Orange Polska Sa

Good morning. Thank you for standing by. Let me welcome you to Orange Polska conference call in which we will summarize our results in the second quarter and the first half of 2026. My name is Leszek Iwaszko and I'm in charge of investor relations. The format of the call will be a presentation made by management team followed by a Q&A session. Speakers for today will be CEO of Orange Polska, Ludmila Klimok and Jacek Kunicki, CFO. Let me now pass the floor to Ludmila to begin the presentation.

Thank you, Leszek. Good morning and welcome to our conference summarizing second quarter of 2026. And let's start on slide four. I am very pleased to share with you on our progress for first six months of the year. within this time we were focused on our priorities set in lead the future strategy pursuing brave commercial agenda investing in our network and implementing transformation initiatives for our operations and it all starts with profitable growth which was excellent across all our business lines Firstly, in core telecom services, we successfully combined healthy pace of growth of customer basis and improving our port dynamics. And I am very happy that Orange Polska was the leader in mobile number portability for the second consecutive quarter, with net gain for Q2 of 20,000 customers. Secondly, it was a particularly good quarter for B2B. Revenues in IT and IS increased by as much as 50% in second quarter thanks to an accumulation of contracts won. In addition, we signed the first major contract for the defense area which we see as a significant milestone for future developments. And finally wholesale sustained very strong momentum, growing revenues by double digits despite lack of national roaming contract which expired last year. These strong commercial achievements were combined with progress in our transformation program as we strive towards high efficiency and it is visible through indirect costs which were flat if we compare year over year and all that is translated into strong financial results in H1 revenue growth exceeded 7% and EBITDA growth exceeded 6% and as a consequence of strong first half of the year. We are confident in the right execution of our strategy and we are more optimistic regarding our future prospects. Let's review these achievements in more details and I will start with commercial activity on next slide. So our commercial performance in Q2 was successful both in volume and value. These trends are key to today's value creation, but also give us confidence for quarters to come. And starting with mobile, where results were particularly excellent, net customer additions exceeded 80,000. and as I have mentioned already, we were again the winner of number portability with a big advantage. This demonstrates the strength of our multi-brand strategy and also confirms that customers continue to value the quality and our always-on connectivity. For the mobile ARPO growth improved exceeding 2% as we monetize our value strategy. It was driven by acceleration in the main brand on consumer market and an improvement in B2B. And as a result, we have reached a well-balanced volume value growth in mobile which was not that evident in the previous quarters. Moving on to fiber, customer base increased 10% year on year. Net customer additions were similar to a year ago and we see it as a very strong achievement despite fierce competition which we see in these areas. In second quarter, we increased our footprint for high-speed broadband by 900,000 households in hybrid fiber co-ops, HFC technology, of getting access to one of the wholesaler's networks. Over the time, these footprints will be further increasing and will be gradually upgraded to FCTH standard. And this new infrastructure creates a new fishing pool for us for growth in our very high broadband services. Strong mobile and fiber were accompanied by further growth growth in convergence with the pace of growth in line with lead with future strategy convergence remains key to value creation on consumer market it already penetrates our customer base in a very high proportion and that's why we are focusing on reaching new households not yet using our services with fiber or mobile services and we are quite successful with that in the first half of 2026 the number of households where Orange is present with our services was growing offering promising prospects for the future and strong results of core telecom services were accompanied by strong performance in B2B and wholesale and I would like to zoom in on it on next slide, slide six. So common feature of these two business lines is that their revenues include both recurrent streams and the boosts from particular big deals. And if we want to achieve strong growth, we need both of these streams. And we see it well reflected in results of the second quarter. Starting with the business market, if you remember our priorities for 2026 that we were presenting in February, one of them was to achieve profitable growth in B2B. And I am pleased to confirm that this is clearly happening. It is driven by constantly improving trend in telco services and the accumulation of contracts won in ITNS. And additionally we have signed a first major contract in the defense sector and I hope that this will open new market opportunities for value creation. I'm switching to wholesale. it sustained great momentum in H1 with particularly high 17% growth revenue growth in Q2 and this is despite the absence of revenue from national roaming contract it was driven by consistent growth in wholesale fiber access and big deals in infrastructure rentals This should remind us that wholesale is our strategic line of business, complementing our retail operations and balancing our risk profile. And now we have discussed all three business lines which build growth of our revenues and margin. And the missing element for EBITDA is cost transformation. and I invite you to look on next slide, on slide seven. Under the Lead the Future, we have launched a new wave of transformation focused on improving efficiency, expanding margins, and strengthening our cash generation. It covers all areas of our business, and you can see the pie chart on the slide illustrating it. Its key levers are automation, processes re-engineering, and opportunities from integrating AI in our operations. And the key measure of its overall progress is the evolution of indirect cost, indirect so it is not directly linked to revenues and our aim to keep these costs flat despite growing business and despite growing investments in our networks. This enables high operating leverage and as a result allows us to to floor our revenues in EBITDA and consequently into the cash. And we are very pleased that this transformation is progressing well and that underlying indirect costs were flat year over year if we look on first six months of this year. Now you have seen that strong H1 results were a combination of strong commercial execution and also a solid progress in our cost transformation. It allows us to be more optimistic regarding the future. And just to illustrate it on the next slide, as a consequence, we are raising our full year guidance in most areas so for revenues for EBITDA and for organic cash flow following the exceptional revenue growth to date we now expect full year revenues to grow by low to mid single digit in percentage this will translate into EBITDA that we expect to grow at above 6%, so an important improvement versus our initial estimate. We have decided to guide above 6% as the perfect execution in the second part of the year could see us landing above this level. And finally, we are raising operating OSPF cash guidance to at least 1.2 billion zloty this means that we plan it to grow by more than 20% in 2026 this guidance is underlining our determination to grow our financial outputs and to create values for our shareholders. This is all for me as for now and I hand over the floor to Jacek to walk you through the details of our financial results.

Thank you, Ludmila. Good morning, everyone. Let's start the financial review on slide 10 with the highlights of our performance I am very pleased with our financial results in Q2. We have increased our revenues, profits and cash generation. Revenues were up by 12% year-on-year. A solid, consistent development of core telecom services was coupled with exceptional growth of revenues from IT and IS. High top line was coupled with cost savings. and in turn, this drove the 3% EBDA growth in the second quarter. This is a strong achievement, especially as we note that the second quarter of 2025 included a 75 million zloty positive one-off from the rollout agreement, so the comparable base was very high. Solid revenue and EBDA in Q2 enabled us to achieve excellent results for the first semester with 7.5% revenue uplift and a 6% growth of the EBDA. High operating results were coupled with CAPEX discipline and as a result we have significantly increased our net income by 24% year-on-year and our organic cash flow by 43% year-over-year

both viewed for the first semester.

These are very strong results based on solid underlying trends. They give us an increased level of confidence for the future as evidenced by the guidance uplift described by Ljubljana. Let's now look into the sources of these achievements starting with Topline on the next slide. due to revenues grew by 12% EUR an exceptionally steep dynamic this combined a solid consistent performance of core telecom services and a very strong growth of the less recurrent areas such as IT and IS and wholesale revenues from core telecom services increased by 5% EUR similarly to The first quarter reflected a strong, about 6% growth of all post-paid service revenues and a natural slowdown in prepaid following its steep growth in 2025. Consistent development of core telecom service revenues is fuelled by the rock-solid growth of their customer bases on ARPUs. Good growth of core telecom revenues was coupled with an exceptional 50% increase of revenues from IT and IS. This quarter we benefited from a big accumulation of contracts for digital transformation and IT infrastructure upgrades. This demonstrates that market conditions are improving and that we are able to grab those opportunities due to our large portfolio of competences and relevant experience. We continue to observe a solid pipeline of projects for H2. However, we note that the Q2 dynamic was exceptional and we expect less spectacular growth in the second semester from ICNIS reviews. Top line, also benefited from a very solid growth of wholesale, which was fueled by infrastructure contracts and IoT equipment sales in the D3. To sum up, Q2 revenue dynamics was exceptionally high. As consistent, solid performance of core telecom service revenues was coupled with extra growth from big contracts. Revenue achievements in H1 lead us to increase the full-year guidance, even if we expect a slightly slower but single-digit growth in the second semester. Let's now look at how we turned these higher revenues into profitability on slide 12. Our Q2 EBDA has increased by 3% year-on-year. We're very pleased with this result. Specialist last year's EBDA included the large one-off from the fiber rollout agreement for our fiber cost that I already mentioned. This shows that the underlying growth of Q2 was indeed very strong. It was driven both by an accelerated growth of the direct margin fueled by revenues and by solid benefits of our cost transformation. The direct margin increased by more than 6%, an outstanding dynamic that followed strong revenue growth across all business lines. It mainly reflected the growth of the high margin areas such as core telecom services and wholesale, but it also benefited from the exceptionally high IT and IS sales. last item carries much lower margins versus Cold Telco but still delivers a direct margin rate in the area of close to 20% and an EBDA contribution close to the 10-12% mark our indirect costs were flat apart from the impact of the already mentioned fiber rollouts one of last year. We benefited from the cost transformation program and made efficiency gains in network operations, employment and property maintenance costs. As a result, we preserved a high operating leverage and we are able to convert revenue growth into higher EBITDA. This result enabled us to reach over 6% EBDA growth for the first semester. And, as you have seen, we expect this dynamic to hold or even accelerate in H2. With this, Orange Polska will reach its highest EBDA growth rate in many years. Now let's look at net income on the next page. Our net result amounted to 580 million zlotys in H1, growing by 24% year-over-year. There were two drivers of this increase. Firstly, the strong EBITDA growth discussed a moment ago. Secondly, high gain on asset disposals as we executed large real estate transactions, selling properties that we no longer need as we transform our operations. These was partly offset by higher depreciation linked to the 5G license that we've acquired last year and a change in capex structure evolving into assets with shorter useful lifetimes such as IT software H1 results puts us on a solid path for a significant growth of net income for the full year and now let's switch to capex on page economic capex amounted to 725 million zloty in H1 so 9% down year to year the difference resulted entirely from the 100 million zloty higher proceeds from real estate disposal due to the very good result achieved this year capex spending was on a comparable level to last year in line with strategic priorities We allocated almost 40% of capital expenses to access networks. In fixed, this is mainly fiber rollout in wide zones, a project that will be completed before year-end. In mobile, we are deploying the 5G network, now reaching almost 90% of population and finalizing the renewal of our radio access network. another 30% of CapEx is dedicated to core and fixed networks as we are expanding the capacity of our networks to deal with the growing traffic. Finally, we've spent just over 30% on IT with focus on projects to support process efficiency through digitalization, both on the front desk and in the technical and support areas. Finally, A quick look at the cash flow on page 15. We generated close to half a billion zloty of organic cash flows in H1. This was 150 million or 43% more than in H1 of last year. It was driven predominantly by the strong growth of the EBDA coupled with higher cash from real estate disposal. We also benefited from less cash capex with lower payment for prior year's investments than in H1 of 2025. However, this was offset by a higher need for working capital as a result of the great revenue growth in IT and IS, equipment, but also in the core telecom services area in H1 of this year. As a takeaway, we're happy with cash generation in H1. We also expect a solid H2, and we are eyeing the above 1.2 billion of organic cash flow for the full year. This is all from me for now, and I hand the floor back to Miwa. Thank you.

Thank you, Jacek. So summarizing, just illustrating the bullet points which you see on slide 17. Our commercial and financial results in second quarter and first part of the year were strong. They not only give us confidence to upgrade full year guidance but also constitutes a great platform for growth in the future and in the same time demonstrates that discipline execution of lead the future strategy is bringing desired results. This gives us even stronger determination to execute on commercial actions in the upcoming peak season and to focus on new transformation initiatives, but also to take more mid-term perspectives and to launch new actions that will fuel our growth in the years to come. This is all for us, and now we are ready to take your questions.

Thank you. Reaching now to Q&A session, let me read the instructions first. First, if you are dialed in via the phone and you 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 website window. So, again, to ask a question, press star 2 on the keypad or press the question button on the platform. We are... usually prioritizing questions from voice questions the first question is coming from the line of Dominik from Trigon Dominik your line is open you may ask your question thank you from Trigon I would like to ask two questions so first is on wholesale revenues

in the second quarter, it's up by 34 million. So I was wondering, should we do this temporary or do we expect this infrastructure projects to be more like a recurring contributor or it's just a fluctuations from quarter to quarter? So this was exceptional quarter. And what was the scale maybe if this was kind of not recurring?

thank you for your question Dominic so when you take a look at wholesale obviously it is you know driven both by the recurrent streams of revenues such as rentals of our infrastructure on a subscription basis or sale of BSA excesses for the wholesale customers. And this is very often then fluctuating as we have additional impacts of large projects. So wholesale is, I would say it has a base that is recurrent, but then it's fueled by non-recurrent projects. so yes we did see Q2 impacted by over 20 million of non-recurrent projects but what I would really emphasize is that we first of all have grown year over year despite losing the revenues from national roaming so that is that was about an 11 million negative impact and is 11 in Q1 and 11 in Q2 we've had to offset this and then what I would mention is we are already heavily working on additional projects to come in the second semester that you know, if we are able to execute them properly will also give us quite nice upside and enable us to continue to grow revenues in H2. So it's not that we've run out of kind of projects, it's that wholesale is a lot about non-recurrent projects and we are working and developing those projects and we're quite confident that wholesale

will continue to deliver quite nice revenue growth okay that's clear and optimistic so thank you and one more question on data centers so with this AI and data center investments like accelerating globally but also across Europe does Orange Polska see opportunities to partnerships or some kind is on a higher scale in this area. We've heard about the cooperation with Morrison in France by your parent company just yesterday. So is this the path you are looking for as well?

Another relevant question. What I would say is that today we have a meaningful data center business already as we are providing co-location for our business customers and then obviously on top of that a number of services starting with connectivity, security, remote maintenance, energy guarantee and so on. The usual package for data centers. These are not AI driven data centers. So they are with a low energy intensity. And usually they are located next to the data centers that we have for the purposes of Orange Polska. So for our internal needs. And this represents on an incremental level an attractive business model because we are using the space that has already been developed for Orange Polska purposes we do not envisage today you know huge projects such of the scale as you have mentioned and targeting the the AI boom, but would rather be continuing to look for ways to serve our business customers with this low intensity data center services. And here, obviously, we are not close to needing to own data centers, we can just as well rely on trusted partners, reliable partners, such as we do with Fiverr, where not only do we have Światłowice Uniwersytet, which is co-owned and not entirely owned, but also please note that a significant part of our coverage relies on hold-by tactics. for Pure Data Center connectivity, I would say we are open for all forms of gaining access to infrastructure to serve our customers. While obviously our unique advantage is to be able to provide the value added services on top of the basic colocation services that are usually offered by the Pure Data Centers. Thank you. Thank you.

Thanks, Dominic. Next voice question will be coming from the line of Ali Naqui from HSBC. Ali, your line is open.

Hi. Thank you for taking the question. I hope you can hear me. Can I just get your view on capitalization for non-Pelco M&A, such as real estate, if there was a chance to steal some of the available in the event.

I'm sorry, Ali, could you read your question slowly? We have quite a poor line from you, so we have a hard time to get your question.

Great. First one is your policy on non-Telco M&A, for example, in real estate. If you have anything to say on that. And then in terms of your uplift in guidance for 2026, are there any scenarios or is there any update to give you on your medium-term guidance, whether you could raise that as well?

Thank you very much for your question. So I will start with the M&A. Yeah, we're very consistent. we would not be open to venture far out away from the telco side the two areas of MNAs that we are open to and historically have been open to is on the one side the potential increase of our competences in the ICT area where we've done a number of MNAs historically and where obviously we need to be relatively selective as to which exactly competences would be potentially wish to acquire and on the other hand the infrastructure fiber infrastructure where we are an active participant on those infrastructure projects the last one being the ongoing process of acquiring Nexera together with APG. And those would be pretty much the only areas that we would be looking at right now. We're not really eyeing any MNAs that would be outside the core business. Now, I think regarding the EBDA, what I would say is first of all we need to understand where this guidance revision upward guidance revision stems from so we're happy with the growth that we've seen so far for 2026 and we're happy with the sources of growth and the way that I would put it it's in three steps this guidance revision and growth stems from One, strong sustainable growth across the recurrent business, so core telecom services. We've seen great trends in H1. We think they will be continued in H2. Plus, we see support from big deals. We've seen very nice revenue growth and converting into also EVDA support in B2B, which continued and will continue good growth from wholesale. and number three is another plus so a great contribution of our cost transformation and this has visibly accelerated this year so that gets us to guiding about 6% and as Luziwa mentioned perfect execution could take us even 1-2% higher now as far as H2 expectations obviously we expect relatively slower revenue growth versus the one that we observed in Q2 as IT and IT was truly exceptional but at the same time we expect rock solid revenue margin from core telecom services so that is in fact translating into EBDA growth that would even be higher could even be higher in H2 than the one that we see in H1 now what is great about this dynamic is that both core telecom services and cost optimization provides a recurring effect so we should be able to enjoy their benefits in the future now repeating this year's forecast would obviously also require for sizable additional big deals and it's a bit early to be eyeing this right now we are in mid-year but our 2026 performance is definitely creating a good platform for further growth in the future. And our midterm EBDA guidance is a low to mid single digit percentage CAGR. So today we stick to this, but clearly our ambitions are at the high end of this guidance. We will be doing our annual business planning in H of this year and we will definitely address well next year's guidance but also give you a better outlook for 2028 together with the full year results so in February of 2027 thank you great thank you thanks Ali we have

No more voice questions as of now, but we have text questions that came to us from Paweł Puchalski from Erste Brokerage. Three questions. First question is, in Q226 we observed 200 million top-line consensus BIT and near 6 million EBITDA BIT. Is that actual margin on ICQ or more profit? would be recognized in coming quarters? That's the first question. Maybe we'll take them one by one.

Sure. So thank you, Paweł, for the very relevant question. I believe I mentioned part of the reasons when commenting the EBDA. So while we have indeed noted very steep growth of revenues from IT and IS, we need to remember that IT and IS carry much lower margins than the incremental margin by extra core telco revenue so this is where the EBDA contribution of this extra revenues it is about 10% this quarter so that I hope explains to you why the 200 million top-line leads, which was, I believe, mostly about IT&IS. I do not have the details per product line of consensus, obviously, but I do believe that this was mostly about IT&IS. It's not translating into a spectacular bit of the EBDA, and so congratulations to everyone that was forecasting well and had faith in our ability to deliver EBDA growth despite this big one-off in Q2 of last year because all of you guys have actually had faith that we will deliver a very strong underlying growth and we're happy with this.

then the next question I will read but I believe this was already at least partly answered it concerns OCF guidance following 26 OCF guidance increased by 0.1 billion zloty should we assume it would result in your 2028 OCF guidance or maybe 26 OCF is related to uniquely strong

real estate asset leaving mid-term OCF outlook unaffected I think it's worth answering this one directly because it's about organic cash flow before we comment more on about ABDA so thanks for spotting this one Paweł I would say first of all this year OCF looks indeed to be very strong at least 20% growth to reach more than 1.2 billion it is a remarkable achievement for a telco so we're happy with it and we're confident in our ability to deliver. It will be an outcome of both the strong possible revenue growth and operating costs that we have envisaged in the EBDA guidance, but also disciplined CAPEX, enabling the EBDA growth to flow through to the organic cash flow. As you remember our e-CAPEX guidance, broadly stable versus last year. So it is not about a huge cut of a huge, I would say, non-recurring one-off cut to the e-CAPEX, but the strong OCS growth is rather about a very good result expected on the EBDA side. So that is, I would say, really the bright side of things is the quality of the sources of the EBDA growth. And CAPEX is merely there, first of all, to finance the future growth, because this is why we want to invest in CAPEX. And also the CAPEX discipline, so to enable the EBDA growth to flow through to organic cash flow. Now, looking into the future, I would say, on the one hand, we note that this year's EBDA growth is supported by large deals and this year's organic cash flow is obviously supported by the sale of real estate and over the course of the next years, the real estate proceeds will be diminishing as we will be progressively selling all that we have and are not using. On the other hand, we have a good track record of developing new growth levels and of outperforming our targets and we are very motivated to maximize shareholder value. So I do believe that there is a case to be optimistic for the future. But now we're concentrating on reaching this year's goals. There's a lot of execution to be done. We will refresh the plans for the next two years in H2 and we'll address the topic in more detail in February. Thanks.

The last question of Paweł is

following 26 OCF growing 20% year on year should we expect your 2027 DPS also growing by 20% year on year So Paweł is following through all the way to the dividends thank you I think it's clear that for us the dividends are an important part an essential part of value creation to our shareholders so we're looking and we're working hard to create the financial conditions to be able to offer sustainable growth of the dividend. Today, by increasing the guidance, we're demonstrating that our actions are bearing fruit, and we're progressively delivering those better financial outputs. Whenever we analyze dividends each year, we look into the mid-term projections for our profitability, our cash generation, and the balance sheet. these will inevitably include the 400 million cash outlay for the 1800 Spectrum renewal in 27 and some other renewals after 2028 but also they will include our updated expectations for profitability and cash generations and this will follow the financial planning process in H2 of this year that I've already mentioned and that's why We will address the question of the next dividend in February together with the full year results. But I hope that you can understand the logic that we take in determining each year what is the next level of the dividend that we pay going forward. Thanks.

Thank you. We have a follow-up question, a text question from Dominik Nis from Trigon. You mentioned a new defense contract in the shareholder letter. Can you share more details? And what defense capabilities does Orange Polska aim to develop over the coming years?

Thank you, Dominik, for spotting it. Indeed, we see the contract as a significant milestone, although we are bound by confidentiality, so... you appreciate that we will be rather general in comments our relationships in the defense sector in Poland is a long lasting one and obviously now the sector is becoming even more important in current geopolitical landscape and we see growing demand and what I can say is that the contract is an evidence that technology and modern infrastructure play an important role to strengthen defense and security in Poland We see it also as an important step for long-term value building in this market segment. It is not new for us. We are working in this area for quite a long time. And now we are intensifying efforts, working on a wider scope of solutions, which are could serve defense and security needs not only of public but also in private sectors. As for this particular contract, you need to expect and we plan that this contract will contribute to our results gradually starting with 2027. So it is not yet

reflected in our H1 numbers Thank you, it appears we have no further questions neither voice or text so thank you very much for participating enjoy rest of the summer and please send us a note if you wanted to meet us on one month

We are always open and let's see you at the latest in October and on conferences and roadshows in between.

Thank you.

Thank you. Bye.