Summary of Q3 2019 results of Cyfrowy Polsat Group

Introduction of the OTT web TV, a new package of Polish Ekstraklasa football premiership, strong sales results for mobile telephony and smartphones, signing a joint venture agreement with Discovery and TVN with intention to create a joint OTT platform

Cyfrowy Polsat Group ended Q3 2019 with revenue at the level of PLN 2.9bn, EBITDA profit amounting to PLN 1bn and 35% EBITDA margin. Operating results in both segments of its business improved and the consistent development of multiplay services translated into the growth of an average revenue per customer and a very high customer loyalty, once again expressed by a churn at a record-low level of 6.8% annually. High growth of revenue and a stable EBITDA result enabled the Group to share the generated profit with its shareholders.

Major operating figures[1] for Q3 2019

• Every third customer of the Group uses multiplay offer:
  • Consistent implementation of the strategy results in the stable growth of the number of customers – up by 220 thousand (13%) YoY, to the level of nearly 2 million, or 35% of our contract customer base.
  • The number of services (RGU’s) used by this group of customers increased to 5.9 million.
  • It was yet another quarter of the churn at a record-low level – it decreased by 1.1 percentage points to just 6.8% annually.

• Strong growth of the number of contract services – up by 531 thousand (3.8%) YoY, to 14.6 million:
  • Growth of the number of mobile services – by as many as 543 thousand (7.5%) YoY to 7.8 million in total, as a result of: effective execution of the strategy of upselling services, new attractive tariffs which were launched in February 2018 and the sustained high demand for m2m services from business clients.
  • The total number of pay TV contract was at a high level of 5 million.
  • High, stable base of Internet access services at ca. 1.8 million. During Q3 2019 retail customers of Cyfrowy Polsat and Polkomtel transferred ca. 283 PB of data, while during all three quarters of 2019 the data usage was at the level of ca. 813 PB. Nearly 100% of Poles live within the coverage footprint of the Group’s LTE network, with LTE Advanced coverage extending over an area inhabited by 73% of the country’s population.

• High base of 5.7 million contract customers:
  • Growth of saturation of services per customer – up by 4.9% YoY, with each customer using 2.58 of the Group’s services on the average in Q3 2019.
  • Average revenue per contract customer (ARPU) increased by 1% YoY and reached PLN 84.8.

• As a result of the dynamic growth of sales of IPLA service, the prepaid service base increased to 2.7 million (YoY), with high ARPU which amounted to PLN 20.8.
• The Polsat TV Group’s channels remained at the leading positions as regards audiences in the commercial viewer group, achieving viewership of 24.8% (including 11% by Polsat’s main channel and 13.8%  by the theme channels), in Q3 2019 and of 24.3% (including 11.2% by Polsat’s main channel and 13.1%  by the theme channels) in all three quarters of 2019.
• Polsat TV Group’s revenue from TV advertising and sponsoring increased by 3.7% YoY in Q3 and reached the value of PLN 250 million, thus the Group’s share in the TV advertising market increased to as much as 28.1%, while during the first three quarters of 2019 there was a growth by 1.7% YoY to the value of PLN 845 million (while market-wide TV advertising market dropped by 0.7% during the same period), thus ensuring the Group’s share in the TV advertising market at the level of 27.7%.

“It is another quarter with very good results, both in the area of sales and finances. Third time in a row, the number of contract services which we provide to our customers increased by half a million – we now provide nearly 14.6 million such services and nearly 2 million of our customers use multiplay offers”, says Mirosław Błaszczyk, the CEO of Cyfrowy Polsat S.A. and Polkomtel Sp. z o.o. “Such an effective execution of the multiplay strategy, that is upselling of more services to our existing customers, translated into a slightly faster, than the last time, growth of the average revenue per customer – by 1% to the level of PLN 84.8 – and once again a record-low level of churn – which amounted to only 6.8% annually.

“We consistently implement our strategic idea which has been announced recently: “Television – for Everyone. Everywhere. Internet – for Everyone. Everywhere. Telephone – for Everyone. Everywhere.” Soon after introducing cable TV in IPTV technology we presented the next novelty, i.e. OTT web TV with EVOBOX Stream set-top box. This service, enabling reception of TV channels via Internet access service from any provider, with a flexible programming offer where program bundles can be freely switched on right from the set-top box, without the necessity of entering into any long-term commitments, generates very promising sales results” says Maciej Stec, Vice President of the Management Board for Strategy at Cyfrowy Polsat S.A. and Polkomtel Sp. z o.o.

“We have extended our premium sports offer with Canal+ Sport 3 and 4 channels, ensuring for our football fans – in addition to the UEFA Champions League and UEFA Europa League as well as the best European leagues available on Eleven Sports channels – also a possibility to watch the matches of Polish PKO BP Ekstraklasa football premiership. A new IPLA PREMIUM package offered in IPLA continues to gain interest. Under the package, the viewers will find their favorite TV series with early access, thousands of Polish and foreign movies, including box office hits, plus hundreds of kid cartoons, entertainment, information, journalism and popular science content. Conclusion of a joint venture agreement with Discovery and TVN regarding the launch of a joint OTT streaming platform was another step we took on a path to development of the digital entertainment. We are pleased that we take part in a project which may become a real alternative to international streaming services. Our ambition is to ensure that this platform offers the best and top quality technological solutions. It is particularly important that this challenging project may come to fruition in Poland. Thanks to this, Polish content will have an opportunity to reach also international audience,” adds Maciej Stec.