Orange Polska Sa

Ladies and gentlemen, thank you for standing by. I have a pleasure to welcome you on Orange Polska results conference summarizing full year 2023. At this time, all participant lines are in listen-only mode. The format of the meeting will be a presentation made by the management team, followed by a Q&A session. Let me introduce speakers for today's conference, starting from Ludmila Klimokower, CEO, Jolanta Dudek, Deputy CEO in charge of consumer market, Bożena Leśniewska, Deputy CEO in charge of business market, Jacek Kunicki, CFO, and we also have in the room Witold Droszcz, who is a management board member in charge of strategy and corporate affairs. I hand the floor to Ludmila to begin the presentation.

Good morning and welcome everyone to our conference summarizing the fourth quarter and full year of 2023. And I propose to start with slide five. I have a pleasure to say that 2023 was a very good year for Orange Polska. We delivered on all our annual objectives, growing our financial outputs year on year. Commercial results were the key to growth of our revenues and our profits. We achieved a simultaneous increase in our key customer bases and respective ARPO, and these delivered a lot of value. From a strategic perspective, acquisition of 5G spectrum is an important point for further commercial deployment, and we are very happy that this lengthy process has been finalized. Financial results were strong across the board. We are pleased that the growth of our revenues and BDAL also translated in higher net income and cash generation. While being focused on the current results, we also continue to transform our businesses on many fronts to be ready to meet future challenges. We also remain committed to our ESG objectives where we have done a significant progress. It contributes to lower cost and make our business much more friendly for the environment. Our performance in 2023 proved again that we are on the right track to make the dot-grow strategy a real success and that our business has strong fundamentals. It was a collective effort of all Orange Polska teams and I would like to thank them for this commitment. And let's look now at the financial highlights on the next slide. In 2023, we delivered on all our financial commitments. Revenues increased by almost 4% with all key business lines contributing to this growth. Good top line performance was a key enabler to mitigate the impact of inflation on our cost and allowed us to deliver more than 3% EBITDA growth. And I would like you to note that we are reporting the growth of our operating profitability for the sixth consecutive year. Since 2018, we increased EBITDA more than 20% despite a lot of unexpected challenges and increased costs. Economic CapEx in 2023 was closer to low end of our guidance as we were disciplined on investments and this is a good demonstration of our ability to execute a well-designed plan and turning actions into concrete results. Let's look in more details now on how we have executed our strategy in 2023. Here on slide 10 we show you that in 2023 we have made a real progress on all four pillars of our strategy. Starting with core business, its performance is a key driver for our growth. It was solid both on retail and on wholesale markets. We achieved good revenue growth on the back of higher prices and strong demand for our services and infrastructure. Obtaining new 5G spectrum was obviously a key highlight of last year. It will unlock a lot of new opportunities over the medium and long term. IT and IS had another good year with double-digit revenue growth despite the lower demand of IT services solutions on the market. In terms of our efficiency plan, we are increasingly relying on digitalization and the new possibilities of big data and AI to explore our potential. Firstly, we are developing digital channels, encouraging customers to use them to buy, to upsell, or to pay. And secondly, we are boosting adoption of robots to automate our processes. In the responsibility pillar, we delivered on very ambitious commitments. We increased the share of green energy in our mix to 74%, which enabled significant reduction of CO2 emissions. They were almost 80% lower versus our benchmark level in 2015. We are very proud to have succeeded in our flagship social programs with Orange Foundation. Over the past four years, more than 80,000 Polish teachers, mainly from small towns and villages, boosted their digital skills. This project was an important element of digital transformation of Polish schools being co-financed by European Union. Let's look on the performance in greater detail on slide 9. This success of our strategy lies in the strength of our core business. It consists on three strong engines. Service for consumers, for businesses, and wholesale services for our telecom operators. These engines consistently deliver growth of revenues and direct margins since the launch of our DotGrow plan. They contributed to an 11% increase of direct margin. This is a strong achievement and key success factor behind the growth of our profits. As you can see, in 2023, this growth accelerated versus 2022, which was a vital element for our ability to offset inflation impact on our cost. Thank you for now, and I hand the floor to my colleagues who will tell you more about performance in their respective markets. Jolanta, please.

Good morning. We are on slide 10. This slide illustrates what is essential to our profit generation. This is simultaneous growth of customer bases and ARPU in key telecom services. We are satisfied with our performance in 2023. Convergence customer base increased another 5%, maintaining its level of growth from 2022. Fiber customer base recorded a healthy 15% increase. These results are even more appealing, taking into account intensified competition in these particular areas. As we commented many times, competition has intensified in fixed broadband as there are more retail fibre providers who use infrastructure of different fibre costs. Competition has moved more to local market which require us to be more agile and innovative in our marketing strategies. Good results demonstrate that customers appreciate qualities of our multi-service offers. Our fibre services are available to almost 8 million households. This is more than 50% households in Poland. This means that we already reached high end of the strategic ambition for 2024. What's important is that this consistent expansion of customer bases was accompanied by a good ARPU growth. It was growing in the range of 3-4% in 2023. In addition, in all the services, this pace of growth accelerated versus 2022. So our value initiatives are gradually rolling into our customer base. We pursued our value strategy in 2023, increasing prices in more-for-more formula in fiber and convergence. We will continue this approach in 2024. In January, we adjusted our prices in mobile, again in the more-for-more spirit. Going forward, we want to keep this momentum. Thank you, and I hand the floor to Bożena.

Good morning, everyone. Let's look at page 11. 2023 was a difficult year for business in Poland, but I have the pleasure to say that it was successful for us. Why was it difficult? Economic slowdown, high inflation influenced decisions of our customers and decreased predictability of our business. Why despite that we succeed? It is because we have unique assets. We are able to address needs of our customers in a complex way, offering both connectivity and IT and integration services. In connectivity, we continued our value strategy, both in mobile and fixed broadband, bundling value-added services and data allowance into flexible packages. Mobile revenues grew 6% and revenue from fiber 19% year on year. Growth resulted from both expansion of customer base and growth of ARPO. Please note that since beginning of DotGrowth strategy, mobile ARPO increased by 10%. Last year was also strong for network area where we completed some complex projects merging communication and integration competencies. In ICT, it was for us another year above the market revenue growth. All domains contributed to it, starting from IT infrastructure and services through cybersecurity and finishing with software and application. We benefited from the ongoing process of digitization, cloudification, and automation of companies. Last year, we continued also dynamic development of our solutions based on Internet of Things. Our city management platform was appreciated by more than 100 cities who used our intelligent metering and monitoring platform for light water transport management. All this improves quality of life and brings tangible savings for the customers. Looking into 2024, we will finally be able to more intensively monetize 5G. We have ambitious plans regarding mobile private networks that we will implement for industrial customers, municipalities, and universities. We are also excited about prospects regarding unblocking EU funds, which will stimulate business activity and also our project pipeline. Thank you, and I hand the floor back to Lyudmila.

Let's look at slide 12 and speak about digital. Digital is one of the key enablers for us to increase further our efficiency and productivity. And here I would emphasize two main directions. First one is development of digital channels for interactions with our customers. Digital channels carry less costs for us to acquire customers. At the same time, we are able to respond better and faster to their needs. Sales through digital channels grow systematically and in 2023 constitute 20% of commercial acts and we have a very ambitious plan to grow it further in 2024. The key driver for digitalization of customer interactions is our application. We constantly develop it to make it more attractive and more useful for our customers. Over the past two years, 50% more customers use My Orange application. And looking on channel mix, the highest share of digital channels is mainly at the expense of telesales and accordingly number of customer calls to our info lines is systematically decreasing every year, improving our efficiency. So the second direction is our internal efficiency. And activities here embrace many areas, and I would mention just two. Firstly, to be better in marketing, we are deploying machine learning and AI models to help us to manage customer interactions. This gives us better personalization of contracts and offers and as a result it will translate into more services sold, increase customer loyalty and more revenues. And results achieved so far during first two years of this program are really promising. Secondly, we are massively adopting robots across the company. We doubled the number of them in 2023 as we launched a robotization program using low-code technology. It allows us to save cost and to relocate our human resources from repetitive jobs to more creative tasks. And on the next slide, let me reiterate again why we are happy being able to use now 5G C-band spectrum. Why it is so important for us? As you can see on the upper left chart, this new 100 MHz block almost doubled our total spectrum resources. Firstly, more spectrum means more capacity to carry ever-growing data traffic, which means higher CapEx efficiency for us. And secondly, more spectrum means also that we will be able to offer higher data packages to our customers, which will provide support for our commercial strategy. Thirdly, 5G with its capabilities, speed, latency, slicing, will constitute a basis for new business opportunities, which will gradually reveal over the number of years. For example, mobile private networks, where we have an ambition to be a leader in Poland, as Bożena just mentioned. Network rollout is obviously our key focus now. As we speak, already more than 1,000 sites are available for our customers operating on this spectrum. And over the next three years, we will invest around one billion zloty for both 5G rollout and our radio access network renewal project. This is in line with assumptions which we have presented for our dot-growth strategy. And now I hand the floor to Jacek for financial review.

Thank you, Ludmila. Good morning, everyone. Let's start the financial summary on slide 15. Our financial results last year were strong across the board as we delivered on all of our annual objectives. We increased our revenues, profits, and cash generation. The top-line growth was supported by all major revenue lines, including the core telecom services, which are key to our margins. We maintained a high operating leverage and converted higher revenues to profits. Hence, our EBITDA increased by 3.3% despite inflationary pressures. We exercised an adequate discipline in CAPEX and translated the growing EBITDA into a double-digit increase of the net income and the organic cash flow. The OCF has reached its highest level in over a decade, surpassing the landmark 1 billion Zloty value. The expanding profitability and good capital allocation have further improved our return on capital employed, a KPI that we focus to create value for shareholders. It increased to 7.6% and we continue in our efforts to further grow this key metric of our capital efficiency. Let's now review our results in more detail, starting with the top line. Our revenues increased by over 3% in Q4, rebounding from a temporary slowdown in Q3. The key reason is the return to growth of IT and IS revenues, which after a deceleration in the third quarter, have rebounded in the last quarter of the year, benefiting from more integration projects. Revenues from co-telecom services grew at a solid pace of low to mid single-digit percentage. It's driven by a simultaneous expansion of our key customer bases and their respective ARPUs, which we discussed a lot today. Our core services have good fundamentals as we systematically execute our value strategy. Growth of the core telecom services was complemented by the expanding top line from equipment sales and also from our wholesale activities. Increasing revenues were the main driver of our profitability. And now let's take a look at the latter on the next slide. The EBITDA grew by over 2% in Q4, enabling us to reach a 3.3% growth in the full year. It was a very good quality growth, stemming from an expanding direct margin. It grew by over 3% year-over-year in the last quarter of the year and over 4% in the entire year thanks to higher revenues and good profitability of our services. The indirect costs have increased versus last year under the pressure of inflation. It was partly mitigated by cost transformation, which included process digitalization as well as further headcount reduction. This helped us to contain the growth of costs during the critical time of high inflation. As we now see inflation progressively slowing down, we are confident that our high operating leverage will continue to be our asset in the further growth of our profitability. The structure of EBITDA growth, relying on direct margin, demonstrates the sustainability of this growth going forward. Improving operating profits enabled us to grow the net results. Let's review this on slide 18. We achieved over 800 million of net income in 2023, as it grew by 13%. There were three key elements to this achievement. First, the EBITDA growth that we have just analysed. Second, our discipline in CAPEX resulted in lower depreciation, while we made gains on sale of properties that we no longer use and require. Finally, our net income costs were lower year over year. This was helped by our low debt, and also by the foreign exchange gains on some of the Euro-denominated long-term lease contracts. Please also note that Q4 net income included a 125 million zloty provision relating to a new social plan for the years 2024-2025. And now let's switch to CAPEX over on page 19. Our economic capex for 2023 amounted to just over 1.5 billion zloty and came towards the low end of our guidance. Its level was particularly low this year due to two main reasons. First, as the spectrum auction was only concluded in Q4, the capex for 5G network rollout was below the run rate that we will now see in 2024-25. Secondly, we recorded strong sales of properties that we no longer use. We generated almost 230 million zloty of proceeds, the most since 2019. As Ludmila mentioned, buying the 5G spectrum opened up a new investment chapter for us and we will now spend more focusing on the rollout of our 5G networks in the coming years. At the same time, though we mainly grow our fibre footprint through the Fibre Code JV, we will also incur some capex for the rollout of fibre as part of the EU recovery fund contests. Finally, over to cash flow and balance sheet situation on page 20. We're very happy to report almost 1.2 billion zloty of organic cash flows in 2023, the highest level in decades. Our cash generation was a result of three main drivers. First, the growth of EBITDA. Secondly, decrease in working capital requirements, as we contained the growth of accounts receivable from handset sales through an enlarged factoring facility. Third, this was partly offset by higher cash capex, most of which related for the capex of 2022, which was paid in 2023. In result, our balance sheet remains very sound. Our financial leverage stands at 1.1 times EBITDA or 1.2 times if we include the full payment for the 5G spectrum and the last $300 million was paid in early January. Finally, let's do a quick check-up of how we stand against our financial ambitions after three years of executing the dot growth strategy on the next slide. Since its launch, our growth strategy is about increasing our revenues and translating this growth through high operating leverage into a low to mid-single-digit increase of the EBITDA. Next, by keeping a stable capex, we plan to boost cash generation and the return on capital employed. The results of the last three years show that we have done exactly as we have committed. Revenues and EBITDA growth is at the high end of the guidance. Our capex spending is at the low end of expectations. Finally, we have increased the return on capital employed five times and preserved a very sound balance sheet. In addition, as you've seen today, we have significantly improved our cash generation. In short, after three out of four years of the growth, we are on the right track to deliver all of our mid-term financial commitments. Obviously, we now focus on execution in the last remaining year of the strategy. as this is key for its finalization. Thank you for your attention, and I hand back the floor to Ludmila for the outlook and conclusions.

Thank you, Jacek. Talking about 2024 priorities, indeed, this year is the final year of implementation of our DotGrowth strategy, and we will focus on execution of the well-proven commercial strategy. Here, we will pursue further our value strategy and capitalize on strong customer demand, especially in fiber. Wholesale will continue to be developed, monetizing our infrastructure. We will accelerate the rollout of 5G so that our customers could benefit from super-fast internet on the move and on-site. While commercial developments is at the very heart of DotGrow, we will absolutely not forget about our costs. We will continue to transform and make efficiency gains using new opportunities stemming from digitalization. And finally, we will continue to be committed to our ESG agenda and will push further with the cultural transformation of Orange Polska. Let's now turn the page to see how our strategic agenda translates in financial targets. Our objectives for 2024 are not surprising, as we target to reach all of their dot-grow objectives. We target to grow our top line, benefiting from the solid demand for our services and our ability to implement the value strategy. Within the revenues, performance of the core telecom services will be critical, as they bring us the most in terms of margin. Next, we will turn the revenue growth into high EBITDA, keeping a right grip on fixed costs and mitigating the inflationary impact. Finally, we will invest between 1.7 and 1.9 billion zloty in the capital expenditures, which will include the full pace of 5G rollout and the modernization of the mobile access network. Our financial plan for 2024 is fully consistent with the dot-grow strategy, designed to boost the return on capital employed and grow shareholder value. And obviously the dividend is a key element for shareholders, so let's turn to this final element of our presentation. As we presented to you today, we are on track within our strategy execution. We delivered on all our annual objectives and I am pleased that we are now in a position to share benefits of this growth with our shareholders. And in line with our policy, we recommend to the general meeting of shareholders a payment of 48 grosche per share cash dividend in 2024 for 2023 profits. This is the second consecutive increase of the dividend after we reinstated it back in 2022. And it reflects the confidence that we as a management team have in long-term prospects of Orange Polska. This concludes our presentation and we are now ready to take your questions.

Thank you. We will now be moving into the Q&A session. If you are dialed in by the phone and would like to ask a question, please press star 2 on your keypad and wait for your name to be called. You may also ask a text question using the web platform. So once again, if you would like to ask a question, please press star 2 on the keypad and press the question button or press the question button on the web platform. We have the first question coming from the line of Dawid Grzynski from PKLBP. Dawid, your line is open, please go ahead. Hello, thank you for the presentation and congratulations on your result.

I have three questions actually. First one, if you can provide and the guidance for organic pre-cash flow in 2024. My reasoning is that the level you achieved last year would be impossible to be repeated, but if you can comment on the direction or potential scale of the reduction, as you can see. This is the first one. The second one is I have seen that ARPU growth, the dynamic in post-paid mobile business decreased from over 3% year-on-year in previous quarters to 2.2%. right now so is there any specific reason behind that drop or if you can give more color in this area and the third question is about capex in a little bit longer perspective could you provide some initial clue about like capex after the rollout, like when you finish the rollout of 5G network, so after 2026, do you think it may drop from the current level or you already see some attractive investment projects that may fill in this gap? So that's three questions from my side, I think, in advance.

Thank you very much for your questions. Maybe I will take one in three and we can share the mobile voice. I think on the organic cash flow, Obviously, the 2023 result was extremely strong. We achieved the highest level in 10 years. Some of the drivers of this growth are sustainable. Some of them are not sustainable by nature. So if we analyze them to try and digest what is driving the organic cash flow first, what is important is that we keep on growing our EBDA And this is delivering more and more cash from operating activities. And this is something which is sustainable for the future. We're happy with the structure of EBDA growth. We're confident in our ability to work and to make sure that the EBDA that we generate year after year is becoming higher. And this will definitely give a boost to the organic cash flow. And then for 2023 cash flow specifically, you need to see the balance of two items. One is that the cash capex was quite high as we had a lot of payments that happened in 2023 relating to a peak of capex in 2022. The 2022 capex really peaked in the last quarter, so vast portion of the payments were made in 2023. This is, I would say, a negative factor that influenced 2023. On the other hand, we did have well, first, good growth of real estate, proceeds from real estate, and secondly, the increase of the factoring program that enabled us to reduce working capital. The working capital actions, this is definitely something which is not sustainable at this scale, and it needs to be viewed together with the... The downside pressure that we had on the cash capex, but I think both of these are non-recurrent in nature. When it comes to real estate sales, I am confident that we will continue to sell a lot of real estate that we no longer require, but it's not something which is very predictable from one year to another. And I think the 2023 level is already very challenging to be repeated. So, yes, it is a very challenging number. 2023 organic cash flow. I think we're very happy that this surpassed the 1 billion Zloty landmark. Over the long term, we will see organic cash flow continuing to grow, but there is a reason why we don't guide for it also because it fluctuates from one year or another. So I will not be very specific regarding the OCF that we expect in 2024. I think you need to have your own assumptions as to how much boost was given from the working capital and how is this reflected possibly in 2024. Regarding CapEx, so 2023 had a particularly low level of CapEx. as we were no longer investing heavy amounts in fiber and we did not yet reach the peak spendings for the 5G spectrum and for some of the capacity and run renewal projects that we have on the outlook. That's why 2024 guidance is a notch higher and this is clear. We can expect CAPEX to be under the influence of 5G rollouts still in 2025, in 2026, because this is where this rollout will take place. I think we mentioned before that when it comes to the 5G rollout, we have spent around 700 million already. There is about 1.1 billion to be spent going forward within those three years. So we can expect capex to be rather higher than in 2023. To be more specific, definitely we will address this question next year when we present the new strategy, as this will then include all the elements that we might want to take into account for CAPEX, so I will not be that much more talkative today. I think that the changing element is 5G for the short term.

And on a question on mobile ARPU, I must say that we are happy with the dynamic of ARPU growth. Value strategy is working and it is consistent, even if the dynamic between quarters can be different. There are two main reasons for the slowdown of the trend in last quarter and Q4. First is slowdown of growth in roaming. It was going at a lower pace in last quarter. And this is, you need to look on it comparing to trends in the first part of the year. where recovery of roaming was much higher because it was still recovery post the post pandemic and accordingly in the last quarter we are comparing already to significantly higher base in you know comparable basis for the second part of the year And also you should note that lower revenues for roaming also were accompanied by lower costs. So we have a quite good performance on this business line in EBITDA. And secondly, high comparable basis again of previous year was due to the fact that price hikes in B2B in 2022 were effective in the last quarter in Q4 2022. So comparable basis for now is much higher. And as we have commented, we are committed to continue our values strategy, which is the main driver for growth of our commercial engines and in January we have done another price hike for our consumer offers.

Thank you. Our next question will be coming from the line of Dominik Niszt from Trigon. Dominik, your line is open. Please go ahead with your question.

Thank you. Good morning, Dominik Niszt, Trigon. So two questions from me. One maybe follow up on this ARPU question. So you now have around 3%, maybe 2% growth despite much higher tariff hikes. So I understand that it is also influenced by the migration of customers to cheaper subscription plans like new mobile, orange flags instead of orange brands. I mean, this B2C segment, maybe some high ARPU customers migrate to the convergent offer. So do you think that this change of structure of your clients will subside in 2024 or stop and we will see greater impact of price list increases on our pool in 2025-26. Is it realistic to assume growth exceeds 5% in the medium term and now we see a bottom here?

As was mentioned, we are very satisfied with the growth of ARPU in B2C, 3-4% achieved in 2023. And we will be pleased to keep going with this pace. So we do not observe migration of our base from postpaid mobile to postpaid subscription like new. and flex, the trend is the same like previous year, means 2022. Those two offers noticed increase of customers in their base, but this is not migration from the poor postpaid. We addressed by those two offers with subscription like Flex, we addressed the specific segment of very digitalized customers and with New, New is very appreciated brand and has its segment, its customer who slowly but very, very systematically the base is growing. We will continue our, as I said, we will continue our approach for more, for more strategy for mobile voice, so I'm convinced that the piece of increase of ARPU this year will be, I hope, similar or even better than in 2023.

Okay, so it was not a migration, but nevertheless, change in structure took place, right? So more of those cheaper brands, good customers, okay. So this should subside. Thank you. And the second question on your dividends and not only this year, but what's your considerations regarding next year's? So you still have a cash-in in terms of net debt to EBITDA. When thinking about dividend, it's 1.2, assuming this spectrum payment. However, you still have an option to acquire 1% in joint venture, which currently has around 1.5 billion net debt, and it's growing by 700 million last year, I guess. So in three years it will be probably much higher amount of debt there. So are you considering this extra debt when making decisions about dividend payments this year and in 2025? And is it highly probable that you exercise that option? I understand economically it's only half of this debt that We can attribute to you, but if you consolidate JVID and all that will be on your balance sheet. So the ratio that the JVID may change strongly. So the question is whether you consider this scenario currently. Thank you.

Thank you. So if I will take this, it's worth to say we're really happy that we're in the position to increase the dividend again. As you remember, we reinstated the dividend in 2022 paying 25 gros per share. We increased it by 10 gros in 2023. And now this year, looking at good performance, good prospects, we decided to make this increase a bit faster, a bit steeper. So this is where, you know, 48 grosch comes from. It is almost a 40% increase versus the figure last year, 37% increase versus the figure last year, almost 90% increase. versus the initial figure. And it does represent basically a full payout of the free cash flow. Basically, if you take our organic cash flow and you subtract whatever we paid for the license, including this 300 million that we paid early January, we've basically distributed the entire free cash flow. I have the trust that the AGM will accept this proposal. As you remember, our thinking has always been to make the dividend fully sustainable. First of all, we've already indicated that 48 gros is the floor to be paid in 2025 for the 2024 result. That's one measure of sustainability. And then, if you remember, we've always said that when thinking about dividends, we're looking at the long-term prospects for the operating profitability, cash generation, and also the longer-term prospects for leverage. So we don't only look at the leverage that we have right now, the 1.2 times, We look at the possible actions that we may or may not want to take in the next years. And here we come to the question that you asked about leverage. So it's good to have the sound business balance sheet in business case. This gives us the flexibility should we want to and should there be an opportunity to engage in any value-creative non-organic activity. Obviously, when we're thinking three or four years ahead, we keep somewhere in the back of our minds the possibility to re-consolidate the Fiber Core. As you have mentioned, right now the debt level is already material and it will increase. I think we've mentioned that this is a 3 billion zloty full depth facility which was set up at the inception of the Fibrecom. So this is something which if we were to decide to exercise it, and I will not comment on the probability today because this is a decision that we will be able to take between 2027 to 2029, we need to have the adequate flexibility to be actually in the position to consider this decision. So yes, it is always on our minds to be in a position to have the flexibility to make inorganic moves that would create value for Orange Polska in the long term. I hope that answers your question.

Yes, so can you maybe just remind us, you still have investment plans in JV for the next around two, three years, right, of this high-level spending, and then it should drop significantly, because when we take like half of this cash flow in JV and attributes to your organic cash flow, your dividend this year would be already higher than your cash flow, right? So can you just... Comment on this medium-term prospects, just a reminder.

I think for the FiberCo, yes, the investment horizon of the FiberCo is until the end of 2025 with some, you know, there is a possibility, of course, of some investments being slightly delayed, but today it's until the end of 2025. And if you're asking about our prospects and thinking about the dividend going forward, of course we will address it in the next strategy on which we will be working on this year. So we should come back and present a new strategy early next year and inevitably this will address the question of capital allocation and also dividends for shareholders.

Thank you very much.

Thank you very much.

Our next question will be coming from the line of Rohit Modi from CT. Rohit, your line is open. Please ask your questions slowly, if you can, please.

Thank you for taking my question. Most of them have already been answered. Just two from my side. First on the guidance, the revenue guidance of low single digit looks like slightly conservative compared to you had decent growth last year. And given what you said around B2C and ARPU growth, which looks like you have a better revenue, better ARPU growth there. What's driving this lower revenue growth guidance this year? What are the key factors? Are you seeing more demand or is it just the competition or any other factors? Second, if you can please give any color around Fiberco in terms of what is the take-up you're seeing, take-up rate you're seeing at the Fiberco, what percentage of your current net ads coming from Fiberco footprint and what percentage coming from your own footprints? Thank you.

Okay, so starting with the revenue guidance, I think you will see us being quite confident on our ability to continue to deliver this low to mid single digits growth of revenues coming from core telecom services. I think this is very important. It is something which is the main driver of the direct margin that we generate and therefore the profitability that we are able to ultimately enjoy. When it comes to other revenue lines, you will see trends which are a bit less predictable or they are under different pressures. We do have considerable amount of revenues coming from energy trading activity. You will have seen energy prices fluctuating strongly. You see that energy prices are down year over year when we compare even January to January of last year. And this is not a revenue line which will continue to have the type of dynamics that we have been observing. On the equipment front, the equipment was strongly supported. by growth both coming from the structure of handset but also from the value strategy within the handset that we have been selling last year and it's going to be quite difficult to repeat the same type of dynamics in the full year of 2024, hence the low single digit. I think if we go back a year, we were much less confident about revenue growth when we were guiding for 2023. If I remember correctly, this was flat to low single digits, which we then have upgraded. It is something on which I don't see a change of trend, not on the key revenue drivers. It's rather the equipment or energy and other, I would say, non-core telco revenue drivers that are a bit less difficult to be predicted for this. In terms of the Fiber Co., I think it's fair to say they have a footprint now of 1.7 million households within reach, they have just about 440,000 customers, so this is an entity which is progressing. Obviously right now the main focus is to build on time, add budget in the geographies that we want to build into achieve, reach a network that will be an attractive investment for us and a big opportunity to grow our retail presence and make our share of the wholesale profits that this entity will generate.

Thank you so much.

Thank you. We received two questions via web platform. The first question from Jakub Wiskardi from Bosch has already been addressed. I believe this is a question on the moving parts regarding dividend and the leverage, so it's very similar to the question that Dominik asked, so I will skip this question. Another question from Piotr Raciborski from Wooden Co. What level of 5G rollout related CAPEX do you expect to record in 2024 and 2025? That's the first question. And the second question, do you see room for further mobile and fixed broadband prices growth? When do you expect to increase prices again?

I can start and very quickly answer on the second part of the question. Of course, we will not give any insights on our commercial decisions. You will see it when it will be implemented on the market. And I can just reiterate that we are committed to pursue our value strategy. And Jacek, you want to take the question on CapEx?

I think on the pricing moves, we anticipated the question, so we actually increased prices in general.

Yes, to please the audience today.

Yes, it is continued. And on a serious note, 5G, we did mention. We've spent, you know, if we take 5G and run renewal together, because this is how we look at this program, We've spent around 700 million zloty on this to date. It's to roll out 5G and to renew the access network for the mobile. We have another, let's say, 1.1 billion zloty to be spent And this will be predominantly spent in 2024-2025 with some capex probably being still left to be finalized in 2026. So 1.1 billion zloty. Of course, the exact amounts will really depend on many factors, but you could imagine greater parts of this in 2024-2025.

It appears we have no further questions, so thank you very much for your attention, for watching us. If you have any follow-up questions, please do not hesitate to contact us. Otherwise, see you again on the conference summarizing Q1 results in April. Thank you and goodbye, have a good day.

Thank you very much.

Thank you.