Orange Polska S.a. · GPW:OPL
Orange Polska — Q2 2023 Earnings Presentation
25 slides from Orange Polska's earnings presentation, Jul 26, 2023
Slide 1: Orange Polska 2Q 2023 results
Orange Polska 26 July 2023 2Q 2023 results .Grow Orange People 1
Slide 2: Forward looking statement
Forward looking statement This presentation contains 'forward-looking statements' including, but not limited to, statements regarding anticipated future events and financial performance with respect to our operations. Forward-looking statements can be identified by the fact that they do not relate s
Slide 3: Reconciliation of operating performance measure to financial statements
Reconciliation of operating performance measure to financial statements Disclosures on performance measures have been presented in the Note 2 to Condensed IFRS Interim Consolidated Financial Statements of the Orange Polska Group for the 6 months ended 30 June 2023 (available at https://www.orange-ir
Slide 4: Highlights & Business review
Highlights & Business review Julien Ducarroz Chief Executive Officer 4
Slide 5: Strong 2Q'23 performance in a challenging environment
Strong 2Q’23 performance in a challenging environment Solid commercial performance with focus on value ▪ ARPO improving dynamics in all key services ▪ Solid customer base growth in a challenging environment ▪ Value strategy further intensified Very good financial results with 3.1% EBITDAaL growth ▪
Slide 6: Full-year guidance upgraded due to good execution of our 2023 plan
Full-year guidance upgraded due to good execution of our 2023 plan 2023 low single digit flat/low single digit guidance PLN 1.5-1.7bn growth growth 1H 2023 Results Revenues EBITDAaL eCAPEX in PLN 6.36 bn 1.59 bn 538 m YoY +6.3% +4.3% -6.1% Improved low-to-mid single low single digit guidance guidanc
Slide 7: Growth of all ARPOs accelerated coupled with customer base increase
Growth of all ARPOs accelerated coupled with customer base increase PLN Convergence ARPO +4.3% PLN Fixed broadband-only ARPO PLN Mobile-only handset ARPO 118.6 yoy (vs. +2.4% yoy in 1Q) 64.0 +4.4% yoy (vs. 3.3% yoy in 1Q) 29.3 +3.5% yoy (vs. 3.2% yoy in 1Q) Solid convergence Fibre customer base grow
Slide 8: Value strategy persistently executed through a variety of marketing tools
Value strategy persistently executed through a variety of marketing tools Middle mobile tariff More benefits Main convergent More benefits Increased prices for price point* 9x more GB package price point* 20x more GB new contracts & +18% Cyber Protection Mobile TV 27 ch +18% Cyber Protection more TV
Slide 9: CO2 emissions -65% yoy in 1H and on track to reach 2025 strategic goal
CO2 emissions -65% yoy in 1H and on track to reach 2025 strategic goal (Scope 1+2) Scope 1+2: own emissions Scope 3: value chain emissions CO2 emissions reduction on track to Scope 3 emissions main sources: meet our 2025 goal… c.-70% target Customers: Suppliers: -65% production of devices energy use
Slide 10: Financial review
Financial review Jacek Kunicki Chief Financial Officer 10
Slide 11: Strong 2Q/1H'23 financial results across the board
Strong 2Q/1H’23 financial results across the board in PLNm 2Q’23 yoy 1H’23 yoy ▪ Strong performance of core telco services revenues 3,224 +5.5% 6,363 +6.3% ▪ Robust growth of IT/IS EBITDAaL 823 +3.1% 1,585 +4.3% ▪ Fuelled by strong direct margin expansion ▪ Indirect costs affected by inflation and l
Slide 12: Solid 5.5% yoy revenue growth in 2Q driven by IT/IS and core telecom
Solid 5.5% yoy revenue Revenue evolution growth in 2Q driven by (yoy change in %) 8.2% IT/IS and core telecom 6.9% 6.6% 7.1% 5.5% services 6.0% 5.6% 3.4% 5.0% 5.0% Total reported Core telecom services* 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 Revenue evolution breakdown in PLNm ▪ Core telecom services* (+5% yo
Slide 13: 2Q EBITDAaL +3.1% yoy fuelled by very strong direct margin expansion
2Q EBITDAaL +3.1% yoy EBITDAaL evolution fuelled by very strong (yoy change in %) direct margin expansion 5.6% 4.1% 5.5% 3.9% 3.1% ▪ Direct margin up 6% yoy: ▪ Enabled by concerted contribution from all core commercial engines 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 and energy resale business ▪ Indirect costs
Slide 14: 1H net income +38% due to rising EBITDAaL, gain on property sale
1H net income +38% due to rising EBITDAaL, gain on property sale and less finance costs Net income evolution in 1H 2023 (yoy change in PLNm) +38.3% +49 +24 +44 -62 509 +65 +21 ▪ +63% yoy gain on disposal of 368 assets as we sold more of unused real estate in our transformation programme ▪ -31% yoy n
Slide 15: 1H eCapex reflects high proceeds from property disposal
1H eCapex reflects high proceeds from property disposal and more evenly phased network Investment areas & IT spending (in PLNm) Fibre net of disposed rollout to FiberCo 77 Mobile network 90 ▪ Growth in mobile reflects start of 177 120 5G network rollout in core and Fixed & core network RAN renewal 2
Slide 16: Solid 1H Organic Cash Flow and sound balance sheet structure
Solid 1H Organic Cash Organic Cash Flow evolution breakdown in 1H 2023 Flow and sound balance in PLNm sheet structure yoy change +5 +25 -339 +100 -15 -224 1,636 +90 ▪ 1H OCF yoy reflects payments for very high capex of 4Q’22 and -1,199 much higher proceeds from sale +168 of assets -271 424 ▪ Working
Slide 17: Summary
Summary Julien Ducarroz Chief Executive Officer 17
Slide 18: Summary
Summary Strong 1H performance triggers upgrade of our full-year guidance Execution of value strategy and cost transformation actions mitigate inflation impact 5G Focus on 5G: acquisition of licence and network preparation for launch Smooth transition in the CEO position from 1 Sept: Liudmila Climoc
Slide 19: Q&A
Q&A 19
Slide 20: Appendix
Appendix 20
Slide 21: Details of bottom line evolution in 2Q and 1H 2023
Details of bottom line evolution in 2Q and 1H 2023 in PLNm 2Q’23 2Q’22 Change 1H’23 1H’22 Change EBITDAaL 823 798 +25 1,585 1,520 +65 Gains on disposal of fixed assets 28 49 -21 114 70 +44 D&A of PPE and intangible assets* -502 -506 +4 -989 -1,010 +21 Add-back interest expense on lease liabilities 3
Slide 22: Details of organic cash flow evolution in 2Q and 1H 2023
Details of organic cash flow evolution in 2Q and 1H 2023 in PLNm 2Q’23 2Q’22 Change 1H’23 1H’22 Change Net cash flow from operating activities before change in 868 848 +20 1,636 1,631 +5 working capital Change in working capital 197 4 +193 90 65 +25 Net cash flow from operating 1,065 852 +213 1,726
Slide 23: We successfully combine growth with social responsibility
We successfully combine growth with social responsibility Environment Social Governance We have clear climate/environmental We make new technologies a supporter Our corporate governance is goals and tangible results of economic and social development designed to provide responsible ▪ Climate goals:
Slide 24: Glossary (1/2)
Glossary (1/2) 4G/LTE Fourth generation of mobile technology, sometimes called LTE (Long Term Evolution) 5G Fifth generation of mobile technology, which is the successor to the 4G mobile network standard Fibre customer base (retail + wholesale)/ Total households connectable to our fibre network (own
Slide 25: Glossary (2/2)
Glossary (2/2) FBB Fixed Broadband Fixed broadband access network based on FTTH (Fibre To The Home ) /DLA (Drop Line Agnostic) Fibre technology which provides the end user with speed of above 100Mbps Fixed broadband-only Revenues from fixed broadband offers (excluding B2C convergent offers and equip