Dividend

Dividend policy of Cyfrowy Polsat S.A. for the years 2022-2024

The main goal of the strategy of Cyfrowy Polsat S.A. Capital Group (the “Group,” “Polsat Plus Group”) is the permanent growth of the value of Cyfrowy Polsat S.A. (the “Company”) for its Shareholders. We intend to achieve this goal by implementing the major elements of our operational strategy which include:

• growth of revenue from services provided to individual and business customers through the consistent building of our customer base value by maximizing the number of users of our services as well as the number of services offered to each customer and simultaneously increasing average revenue per user (ARPU) and maintaining a high level of customer satisfaction;
• growth of revenue from produced and purchased video content by expanding its distribution, including a search for new channels of exploitation of rights, maintaining the audience shares of channels produced by us;
• use of opportunities arising from the advancing technological changes and market opportunities in order to expand the scope of our products and services;
• building a position on the clean, renewable energy market, in particular from the sun, wind, biomass, thermal waste treatment and building a complete value chain of a hydrogen-based economy, which creates opportunities to build a new stream of revenues for Polsat Plus Group and will bring tangible social benefits in the form of greenhouse gas emissions reduction;
• effective management of the cost base of our integrated capital group by exploiting its inherent synergies and economies of scale, and
• effective management of the Group’s finances, including its capital resources.

Predictable dividend payouts to Shareholders is one of the main goals underlying the capital resources management policy of the Company. At the same time, bearing in mind the goal to achieve and maintain a low level of indebtedness, designated by the General Meeting of Shareholders in the Articles of Association of the Company (the “Target Leverage Ratio”), the Management Board of the Company is obligated to formulate the financial policy of Polsat Plus Group in such a way, so as to meet the expected Target Leverage Ratio.

In view of the above, the Management Board of the Company intends to present a proposal concerning dividend payout together with the Management Board’s recommendation to the General Meeting annually, subject to the observance of the following general principles:

• the amount of a dividend paid out every year shall guarantee an attractive return on invested capital to the Company’s Shareholders;
• the level of the obtained return shall be shaped in relation to the commonly available on the Polish market forms of safe investing of funds, in particular in relation to the level of bank deposits rates, while taking into account a risk premium associated with floating of Cyfrowy Polsat’s share prices on the Warsaw Stock Exchange;
• the annually submitted proposal for distribution of the Company’s net profit for the previous financial year should allow for the continuation of gradual reduction of the net debt of Polsat Plus Group in order to achieve the Target Leverage Ratio.

In regard to the above, after having reviewed the investment plans of Polsat Plus Group and evaluated the possibilities of allocating the expected cash resources of the Group with an aim to pay out dividends to the Shareholders of the Company, in the years 2022-2024 the Management Board of the Company intends to recommend to the General Meeting dividend payout in the total amount of not less than PLN 3.00 per share in three installments as follows:

• at least PLN 1.00 per share to be paid out from net profit generated in 2021;
• at least PLN 1.00 per share to be paid out from net profit generated in 2022;
• at least PLN 1.00 per share to be paid out from net profit generated in 2023.

Simultaneously, the Management Board underscores that every time when presenting a proposal for distribution of the profit for the previous year it will take into account the Group’s net profit, financial standing and liquidity, existing and future liabilities (including potential restrictions related to facility agreements and other financial documents), the assessment of the Group’s prospects in specific market and macroeconomic conditions, potential necessity of spending funds for the Group’s development, in particular through acquisitions and embarking on new projects within the framework of the Group’s strategy, one-off items, as well as valid legal regulations.

The dividend policy will be subject to regular verification by the Company’s Management Board. The new dividend policy will take effect from January 1, 2022.

2023

Without dividend (allocated to reserve capital)*

*The justification for the resolution of the AGM held on June 29, 2024 - In the opinion of the Management Board of the Company, the proposed allocation of profit in its entirety to reserve capital and the lack of a recommendation for dividend payment is dictated by the ongoing capital-intensive, strategic investments implemented by the Company as part of its Strategy 2023+, aimed at continuing the development of the Company's capital group over the long term in accordance with the overarching strategic objective of sustainably growing the Company's value for its shareholders. In particular, the funds retained by the Company will be used for the timely implementation of the currently ongoing green energy projects, which, among others, include the construction of wind farms. As a result of the implementation of the aforementioned projects, the Company's capital group will reach an installed capacity in renewable energy sources in 2026, which will enable the production of up to 2 TWh of clean energy per year. According to the Company's estimates, the execution of strategic assumptions will translate into incremental recurring EBITDA at the consolidated level of ca. PLN 500-600 million per year. At the same time, in deciding not to pay a dividend, the Management Board took into account the Company's net debt ratio, which remains at an elevated level due to, among others, the financing of strategic investments, as well as the unfavorable macroeconomic environment, in particular high inflationary pressure and persistently high interest rates translating into high debt service costs for the Company.

2022

Without dividend (allocated to reserve capital)*

*The justification for the resolution of the AGM held on June 29, 2023 - In the opinion of the Management Board of the Company, the allocation of profit in its entirety to reserve capital and the lack of recommendation for dividend payment is dictated by the ongoing, capital-intensive, strategic investments implemented by the Company as part of Strategy 2023+, aimed at continuing the development of the Company's capital group over the long term in accordance with the overriding strategic objective of sustainably increasing the Company's value for its shareholders. At the same time, the Board of Directors took into account the Company's net debt ratio, which remains at an elevated level as a result of the financing of strategic investments, as well as the unfavorable macroeconomic environment, in particular, high inflationary pressures and persistently high interest rates translating into rising debt service costs for the Company. At the same time, the Company's Management Board maintains the dividend policy adopted on December 20, 2021. 

2021

Paid

2020

Paid

[1] In accordance with the resolution of the General Meeting, includes PLN 362,473,205.28 from the reserve capital created from profits earned in previous years.

2019

Paid

[1] In accordance with the resolution of the General Meeting, includes PLN 52,743,890.27 from the reserve capital created from profits earned in previous years.

2018

Paid

[1] In accordance with the resolution of the General Meeting, includes PLN 106,257,681.15 from the reserve capital created from profits earned in previous years.

2017

Without dividend (allocated to reserve capital)*

*The justification for the resolution of the AGM held on June 28, 2018 - Taking into consideration the strategic investments made by the Company and some of its subsidiaries in 2017 and 2018, which ensure the continuation of the development of the capital group of the Company (the “Group”) in the long term in accordance with its key strategic goal to sustainably grow the Company’s value for its shareholders as well as bearing in mind a relatively high level of the Group‘s indebtedness, the Management Board of the Company decided not to recommend a dividend payment from the profit for 2017. In the opinion of the Management Board, this will allow to reduce the indebtedness level of the Group, in line with the adopted strategic assumptions, and with the goal of the capital resources management policy in particular, which is to reduce in a possibly short time the total net debt ratio for the Group (net debt to EBITDA) below 1.75x. In parallel, the Management Board of the Company confirms the dividend policy adopted on November 8, 2016. Taking into account the above, the Management Board, acting pursuant to article 382 § 3 of the Commercial Companies Code and article 19 item 2(a) of the Company’s Articles of Association, recommends to allocate the entire profit earned by the Company in the financial year ended December 31, 2017, amounting to PLN 605,963,020.33 (say: six hundred five million nine hundred sixty three thousand twenty zlotys and thirty three grosze) to the reserve capital.

2016

Paid

2015

Without dividend (allocated to reserve capital)*

*The justification for the resolution of the AGM held on June 29, 2016 - Considering the relatively high level of the current indebtedness of the capital group of the Company, the Management Board of the Company consistently aims for its reduction. In accordance with the adopted assumptions, the strategic goal of the capital resources management policy is the reduction of the total net indebtedness ratio of the Company's capital group, i.e. net debt to EBITDA, below the level of 1.75 as fast as possible. The rapid achievement of the goal would allow for a revision of the dividend policy and the return to regular payouts of part of the generated profit starting from the year 2017.

2014

Without dividend (allocated to reserve capital)*

*The justification for the resolution of the AGM held on April 2, 2015 - In accordance with the dividend policy of the Company, adopted on January 22, 2014, of which the Company informed in current report no. 7/2014 dated January 23, 2014, the Management Board of the Company shall submit a proposal to the General Meeting for the distribution of dividends provided that the total indebtedness ratio of the Company's capital group, i.e. net debt to EBITDA as at the end of the financial year to which the profit distribution refers is less than 2.5x. Bearing in mind the existing obligation of the Company’s capital group, the aim of the Management Board of the Company is to reduce the level of indebtedness as fast as possible in order to achieve the level of the net debt/EBITDA ratio anticipated in the dividend policy in the shortest term possible.

2013

Paid

2012

Without dividend (allocated to reserve capital)*

*The justification for the resolution of the AGM held on June 11, 2013 - The Management Board's recommendation concerning the distribution of the profit is justified by one of the strategic objectives of the Company, that is lowering the Company's indebtedness, arisen due to the acquisition of Telewizja Polsat by the Company, in the shortest possible term. According to the loan agreements, consistent reduction of the level of the Company's debt ahead of schedule, and thereby reduction of the net debt/EBITDA ratio, will result in both reduction of nominal principal payments and interest charges, which will have a positive impact on the Company's financial standing in future periods.

2011

Without dividend (allocated to reserve capital and to cover losses from previous years)*

*The justification for the resolution of the AGM held on June 5, 2012 - The decision of the Management Board concerning the distribution of the profit was based on one of the strategic objectives of the Company, which is lowering the Company's indebtedness, arisen due to the acquisition of Telewizja Polsat by the Company, in the shortest possible term. Consistent reduction of the level of the Company's debt and thereby reduction of the net debt/EBITDA ratio, according to the loan agreements will reduce interest charges and thus will have a positive impact on the Company's financial standing in future periods.

2010

Without dividend (allocated to reserve capital)*

*The justification for the resolution of the AGM held on May 19, 2011 - The Management Board justifies its recommendation by the need of future service of the debt incurred by the Company to purchase 100% shares of Telewizja Polsat S.A. The reduction of indebtedness of the Company, planned by the Management Board, and thereby reduction of the net debt/EBITDA ratio, will reduce interest charges arising from the signed loan agreements, and thus will have a positive impact on the Company's financial standing.

2009

Paid

2008

Paid

2007

Paid