Cyfrowy Polsat S.A. Ord

Good afternoon, ladies and gentlemen. Welcome to the earnings call for the third quarter of 2025 of Polsat Plus Group. Can we please move on to the next slide? We will begin with a presentation of our results delivered by Andrzej Abramczuk, President of the Management Board, Maciej Stec, Vice President for Strategy, and Katarzyna Ostaptoman, Chief Financial Officer and ESG Officer. If you have any questions, please submit them via the Q&A panel. We will address them after the presentation. As a reminder, kindly include your name with your question as we do not accept anonymous submissions. With that, let's move on to the presentation. Andrzej, the floor is yours.

Good afternoon, ladies and gentlemen, and welcome on the conference regard of the result for the third quarter of 2025. Thank you for joining us today. Here is our agenda. First, I will share the key highlights of the quarter. Next, we will review operating and financial results in detail. Finally, we will summarize and move to the Q&A session. Let's begin with the key highlights for the quarter. Let's start from the telco segment. In the B2C and B2B service segment, our new Multiplay offer is performing above expectations. Since its launch in June, 11% of our customer base has already migrated to this offer. Additionally, bundles with the three or more services are gaining strong momentum, sell have nearly tripled. Average revenue per user also shows consistent growth up 4% year-on-year. Turning to the media segment, this was an exceptional quarter for the sport. we broadcast the Volleyball National League and the World Championship and we strengthened our portfolio with premium rides including Formula One, Bundesliga, UEFA Conference League and European League. This investment strengthened our position and driven audience engagement. However, the concentration of major sport events in the one quarter resulted in the visible increase in the content cost. Looking ahead, we secure exclusive right in Poland for WTA Tours Tennis from 2027 until 2031, a great addition to our support offering. In the green energy segment, we are coming to an end to develop investments. The Dzerzewo wind farm has been completed and the commercial launch is planned for early 2026. Also in the third quarter, we carried out our merger maintenance on one of Biomas unit. The energy market remains challenging with low energy price. Let's take a quick look at the number. In the third quarter, the revenue was 3.4 billion zlotys and a BDA amount 766 million zlotys. ARPU per B2C customer exceeded 80 zlotys, up 4%. Our Multiplay customer base surpassed 3 million and continued to grow, supported by the success of our Multiplay strategy. Like I said, our rich programming and support offer are very popular with the viewers and in the third quarter audience share rose to 22.7% up one percentage point. Green energy production reaches 237 gigawatts and was lower year on year due to the scheduled maintenance of the biomass unit. Overall, this quarter delivers solid operating performance especially in B2C, B2B and media but at the same time we face certain challenges. Let's now to the more details review of our operating result. Maciek, over to you.

Thank you, Andrzej. I'm pleased to share the operating results from each of our business segments. I'll begin with the media segment, focusing on both television and online performance. Could we move to the next slide, please? In the third quarter of 2025, our viewership figures and position in the advertising market remained strong. Polsat, our main channel, was the market leader with a 7.3% audience share, while our thematic channels collectively reached 15.5%. Altogether, TV Polsat Group achieved a total audience share of 22.7%, marking a 1% point increase compared to last year. The TV advertising and sponsorship market in Poland was slightly softer in the third quarter, declining by 2.6% year on year. The reason behind this is that last year there were major sporting events that took place in Europe. The Olympic Games in Paris and the UEFA Euro Championships in Germany. Our advertising revenue followed a similar trend. However, in real terms, this was only 8 million slots lower than in Q3 2024. As a result, our market share remained stable at 27.6% in Q3. Let's move to the next slide, please. Given the seasonal nature of the media business, it's important to assess our results over a longer period. Over the first nine months of 2025, we delivered strong audience figures. Our group's total audience share rose to 22.4% year-on-year, with our main channel Pulsat accounting for 7.4% and our thematic channels contributing 15.1%. These achievements are in line with our long-term strategy. Turning to the advertising market for the first three quarters of 2025, the sectors performed as we had anticipated, with growth rates in the low single digits. We outperformed the market, increasing our advertising revenue by 1.7% to 981 million zlotys, which resulted in a market share of 28.2% for the nine-month period. Let's move on to the next slide. We consistently maintain a very strong position in the Polish online media market. According to media panel data, in the third quarter, Polsat Interior Group was the clear leader among internet publishers in Poland, achieving the highest average monthly number of users, 20.5 million, and a total of 2 billion page views during the quarter. What's important, Polsat Interior Group is also a market leader in the mobile category, holding the top spot for three consecutive months in Q3 of 2025. These results demonstrate the strength and stability of our digital platforms, and we will continue to strengthen our position in the online media segment. Can I have the next slide, please? Our autumn programming schedule delivers strong results combining popular entertainment formats with major sports events. Flagship shows such as Dancing with the Stars, newly acquired format of Millionaires, Your New Home, Your Face Sounds Familiar attracted large audiences, while premium sports broadcasts further strengthened our position. This quarter, we broadcast several exceptional sporting events. Notably, we earned matches of the Volleyball Nations League, including 12 games held in Poland, where our national team won the competition. We also covered the men's and women's Volleyball World Championships in the Philippines in August-September, where our men's team won the bronze medal. These volleyball events are a vital part of our programming, supporting viewership and confirming our leadership in sport broadcasting. However, they also led to higher one-off content costs during the third quarter. Additionally, we have recently expanded our sport rights portfolio, acquiring rights to major events such as Formula One, Bundesliga and the UEFA Conference and the Europa Leagues. These investments contributed to higher content costs, especially when compared to last year, when our cost base was lower as we no longer held the rights to the UEFA Champions League. Overall, as a result of these initiatives, our audience shares rose to 22.7%, confirming the effectiveness of our programming strategy and the strength of our diversified content portfolio. However, this quarter's results were affected by increased content costs. Next slide, please. Let's now look at the B2C and B2B services segment and its performance in Q3 2025. Next slide, please. We continue to see strong performance in our Multiplay offering supported by the new offer introduced in June 2025. As Andrzej has already highlighted, customer interest in our new Multiplay packages is very high and we are successfully moving customers to this offer. At the end of the third quarter, more than 3 million customers were using our Multiplay services, representing 53% of our total customer base. Over the past year, we grew the Multiplay base by 41,000 customers, again thanks to the continued effective upselling of our services. Our Multiplay customers account to 11 million RGU's and increased over 1.1 million year on year. This growth was also driven by the new Multiplay offering and strong demand for bundles consisting of three and more services. Importantly, churn remains low at 7.4%, which reflects the strength of our Multiplay strategy and the value it brings to our customers. Let's move to the next slide, please. Our strong multiplayer performance is closely linked to the overall growth of our contract services portfolio. In the third quarter, we delivered more than 13.3 million contract services, representing a 2% increase compared to the previous year. Mobile telephony continued to be a key driver of growth with 195,000 more services provided than last year. We also observe as a key driver demand for internet services, adding 207,000 mobile and fixed connections year on year. The pay TV base continues to face pressure, but this is partly offset by the growing adoption of IPTV and OTT solutions, which help us maintain a competitive position in the pay TV segment. Next slide, please. As a result of our consistent long-term execution of the Multiplay strategy, we continue to see growth in RPU per B2C customer. In the third quarter, RPU increased by 4% year-on-year and reached 80.3 zlotys. This progress was driven by solid sales of mobile and internet services, as well as the consistent execution of our Multiplay approach. I would like to highlight that for the first time, our average revenue per customers has exceeded 80 zlotys. This is clear evidence of the effectiveness of our strategy. We are also observing a constant rise in the number of services used by each customer with an average of 2.36 ARGUs per customer at the end of the third quarter. This result demonstrates our successful upselling and bundling efforts. As Andrzej mentioned earlier, sales of packages with three or more services have almost tripled since we introduced the new Multiplay offer in June. This not only shows strong customer interest in our new offer, but also proves that there is further potential to increase the saturation of our customer base with additional services in the future. Let's move to the next slide, please. In the prepaid segment, we maintain a high stable base of 2.41 million services, despite operating in a highly competitive and challenging market environment, which I underline quarter by quarter. RPO in this segment increased by 3.4% year on year, reaching 18.4 zloty. This growth was supported in part by the launch of new and attractive pay TV packages on Pulsat Box Go, Pulsat Lovers, Premium and Premium Sport, priced at 20, 30 and 50 zlotys respectively. Each package builds on the previous one, offering flexible access to up to 180 TV channels, including 24 Premium Sports channels, a wide range of exclusive sports broadcasts and a rich VOD library. I'm confident that this new offering, together with our continued efforts to increase the value of prepaid customers, will help us further grow prepaid ARPU even in the face of the market challenges. Next slide, please. In the B2B segment, we continue to maintain a stable customer base of around 68,000. I would like to underline that the B2B market is very demanding and we operate in a highly competitive environment. Our main objective in this area as in all other segments is to increase customer value. RPU per B2B customer increased by 2.1% year-on-year, reaching almost 1,550 slots per month. This growth demonstrates our commitment to providing high-quality services tailored to the specific needs of our clients and to building strong long-term relationships with our business customers, which ensures continued resilience in this segment. Next slide, please. Let us now turn our attention to the green energy business. The next slide, please. In the green energy segment production in the third quarter was 21% lower year on year amounting to 237 gigawatt hours. This decrease was mainly due to scheduled major maintenance on one of our biomass units, which continued throughout the quarter and significantly reduced output. Such maintenance is routine, occurring every 8-10 years, with the other unit expected to undergo similar work in around 5 years. Despite this temporary reduction, total green energy generation for the first 9 months of the year increased by 15% year-on-year, reaching 830 GWh. This growth was driven by the expansion of our wind energy capacity And our largest wind farm, Drzezewo, has now been completed and is currently generating energy as part of its technical commissioning. It's worth mentioning that energy production in the first nine months of 2025 was noticeably affected by weaker weather conditions. Nevertheless, wind energy continued to be the main driver of growth. Production from wind sources increased by 56% year on year in the third quarter and by 73% for the nine month period, reflecting the positive impact of our new capacity. Can I have the next slide, please? EBITDA in the green energy segment amounted to 175 million zlotys for the first nine months of 2025, representing a 14% decrease year on year. In the third quarter, EBITDA stood at 52 million zlotys, 37% lower than the previous year. This decline was primarily the result of scheduled major maintenance work on the biomass unit, which significantly reduced production during the quarter. And the comparison to last year is impacted also by an exceptionally strong base driven by higher contracted prices and more favorable supply terms for biomass energy. Ongoing low market energy prices also continue to affect profitability. The completion of the Drzezewo wind farm doubled our installed wind capacity to 289 megawatts. With this project, we have reached our target capacity in wind energy combined with stable energy prices going forward. This positions us to strengthen BDA in the coming periods. This milestone marks the final stage of our investment program in renewables. Ladies and gentlemen, before I hand over to Kasia, I would like to very briefly summarize our operating performance across segments in the past quarter. In Q3, 2025, our media segment achieved excellent viewership results with a 22.4% audience share in nine months of 2025. We maintained a strong position in the advertising market with a 28.2% market share and ad revenue growing by 1.7%. The third quarter, the financial results of the media segment was affected by higher one-off content costs due to new sport rides and major volleyball events. In the B2C and B2B services segment, Multiplay continues to drive growth. Over 3 million customers now use Multiplay services and ARPU per B2C customer exceeded 80 slots for the first time. The commercial momentum of our Multiplay offer is very good, supporting our operating results in the coming quarters. Prepaid and B2B segments remain resilient with growing RPOs supported by attractive offers and tailored solutions. In green energy, we completed the Drzezewo wind farm, reaching our target wind capacity and finalizing our renewable investment pipeline. The operating and financial results of this segment were heavily impacted this quarter by the renovation of the biomass unit, which is one of event. I expect that going forward EBDA will improve on the back of higher wind capacity, providing that energy prices remain at least stable. Still, I would like to signal that reaching our strategic EBDA goal in 2026 is going to be challenging and I would rather anticipate a result in approximate 400 million zlotys next year. That said, please remember that our renewable energy projects are long-term, 30 years investment and this is how they should be analyzed. Kasia, please come on, the floor is yours.