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.