Cyfrowy Polsat S.A. Ord

Good afternoon, everyone. It is my pleasure to welcome you to the earnings call of Polsat Plus Group for the fourth quarter and the full year of 2023. Could I please have the next slide? The composition of speakers for today is slightly different than usual. The presentation will be delivered to you by Mr. Miroslav Błaszczyk, CEO of Cyfrowy Polsat. Mr. Maciej Stec, Vice President responsible for strategy, Ms. Katarzyna Ostaptoman, CFO and Management Board member responsible for ESG, and finally, Mr. Piotr Rzak. As I am sure most of you know, Piotr holds the position of CEO at Telewizja Polsat since the beginning of this year. After the presentation, we will hold a Q&A session, but I encourage you to post your questions in the chat section in advance. Thank you very much. and over to Mr. Błaszczyk.

Good afternoon, ladies and gentlemen. The agenda of today's presentation will follow the standard pattern. I will begin with the highlights of 2023. After that, Piotr will talk about the media segment and Maciej will present the results of the B2C and B2B services segment and the green energy segment. Kasia will then give you an overview of our financial performance in the past year, and I will sum up the presentation and tell you about our objectives for 2024. Next slide, please. 2023 was a year marked by quite a number of significant events for our group. So I have decided to divide the key events into three parts. Telco and media, green energy, and finally, development in the area of finance. Next slide, please. Telco and Media first. As you already know, we entered into a strategic partnership with Google Cloud. As part of this collaboration, Google signed a 10-year power purchase agreement to buy green energy from our Przerów wind farm. We also cooperate with Google Cloud in the area of cloud solutions. This is a big opportunity for our business going forward. We continue our efforts to expand the coverage of Poland's widest 5G Plus network. By the end of 2023, over 23 million people, that is almost 70% of the population of Poland, work within the range of our 5G Plus network, and already 6 million are covered by the superfast 5G Ultra Plus network with maximum download speeds of up to 1 gigabit per second. The C-band spectrum dedicated to 5G in Poland was finally distributed and we will use this frequency to continue to develop our Plus 5G network. In the media segment, in January this year, Polsat Interior Group became the leader on the online media market for the first time in history. We also strengthened our position on the TV and online markets by acquiring the Naekrani.pl website and 4FUN TV channels. Next slide, please. We are strongly committed to development of our green energy business. We gained control over the Pak PC Group in July 2023 and launched the first two wind farms at Kazimierz Biskupi and Miłosław in September. We also installed an additional 12.4 MW of generation capacity at the Brudze photovoltaic farm. We are making rapid progress in the implementation of our strategy 2023+. As of today, four more wind farm projects are under construction, two of which are at the very advanced stage. We are also building four more hydrogen refueling stations. The Człuchów Wind Farm began technical commissioning in February 2024 and we completed the installation of turbines at the Przerów Wind Farm ahead of schedule. We also made significant progress in the field of sustainable transportation. We put into operation the first publicly accessible hydrogen refueling station in Poland, in Warsaw and Rybnik. We completed the delivery of 20 nesobuses of our own production to Rybnik and we secured new contracts for the long-term lease of 10 nesobuses in Gdańsk and the delivery of 26 nesobuses to Chełm. Next slide, please. In terms of finance, we have successfully completed the process of refinancing our debt. We entered into a loan agreement for 7.3 billion zlotys. and 500 million euro in term loans and the revolving credit facility of up to 1 billion zlotys. We successfully placed three sustainability link bonds issues with a total nominal value of 3.890 million zlotys. In addition, we are very successful in raising financing specifically dedicated to the implementation of our green energy projects. In 2023, we obtained over 1.1 billion zlotys in investment loans to finance the construction of renewable energy sources, totaling 145 megawatts of installed capacity. I'm especially proud of the fact that all of our new debts, both bank loans and bonds, are either sustainability-linked or dedicated to the development of green projects. I think this demonstrates our strong commitment to responsible finance and sustainable development of Polsat Plus Group. In conclusion, 2023 was quite a challenging year, marked with a significant effort on our side to implement our strategic plans. Looking at the first months of 2024, I'm optimistic for this year. Next slide, please. This is all from me for now. Let's take a look in more detail at the operating performance of our business segments starting with Piotr and the media segment. Piotr, please go ahead.

Hello and good afternoon, everyone. As Agata said, I've been acting CEO of Telewizja Polsat for the last three months and it's my great pleasure to present to you today the results for the media segment for television and online. So let's get on with it. Next slide, please. Let's start with our viewership and our position in the advertising market in the last quarter of last year. Our total audience share in this time period was 22%. with our main channel achieving 7.5% audience share and our thematic channels 14.5%. The advertising market in this period of time grew by 0.4%, whereas we outperformed the broad market with revenues from television advertising and sponsorships increasing by 1.1%, which gave us a total market share of 28.6%. Thank you for this slide, and let's move on to the next one, please. We always emphasize that it's important to look at the television market in a yearly perspective to cut out any kind of seasonal effects and smooth those out over the year. So when we look at 2023, we're in line with our long-term strategy. So our total viewership results were 22%, with our main channel being at 7.6% and our thematic channels at 14.4%. When we look at the advertising market, we can see that it grew by 3.3% in last year, Whereas we outperformed it just slightly at 3.4% growth. And again, this gave us a total market share of 28.6%. Next slide, please. I also wanted to tell you guys a little bit about 2024. We started off the spring schedule with a blast. We created a lot of formats that people know, that people love, that people have seen in the past. This allows us to maintain a stable viewership base while also allowing us to optimize costs through the experience that we've had in the past. So a lot of the returning formats are things like Dancing with the Stars, Love Island, Ninja Warrior. I'm sure or I hope these are all things that you guys have seen before. Next slide, please. Let's now turn to our second business leg in the media segment, which is our online presence. And this is something we invested into in 2020 with the purchase of the Inter-APL group. And as you can see on the slide, four years later, we have an average monthly number of users, which is 21 million active users every month, which generate a total of nearly 2 billion page views every month. So these are really, really huge numbers in terms of reach. And actually, for the first time ever, in January of this year, the Pulsar Interia Group was number one among online publishers, thanks to 21.1 million active users, which was an amazing result for us. Let's go on to the next slide, please. I would also like to take this opportunity to share with you the results of the synergies that we have achieved over the last four years since the purchase of the Interia Appel Group. And so back in 2020, we announced that we would grow our EBITDA by 20 million in a one year timeframe. And in a medium to long term perspective, we would actually double them. And so what you can see at the bottom left hand of the slide is that by 2021, we grew our EBITDA by exactly 20 million. And by 2023, we grew the EBITDA by 97% relative to the base year of 2019. So I'm happy to say that we've actually achieved what we set out and what we promised to do back four years ago. Additionally, since 2020, the Pulsat Interia group was one of the very few internet publishers to actually be growing in terms of real users, whereas most of the competition has been slightly decreasing over that time period. This brings me to the end of my presentation. So let me just quickly recap the media segment before we move on to Maciek. I'm very satisfied with the results from both the last quarter of last year, as well as all of 2023 in total. Both were online, both for television. We're stable. We have lots of ideas. We started 2024 off with a blast, and hopefully that'll continue throughout the year. So that's all for me. Thank you very much. And let me hand over everything to Maciek for the B2C and the B2B segments. Thank you.