Cyfrowy Polsat S.A. Ord

Ladies and gentlemen, welcome to Polsat Q3 2020 results conference call. I will now give the floor to Mr. Miroslav Blastryk, CEO of Polsat. Sir, you may begin.

Good afternoon, everyone, and welcome to Polsat Group's first quarter 2020 result call. The usual agenda of our presentation is well known to you. First, I will point out the most important events of the first quarter. Then, Sasek and Maciek will discuss the operating results of both our business segments. And Kasia will present our financial results. After I shall sum up the presentation, it will be available to answer all your questions. Key events of third quarter 2020. As you may remember from our last presentation, I told you we had many projects ahead of us, and here they are. First of all, we finalized the acquisition of Interior Group in July, and have been consistently integrating it with all subgroup structures, smoothly and successfully. We have also completed a smaller acquisition project. we took control of the two channels that we previously co-owned, Fortis TV and Nova TV. This move gives us greater flexibility in terms of management and facilitates the development of this channel. I'm proud to underline the TV Pulsar family is currently composed of as many as 36 internally produced TV channels. Moving on to a very hot topic, both on the Polish and European market recently, infrastructure sales. As you know, from our former communication, we have initiated the process of review of strategic options regarding the potential sale of our mobile telecommunication infrastructure. Anticipating your questions, I will say that the process is ongoing and it is still too early to say anything more on this subject. I want to assure you we will provide you with additional information on the topic as soon as we have anything to communicate. And the last key event concerns our decision to intensify the pace of rollout of our PLUS 5G network By the way, the only mobile network to offer transmission speeds of as much as 600 megabits per second. A big step forward into the future. Summing up, another dynamic quarter focused on new strategic initiatives. I will now let my team tell you about the details of Polsat Group's operating and financial performance. Staszek, please go ahead.

Thank you, Mirek. First of all, please note the change in the name of the segment. Following the acquisition of Niteria, we decided to rename this segment and clearly include this new and important leg of our business. So, from now on, I will present the results in the media segment, TV and online. So, let's start off with this new online business of ours. On slide number 8, I would like to give you a quick overview of our current positions. Thanks to the acquisition of Interia, we now hold a leading position in the Internet media market. As you can see on the top chart in the joint post that Interia Group jumped into the third place in terms of the average number of real users per month. In Q3, we had 18.5 million real users, almost twice as many as a year ago. We also observed a surge in the average monthly number of page views, which increased tenfold to 1.5 billion per month. Let me underline that we have significantly strengthened our position on the online market. This will of course support us in delivering the synergies that we announced when acquiring Imperia Group earlier this year. Returning to the more traditional part of the business. As soon as it was possible after the lockdown was lifted, we resumed internal production to prepare for the autumn programming schedule. As a result, in Q3, we achieved very satisfactory viewership figures in the top range of our target audience shares. Polsat group channels gained a total of 24.6% of audience shares in the commercial group, where our main channel Polsat came in top with 9.4% of audience shares, and our thematic channels retained very strong position with over 15% audience shares. Our news channels are still doing very well and maintain high viewership results. The third quarter on the advertising market saw positive sentiment and the return of ad budgets, as I guided for a quarter ago. We used this time to bridge the gap that was caused by the breakdown observed on the ad market in Q2, and I think we did it very successfully. Our revenue from advertising and sponsorship grew by almost 1% on a slightly deceiving market. Naturally, as a result, our TV market share increased to 29% in Q3. Given that this year is characterized by dynamic ups and downs, let's look at the nine-month perspective. In three quarters of 2020, we maintained overall viewership figures within our target corridor of 23 to 25%. Our flagship channel, Polsat, captured 9.5% of audience share, while our thematic channel had a little over 14%. This gave Polsat Group a total share of 23.6% in the commercial group of viewers in three quarters of 2020. In the nine-month perspective, we can see that this thin breakdown on ad markets caused by the economic lockdown was largely mitigated. The broad market declined by 15.5%. Our ad revenue dynamic was in line with the market declining by 13% year-on-year. We continue to record a high market share of 28.2%. At this point, I would like to underline that even though the epidemic situation in Poland has been developing dynamically over the last weeks, The second scrolling lockdown will not resemble the one in the context of the ad market. I can say that the beginning of Q4 supports my guidance from August of flat ad revenues in the second half of this year, which means that we are aiming for a 10-12% decrease in the full year. So much for the media segment. Maciek will now present the results of our bigger business segment.