Orange Polska S.a. · GPW:OPL
Orange Polska — Q2 2022 Earnings Presentation
24 slides from Orange Polska's earnings presentation, Jul 28, 2022
Slide 1: Orange Polska 2Q 2022 results
Orange Polska 28 July 2022 2Q 2022 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 2022 (available at https://www.orange-ir
Slide 4: Highlights & Business review
Highlights & Business review Julien Ducarroz Chief Executive Officer 4
Slide 5: 2Q 2022 key messages
2Q 2022 key messages Increasingly challenging environment ▪ CPI at >15% and further rise in energy prices ▪ Entrance of a new convergent player Good commercial performance ▪ Better yoy customer net additions and solid ARPO growth in all key services; handset sales rebounding ▪ Good agility of ICT bu
Slide 6: 1H 2022 strong financial results
1H 2022 strong financial results 2022 flat/low single digit very small decline growth (energy guidance due to regulatory PLN 1.7-1.9bn prices as key MTR/FTR cuts uncertainty) 1H 2022 Results Revenues EBITDAaL eCAPEX in PLN 6.0 bn 1.5 bn 0.6 bn YoY +1.9% +3.8% -35% Update on Guidance Guidance revised
Slide 7: Solid commercial performance in convergence and fibre
Solid commercial performance in convergence and fibre PLN Convergence ARPO +2.1% yoy 6.5 M Fibre HHC with 17.5% adoption rate 113.7 Steady growth pace of Strong demand for Orange fibre Fast expansion of fibre footprint convergence customer base continues Adoption 16.1% 17.5% rate +4% +20% Access to
Slide 8: Strong net additions in mobile post-paid and pre-paid
Strong net additions in mobile post-paid and pre-paid PLN Mobile-only handset ARPO Mobile pre- paid ARPO PLN 28.3 +2.2% yoy -0.8% yoy (+9% yoy adj. for non- 12.5 active starters for refugees) Strong net customer additions in all B2C Customer base boosted by distribution brands (Orange, Nju, Flex) of
Slide 9: Financial review
Financial review Jacek Kunicki Chief Financial Officer 9
Slide 10: Very strong financial results in 2Q bring us closer to reaching full-year objectives
Very strong financial results in 2Q bring us closer to reaching full- year objectives in PLNm 2Q’22 yoy 1H’22 yoy ▪ Strong performance of core telco services and revenues 3,055 +3.4% 5,986 +1.9% IT/IS ▪ MTR/FTR cuts affected legacy wholesale EBITDAaL 798 +5.6% 1,520 +3.8% ▪ Margin from core revenues
Slide 11: 2Q revenue +3.4% yoy (+7.0% ex regulatory impact)
2Q revenue +3.4% yoy Revenue evolution (+7.0% ex regulatory impact) with (yoy change in %) 8.3% 7.2% good performance in all 6.7% 7.1% 6.9% major lines 4.5% 3.3% 3.4% 2.9% Total reported 0.4% ▪ Core telecom services* (+6.9% yoy) Core telecom services* Strong performance continues driven by 2Q'21 3Q'
Slide 12: 2Q EBITDAaL +5.6% yoy: exceptional performance with direct margin growth
2Q EBITDAaL +5.6% yoy: EBITDAaL evolution exceptional performance (yoy change in %) with direct margin growth and less indirect costs 6.6% 8.1% 5.6% 3.8% 1.8% ▪ Direct margin up 1% yoy: ▪ Driven by strong revenue performance 2Q'21 3Q'21 4Q'21 1Q'22 2Q'22 ▪ Includes negative scope impact (c. PLN 20m
Slide 13: 1H net income +140% yoy driven by higher EBITDAaL & gain on real estate sales
Evolution from EBITDAaL to the net income in 1H 2022 1H net income +140% (PLNm) yoy driven by higher EBITDAaL & gain on yoy real estate sales and change +55 +108 +11 -16 +83 -45 +17 +213 lower D&A 1,520 -1,010 +38 -37 ▪ 10% yoy lower depreciation +70 reflects extension of economic useful life for ce
Slide 14: 1H eCapex benefits from transfer of fibre rollout to FiberCo
1H eCapex benefits from transfer of the fibre rollout to FiberCo and rebound of real Investment areas estate sales (in PLNm) Fibre net of disposed rollout to 275 FiberCo The yoy decline reflects Mobile network 90 72 ▪ c.70% lower fibre as we benefit 120 Fixed & core network from FiberCo JV 233 ▪ Gro
Slide 15: Cash generation in 1H 80% higher yoy leading to net debt reduction
Cash generation in 1H Cash flow evolution breakdown in 1H 2022 in PLNm 80% higher yoy leading to net debt reduction yoy change +120 -30 +198 +20 -17 +291 1,631 +65 Strong OCF generation mainly -860 driven by: +68 -256 648 ▪ EBITDAaL growth ▪ Lower cash capex Net cash from Change Cash Repayment in Ca
Slide 16: Summary
Summary Julien Ducarroz Chief Executive Officer 16
Slide 17: Summary
Summary Strong 1H results confirm our resilience to an increasingly challenging environment Focus on value strategy in the inflationary environment Perseverance in implementation of savings and transformation actions Acceleration on Green agenda: new PPA contracts to mitigate surging energy prices a
Slide 18: Q&A
Q&A 18
Slide 19: Appendix
Appendix 19
Slide 20: Details of bottom line evolution in 2Q and 1H 2022
Details of bottom line evolution in 2Q and 1H 2022 in PLNm 2Q’22 2Q’21 Change 1H’22 1H’21 Change EBITDAaL 798 756 +42 1,520 1,465 +55 D&A of PPE and intangible assets -506 -542 +36 -1,010 -1,118 +108 Add-back interest expense on lease liabilities 21 14 +7 38 27 +11 Adjustment for the costs related t
Slide 21: Details of organic cash flow evolution in 2Q and 1H 2022
Details of organic cash flow evolution in 2Q and 1H 2022 in PLNm 2Q’22 2Q’21 Change 1H’22 1H’21 Change Net cash flow from operating activities before change in 848 763 +85 1,631 1,511 +120 working capital Change in working capital 4 -50 +54 65 95 -30 Net cash flow from operating 852 713 +139 1,696 1
Slide 22: 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 Our corporate governance is goals and tangible results supporter of economic and social designed to provide responsible ▪ Climate goals and performan
Slide 23: 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 24: 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 FTR Fixed termination rate HHC (Households connectable) in fibre Households where broadband access service b