Orange Polska S.a. · GPW:OPL
Orange Polska — FY2024 Earnings Presentation
38 slides from Orange Polska's earnings presentation, Feb 13, 2025
Slide 1: Orange Polska FY 2024 results
Orange Polska FY 2024 results .Grow 13 February 2025 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: 2024 Business highlights
2024 Business highlights Liudmila Climoc Chief Executive Officer 3
Slide 4: 2024 performance underscores the success of .Grow strategy
2024 performance underscores the success of .Grow strategy Solid commercial momentum confirmed by better customer perception (NPS#1) ▪ Strong performance in B2C ▪ Challenging environment on the enterprise market ▪ Wholesale commercial engine reinforced by wider fibre network opening Important step u
Slide 5: Core telecom services: good ARPO growth coupled with solid customer base expansion
Core telecom services: good ARPO growth coupled with solid customer base expansion PLN Convergence ARPO +4.6% PLN Fixed broadband-only ARPO +3.4% PLN Mobile-only handset ARPO +1.6% 124.3 yoy (vs. +3.6% yoy in 2023) 66.4 yoy (vs. +4.0% yoy in 2023) 29.9 yoy (vs. +3.1% yoy in 2023) Convergence custome
Slide 6: 2024 Financial review
2024 Financial review Jacek Kunicki Chief Financial Officer 6
Slide 7: Solid financial performance in 2024 across the board
Solid financial performance in 2024 across the board in PLNm FY24 yoy 4Q’24 yoy ▪ Strong growth of core telco services offset by revenues 12,732 -1.8% 3,423 -2.0% decline in low margin energy resale and IT&IS (lower market demand & high comparable base) EBITDAaL 3,324 +4.6% 804 +6.8% ▪ Very solid gr
Slide 8: 2024 guidance achieved
2024 guidance achieved 2024 objectives 2024 results flat/low single digit Revenues yoy -1.8% √ decline low-to-mid single digit EBITDAaL yoy +4.6% √ growth eCapex PLN 1.7-1.9 bn PLN 1.8 bn √ 8
Slide 9: 4Q revenue with strong growth from core telecom services and decline in IT&IS
4Q revenue with strong Revenue evolution growth from core telecom (yoy change in %) 6.1% 6.3% services and decline in 3.8% 4.2% 4.7% IT&IS 3.3% -0.3% Total reported -3.1% -1.8% -2.0% Core telecom services* 4Q'23 1Q'24 2Q'24 3Q'24 4Q'24 Revenue evolution breakdown 4Q reflects: in PLNm ▪1 Core telecom
Slide 10: 4Q EBITDAaL +6.8% yoy with strong growth of margin from core business
4Q EBITDAaL +6.8% yoy EBITDAaL evolution with strong growth of (yoy change in %) margin from core business 4.9% 3.8% 6.8% 2.3% 3.1% 4Q'23 1Q'24 2Q'24 3Q'24 4Q'24 EBITDAaL evolution breakdown (yoy change in PLNm) 4Q reflects: +4.6% 1▪ Solid performance of direct margin from core business (ex. energy
Slide 11: 2024 net income +12% yoy due to rising EBITDAaL
2024 net income +12% yoy due to rising EBITDAaL Net income evolution in 2024 (yoy change in PLNm) +12% Net income evolution mainly reflects: ▪ EBITDAaL growth -21 -21 ▪ Higher net financial costs due to 913 +145 -78 increased interests on debt and 818 -25 +95* high FX gains in 2023 o/w FX gains ▪ PL
Slide 12: 2024 eCapex reflects full pace of 5G rollout
2024 eCapex reflects full pace of 5G rollout Investment areas (in PLNm) Fibre net of disposed rollout to 227 FiberCo 172 Mobile network 515 ▪ Growth in mobile reflects full pace 473 of 5G network rollout and RAN Fixed & core network renewal 575 ▪ Fibre growing due to network 549 IT Systems and Infra
Slide 13: c.PLN 1bn of organic cash flow and sound balance sheet structure
c.PLN 1bn of organic Cash flow evolution breakdown in FY 2024 cash flow and sound in PLNm balance sheet structure yoy +289 -331 -46 -15 -85 -188 -123 +263 -48 change OCF evolution reflects: 3,508 -97 ▪ c.5% EBITDAaL growth -2,045 ▪ increase in working capital linked to +183 -564 higher capitalised c
Slide 14: .Grow summary
.Grow summary Liudmila Climoc Chief Executive Officer Jolanta Dudek Deputy CEO in charge of the consumer market .Grow Bożena Leśniewska Deputy CEO in charge of the business market Maciej Nowohoński MB member in charge of wholesale market Jacek Kunicki Chief Financial Officer Orange People 14
Slide 15: Key achievements of .Grow strategy 2021-2024
Key achievements of .Grow strategy 2021-2024 Value growth via balanced ARPO and customer base uplift (revenues* +25%) c.+60% IT/IS revenues outperforming the market c.+60% wholesale revenue as Acquisition of 5G spectrum and we monetise our infrastructure** start of network rollout -78% CO2 reduction
Slide 16: .Grow was fuelled by all three core business engines
.Grow was fuelled by all three core business engines Direct margin growth drives B2C EBITDAaL expansion Convergence strategy supported by growing fibre reach and value strategy +14% 2024 2023 2022 2021 B2B Strong position in telco services complemented by wide portfolio of IT/IS competencies Wholesa
Slide 17: Convergence as a bedrock of our commercial strategy for households
Convergence as a bedrock of our commercial strategy for households Customer base fuelled by fibre …coupled with ARPO growth driven …translated into strong expansion and our attractive offers … by our value strategy and growing convergence revenue growth customers needs…. +20% +18% +48% (CAGR +10%) L
Slide 18: Fibre connectivity is a key driver of value
Fibre connectivity is a key driver of value Fibre network* expanded mainly by Retail customer base more than doubled FiberCo JV and wholesale agreements despite intensive competition +80% +116% 1.9 ~9* 1.57 1.4 0.2 0.5 ~5 0.73 NPS #1 in m in m FiberCo M&A EU subsidised Other 2024 2020 projects 3rd p
Slide 19: Solid mobile performance on a mature market
Solid mobile performance on a mature market Consistent mobile handset customer Mobile-only handset ARPO reflects value Blended data AUPU base growth on mature market strategy and growing share of b-brands 11.5 +14% 4.7 +8% in GB 9.19 2020 2024 8.10 29.9 Data download Mobile-only Customers 5.3 6.0 27
Slide 20: B2B executed .Grow ambitions confirming the leadership position on telco market
B2B executed .Grow ambitions confirming the leadership position on telco market and… Telco services key revenue growth B2B telco services revenue +10% drivers despite 40% drop in narrowband Mobile +26%: consistent growth of customer base and ARPO (+11%) +10% 2.83 Fixed broadband +20%: 2.58 growing s
Slide 21: B2B became TOP3 integrator and digital services provider in Poland
…and B2B became TOP3 integrator and digital services provider in Poland +~PLN 600m IT&IS revenues IT&IS revenue growth driven by expansion of E2E integration and digital solutions for business transformation: +59% Significant acceleration in cybersecurity (+PLN 107m) 1.59 Customised software develop
Slide 22: Wholesale maximises monetisation of infrastructure
Wholesale maximises monetisation of infrastructure Our infrastructure assets meet growing Significant growth of FiberCo JV demand from other operators 2.1x vs 2020 6.0x* vs 2020 FiberCo network rollout on track with business plan data transmission wholesale fibre 2.1 capacity sold customer lines 4.1
Slide 23: Transformation brings new business opportunities and helps to mitigate cost inflation
Transformation brings new business opportunities and helps to mitigate cost inflation Increasing share of digital sales with Robust process transformation Workforce evolution My Orange App as a key driver across key areas -19% ▪ 100% of POS with paperless service 25% ▪ less costs thanks to FTTH serv
Slide 24: We delivered on our ESG commitments
We delivered on our ESG commitments Environment .Grow target: ~65% CO2 emission reduction till 2025* Achieved -78% CO2 emissions reduction vs 2015cb (scope 1+2) Digital inclusion Diversity Large education and social programmes for children, teachers and seniors .Grow target: 35% women in senior mana
Slide 25: Value creation underscored by >PLN 500 mln EBITDAaL growth
Value creation underscored by >PLN 500 mln EBITDAaL growth Revenues EBITDAaL +11% +19% -1.8% +1.2bn +0.5bn 12,732 3,324 11,508 2,797 +1.8pp 24.3% 26.1% in mPLN in mPLN EBITDAaL margin 2020 2024 2020 2024 Organic Cash Flow Net debt /EBITDAaL ROCE +53% -0.9x +5x +0.3bn 985 2.0x 7.9% 643 1.1x 1.6% in m
Slide 26: .Grow financial ambitions met
.Grow financial ambitions met Mid-term guidance (2021 to 2024)* 2021-24 performance Revenues low single digit growth CAGR +2.6% CAGR √ EBITDAaL low-to-mid single growth CAGR +4.4% CAGR √ 1.7 to 1.9 yearly average over the 1.71bn eCapex (PLN bn) period (avg 2021-24) √ 7.9% in 2024 ROCE increase 3-4x
Slide 27: 2025 outlook
2025 outlook Liudmila Climoc Chief Executive Officer 27
Slide 28: Priorities for 2025
Priorities for 2025 Further commercial growth in core telecom services Growth of ICT despite still fragile environment Securing leadership in connectivity infrastructure Launch of the new mid-term strategy (announcement on 19 March) 28
Slide 29: 2025 guidance
2025 guidance 2024 results 2025 guidance Revenues yoy -1.8% low single digit growth EBITDAaL yoy +4.6% low single digit growth eCAPEX PLN 1.8 bn PLN 1.8-1.9 bn 29
Slide 30: We are committed to sustainable shareholders' remuneration
We are committed to sustainable shareholders’ remuneration Dividend per share (PLN) (payment year) +112% PLN 0.53 +37% +10% per share +40% to be paid in 2025 from 2024 profits* 0.48 0.53* 0.25 0.35 2022 2023 2024 2025 * Management recommendation, subject to approval of General Meeting of Shareholder
Slide 31: Q&A
Q&A 31
Slide 32: Appendix
Appendix 32
Slide 33: EBITDAaL evolution breakdown in 2024
EBITDAaL evolution breakdown in 2024 EBITDAaL evolution breakdown in 2024 (yoy change in PLNm) +4.6% ▪1 Solid and consistent performance of direct margin from underlying business +212* -79 +139 3,324 -127 ▪2 Cost transformation & efficiency 3,179 initiatives** compensate headwinds from CPI and energ
Slide 34: Reconciliation of operating performance measure
Reconciliation of operating performance measure 4Q 2024 FY 2024 4Q 2023 FY 2023 in PLNm Operating income 340 1,419 109 1,221 Less gains on disposal of fixed assets -38 -113 -9 -134 Add-back of depreciation, amortisation and impairment of property, plant and equipment and intangible assets* 486 2,021
Slide 35: Details of bottom line evolution in 4Q and 2024
Details of bottom line evolution in 4Q and 2024 in PLNm 4Q’24 4Q’23 Change 2024 2023 Change EBITDAaL 804 753 +51 3,324 3,179 +145 Gains on disposal of assets 38 9 +29 113 134 -21 D&A of PPE and intangible assets* -486 -517 +31 -2,021 -2,000 -21 Add-back interest expense on lease liabilities 36 36 0
Slide 36: Details of organic cash flow evolution in 4Q and 2024
Details of organic cash flow evolution in 4Q and 2024 in PLNm 4Q’24 4Q’23 Change 2024 2023 Change Net cash flow from operating activities before change in 858 731 127 3,508 3,219 289 working capital Change in working capital* 75 96 -21 -97 234 -331 Net cash flow from operating activities 933 827 106
Slide 37: 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 38: 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 FTO Full time outsourcing FTR Fixed termination rate HHC (Households connectable) in fibre Households where