Cyfrowy Polsat Sa · GPW:CPS
Cyfrowy Polsat Sa — Q1 2020 Earnings Presentation
56 slides from Cyfrowy Polsat Sa's earnings presentation, May 14, 2020
Slide 1: Financial results Q1'2020
Financial results Q1’2020 14 May 2020 Cyfrowy Polsat S.A. Capital Group
Slide 2: Disclaimer
Disclaimer This presentation may include forward-looking statements, understood as all statements (other than statements of historical facts) regarding our financial results, business strategy, plans and objectives pertaining to our future operations (including development plans related to our produ
Slide 3: Agenda
Agenda 1. Key events in Q1’20 2. Operating results 3. Financial results 4. Summary and Q&A
Slide 4: 1. Key events in Q1'20
1. Key events in Q1’20 Mirosław Błaszczyk President of the Management Board, Cyfrowy Polsat
Slide 5: Key events in Q1'20
Key events in Q1’20 Efficient adjustment of the operating activities of Polsat Group companies to the state of epidemic introduced in the country Favorable refinancing of bank debt completes the multi-stage debt restructuring process Strategic acquisition of Interia.pl Plus launches the first commer
Slide 6: 1.1 Impact of COVID-19 on the activities of Polsat Group
1.1 Impact of COVID-19 on the activities of Polsat Group Mirosław Błaszczyk President of the Management Board, Cyfrowy Polsat
Slide 7: We believe our business model is largely immune to disruptions caused by COVID-19
We believe our business model is largely immune to disruptions caused by COVID-19 Our diversified and subscription-based business model ensures predictable and stable revenue streams The ultimate impact of COVID- Home office and #stayathome initiatives generate higher demand for connectivity: voice
Slide 8: Polsat Group responds responsibly to the challenges faced by Poles today
Polsat Group responds responsibly to the challenges faced by Poles today • 200k coronavirus tests, along with the required laboratory Lsat equipment, have been presented to Poles “It is a very difficult time for all of us and we must help each other. • 2.2k connected tablets for children who are mos
Slide 9: 1.2 Refinancing completed successfully
1.2 Refinancing completed successfully Katarzyna Ostap-Tomann CFO, Cyfrowy Polsat
Slide 10: Ambitious goals of the refinancing process
Ambitious goals of the refinancing process 1. Achieving greater flexibility of operations and enabling further development of Polsat Group 2. Reflecting the changes taking place in the IFRS in the financial documentation 3. Adapting debt maturity profiles to current acquisition-related goals and to
Slide 11: Strategic refinancing plan
Strategic refinancing plan Refinancing of bonds Issue of Series C green Series A—>B bonds Reduction of the cost and Greater diversification longer maturity periods with attractive coupon March/April 2019 February 2020 November 2019 April 2020 Drawing additional bank loan of Refinancing o
Slide 12: Comfortable debt maturity structure allows to continue the Group's development
Comfortable debt maturity structure allows to continue the Group's development Debt maturing profile1 (as at 13 May 2020) 6,208 Obligacje Serii C (mPLN) 800 800 1,000 1,000 1,000 600 2020 2021 2022 2023 2024 2025 2026 2027 Combined SFA Tranche A Combined SFA Tranche B Series B Bonds Series C Bonds T
Slide 13: 1.3 Strategic acquisition of Interia.pl
1.3 Strategic acquisition of Interia.pl Maciej Stec Vice President of the Management Board, Cyfrowy Polsat Katarzyna Ostap-Tomann CFO, Cyfrowy Polsat Stanisław Janowski President of the Management Board, Telewizja Polsat
Slide 14: Interia is a strategic asset of Polsat Group
Interia is a strategic asset of Polsat Group planned new acquisition own content production >16m real users per month and broadcasting 34 internally produced TV channels multiplay product tv production news, multimedia, social tv and communication production services telecommunications broadband Int
Slide 15: Strategic acquisition of Interia
Strategic acquisition of Interia • A strategic decision aimed at Polsat Group taking a significant position in the Internet • A well-managed business with a competent team • Additional channel for distribution and monetization of the content currently produced for the needs of TV Polsat’s channels •
Slide 16: Interia Group business at a glance
Interia Group business at a glance • Interia Group is the TOP3 leading Media Tech Group and one of the biggest digital companies in Selected KPIs Poland • The company operates one of the ~100 ~100 60% websites mobile internet users biggest horizontal portals with an applications reach in Poland emai
Slide 17: Polsat Group plans the acquisition of 100% of shares of Interia Group
Polsat Group plans the acquisition of 100% of shares of Interia Group Acquisition of 100% of shares • TV Polsat has concluded a preliminary agreement on the acquisition of 100% of shares in Grupa Interia.pl sp. z o.o. as well as of the rights and obligations of a limited partner in Grupa Interia.pl
Slide 18: Multiples for peer companies
Multiples for peer companies Multiples for peer companies • The acquisition price of PLN 422m implies an EV/EBITDA 2019 multiple in the range of 8.7x, 14.9x accounting for synergies 11.8x 8.7x 8.7x Interia.pl Interia.pl Peer Peer (excl. (incl. synergies) companies companies synergies) (24/02/2020) (
Slide 19: We plan to double Interia's EBITDA in the mid-term
We plan to double Interia's EBITDA in the mid-term An additional channel for the monetization of content currently produced for the needs of the 34 Polsat family channels Cost optimization by insourcing the online marketing campaigns run by Plus, Cyfrowy Polsat, IPLA, Netia or in TV Polsat’s channel
Slide 20: 1.4 Plus launches the first Polish commercial 5G network
1.4 Plus launches the first Polish commercial 5G network Mirosław Błaszczyk President of the Management Board, Cyfrowy Polsat
Slide 21: The first and only commercial 5G network in Poland!
The first and only commercial 5G network in Poland! 5G in Plus – available here and now!!! • On May 11 Plus launched the first commercial 5G network in Poland, operating in 2.6 GHz TDD frequency band which supports data transfer rates of up to 600 Mbps – The 2.6 GHz frequency band enables transmissi
Slide 22: 2. Operating results
© oo 2. Operating results — mn | plust Gipla NeETIA
Slide 23: 2.1 Broadcasting and TV production segment
2.1 Broadcasting and TV production segment Stanisław Janowski President of the Management Board, Telewizja Polsat
Slide 24: Viewership of our channels in Q1'20
Viewership of our channels in Q1’20 • Polsat Group and its main Audience shares(1) channel are the viewership Main channels Thematic channels 16.8% leaders in the commercial group 9.9% 9.7% 13.4% 7.7% 6.3% 7.9% Polsat TVN TVP2 TVP1 POLSAT(2) Discovery TVP Dynamics of audience share results(1) Q1'19
Slide 25: Position on the advertising market in Q1'20
Position on the advertising market in Q1’20 Market expenditures on TV advertising • The dynamics of advertising and and sponsorship sponsorship revenues of TV Polsat 966 -3.1% 936 Group in line with the market trend (mPLN) • As a result, our share in the TV advertising and sponsorship Q1'19 Q1'20 ma
Slide 26: 2.2 Services to individual and business customers
2.2 Services to individual and business customers Maciej Stec Vice President of the Management Board, Cyfrowy Polsat
Slide 27: Millionth customer joined our multiplay offer in January'20
2 millionth customer joined our multiplay offer in January’20 Number of multiplay customers • Consistent implementation of +8% our multiplay strategy results 1,855 1,993 2,012 100% 2 000 in a stable increase in the 90% 80% number of customers with 1 500 (thous. customers) 70% 60% 36% bundled service
Slide 28: We sold almost half a million additional services
We sold almost half a million additional services • An increase in the number of contract +3% services by 466K YoY 14.33m 14.73m 14.80m 1.8m 1.8m • The dynamic growth of voice services 1.8m as a result of positive impact of our 5.0m 5.0m 5.1m multiplay strategy and the simple Plus tariffs which were
Slide 29: Growth of ARPU thanks to the consistent implementation of the multiplay strategy
Growth of ARPU thanks to the consistent implementation of the multiplay strategy • 3.0% YoY increase in ARPU 95 resulting from consistent building 90 +3.0% of the value of our existing 85.6 85.4 85 82.9 customer base and larger number 2.64 80 2.61 250% of voice calls, which translates into 2.53 75 h
Slide 30: ARPU growth with a stable prepaid base
ARPU growth with a stable prepaid base • Stable number of provided 2.64m 2.66m 2.64m prepaid services, mainly thanks to high sales of IPLA packages • Growing ARPU, supported by a higher number of voice calls which translates into higher Q1'19 Q4'19 Q1'20 interconnect settlements Pay TV Telefonia kom
Slide 31: 3. Financial results
3. Financial results Katarzyna Ostap-Tomann CFO, Cyfrowy Polsat
Slide 32: Results of the Group in Q1'20
Results of the Group in Q1’20 revenue EBITDA 2,792 +2.0% 2,849 1,038 -1.1% 1,027 Q1'19 Q1'20 Q1'19 Q1'20 LTM FCF net debt/EBITDA LTM +7.4% 1,433 1,334 2.91x 2.86x Q4'19 Q1'20 Q4'19 Q1'20 Source: Consolidated financial statements for the 3-month period ended 31 March 2020 and internal analyses 32
Slide 33: Revenue and EBITDA – change drivers
Revenue and EBITDA – change drivers Revenue EBITDA +2% -1% YoY change YoY change +57 m -12m 2,792 55 6 2,849 1,038 2 1,027 -4 -13 (mPLN) (mPLN) 37% 36% Revenue Segment of Broadcasting and Consolidation Revenue EBITDA Segment of services to Broadcasting and TV EBITDA Q1'19 services to TV production a
Slide 34: Strong start of the year in terms of the amount of cash generated
Strong start of the year in terms of the amount of cash generated mPLN Q1’20 Adjusted FCF after interest Net cash from operating activities 779 Higher Higher Higher Higher smartphone No increase CAPEX CAPEX CAPEX Net cash used in investing activities -364 purchases in installments receivables Paymen
Slide 35: Cash flow statement in Q1'20
Cash flow statement in Q1’20 FCF 3M’20: PLN 267m -822.2 -56.2 Acquisition of shares and 1,000.0 organized part of the -364.0 enterprise 1,140.8 778.8 (mPLN) -203.3 -1.6 CAPEX1 753.1 /revenue 10.8% Cash and cash Net cash Net cash used in Payment of Bonds issue Repayment Other Cash and cash equivalent
Slide 36: The Group's debt
The Group’s debt mPLN Carrying amount Debt structure4 As at 31 March 2020 by instrument type by currency Combined SFA (Tranche A and B) 9,354 Bonds Revolving Credit Facility (RCF) 335 17% Series B and C Bonds 2,014 PLN Leasing and other 1,422 100% Banking debt Gross debt 13,125 83% Cash and cash equ
Slide 37: 4. Summary and Q&A
4. Summary and Q&A Mirosław Błaszczyk President of the Management Board, Cyfrowy Polsat
Slide 38: Summary
Summary Our diversified, subscription-based business model remains immune to epidemic-associated factors Polsat Group and its employees are actively involved in initiatives for the good of Poland and Poles The strategic investment in Interia.pl is an essential step forward in the consistent developm
Slide 39: 5. Additional information
© oo 5. Additional information — in plust Gipla NeETIA
Slide 40: 5.1 Impact of COVID-19 on the activities of Polsat Group
5.1 Impact of COVID-19 on the activities of Polsat Group
Slide 41: COVID-19 creates both downward and upward pressures on our financials
COVID-19 creates both downward and upward pressures on our financials key upward pressures • positive contribution to retail revenue from • uncertainty as to the duration and final 2019/2020 mobile pricing increases impact of coronavirus on global, European • demand for larger data packs triggered b
Slide 42: 5.2 Strategic purchase of Interia.pl
5.2 Strategic purchase of Interia.pl
Slide 43: Interia has a very strong position on the Polish Internet market
Interia has a very strong position on the Polish Internet market Number of real users – Media Tech Groups in Poland 4Y growth dynamics (%) (m) 22.4 21.320.7 21.8 21.1 20.420.1 20.820.9 21.0 +1% Gazeta.pl Group 19.8 19.5 19.0 19.0 16.9 17.2 +16% Intetria Group 16.2 15.9 16.4 15.7 +10% Ringier Axel Sp
Slide 44: Healthy financial profile
Healthy financial profile Cash advertising revenue amounted to • Total revenue: PLN 112m ca. 90% of total cash revenue generated in 2019 – Cash revenue1: Display Video PLN 97m ⁞ 6,380 active emission plans at ⁞ +100m streams available • Adjusted EBITDA: PLN 28.1m the same time ⁞ 36k unique playback
Slide 45: Polsat Group will strengthen its position in the online advertising market
Polsat Group will strengthen its position in the area of the dynamically growing online advertising market Online ad market in Poland Polish online ad market breakdown 2019 (%) (PLNbn) per segment per channel 4.9 +13% CAGR 4.5 0% 4.0 3.6 14% 3.1 28% 2.6 35% 2.2 2.4 2.0 1.6 32% 74% 2% 17% 2010 2011 2
Slide 46: 5.3 Plus launches the first Polish commercial 5G network
5.3 Plus launches the first Polish commercial 5G network
Slide 47: Target coverage footprint of 5G technology by Plus in Warsaw urban area
Target coverage footprint of 5G technology by Plus in Warsaw urban area • Due to the larger size of individual cells, the 2.6GHz TDD frequency band enables to build a 5G coverage in a more cost-effective manner than in the case of the 3.6GHz band • Expenditures will be incurred in the years 2020-202
Slide 48: 5.4 Refinancing completed successfully
5.4 Refinancing completed successfully
Slide 49: We have obtained numerous favorable changes of our debt structure
We have obtained numerous favorable changes of our debt structure What has changed? What is unchanged? • Longer maturity periods of our loans and bonds • Still 100% of our debt is PLN-denominated • 4 quarters of loan repayment holidays • Reduction of repayment amounts from PLN 254m to PLN 200m quart
Slide 50: 5.5 Financial results Q1'20
© oo 5.5 Financial results Q1’20 plus Qipla neTtaA
Slide 51: Results of the segment of services to individual and business customers
Results of the segment of services to individual and business customers mPLN Q1’20 YoY change • Increase in sales revenues due to higher interconnect settlements, which Revenue 2,453 2% resulted from a strong increase in the volume of voice calls recorded since Operating costs(1) 1,580 4% the announ
Slide 52: Results of the broadcasting and TV production segment
Results of the broadcasting and TV production segment mPLN Q1’20 YoY change • The segment's stable financial results, despite a slight decline in Revenue 461 1% advertising and sponsorship revenues, are due to good results of Operating costs(1) 311 1% wholesale sales of TV Polsat channels to cable a
Slide 53: Revenue structure
Revenue structure mPLN • Stable level of retail revenues despite pressure from declining revenues from fixed-line telephony services provided by Netia. 0% 1,605 • An increase in interconnect revenue, following a strong growth Retail revenue 1,606 of voice traffic volumes since the introduction of th
Slide 54: Operating costs structure
Operating costs structure mPLN • Higher technical costs and cost of settlements with Technical costs and cost of settlements 601 7% telecommunication operators mainly from higher interconnect costs with telecommunication operators 564 on higher volumes of outgoing traffic, which was associated with
Slide 55: Glossary
Glossary RGU (Revenue Single, active service of pay TV, Internet Access or mobile telephony provided in contract or prepaid model. Generating Unit) Natural person, legal entity or an organizational unit without legal personality who has at least one active service Customer provided in a contract mod
Slide 56: Contact Investor Relations
Contact Investor Relations Konstruktorska 4 02-673 Warsaw Phone: +48 (22) 426 85 62 / +48 (22) 356 65 20/ +48 (22) 337 93 14 Email: ir@cyfrowypolsat.pl www.grupapolsat.pl