Polsat Group has efficiently adjusted its operations to the new conditions at the times of the pandemics.
Polsat Group launched the first in Poland 5G network, operated by Plus, using the spectrum from the 2600 MHz TDD frequency band. The network’s coverage will soon be extended to a territory inhabited by over 11 million of Poland’s population. 5G network roll-out will accelerate substantially, following the recently announced strategic partnership with Cellnex Telecom. Acquisition of Interia.pl Group has in turn led to even greater strengthening of the Group’s position in the Internet. Entering the market of solar power solutions under the ESOLEO brand was a new direction of the Group’s development.
Polsat Group provides a total of 18 million TV (DTH), Internet access and telephony services (RGU’s), while more than 2 million of the Group’s customers, using 6.4 million services, are members of smartDOM loyalty scheme The Group’s revenue increased to nearly PLN 12 bn, with a stable adjusted EBITDA in the amount of PLN 4.2 bn and net profit demonstrating growth to PLN 1.15 bn. Cyfrowy Polsat also paid out a record-high dividend in the total amount of PLN 640 mn, or PLN 1 per share.
At the same time, during the entire 2020 Zygmunt Solorz and Polsat Group were actively involved in the fight against coronavirus epidemics, by donating more than PLN 50 mn to support the society, the healthcare system, the customers, the viewers and the employees.
“2020 was a special time and brought new challenges that we had to face in many areas. Our top priorities included assuring maximum safety to our employees, as well as business continuity and the possibility of providing to our customers top quality services, especially in the areas of Internet and telephony, thanks to which they could, among others, continue working and learning remotely,” says Mirosław Błaszczyk, the CEO of Cyfrowy Polsat and Polkomtel.
In 2020 we implemented projects which will assure further, consistent development of the Group’s operations. Most important events included launch of the first 5G network in Poland and establishing the strategic cooperation with Cellnex Telecom, which will enable even faster roll-out of 5G network.
Plus’s 5G network was launched in May of 2020 in 7 cities in Poland while using 100 transceiver stations and the radio spectrum from the 2600 MHz TDD frequency band. Thanks to the fast roll-out, Plus’s 5G network is already available for use in all 16 provinces of Poland. Soon the latest 5G 2600 MHz TDD network operated by Plus will cover an area inhabited by more than 11 million people.
In February 2021 Polsat Group announced the intention of entering into strategic cooperation with Cellnex Telecom. The underlying intention of the partnership relies on the concept of sharing of the active and passive network infrastructure, a solution in which the mobile operator focuses on providing top quality services to build maximum customer satisfaction, while the infrastructural operator is responsible for delivering the requested network capacity in the most cost-effective manner.
New opportunities have also emerged for Polsat Group with the acquisition of Interia.pl Group, a leading Internet market player in Poland. Following the acquisition of Interia, Polsat Group became one of the leading players on the online advertising and e-commerce markets in Poland. Fast integration of the portal within Polsat Group’s organizational structure has enabled tapping on the potential offered by numerous synergies. Starting 1 October 2020 the entire advertising support of Interia.pl Group was taken over Polsat Media who offers unique cross-medial solutions.
In 2020 the Group also started operations on the solar power market by introducing the offer of photovoltaic installations under ESOLEO brand. ESOLEO offers numerous benefits for customers: lower electricity bills, equipment from renowned manufacturers, comprehensive handling of all formalities, development of a PV system design, assistance in obtaining a loan with no own contribution required, as well as fast installation process. ESOLEO offer is available nationwide from over 1000 points of sale and customer service of Plus and Cyfrowy Polsat as well as on www.esoleo.pl website and by calling a dedicated information line at 222 136 222.
At the same time, acting as the leader of a consortium, ESOLEO will build the biggest in Poland photovoltaic farm, offering 70 MWp of power, for ZE PAK Group. The photovoltaic power plant will be built in Brudzew, on around 100 hectares of re-cultivated land which was earlier a site of an opencast brown coal mine.
Polsat Group signed an agreement for purchase of clean energy from the solar power plant in Brudzew and soon it will be using only clean, zero-emission electrical power for its operations, thus contributing to reduction of CO2 emission as well as to the reduction of its carbon footprint.
The decision perfectly fits in with the pro-environmental activities carried out by the Polsat Group companies. Being the members of the Clean Poland Program Association, established by the main shareholder, Zygmunt Solorz, the Group’s companies have become actively involved in the process of ecological education and promoting of behavior and attitudes that are environment- and nature-friendly via, among others, Polsat TV, Interia.pl and Polsatnews.pl portals, as well as in “Brawo Ty!” subscribers magazine.
Since the beginning of the epidemics, Polsat Group has embarked upon numerous pro-social initiatives and has introduced many improvements for its customers. It became involved in many areas, supporting healthcare institutions, education, digitally-excluded children, senior citizens, and also assuring solutions for its customers and thousands of its employees. Zygmunt Solorz and Polsat Group donated a total of 50 million zloty for that purpose. The activities conducted jointly with Polsat Foundation included purchase of 200 thousand coronavirus tests for 16 million zloty, together with the required laboratory equipment, donation of 20 state-of-the-art ventilators, worth nearly 3 million zloty, to isolation hospitals, purchase of protective gear for medical personnel, a special advertising block in Polsat TV (organized for the purpose of raising money), as well as donation of 2200 tablets for the digitally-excluded children (more information).
18 million services and development of the media segment
2020 was the year of consistent and effective continuation of our strategy “For Everyone. Everywhere,” implementation of new services, such as 5G or OTT TV services – as part of our smartDOM program – and investments in attractive content. The Group provides a total of 18 million services (RGU’s) with over 2 million customers taking advantage of the possibility of bundling services within our smartDOM loyalty program. Thanks to this, the average monthly revenue per customer has been growing while the churn ratio – which is a measure of customer satisfaction with the services we provide – stayed at a very low level of 6.5%.
“The investments that we made in 2020, and the decisions that we take on an on-going basis, enabled us to present, at the beginning of 2021, the new 5G tariffs which offer a totally new mobile experience to our customers. The tariffs have been well accepted by customers and this year we intend to devote a lot of attention to promoting 5G services among Plus and Cyfrowy Polsat subscribers,” says Maciej Stec, the Vice-President responsible for strategy on the Management Boards of Cyfrowy Polsat and Polkomtel.
Major operating figures[1] for Q4 and all of 2020 for B2C and B2B segments:
- The number of customers using multiplay services, which are among others provided as an element of our smartDOM flagship loyalty program, increased by 71 thousand YoY (up by 3.6%), reaching 2.065 mn, with the program’s members using a total of 6.36 mn services (RGU’s).
- Polsat Group provides a total of 18 mn pay TV, Internet access and telephone services, whose number increased by 3.5% YoY.
- Strong growth of contract services – by 643 thousand (4.4%) YoY, to nearly 15.4 mn:
- Growth of the number of mobile telephony services – by 640 thousand (8.1%) YoY to 8.5 mn, being the outcome of the favorable influence of the multiplay strategy, care for customer satisfaction and good sales of m2m services in the B2B segment,
- The number of pay TV (DTH) services was at a high level of over 5 mn,
- Stable base of Internet access services of ca. 1.8 mn,
- On the average each customer was using 2.77 services from the Group’s portfolio –the saturation ratio, showing the number of services per customer, increased by 6.1% YoY,
- Growth of average monthly revenue per contract customer (ARPU) by 5% YoY in Q4, to the level of PLN 89.9 ,
- Churn ratio remained invariably low, at 6.5% annually.
- Stable base of prepaid services in the range of 2.62 mn, with a high ARPU of PLN 21.8 in Q4.
- In 2020 the retail customers of Cyfrowy Polsat and Plus transferred a total of ca. 1.5 EB of data (growth by 36% YoY).
Major operating figures for Q4 and all of 2020 for the media segment:
- TV Polsat Group’s channels ranked at the top of the market in terms of audience in the commercial viewer group and achieved 25% audience share (9.5% for the main channel and 15.4% for theme channels) in Q4, and respectively 23.9% (9.5% for the main channel and 14.4% for theme channels) in the entire 2020.
- TV Polsat Group’s revenue from advertising and sponsoring increased by 4.5% YoY in Q4 and reached PLN 396 mn thanks to which the Group’s share in the TV advertising market increased to 29.2%. During the entire 2020 the revenues decreased by 8.2% YoY, to PLN 1.12 bn, however thanks to the fact that the Group’s revenue growth dynamics exceeded the market dynamics, TV Polsat’s share in the advertising market increased to 28.5%.
- The leading position of Polsat-Interia Group on the market of Internet publishers, with nearly 20 million users and 1.7 billion page views monthly on the average in Q4 2020.
“Just as we expected, a distinct rebound occurred on the TV advertising market in the second half of the year. In autumn we returned to TV with our flagship shows while the cost of programming has been adjusted to account for the condition of the adverting market. The audience results of our TV stations for the whole year are in line with our strategy, at 23.9%. During the fourth quarter our advertising revenue was growing nearly two times faster than the market thanks to which we were able to mitigate the yearly decline of revenue, while our yearly share in TV advertising market increased to 28.5%,” says Stanisław Janowski, the CEO of TV Polsat.
Polsat Group’s financial performance better than expected by the market
Year 2020 was a very successful period for Polsat Group, also as regards its financial results. The Group’s revenue increased by 2.5%, to nearly PLN 12 bn, adjusted EBITDA was stable and amounted PLN 4.2 bn, while the net profit increased to PLN 1.15 bn. The group decided to pay record-high dividend for 2019, in the total amount of PLN 640 mn, or PLN 1 per share. Free cash flow remained at a high level of PLN 1.27 bn in spite of substantial acceleration of our CAPEX projects, while the total debt ratio (net debt/EBITDA LTM) decreased to 2.80x.
In 2020 we generated very good financial results, which enabled us to continue the on-going projects, invest in 5G network roll-out and in the new areas of operations, as well as to decide to pay out record-high dividend for 2019, in the amount of PLN 640 million,” says Katarzyna Ostap-Tomann, a Management Board Member responsible for finance in Cyfrowy Polsat and Polkomtel. “Growing demand for telecommunication and entertainment services during the pandemics translated to the growth of revenue from the services for B2C and B2B segments, which also had influence on the growth of EBITDA from the segment, and at the same time on our decision to accelerate the investments in the 5G technology. Recovery of the level of revenue in the media segment was in turn the outcome of the rebound on the advertising market in the second half of the year, as well as of consolidation of the results of Interia.pl Group and acquisition of new TV channels, Nowa TV and Fokus TV.”
“Despite the pandemics, in 2020 we were able to accomplish all our goals and assumptions. I would like to thank our team and underscore the enormous role they played while demonstrating involvement and enormous responsibility in those difficult times. There are new goals and challenges ahead of us. We wish to deliver the best and the most advanced services to our customers, matching their needs and meeting the growing demand for reliable, high speed Internet access in connection with many of our daily activities having moved to the Internet. We will be working on dynamic roll-out of the 5G network, development of the Internet segment, together with Interial.pl Group, and on the development of our smartDOM program, staying in line with “For Everyone. Everywhere” concept, and while also investing in attractive content,” sums up Mirosław Błaszczyk.
[1] Without the operating data for Netia Group which are published separately from the results of Cyfrowy Polsat Group.
