Orange Polska S.a. · GPW:OPL
Orange Polska — FY 2021 Earnings Presentation
34 slides from Orange Polska's earnings presentation, Feb 17, 2022
Slide 1: Orange Polska FY 2021 results
Orange Polska FY 2021 results .Grow 17 February 2022 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 3 to IFRS Consolidated Financial Statements of the Orange Polska Group for the year ended 31 December 2021 (available at https://www.orange-ir.pl/results-center
Slide 4: Highlights & Business review
Highlights & Business review Julien Ducarroz Chief Executive Officer 4
Slide 5: Excellent 2021 performance is a strong first step of the .Grow strategy
Excellent 2021 performance is a strong first step of the .Grow strategy Steady commercial performance ▪ 1 million fibre customers reached (retail+wholesale) ▪ Value strategy delivered growth of ARPO and revenues in all key areas Strong financial results across the board ▪ 6% EBITDAaL growth ▪ 35% Or
Slide 6: Strong 2021 financial results; guidance delivered
Strong 2021 financial results; guidance delivered 2021 PLN 1.7-1.9bn, low single digit low-to-mid single (depending on guidance growth digit growth proceeds from asset disposal) 2021 Results Revenues EBITDAaL eCAPEX in PLN 11.93 bn 2.96 bn 1.74 bn YoY +3.6% +5.9% -3.6% ✓ ✓ ✓ 6
Slide 7: Key achievements in all pillars of .Grow strategy
Key achievements in all pillars of .Grow strategy +6.7% +2.9% Strong growth +18% of core telco service ICT revenues 2020 2021 revenues* FiberCo project First 5G campus networks executed launched 36% 9% Growing usage of 20% CO2 reduction MyOrange app 2020 2021 16% 14% >6.8k children & >40k teachers G
Slide 8: CO2 emissions reduced by 9% in 2021 supported by renewable energy
CO2 emissions reduced by 9% in 2021 supported by renewable energy Orange Polska to reduce CO2 emissions by 65% by We are half way to reach our 2025 2025 (vs 2015) goal of 60% share of renewable energy: ▪ First wind farms operate from mid-2021 delivering c.10% of our energy needs CO2 emissions vs 201
Slide 9: Commercial review
Commercial review Jolanta Dudek Deputy CEO in charge of the consumer market Bożena Leśniewska Deputy CEO in charge of the business market 9
Slide 10: Strong convergence revenue growth fuelled by customer base and ARPO
Strong convergence revenue growth fuelled by expansion of both customer base and ARPO: on track to meet 2024 targets Simple & rich offer and expanding fibre footprint ARPO growth driven by our value strategy and enable growth of customer base fibre: more appetite for higher speeds, more content, mor
Slide 11: Fibre is a key driver of value and we see strong customer demand
Fibre is a key driver of value and we see strong customer demand Retail customer base up 30% in 2021 Orange fibre services available for Wholesale maximises monetisation of with very high net additions in 4Q (65k)) almost 6m households our fibre network::wholesale customer base doubled in 2021 Fibre
Slide 12: Steady development of mobile post-paid with ARPO recovery
Steady development of mobile post-paid as solid customer take-up is combined with ARPO recovery Handset customer base increased another 4% in ARPO recovery in 2021 was driven by roaming and 2021 supported by all consumer brands (Orange, supported by value strategy (another more-for- Nju Mobile, Flex
Slide 13: On B2B market we delivered revenue growth across all business lines
On B2B market we delivered revenue growth accross all business lines… B2B revenues (yoy % change) +8% +18% 1,094 930 in PLNm 719 +1% ICT revenue +18% yoy driven by solid organic growth and Craftware acquisition 2019 2020 2021 Mobile handset revenue +7% yoy FTTH revenue +34% yoy customer base and ARP
Slide 14: We strengthened our position of integrator and digital services provider
… and we strengthened our position of integrator and digital services provider Revenue performance of different ICT companies in Orange Polska Group +4% * * +27% +27% outside of Orange 2020 2021 2020 2021 2020 2021 Main driver of both organic and in-organic growth were software solutions. We support
Slide 15: Financial review
Financial review Jacek Kunicki Chief Financial Officer 15
Slide 16: Strong financial performance in 2021
Strong financial performance in 2021 in PLNm FY21 yoy 4Q’21 yoy ▪ 4Q/FY growth driven by convergence, revenues 11,928 +3.6% 3,171 +2.9% mobile-only, roaming recovery and IT/IS ▪ MTR/FTR cuts affected wholesale in 2H EBITDAaL 2,963 +5.9% 707 +8.1% ▪ Fuelled by profitable revenue expansion % of revenu
Slide 17: 4Q revenue +2.9% yoy driven by core telecom services and IT/IS
4Q revenue +2.9% yoy Revenue evolution driven by core telecom yoy change 6.8% 8.3% services and IT/IS 4,3% 7.2% 3.6% 2,8% 4,5% 4,1% 3,3% 2.9% Total reported Core telecom services* 4Q'20 1Q'21 2Q'21 3Q'21 4Q'21 Revenue evolution breakdown in PLNm ▪ Core telecom services* (+7% yoy) +3.6% Growth improv
Slide 18: 4Q EBITDAaL +8.1% yoy driven by profitable revenue expansion
4Q EBITDAaL +8.1% yoy EBITDAaL evolution driven by profitable (yoy change in %) revenue expansion 8.1% 5,3% 6,6% 3,8% ▪ 4Q direct margin up 4% yoy: ▪ Driven by growth of core telecom -4,1% services & IT/IS 4Q'20 1Q'21 2Q'21 3Q'21 4Q'21 ▪ 4Q indirect costs broadly flat: ▪ Reflect mainly catch-up in E
Slide 19: Very high net income reflects gain on FiberCo transaction
Evolution from EBITDAaL to the net income in 2021 Very high net income (PLNm) reflects gain on yoy FiberCo transaction & change strong underlying +166 +256 -9 +71 -109 -149 +226 +1,400 +1,626 performance 2,963 -2,255 +52 +1,400 1,672 -271 ▪ 12% yoy lower depreciation reflects PLN 116m impact of -125
Slide 20: eCapex in line with guidance, already benefitting from FiberCo JV
eCapex in line with guidance, already benefitting from FiberCo JV Investment areas (in PLNm) Fibre net of disposed rollout to FiberCo Small yoy decline reflects Mobile network 622 346 ▪ >40% lower fibre as we benefit 196 Fixed & core network 238 from FiberCo JV 524 ▪ construction of new data IT Syst
Slide 21: Organic Cash Flow up 35% yoy
Organic Cash Flow up 35% yoy Cash flow evolution breakdown in FY 2021 in PLNm yoy change +207 -111 +99 +54 -24 +225 OCF generation driven by: ▪ 6% EBITDAaL growth +127 ▪ cash proceeds from sale of -1,906 assets (partly to FiberCo*) 2,974 +114 -442 ▪ decreasing working capital 867 requirement Net cas
Slide 22: Strong balance sheet structure due to solid cash generation and FiberCo
Strong balance sheet structure due to solid cash generation and the FiberCo transaction Net debt evolution in PLNm 5,549 -867 ▪ 90% of debt at fixed interest rate by mid-2024 -750 +144 4,076 ▪ 3.4 years average debt duration Dec 2020 Organic Cash related to Others* Dec 2021 cash flow FiberCo transac
Slide 23: 2022 outlook
2022 outlook Julien Ducarroz Chief Executive Officer 23
Slide 24: Key priorities for 2022
Key priorities for 2022 Further development Further growth of ICT of key value drivers (convergence & fibre) (cybersecurity, cloud, big data) Value strategy particularly valid Capex refocus in inflationary environment from fibre to 5G New PPA Tackling inflation headwinds, contracts in particular ene
Slide 25: .Grow financial ambitions confirmed by 2021 performance & 2022 outlook
.Grow financial ambitions confirmed by 2021 performance & 2022 outlook Revenues EBITDAaL eCAPEX 2021 results: very strong first step in +3.6% yoy +5.9% yoy PLN 1.74 bn .Grow strategy very small decline due to flat/low single digit growth 2022 outlook PLN 1.7-1.9bn MTR/FTR cuts (energy prices as key
Slide 26: Shareholders' remuneration: PLN 0.25 dividend
Shareholders’ remuneration .Grow dividend policy: Cash dividend PLN 0.25 as sustainable floor for the future PLN 0.25 Future changes to be considered yearly, including: per share ▪ Projections of underlying financial results to be paid in 2022 from 2021 profits* ▪ Long-term financial leverage foreca
Slide 27: Q&A
Q&A 27
Slide 28: Appendix
Appendix 28
Slide 29: Settlements between OPL and FiberCo
Settlements between OPL and FiberCo Current picture of settlements between OPL and Światłowód Inwestycje (FiberCo) Revenues wholesale ▪ telco services: infrastructure rental, transmission network Costs labour costs ▪ investment process and network maintenance interconnect costs ▪ BSA access fee per
Slide 30: Details of bottom line evolution in 2021 and 4Q 2021
Details of bottom line evolution in 2021 and 4Q 2021 in PLNm 2021 2020 Change 4Q’21 4Q’20 Change EBITDAaL 2,963 2,797 +166 707 654 +53 D&A of PPE and intangible assets* -2,255 -2,511 +256 -591 -649 +58 Add-back interest expense on lease liabilities 53 62 -9 13 15 -2 Adjustment for the impact of empl
Slide 31: Details of organic cash flow evolution in 2021 and 4Q 2021
Details of organic cash flow evolution in 2021 and 4Q 2021 in PLNm 2021 2020 Change 4Q’21 4Q’20 Change Net cash flow from operating activities 2,974 2,767 +207 722 707 +15 before change in working capital Change in working capital 127 238 -111 -175 42 -217 Net cash flow from operating activities 3,1
Slide 32: We successfully combine growth with social responsibility
We successfully combine growth with social responsibility Environment Social Governance We have clear climate/environmenal We make new technologies a Our corporate governance is goals and tangible results supporter of economic and social designed to provide responsible ▪ Climate goals and performanc
Slide 33: 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 ARPO Average Revenue per Offer AUPU Average Usage per user The number of customers who disconnec
Slide 34: Glossary (2/2)
Glossary (2/2) Fixed broadband-only Revenues from fixed broadband offers (excluding B2C convergent offers and equipment sales) including services TV and VoIP services FTE Full time equivalent HHC (Households connectable) in fibre Households where broadband access service based on fibre technology ca