, please.
Thank you, Jari. Now we move on to Q&A. We ask the first question from the conference call lines, please.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad. Please hold until we have the first question. Our first question comes from Nicola Gifford , Goldman Sachs. Please go ahead. Your line is now open.
Morning, everyone. Thanks very much for taking the questions. I had two, one on top line growth and the second on operating leverage. On the top line, if we look at B2B versus consumer growth, you've delivered mid-single digit consumer growth each quarter this year versus progressively accelerating revenues in corporate since 2Q on an underlying basis. Can you please elaborate on these different growth profiles in consumer and corporate? Maybe explain why we haven't seen more of an acceleration throughout the year in consumer due to 5G upselling. The second question on operating leverage. We saw lower operating leverage in your consumer business this quarter, as we saw in 3Q. Can you just remind us on what's driving this and how you see operating leverage developing going forward? Thanks very much.
All right. In regards to the top line growth, of course, these businesses, consumer and B2B business, they live a bit of their own life cycle, even if there are some same growth drivers like 5G. In B2B side, we also have growing international digital services businesses, for example, different from the consumer side. We, as we are not giving guidance for revenue growth per segment level, I just can comment that, these revenue profiles and growth profiles, they are a bit different in different quarters for these businesses, but for both businesses, we see continuous growth opportunities being very good.
In terms of your operating leverage question in the consumer business, as we highlighted in the third quarter, for the operating leverage, the pressure came a bit from the increased sales and marketing costs, especially in the consumer market due to these many campaign periods that we saw quite intensive also gift card giveaways and so forth, increasing that part of the cost side in consumer business for fourth quarter. We still have some pressure from the NENT cooperation being giving us revenue growth, but not that much EBITDA growth. Going forward, I believe that our operating leverage will be improving.
Of course, our business portfolio is continuously changing from the growth of digital service businesses, which has its impact, of course, overall at Elisa to the margin levels. As you see, we are continuously creating growth in the bottom line and earnings per share, for example, growing by 8% for the quarter.
Great. Thanks very much.
The next question comes from Nick Lyall at Société Générale. Please go ahead. Your line is now open.
Hello, everybody. Thanks for taking the question. It was just to come back to the operating leverage point, please. It seems like employee costs are up again quite strongly.
In the quarter, would it be possible to break down the rise? I mean, I know there's a EUR 2.6 million one-off in there, but even so, could you maybe break down the contribution of acquisitions and other large wage settlements or bonuses maybe in the quarter? Because the implied underlying salary seems to be very strong, and the growth in that seems to be very strong as well. Thanks very much.
Okay. I'll ask Jari to give you some highlights on the employee cost.
Indeed, restructuring charges are included there, EUR 2.6 million that relates to personnel reductions. Also, acquisitions impacting, so that's approximately or more than a quarter of the change year-on-year. There has been some insourcing of personnel, so number of employees in certain areas increasing through insourcing and that impacts in year-on-year comparison. There was some pension insurance positive impacts in comparison year that didn't repeat such in this quarter 2021.
In terms of sort of wage settlements, have you negotiated yet the latest rises for staff? Is this sort of a point in time we should be thinking of for when that comes through?
In terms of impacts in Q4, we had beginning of Q1 increases almost 2% that also impacting in year-on-year comparison. For the future, there has been agreements relating to certain employee groups that are at the level of 1.8%. Some personnel group agreements still to agree.
Okay. That's great. Thank you very much.
Our next question comes from Stefan Gauffin, DNB. Your line is now open.
Yes. Hello. I would like to dig into the digital service development. It seems to be a fairly big jump in digital services both quarter-over-quarter and year-over-year. Just if you can help us understand what's driving this development and what we should expect going forward. Also, you stated that the order backlog increased strongly within several fields. So any additional information that you can share in regards to this would be really helpful. Thank you.
In terms of the digital service businesses, one-off increase, of course, came from the cooperation we have with Nordic Entertainment Group, when we took over the revenues they had and that, of course, made one-off, which we still see in the fourth quarter last year. Of course, there was also organic growth in the video entertainment services. We had growth in our IT business domestically, and also the international digital services had a good revenue development.
In terms of the order backlog, unfortunately, we are not providing quantifiable information at least so far, but we will come, let's say, in the future to the situation that we start to give a bit more numbers for the international digital service business development. We see positive trends in each of the three domains that we are running. Now customers really being active on digitalizing, automating their businesses.
Can I just follow up there? Was the net revenue development around the same level as previous quarters?
Yeah. It was.
Okay. Thank you.
You're welcome.
The next question comes from Terence Tsui, Morgan Stanley. Your line is now open.
Oh, hello. It's Terence here, actually from Morgan Stanley. I've got two questions, please. Just firstly, on mobile service revenue growth, can you please give us an approximation of how much of the 8% revenue growth delivered in Q4 is due to upselling, particularly on 5G, and how much of the growth was due to price rises on legacy products? My second question is around postpaid net adds in Finland. If I look at the number and exclude M2M and IoT subscriptions, I think these were down in Q4 versus growth in previous quarters. I know Q4 has seen heavy promotional and marketing campaigns, but perhaps you can just say a few words explaining this, please. Thanks very much.
All right. First, in regards to the MSR, which was growing 6%, 6.1% in the fourth quarter. As we've said earlier in the year that 5G based on our estimation contributed to 1 percentage point for the full year MSR which for the full year was around 4%. Of course it was now for the full year we can now say that it was around 1.5% for the full year, meaning that slightly more in the fourth quarter because the amount of 4G customers has grown gradually going forward. That's a bit more than 1.5% of the 6% mobile service revenue growth.
Of course, the rest then from the upselling of higher speeds in 4G customer base, as well as some price increases we've done in the older subscription cohorts. In terms of the postpaid net adds, we still continued to lose some customers from that one public sector contract that we lost to a competitor a good time ago. The cities that are utilizing this frame contract do their individual decisions, and there was quite a few customers or cities now deciding to leave Elisa. Those have been very low ARPU customers. From the euro point of view, we haven't lost market share, I dare to say, at this point of reporting season, even if I don't know.
From the volume point of view, of course, we lost some customers. As we have said earlier, in the consumer side, we have been pretty kind of balanced with the volume market share, even if there has been a bit more intensive competition.
Thanks very much, Veli-Matti.
You're welcome.
The next question comes from Artem Beletski, SEB. Your line is now open.
Yes. Hi, and thank you for taking my questions. I would actually ask on two topics. First of all, related to MSR development and fantastic growth you delivered in Q4. Could you maybe provide some color or indications how you see the outlook for 2022? Because we are at a quite high growth pace at the moment. Maybe just in terms of math, is it still valid that basically a customer upgrades from 4G to 5G bring EUR 3 of extra ARPU when it comes to basically MSR? The second question is relating to Estonia, as well as there has been a decision related to Huawei ban.
Could you maybe a bit talk about it, whether it will be impacting your CapEx plans, at least for now, you are sticking to this 12% sales to CapEx sales ratio outlook for start of year?
All right. Thank you, Artem, for MSR. In regards to the outlook for 2022, current year, we are a bit shy on giving any guidances, but approximately we could think of being on the same level as the full year 2021 was, so around 4 percentage points MSR growth probably for the full year. That's kind of the rough estimate for 2022. Then in 5G, yes, we continue to have a bit more than EUR 3 increase in the revenues that we get from the 5G customer compared to non-5G customer.
There has been a relatively good price discipline in 5G, and there is, of course, higher value customers perceive from 5G to 4G, and they are willing to pay that a bit more than EUR 3 on average. In regards to Estonia, yes, we will change over time Huawei radio equipment, and we have decided to go with Nokia. We don't expect any material kind of impacts to our CapEx guidance really. CapEx guidance stays intact while we do this change some point in time in Estonia.
Okay. This is very clear. Thank you.
You're welcome.
The next question comes from Sami Sarkamies, Nordea Markets. Your line is now open.
Hi. Thanks. Most of my questions have been asked already, but I would still pick on two areas, starting from the corporate segment. Firstly, the ARPU growth improved to 6% from 4% in the third quarter. Can you elaborate on the underlying reasons? Then, do you still assume customer losses from these public contracts in the coming quarters?
All right. Thank you. In the corporate segment, increased ARPU gain partly due to the loss of the low ARPU public sector customers. Of course, we have seen good momentum in 5G, for example, in the corporate segment as well. Now also larger corporations starting to be kind of interested more and more to upgrade their 4G to 5G. That's how the ARPU development has basically been created. In terms of this public sector contract, I believe we still have some customers that might change and probably will change to competitor low ARPU customers. Like I said, the euro-based market share in corporate customer segment has been at least held, if not increased during the year.
Thanks. From Jari, I would still ask a housekeeping question. Can you disclose the sort of impact of camLine in Q4 in terms of revenue and EBITDA, please?
Revenue was in the range of EUR 9 million. EBITDA impact in the range of EUR 4 million.
Okay, thanks. I don't have any further questions.
All right. You're welcome.
The next question comes from Peter Nielsen, ABG. Your line is now open.
Thank you. Morning, Veli-Matti and Jari and Vesa. Thank you for the question. Two please. Firstly, Veli-Matti, as you outlined, you are the leader on 5G in Finland. Can I just ask on when customers choose their 5G provider, is there anything in particular? Prices are approximately the same in Finland for the three operators. What do you think you're gaining on in 5G? Is it just the customers stick with you from 4G, or is there anything in particular in your offering, broader coverage, et cetera, on the consumer side? Respectively, how do you believe you're doing in the corporate segment when you're now marketing 5G and sort of upcoming industrial solutions? Then my second question just relates to the outlook, which is of course a traditional, a cautious one.
You did give more specific numerical guidance at the Capital Markets Day. How are we reconciling? I mean, would you say that your full year guidance you've given us, which is traditionally cautious, is in line with the guidance you gave more specifically at the Capital Markets Day for revenue and EBITDA growth? Thank you.
All right. Thank you, Peter. Good. 5G, how customers choose the provider, of course, there are many factors. One is, of course, that what we focus on, that we really focus on getting our own customers to upgrade their subscription. We know their situation better. We can target better the most potential upgraders on every week, every day, because the customers are in different stages with their life cycle to utilize mobile data. Not everybody is jumping to 5G at once. It is basically from the customer behavior point of view. They are doing that step by step. It's customers. Since we have a knowledge of our customers more than our competitors, it's very effective to focus on upgrading our own customers.
What is important for a customer when they want to have a good 5G service? Of course, a good coverage where Elisa is the leader in coverage in Finland, network coverage. Of course, the quality of the services that customers of course experience not only in 5G, but what they have experienced and are experiencing in 4G networks, is very important. Of course, the device offering, which kind of device offering that's of course helpful and other kind of many other kind of parameters that relate to the attractiveness of the brand overall. In terms of the corporate segment, we definitely see activation there. The corporate segment 5G development has started very much more from the entrepreneurs and SME side of the corporate customers.
Now we can see that even the larger companies have become more and more interested. Of course, we will step by step see also private mobile network solutions and corporate 5G network solutions of various kinds gradually also adding to the picture. In terms of the outlook, of course, we are also committed to our medium-term guidance in terms of the revenue and EBITDA growth targets that we set in the Capital Markets Day. Of course, those are our targets. The guidance that we give relates just for the uncertainty that we see at this point of the year for the full year.
We have a very good chance, of course, to get to our medium-term targets also to this year based on our guidance and outlook we see for the business.
Okay, that's great. Thank you very much, Veli-Matti.
You're welcome.
The next question comes from Panu Laitinmäki , Danske Bank. Please go ahead, your line is now open.
Thank you. I have two questions. First one is on the number of 5G customers. Can you comment how many subscriptions do you currently have in 5G? And yeah, you said in the slides that.
18% of the customers already use a 5G handset, so it would be interesting enough to know how many of those actually have a 5G subscription. The second question is on the fixed line business. Just on the kind of revenue growth trends, what do you expect? I think in the first half of 2020, we actually saw positive growth in that business. Was that only due to COVID? Kind of what kind of a number should we assume for the revenue decline in that line going forward? Thanks.
Okay. Thank you for your questions, Panu. For the first, we still continue to be shy on disclosing the number of 5G customers. We have good growth, and like I said, we are focusing on upgrading our own customers. It's very effective. We do not have 5G subscription for every 5G device owner at our network. It's, there's quite much potential to sell just to those ones who have also already 5G device. So unfortunately, I cannot give you more highlight at this point in time. For the fixed line business, it is of course a business segment which includes many different areas, not only the fixed broadband side, but also the local area connectivity businesses and wide area connectivity businesses for corporates.
The cybersecurity parts of the business and a couple of other kind of value-added services business sides. Overall, we expect the fixed business itself be quite stable going forward. There are sub-segments in that business which are growing, but also some areas like the traditional analog telephone business that are going down. Overall, we see a quite kind of a stable development overall.
All right. Thank you.
You're welcome.
The next question comes from Titus Krahn , Bank of America. Your line is now open.
Good morning, everyone, and thank you very much for taking my questions. I have just two, and the first one would be, can you maybe elaborate a little bit more on the M&A impact during the quarter? We already talked about camLine, and I think you also split out the impact from the TenForce acquisition, which I think was less than EUR 2 million for the quarter. Maybe can you add a little bit in terms of, what has been the aggregate M&A and new businesses impact, for revenues and EBITDA during the quarter, and specifically for the Firefly Corporation, how should we think about, revenues and EBITDA generated during the quarter? The second question would be a bit more on the full year outlook.
Already discussed, maybe a little bit conservative, but, you're mentioning a couple of uncertainties ahead, namely inflation and global supply chain. Is there upside potential if these risks don't materialize? Also could you give us, please, an indication to what extent these factors have already been felt, for example, in discussions with unions or suppliers? Thank you.
I'd like to give Jari the word for the M&A question, the first question. Let me ask you a bit about the second question. It was relatively long, so can you a bit repeat the essence of the question, the second question you had?
The second question was on the outlook and on the uncertainties you're-
Yes.
You're mentioning, for example, inflation and supply chains.
Yeah.
Given inflation, I think it seems to be not the main topic in Finland so far. What are your current experiences there?
Okay. Well, the main uncertainties of course relate to the inflation and also the supply chain developments going forward. We still may see some impacts, even if we have been kind of performing really well and being able to mitigate the potential challenges for the supply chain situations in the world. Those are the main uncertainties. Of course, we can say that this geopolitical heated situation might impact to some of our customers, which then might become some impact to us. Those are the main uncertainties. In relation to the, let's say, negotiation with unions and so forth, we think that they are on the kind of a bit different level on uncertainties.
Jari, in regards to the M&A and so forth, please.
Sure.
Go ahead.
Yes. In Q4 revenue impact from acquisition and sort of first consolidation impact from acquisitions as well as NENT cooperation was approximately EUR 13 million all together. NENT cooperation impacts in revenue but in EBITDA it's not contributing to EBITDA.
Very clear. Thank you very much.
You're welcome.
The next question comes from Francesca Schild , BNP Paribas. Please go ahead, your line is now open.
Thank you. I have two questions, please. Firstly, just on the comparable free cash flow decrease, you've already mentioned that this is partly driven by the changes in net working capital due to higher inventory. Does this mean that there'll be a tailwind in 2022? Secondly, please, on fiber, obviously there's rollout of fiber in the Finnish market. Do you think that as this increases, the number of people using mobile or MiFi for broadband is going to decrease? Also, I know you've said in the past that you don't perceive FWA as a threat to your remaining DSL base. Do you think this is still the case, and why? Thank you.
Okay. Again, I'll ask Jari to respond to your first question. The second question around fiber market, as we have been discussing already quite some time, and many times, the fiber market in Finland is very, very different from many other European markets. For example, just taking the Swedish market close by, very different based on the fact that we have the unlimited mobile data pricing, which makes it very affordable, very popular for customers to take the home broadband service by mobile. I don't think there is major change in that direction.
5G has increased a little bit of the opportunity to get even higher speed level broadband to home, but again also we see continuously gradual build-out of fiber infrastructure to the customers in the less populated areas as well, partly by ourselves, but also some other players. I believe that the fiber access market is also having slight growth, but it is totally different on different level as we see in some other countries. Jari, please go ahead for the first question.
Yeah. As we said in our guidance, that there are uncertainties relating to supply chain, and we expect at least the first half of the year these uncertainties to continue. Therefore we mitigate that with inventories being slightly higher than sort of in normal situation where supply chain works without challenges. Short-term, to your question regarding possible tailwind, especially from inventories, not to expect in the first half. Relating to second half, it's too early to say how long this uncertainty continues.
Thanks very much.
You're welcome.
The next question comes from Ondrej Cabejsek, UBS. Your line is now open.
Hi. Thank you for taking my question. I had two, please. One just a follow-up on the mobile service revenue commentary that you had already. If we kind of unpack what's been going on in 2021, I think you're continuing still in the fourth quarter with 4G contributing about 4 percentage points of the service revenues. Then if we look at 2022, you're saying you expect a roughly similar level altogether, which would imply that 4G momentum kind of comes down significantly in the next year. Can you just talk to us a bit in terms of what you think maybe drove the surprising pickup in 2021 now that we're finished with the year, and why should that slow down going into 2022?
Then a second question, if I may, in terms of just, you had a comment that you expect operating leverage to pick up again in 2022 with some of the M&A in the base, et cetera. Is there an estimate from your side, if we just exclude all of the acquisitions that you've done, what the kind of underlying margin development was internally or an internal estimate in 2021, and what would be driving that in 2022 or the growth of that in 2022? Thank you very much.
Okay. In regards to the MSR, of course, you might draw very direct conclusions from my very rough estimates for the MSR growth for the year and how we had the situation exactly in the fourth quarter. I would be a bit careful drawing those conclusions, especially in regards to the momentum of upselling 4G and continuing to do also some price increases. We will see how things are evolving, but we believe that there will be positive momentum created by 5G, of course, continuing. We believe that we will have also positive momentum and impact from the rest of the mobile subscriptions based on upselling and some price changes. A big question mark, of course, is that how much traveling will pick up, if it will pick up.
We haven't expected that much, but of course, with the development of COVID, we also might have impact on increasing traveling sometime of the year with increased roaming. We saw a little bit of roaming also contributing to the fourth quarter. That's maybe something we didn't express so well. There was some positive that we gained year-on-year from the roaming because there was traveling already starting in the early part of fourth quarter. That was quite a minor thing, but there was something that we gained in the third quarter from roaming. In terms of operating leverage, I don't know if we can produce any sort of M&A cleaned picture for that.
Just to say about the development, that if we take a look on the quarters, second, third, and fourth quarter this year, our EBITDA improvement has been correspondingly at 2.2%, 3.4%, and now for fourth quarter, 4%. Our EBITDA has been developing EBITDA growth well during the year. Of course, that's something that we expect ourselves to kind of continue to do.
Thank you. Maybe just on the last question, if I may follow up. What would be the drivers of the operating leverage in 2022? Are there? Obviously, there should be something coming from, you know, the top line, but then in terms of the cost base, do you see that being a positive contribution or how, you know, how should we think about that?
Well, of course, one clear thing is this NENT cooperation that shouldn't be having that impact year-on-year quarter numbers that we had and we saw this year. That's of course one thing. Then, of course, depending on the competitive situation in the market in regards to the sales and marketing costs that how they will further develop, those are maybe the main things.
Thank you very much.
You're welcome.
The next question comes from Adam Fox-Rumley, HSBC. Your line is now open.
Thank you. Thank you very much. I wondered if I could ask about your thoughts on the dividend policy going forward, please. Your EPS range of 80%-100% has been in place for a long time. You've been at the top end of that for the last three years or so. If I look at your cash flow, you're actually paying out 97% of comparable free cash flow this year. I wondered whether or not the board had discussed whether the policy should evolve in any sense. The second question was a bit more mechanical or two parts, really. One, I wondered if you could give us an outlook for the restructuring cost. I think it was EUR 8 million in 2020.
2021, I'd be interested in if you can say anything about 2022. Finally, with your reference to the record order intake in some of your businesses, I wondered if there was anything we should know about how that might phase through into the financial statements. I mean, would you anticipate normally a bit of a lag for that to come through? Thank you very much.
Okay. Thank you for your questions. In terms of the dividend policy, that stays intact. We are performing well. We have been able to generate good growth, and of course, that's the target going forward. 80%-100% distribution policy payout is valid going forward, as we go. To your second question of restructuring, I ask Jari to respond. In terms of the third one, in terms of the record order intakes that we see, there is, of course, some one- to two-quarter delay from the orders to the kind of deliveries and revenues, approximately. Quite soon, we would expect this improved order intakes to also show in the digital service businesses going forward.
Jari please, for the restructuring.
Yes. Yes, indeed, in 2021, restructuring costs were around EUR 8 million in Q2 and Q4 restructuring costs. We continue to do productivity improvement measures in different parts of the processes and organization. Sometimes those developments result in the restructuring and reduction of employees. At this point of time, we don't give any guidance for those. They are one of the costs relating to reductions of employees if these happen.
Okay. Thank you very, very much.
You're welcome.
The next question comes from Abhilash Mohapatra, Berenberg. Your line is now open.
Yes, good morning, and thanks for taking my questions. I mainly just got a few clarifications from some of the earlier questions, please. Firstly, just on the M&A impact, just to clarify some numbers. I think you mentioned the revenue contribution year-on-year growth was EUR 13 million in Q4. What was the EBITDA number, please?
Jari.
It was around EUR 4 million.
Got it. Sorry, just could you please also remind us of at the end of 2021, what was the full year impact from M&A on revenue and revenues and EBITDA as well, please? Sorry for doing this. Oh, please, sorry.
Was it regarding Q4 or?
Full year.
Full year.
Sorry, but on a full year basis as well, if you could just remind us, please, what was the revenue and EBITDA impact from M&A?
Revenue impact relates to camLine, TenForce, and NENT sort of first consolidation, and that is in the range of almost EUR 50 million impact.
EBITDA as well, please, sorry.
For the whole year, it's around six.
Excellent. Got it. Coming back to one of Veli-Matti's earlier comments around the outlook for the fixed line business, and you mentioned that you expect it to be sort of more stable going forward. Just wanted to clarify. In full year 2021, the fixed line business was down 2%, sort of year-on-year. When you say stable, is it fair to assume that you're expecting it to be better than 2021, therefore?
Well, let's say that I didn't comment on the numbers basis, but let's say that around the development we've seen or slightly better.
Got it. Perfect. Just one final question. On the employee expense. Sorry, I know this was raised earlier on as well, the EUR 100 million expense recorded for Q4. Obviously this year, the employee expense base has gone up quite a bit as you've consolidated new businesses, et cetera. Is this sort of roughly EUR 370 million that you recorded in 2021, is that a stable base as we look into next year and we then sort of assume some inflation on top of that? Or are there some other sort of big year-on-year impacts to keep in mind as well? Because obviously this year you've recorded almost a 13% increase in employee expenses year-on-year.
Just trying to understand, you know, how we should think about that heading into 2022. Thank you.
Well, I appreciate your question, but we are not gonna go to the details of giving guidelines and outlooks for certain items in the smaller items in the P&L list, like employee cost outlooks. As Jari said, there is some salary increase coming from the already agreed contracts with part of the personnel, but still some is to be negotiated. That is sure that we know that there will be a 1.8% increase in salaries for certain group of employees. But, elaborating more than that of the employee expenses development this year, unfortunately we do not disclose.
Okay. Got it. Thank you. Thanks for the answers. Thank you.
You're welcome.
We haven't received further questions at this point. I will hand back to the speakers.
All right. Thank you very much for the questions and participating for this call. Thank you from all our behalf, and we wish you a very productive reporting season. Goodbye now.