Cyfrowy Polsat S.A. Ord

Good afternoon, ladies and gentlemen. It is my pleasure to welcome you to the conference call of Polsat Plus Group for the first quarter of 2026. Let's move to the next slide, please. Today's presentation will be delivered to you by Mr. Piotr Żak, President of the Management Board, Mr. Maciej Stec, Vice President, Ms. Katarzyna Ostaptoman, CFO, Mr. Bartłomiej Drewa, Management Board Member, and Mr. Janusz Pliszka, Management Board Member at Telewizja Polsat. Let's move to the next slide, please. Here you have the agenda of today's meeting. Bartek will start off by presenting the key highlights of the first quarter of 2026. After that, Maciej, Janusz and Bartek will discuss the operating results of our business segments. Kasia will then discuss the financial results of the past quarter, and we will sum up and answer all your questions in the Q&A session. Before we move on, I would like to remind you that during today's presentation, you can post your questions in the Q&A panel. I would like to remind you that we do not answer anonymous questions. Therefore, please kindly sign every question with your name and institution. Thank you very much. And over to Bartek for the key highlights. Bartek, please go ahead.

Thank you, Agata. Good afternoon, everyone. Let me walk you through the most important events that have taken place in Pulsat Plus Group since the beginning of 2026. We would like to highlight once again the success of our new Multiplay offer. It allows us to grow RPU across all customer segments, as well as to improve our financial results. You can see the effects on the right-hand side of this slide. Maciej will tell you more about this in his part of the presentation, and Kasia will cover it when discussing the financial results. We have informed you recently about an important development for us. We have signed a term sheet with Tower Link Poland. We have agreed on the key parameters of our future cooperation, which will allow us to improve both the quality and the coverage of our services, fulfill all licensing requirements, and ensure that our costs related to 5G network development are predictable and optimal for us in the mid and long term. Moving to the media segment, we have acquired exclusive broadcasting rights to the UEFA Europa League and the UEFA Conference League for the upcoming 2027-2031 seasons. As a result, we have secured key sport content for both our sport channels and our pay TV packages. Additionally, we have expanded our cooperation with new broadcasters. We have entered into a partnership with Canal Zero in both the distribution and advertising areas. We have also communicated an important matter to our customers. We are planning to shut down our 3G network by the end of this year. This move opens the path to further optimizing our network resources. Regarding our green energy segment, we mentioned this during our previous conference, but let me repeat it. In March, we received a concession for energy generation for our Drzeżewo wind farm with a capacity of 139 megawatts. This means that we have finished our capital intensive investments in the renewable energy segment and have now moved into a demand energy production and sales phase. To wrap up this section on the key highlights, let me repeat what we have already emphasized during our previous meeting. We have restructured the group's management frameworks to address new challenges, both at the strategic and operational level. You can already see the first positive effects of these changes in Q1, both in operating performance and financial results. That concludes the key events of the first quarter. I will now hand over to Maciej, who will present the operating results for the B2C and B2B services segment.

Over to you Maciej. Thanks Bartek. Let me start by saying that this was a very strong quarter, not only on the group level, but especially in the B2C and B2B services segment. We are particularly pleased to see the first tangible effects of the organizational changes implemented recently. We can already see the impact of our efforts in cost discipline and operational efficiency coming through in our results, as Kasia will explain in more detail. Before that, let's look at the operating results on the B2C and B2B services segment on the next slide. Our key focus and the core of our strategy is Multiplay. We continue to see strong performance in our Multiplay base, which already exceeds 3 million customers. In the first quarter, the base increased by 35,000 year-on-year and continued to grow at a steady pace, up by 1.2% year-on-year. This means that the saturation of our total customer base with Multiplay is also increasingly steadily reaching 54% in Q1 2026. This growth is clearly driven by effect of upselling within our Multiplay strategy. The number of services used by our Multiplay customers is increasing consistently. At the end of the first quarter of 2026, they were using 12.5 million RGU's, which is an impressive increase of 2.3 million year on year. At the same time, churn remains low, which confirms strong customer loyalty and the quality of our offering. At the end of the first quarter, churn was 7.9%, which is within the upper end of our target range of 7% to 8%. This increase was driven partly by the consolidation of contracts under our new Multiplay offer, and partly by the concentration of contract expires in the fourth quarter of last year. Let's move to the next slide, please. The excellent uptake of our Multiplay offer is directly translating into solid growth in our contract RGU base, which reached 13.6 million in the first quarter, up 2.3% year-on-year. The drivers remain the same as in recent quarters. This increase in the RGU base is the result of strong demand for mobile and fixed internet services, which grew by 285,000 year-on-year. In addition, mobile telephone sales remain very strong, growing by 183,000 over the past year. We also continue to see the trend in the pay TV base, which remains under some structural pressure, but this is partly mitigated by the continued shift towards IPTV and OTT solutions. Next slide, please. We continue to see strong momentum in ARPU, which increased by 5.8% year on year and reached 82.2 zlotys in the first quarter. I would also like to highlight the acceleration in ARPU growth from a little over 4% last year to 5.4% in Q4 2025 and to 5.8% at the end of Q1 2026. This growth is clearly driven by the effective execution of our Multiplay strategy supported by strong sales of mobile and internet services as shown on the previous slide. At the same time, we continue to see higher services penetration. The number of services per customer increased to 2.43, up from 2.32 last year. This has also been supported by the new Multiplay offer. Since its launch in June last year, 28% of all our customer base have already migrated to the new offer. This confirms that our offering is well designed and is effectively driving customer value. Let's now turn to the prepaid segment services on the next slide. Our prepaid base remains high and around 2.3 million services despite a very competitive market environment. The downward pressure comes mainly from a lower number of mobile services provided. This is the result of strong competition on the one hand and natural migration towards more attractive contract offers on the other. A clear positive highlight in this customer segment is the consistently high and growing RPO. In the first quarter of 2026, prepaid RPO increased by 4.7% year-on-year and reached 17.8 zlotys. This reflects our strong focus on value rather than volume in this segment. Prepaid RPU is supported by the strong take-up of our referred Polsat box offer and the new package structure, which clearly strengthens the value proposition for customers. Last year, we restructured the prepaid pay TV offer into three simple packages, Polsat Lovers, Premium and Premium Sport, with each package expanding on the content of the lower one for an incremental fee. At the beginning of this year, we also expanded the lineup to almost 200 channels by adding TVN and TVP channels. Next slide, please. In the B2B customer segment, trends remain stable over the mid-term. We have a high and relatively stable customer base of around 67,000. Let me remind you that this is a highly competitive and challenging market. Despite this competitive pressure, we continue to build ARPU per B2B customers, which increased by 3.8% year-on-year to 1,565 zlotys per month. And this reflects our focus on delivering tailored, high-value solutions for business customers, allowing us to build value effectively within the existing base. To sum up the segment, we continue to deliver a very solid performance across the B2C and B2B services segment. Our focus on increasing value has resulted in growing ARPU across all customer segments with a clear acceleration of ARPU growth in B2C to 5.8% year-on-year. We are systematically expanding our Multiplay customer base. This is a direct result of the consistent execution of our Multiplay strategy and successful upselling, which strongly supports customer value and service penetration. The new Multiplay offer continues to be very popular and we continue to see very good uptake. This clearly confirms that it remains the key driver of our operating performance and will continue to support our results in the coming quarters. That is all from me today. Thank you for your attention. I will now pass the floor to Janusz, who will present the results of the media segment. Janusz, please go ahead.

Thank you, Maciek. For the second time, I have the opportunity and pleasure of presenting to you the results of our media segment. Next slide, please. We've achieved strong viewership results in Q1 26. We've broadly maintained our commercial audience share at 21.9% versus 22.1% in the same quarter last year, despite the Winter Olympic Games. Our main channel, Polsat, continued its positive trend with audience share in the commercial target group increasing slightly from 7.5 to 7.6%. TV advertising and sponsorship spending growth in Q1 26 is estimated at 2%, while our ad and sponsorship revenue was up by 1.2%, so a bit below the market. This was mainly due to a high base last year as we grew significantly faster than the market in Q1 25, as well as the impact of the Winter Olympics and ski jumping, which supported stronger sponsorship revenues at other broadcasters. At the same time, we see our advertising market share in Q1 is strong at 28.5 above the full year level of 28 in 2025. Let's move to the next slide. Let's now take a look at our online business. The Polsat Interia Group continues to hold a very strong position in the Polish online market. We remain the number one online publisher in Poland and the leader in mobile. Our content reaches over 20 million users every month and generates around 1.9 billion page views. Interia is a key part of our media segment, complementing our media offer for both users and advertisers. Let's move to the next slide. In Q1 26, we achieved a 21.9 share in the commercial audience, despite the Winter Olympics and ski jumping broadcast shown by our competitors. We have kept audience level broadly in line with Q1 25, supported by a good mix of proven entertainment formats and attractive sports rights. I won't go through all of our key entertainment titles, but I'd like to highlight FADMA, or The Farm in English, a show that used to be scheduled outside of the main season. This year we have changed the approach and included the show in the spring schedule. FADMAP had fought strongly delivering very good audience results. On the sports sites we secured the rights to UEFA Europa League and UEFA Conference League for another four years, which together with the current agreement gives us a total of five years of broadcasting these competitions on Polsat Sport Premium. We have also extended the rights to broadcast Italian Football League Serie A for another two years, which means 11 channel subscribers will have access to these matches until mid-29. Thank you for your attention. Let's now move to the segment of green energy to be presented by Bartek.

Thank you, Janusz. Let me now present the operating results of the green energy segment. Next slide, please. Total energy production in Q1 2026 increased by 18% year on year, mainly driven by the expansion on wind capacity. At the same time, the past quarter was very challenging in terms of the weather. The winter was particularly harsh, resulting in lower levels of sunshine and windness. What is more, we faced more frequent shutdowns of our wind turbines due to the adverse weather conditions. Despite this, we increased electricity output from our wind farms through, as I mentioned, the expansion of wind capacity. Solar farms produced a slightly lower level and we also recorded lower level year-on-year output from biomass sources. The main reason was the adjustment of production levels in response to biomass supply conditions. Overall, we delivered 18% growth in energy production year on year, which translated directly into our financial results. Next slide, please. On this slide, you can see EBDA in our green energy segment increased by 73% year on year, from 57 million to nearly 99 million. The main driver of this growth was the production of the Drzeżewo wind farm for the full period following its commissioning in mid 2025. Please bear in mind that the ramp-up effect of this farm will still be visible in Q2 of this year, while from Q3 onwards the results will be fully comparable in terms of installed capacity. To sum up, despite very challenging weather conditions at the beginning of the year, we delivered a strong improvement in our financial results. As I mentioned at the beginning of this presentation, we have completed our capital intensive investment phase and are now focused on electric production and sales, as well as on maximizing EBDA in this segment. That concludes the operating results of the green energy segment. I will now hand over to Kasia, who will present how the operating results of our all business segments have translated into financial results. Kasia, over to you.

Thank you, Bartek. As you have already heard during today's presentation, the first quarter was a strong start in 2026. This is clearly reflected in our financial results, which I will discuss on the next slide. As I said, this was a very good quarter for the Group. Revenue grew by 3% to over 3.6 billion zlotys, mainly driven by the strong performance of the green energy segment. In Q1, 2026 EBITDA amounted to 847 million zlotys up by 4.7% year on year. This strong result is the effect of top line growth combined with disciplined cost control and optimization measures implemented across the group. Improved operating performance also translated into higher net profit, which increased by over 54% to 134 million zlotys in the first quarter. Turning to cash generation, free cash flow for the last 12 months amounted to almost 1.2 billion zlotys, up by nearly 63%, compared to the level reported at the end of 2025. Finally, our key covenant net debt in relation to EBITDA excluding project financing increased slightly to 3.68 at the end of the last quarter compared to 3.59 at the end of 2025. This was mainly due to the payment for the renewal of the 900 MHz concession. Let's now take a closer look at the drivers behind these results on the next slide. Let's begin with the factors that drove revenue and EBITDA growth this quarter. The main growth driver in Q1 was clearly the green energy segment. It contributed 136 million zlotys to revenue and 42 million zlotys to EBITDA. As Bartek mentioned earlier, we generated a significantly higher volume of energy thanks to the Drzezewo wind farm. In addition, energy prices were higher than a year ago. The B2C and B2B segment also performed very well. EBITDA increased by 14 million zlotys year on year despite lower revenue. This reflects the impact of highly effective cost reduction initiatives that have been implemented since the beginning of the year. On the revenue side, as Maciek said earlier, strong sales and RPU growth supported retail revenues. However, lower equipment sales offset this increase. In the media segment, we recorded higher revenues from advertising and from content sales to cable and satellite operators. However, this increase was more than offset by higher costs. In the real estate segment, it's worth remembering that the first quarter of 2025 was particularly strong due to the handover of a pool of apartments to customers in Port Pruski. As a result, we are now comparing against a high base which translated into lower revenue and debit year-on-year. Let's now move to the cash flow analysis on the next slide. We generate a solid level of underlying free cash flow, which amounted to 1.2 billion zlotys over the last 12 months. As I mentioned earlier, EBITDA improved year on year, supporting free cash flow. Over the last 12 months, we also saw a strong contribution from working capital. That said, this effect is temporary and I expect the contribution from working capital changes to be a bit lower in the coming quarters. Despite stronger cash flow from operations, free cash flow after interest was slightly negative. This reflects the impact of still high interest rates at the beginning of the last year, which continued to weight on our financing cost. As a result, interest paid and leasing after hedges exceeded 1.2 billion zlotys over the last 12 months. We also had a concentration of significant one-off payments related to spectrum reservations. In total, we paid around 800 million zlotys for reservations in the 700 and 900 MHz bands. Importantly, these are the final payments for telecom spectrum reservations for the next couple of years. On top of that, cash flow was also affected by non-recurring acquisition in the media segment. These were related to simplifying and streamlining the structure within that business. After adjusting for these non-recurring outflows, free cash flow amounted to 813 million zlotys. Lastly, we are in the final stage of our investment cycle, which means capex in green energy remains relatively elevated, although it is clearly on a downward trend. After adjusting for this, underlying free cash flow comes to 1.2 billion zlotys. Let's move to the next slide, please. CAPEX remains under strict control across the Group, reflecting our cautious approach to spending this year. Our TMT business remains CAPEX-lite and we continue to maintain investment spending at a consistently low level within the guided range of 6-7% of revenues. In Q1, CAPEX in the segment amounted to 195 million zlotys, representing 6% of revenues. I would also like to stress that we are now on the finish line of our investment program in the green energy segment, which is clearly visible in the level of capex incurred in Q1 2026. It amounted to only 31 million zlotys, which is five times lower than a year ago. For the full year, capex in energy should not exceed 200 million zlotys. Can I have the next slide, please? On this slide, I would like to highlight a few points. First, our net leverage is slightly higher compared to the end of 2025, both including and excluding project financing. This is fully in line with our expectations and reflects the 590 million Zloty payment for the renewal of the 900 megahertz frequency made in January. Second, the prospective weighted average cost of our debt decreased slightly further to 6.5%, which will support cash generation going forward. Finally, we resumed the scheduled repayment of our capital under our senior facilities agreement. As you can see, we will repay 622 million zlotys by the end of 2026 in equal quarterly installments. To sum up, we started 2026 with a very strong first quarter. All of our key financial metrics improved, showing that we are delivering on our goals for the year, driving top line growth while keeping OPEX and CAPEX under strict control to improve profitability. Thank you for your attention.

Thank you, Kasia. Ladies and gentlemen, allow me to present the key conclusions from our presentation. First, the decision made, new offers and projects implemented in recent months are reflected in a very strong operational results of the first quarter. This confirms that the direction we have chosen is the right one. Our Multiplay strategy is not only working, but it's also strengthening our market position and the TMT segment remains a stable and promising foundation of the group. Second, bearing in mind key role of the TMT segment, we have developed a strategic framework for further cooperation with our key partner, the Celnex Group. The agreed long-term cooperation framework will support further improvement in cost efficiency, the expansion of coverage, and the quality of Plus 5G network. Third, content remains one of the pillars of our operations, and we treated investments in this area as a priority. That is why we have extended the rights to the UEFA Europa League and the UEFA Conference League until 2031, ensuring the continuity and attractiveness for our offerings over the long term. We have also established a multidimensional partnership with the zero channel, both in terms of a broad channel distribution and its advertising services. In conclusion, as announced in April, we are continuing the strategic review of assets aimed at optimal capital allocation and further increasing the value of the Group. We plan to announce the Group's long-term strategy by the end of 2026. We will define measurable targets for our strategic business, telecommunications and media. In the green energy and real estate segments, we are reviewing all assets and considering various scenarios in order to select the development path that will deliver the greatest value to the group and its shareholders. And we will also present our approach to financial policy in the medium and long term with particular emphasis of the balance between investments, debt levels, and dividend policy. That is all. Thank you very much. And we are now ready for the Q&A session.

Thank you very much. Surprisingly, I don't have any questions in the Q&A session. So maybe a minute for anyone who would like to post a question.

Anybody?

Okay, in that case, thank you very much for your participation today. And from this spot, I would like to invite you to our conference in August for the first half of 2026. Oh, there we go. One question. From Ali, HSBC. Thank you for taking my questions. Please, can you give us a breakdown of the improvement in green energy and expectations for the rest of the year?

Maybe I'll take this question.

Well, in terms of the expectations for the rest of the year, we have provided in the past conferences a guidance that we expect approximately 400 million EBDA from this segment. and uh as for the moment we don't see a reason you know to uh to change this guidance nevertheless please uh remember that in uh renewable energy uh we have the seasonality which means that we have uh a big uh let's say the the high season for the wind in the first and the fourth quarter while in the second and the third quarter there is a rather low season for that source, which means that everything now depends from the fourth quarter and of course the energy prices, which are still uncertain for the rest of the year.

Thanks, Bartek. And a second question. The commentary in the report suggests that business review will be presented towards the end of the year.

Has this slipped from autumn and can you give us any colour on what drove this?

Well, I believe that on the last presentation we have said that the strategy will be presented by the end of the year and the autumn is like from September to November. So please expect it for sure after the summer time, but we have not specified the date.

Once we'll be ready, we will announce the date.

Thank you very much. I thank you for your questions.

There aren't any more. And I think everybody has had enough time to post any questions they might have had. So again, thank you for your participation and see you during our next conference call in August. Thank you very much.

Thank you very much. Bye.