Polsat Plus Group sums its performance in Q2 2022

Polsat Plus Group provides in excess of 20 million services (RGU’s) in total, including pay TV (DTH), voice and Internet access. The Group’s web portals, together with the portals which belong to Interia Group, are visited 21 million users every month who generate 21 million page views. The group strengthens its 5G offer and is the only operator on the market to offer access to Disney+ to its customers. It also develops projects in the new areas of its operations, i.e. Clean Energy and Green Hydrogen.

In Q2 2022 Polsat Plus Group:

• was the only pay TV and telecom operator in Poland to have added to its offer attractive service bundles featuring access to Disney+. The new service bundles with Disney+ are available from Polsat Box via satellite, cable IPTV and as OTT over the Internet, in combination with all Plus postpaid offers, as well as from Netia and via Polsat Box Go streaming service.
• Continued to develop and strengthen its 5G offer addressed to residential and business customers; 5G access offered by Plus is the fastest one in Poland.
• Extended for another 10 years its cooperation with Volleyball World, thus assuring access for its viewers to all major men’s and women’s international volleyball tournaments, including in particular the world championship matches.
• Jointly with ZE PAK power company it presented a Polish-made zero-emission hydrogen- bus powered by “green” hydrogen. At the same time the Group started the construction of its bus factory in the town of Swidnik in southeastern Poland.
• It has been investing heavily in the renewable energy area - – PAK-PCE has acquired the Człuchów wind farm project offering total power of more than 72 MW, thus increasing the power generated by all wind power plant projects to more than 140 MW. The Group also works on another solar power farm in Przykona, which will offer 180-200 MW of power, as well as on a project involving a state-of-the-art waste management installation in Rybnik, in southern Poland.
• Acquired Port Praski – a very special real estate development project located in central Warsaw area.

“Our Group is not slowing down. In recent months we have been betting on new developments in every segment of our operations. The subscribers using all our services have been offered access to Disney+, the broadcasting rights to major volleyball tournaments have been extended for another 10 years, we continuously develop our offer of 5G services ,” says Mirosław Błaszczyk, the President of the Management Board of Cyfrowy Polsat and Polkomtel, Polsat Plus Group. “Together with ZE PAK power company we presented a Polish hydrogen bus – the Nesobus which will carry passengers in Gdansk, Gdynia, Wroclaw, Konin and Warsaw. At the same time we embarked on the cooperation with an experienced partner who is willing to invest together with us in the office and commercial projects in Port Praski,” adds Mr. Błaszczyk.

B2C and B2B segments

“We are consistently pursuing our multiplay strategy, which translates into consistently very low churn ratio of 6.8% and significant growth of the ARPU generated by the residential segment customers which exceeded 70 PLN. The growing popularity of 5G tariffs, supported by the very extensive 5G coverage of Plus network and the growing number of devices which support 5G services, is yet another factor leading to successive ARPU growth,” says Maciej Stec, Vice President of the Management Board responsible for the strategy of Polsat Plus Group.

Major operating figures for Q2 2022 for B2C and B2B segments:

• Polsat Plus Group provides a total of over 20 million pay TV, telephony and Internet access services.
• The number of customers using multiplay services increased by 45 thousand yoy and reached 2.46 million.
• The number of contract services for B2C customers increased by 161 thousand  yoy to the level of ca. 13.35 million.
• Average monthly revenue per contract customer (ARPU) for B2C services was 70.2 PLN (+3.5% yoy).
• Churn ratio for B2C customers remained unchangeably low at 6.8% annually.
• The number of prepaid services increased to 2.77 million (owing in part to the distribution of free starter sets to citizens of Ukraine). At the same time the modifications of the offer that were introduced translated to significant ARPU growth by as much as 8.7%% yoy to 17.4 PLN.
• The volume of data transferred by customers of Polsat Box and Plus during the first half of 2022 was around 966 PB (growth by 11% yoy).
• The total number of B2B clients was 68.8 thousand, with each of them generating average monthly revenue of nearly 1.4 thousand zloty.

Media segment: TV and online

“Polsat was the audience leader in the commercial viewers group during the first half of 2022. In spite of the unfavorable process of obligatory transition to the new DVB-T2 broadcasting standard and the undue privileged position of TVP state television in this area, the audience share of all Polsat channels was 23%, which was in line with our strategic assumptions. Our revenue from TV commercials was stable when compared to the revenue decline-plagued market,” says Stanisław Janowski, President of the Management Board of TV Polsat, a Polsat Plus Group company.  “The number of real users of Polsat-Interia Group’s web portals increased to 21 million. Together with Interia.pl, Polsatsport.pl and Polsatnews.pl we are the leading Internet publisher,” adds Mr. Janowski.

Major operating data for the media segment for Q2 2022 and for H1 2022:

• Audience share of TV Polsat Group’s channels (commercial viewers group) was 22.8% in Q2 2022 (7.7% for the main channel and 15.1% for the thematic channels), and 23% during H1 2022 (8% for the main channel and 15% for the thematic channels).
• The revenue of Polsat Plus Group from TV advertising and sponsoring remained stable, as compared to the decline-plagued market In Q2 the above revenue was at 330 million PLN, similarly as a year before, while during  the first half of 2022 it increased to 603 million PLN, thus leading to the increase of the Group’s share in the TV advertising market to 28.5%.
• Polsat-Interia Group holds the leading position on the Internet publishers market with nearly 21 million unique users accessing its portals every month and generating over 2 billion page views monthly on the average.

Development of Clean Energy projects implemented by PAK-PCE

Numerous activities are carried out which are aimed at fast expansion of the Clean Energy segment. Recent achievements included:

• In H1 2022 the biggest solar power farm in Poland, located in Brudzew in central Poland, produced 42.9 GWh of clean, green energy, thus exceeding the original expectations and at the same time contributing positively to the Group’s financial results.
• The extent of the land wind power projects that have been started doubled thanks to the acquisition of Człuchów wind power farm where projects offering total power of more than 140 MW are being currently implemented.
• The Polish-made, fully ecological hydrogen-powered bus, presented by the Group and ZE PAK power company, already carried passengers on trial basis in Gdansk, Gdynia, Wroclaw, Warsaw and Konin. It was very positively received by the municipal authorities and the citizens – the future passengers.
• An agreement was signed with Mostostal Puławy for the construction of a hydrogen bus factory in Swidnik. Work is expected to start in September with the construction planned to be completed by mid-2023.
• The first electrolyzer, with a power of 2.5 MW, will be delivered to Konin in early September. It offers the possibility of production of 1000 kg of green hydrogen.

Polsat Plus Group’s financial results

Polsat Plus Group’s total revenue increased by 5.8%¹⁾ and reached over 3.2 billion PLN. EBITDA was at the level of nearly 900 million PLN. Free cash flow remained high at 1.34 billion PLN in spite of unfavorable macroeconomic factors, involvement in acquisition projects and the support for the RES projects that are part of our Strategy 2023+. Total debt to ratio remained at a low level of 1.39x (net debt /EBITDA LTM). The Group will pay out dividend in the total amount of 661 million PLN or 1.2 PLN per share.

“Gradual consolidation of ARPU of residential customers is transforming into stable growth of retail revenue, which is also accompanied by strong revenue growth from sale of smartphones, compensating for the loss of wholesale revenue. The stable EBITDA for B2C and B2B segments is worth noting. It has been achieved in spite of the inflation pressure and the growing energy costs. The media segment, in turn, demonstrates growing revenues from online advertising, revenues from cable—and-satellite operators as well as from sale of licenses. The real estate segment and the high production of electrical power by the high capacity solar power plant in Brudzew also contribute positively to the Group’s results,” says Katarzyna Ostap-Tomann, Management Board Member and CFO of Cyfrowy Polsata and Polkomtel, Polsat Plus Group.

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1)        Change yoy adjusted to account for IC revenue delta