Orange Polska S.a. · GPW:OPL
Orange Polska — Q2 2021 Earnings Presentation
26 slides from Orange Polska's earnings presentation, Jul 29, 2021
Slide 1: Orange Polska 2Q'21 results
Orange Polska 2Q’21 results 29 July 2021 .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 Notes 2 and 3 to Condensed IFRS Interim Consolidated Financial Statements of the Orange Polska Group for the 6 months ended 30 June 2021 (available at https://www.or
Slide 4: Highlights & Business review
Highlights & Business review Julien Ducarroz Chief Executive Officer 4
Slide 5: 2Q 2021 key messages
2Q 2021 key messages New .Grow 2021-2024 strategy announced ▪ Faster growth with more solid fundamentals; return to sustainable dividends from 2022 Strong financial results ▪ Revenue growth driving the expansion of EBITDAaL Commercial performance reflects low customer activity on the market ▪ Solid
Slide 6: Strong 1H financial results, in line with the increased guidance
Strong 1H financial results, in line with the increased guidance* 1H 2021 Revenues EBITDAaL eCAPEX in PLN 5.87 bn 1.47 bn 0.89 bn YoY +4.3% +4.6% +8.3% FY 2021 PLN 1.7-1.9bn, low single digit low-to-mid single (depending on guidance growth digit growth* proceeds from asset disposal) *EBITDAaL guidan
Slide 7: Convergence fuelled by growth of both ARPO and customer base
▪ convergence fuelled Convergence ARPO growth Convergent customer base up 8% yoy by growth of both accelerating to 6% yoy (in m) (in PLN) ARPO and customer +6% +8% base 111.4 1.50 1.52 109.6 1.41 ▪ good demand for 105.4 fibre continues: 48k +23 +20 +14 net adds in 2Q 2Q'20 1Q'21 2Q'21 2Q'20 1Q'21 2Q
Slide 8: Mobile: Good growth of customer base
Mobile: Mobile-only handset ARPO Mobile handset customer base up growing due to roaming by 5% yoy ▪ Good growth of (in PLN) (in m) +1.8%* +5% customer base 27.7 8.18 8.27 ▪ Post-paid and pre- 27.2 27.2 7.88 paid ARPO growing +65 +88 +83 2Q'20 1Q'21 2Q'21 2Q'20 1Q'21 2Q'21 net adds in k *excl. roamin
Slide 9: More-for-more offer update for the consumer market
”More-for-more” offer update for the consumer market Mobile post-paid offers (prices in PLN) 5G 5G Plan 40 Plan 50 Plan 60 Plan 80 Convergence offers (prices in PLN, for the most popular 300 MB/s speed option, 40 50 60 80 exclude seasonal promotions) 35* 45* 55* 75* 4 GB** 12 GB** 25 GB** 80 GB** Mi
Slide 10: Important milestones concluded for the FiberCo transaction; closing expected by end of August
Important milestones concluded for the FiberCo transaction; closing expected by the end of August Transfer of 672k households to S-I out of OPL current footprint, including active lines for around 170k of OPL retail customers Apr Jul Aug Signing of the agreement with APG to create FiberCo S-I has si
Slide 11: Financial review
Financial review Jacek Kunicki Chief Financial Officer 11
Slide 12: Strong financial performance in 2Q/1H
Strong financial performance in 2Q/1H in PLNm 1H’21 yoy 2Q’21 yoy ▪ Driven by convergence, mobily-only and revenues 5,872 +4.3% 2,954 +4.5% IT/IS EBITDAaL 1,465 +4.6% 756 +3.8% ▪ Fuelled by profitable revenue expansion ▪ 2Q comparable base includes net positive % of revenues 24.9% 0.0pp 25.6% -0.1pp
Slide 13: 2Q revenue up 4.5% yoy with all major product lines contributing
2Q revenue up 4.5% yoy Revenue evolution yoy change with all major product 6.8% lines contributing to the 3.6% 4.3% growth 2.3% 2.3% 4.1% 4.5% 2.5% 2.8% Total reported -2.7% Core telecom services* ▪ Core telecom services* (+6.8% yoy) 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 growth improving due to strong ARPO
Slide 14: EBITDAaL +3.8% yoy in 2Q and +4.6% yoy in 1H
EBITDAaL +3.8% yoy in 2Q EBITDAaL evolution (yoy change in %) and +4.6% yoy in 1H 10.0% 5.3% 3.8% 0.4% ▪ Direct margin up 7% yoy: -4.1% ▪ Driven by growth of core telecom services & IT/IS 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 ▪ Reflects ca. PLN -40m impact of crisis-related provisions in 2Q’20 ▪ Indirect co
Slide 15: 2Q net income growth
2Q net income growth Evolution from EBITDAaL to the bottom line in 2Q 2021 (PLNm) ▪ Growing EBITDAaL ▪ Lower depreciation yoy +64 change +28 +94 -2 -7 +2 +4 -55 ▪ PLN 32m impact of extension of economic useful life for certain 756 -542 assets ▪ Higher income tax +14 -11 +7 -45 -63 116 D&A of Interes
Slide 16: 1H'21 eCapex in line with full-year guidance
1H’21 eCapex in line with full-year guidance Investment areas Small yoy growth reflects (in PLNm) ▪ more evenly timed spending in IT and network Gross capex spend 847 886 ▪ construction of new data centre ▪ less mobile capex (spectrum refarming completed) FTTH rollout (incl. CPE) 275 293 ▪ prolonged
Slide 17: Strong underlying cash generation in 1H 2021
Strong underlying cash Cash flow evolution breakdown generation in 1H 2021 in PLNm yoy change +105 -97 +6 +18 -35 -3 1,511 +95 1H stable yoy, despite very high comparable base of working capital -1,058 +48 -239 requirement (WCR) 357 ▪ 1H’20 WCR lowered by delay of PLN 120m of payroll tax payments to
Slide 18: Summary
Summary Julien Ducarroz Chief Executive Officer 18
Slide 19: Summary
Summary Strong 1H results driven by successful value strategy in a low sales volume environment In 2H strong focus on commercial activity in a traditionally higher sales season FiberCo transaction closure planned in 3Q We are well on track to reach our full-year financial objectives ▪ we are careful
Slide 20: Q&A
Q&A 20
Slide 21: Appendix
Appendix 21
Slide 22: Details of bottom line evolution in 2Q and 1H 2021
Details of bottom line evolution in 2Q and 1H 2021 in PLNm 1H’21 1H’20 Change 2Q’21 2Q’20 Change EBITDAaL 1,465 1,401 +64 756 728 +28 D&A of PPE and intangible assets -1,118 -1,244 +126 -542 -636 +94 add-back interest expense on lease 27 32 -5 14 16 -2 liabilities Adjustments* -21 -7 -14 -11 -4 -7 g
Slide 23: Details of organic cash flow evolution in 2Q and 1H 2021
Details of organic cash flow evolution in 2Q and 1H 2021 in PLNm 1H’21 1H’20 Change 2Q’21 2Q’20 Change Net cash flow from operating activities 1,511 1,406 +105 763 695 +68 before change in working capital Change in working capital 95 192 -97 -50 287 -337 Net cash flow from operating activities 1,606
Slide 24: We successfully combine growth with social responsibility
We successfully combine growth with social responsibility Environment Social Governance We implement our business goals We make new technologies a Our corporate governance is with respect for ecology rules and in supporter of economic and social designed to provide responsible harmony with the envir
Slide 25: Glossary (1/2)
Glossary (1/2) 4G fourth generation of mobile technology, sometimes called LTE (Long Term Evolution) ARPO Average Revenue per Offer data user a customer who used mobile data transmission in a given month Revenues from B2C convergent offers (excluding equipment sales). A convergent offer is defined a
Slide 26: Glossary (2/2)
Glossary (2/2) Convergent services, mobile retail and wholesale, fixed broadband, IT and integration services, Growth services equipment and B2B network solutions and adjacent services Households (HH) connectable in fibre Households where broadband access service based on fibre technology can be ren