Orange Polska S.a. · GPW:OPL
Orange Polska — Q2 2020 Earnings Presentation
24 slides from Orange Polska's earnings presentation, Jul 30, 2020
Slide 1: Orange Polska 2Q'2020 results
Orange Polska 2Q’2020 results 30 July 2020 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, including information on data restatements for the year 2019 in connection with changes in accounting policies, have been presented in the Notes 2 and 3 to Condensed IFRS Interim Consolidated
Slide 4: Contents
Contents 1. Highlights 2. Financial review 3. Conclusions 4. Q&A session 4
Slide 5: Highlights
Highlights Jean-François Fallacher Chief Executive Officer 5
Slide 6: Good 1H results helped by mitigating measures: full-year EBITDAaL growth guidance maintained
Good 1H results helped by our mitigating measures: full-year EBITDAaL growth guidance maintained despite 2H uncertainty 2020 guidance/ 1H 2020 outlook PLN 5.63bn • Resilient performance of our core services Revenue growth • Continuation of strong growth in IT/IS +1.7% yoy • Wholesale reflects surge
Slide 7: 2Q proved relative resilience to pandemic; cautious outlook for 2H
2Q proved our relative resilience to the pandemic; cautious outlook for 2H due to economic downturn Limited impact of the pandemic on 2Q performance: Key impact on commercial results: Key impact on financial results: customer traffic gradually recovering to pre-pandemic level much lower roamin
Slide 8: Mitigating measures significantly contributed to financial performance in 2Q
Mitigating measures significantly contributed to financial performance in 2Q Operating costs Curtailment of jubilee awards scheme resulted in provision reversal in 2Q; less cash outflows in the years to come Rate of basic salary increase in 2020 reduced from 3.5% to 1.0% against freeze of furt
Slide 9: Delay in C-band spectrum allocation. 5G launched on 2.1GHz
Delay in C-band spectrum allocation. 5G launched on 2.1GHz in high end tariff plans C-band auction cancelled as of today limited visibility on the launch of the new process; finalisation of the spectrum distribution most likely in 1H21 new head of telco regulations office (UKE) in the process of
Slide 10: Robust performance of fixed broadband in 2Q fuelled by strong quarter for fibre
Robust performance of fixed broadband in 2Q fuelled by yet another strong quarter for fibre Improving total FBB net additions driven by Fibre customer base up 40% yoy VHBB (fibre+VDSL): 43% of total resilient sales and low churn (the 2nd best quarter ever repeated) broadband customer base (in k) (in
Slide 11: Value creation visible through resilient commercial performance and strong cost optimisation
Value creation visible through resilient commercial performance and strong cost optimisation Growing convergence Growing B2C convergent Mobile handset ARPO trend Strong mobile post-paid net adds ARPO customers affected by roaming excl. 2.5% 2.5% quarterly churn in convergence roaming 2.1% COMMERCIAL
Slide 12: Financial review
Financial review Jacek Kunicki Chief Financial Officer 12
Slide 13: 2Q'20 financial results key highlights
2Q’20 financial results key highlights in PLNm 1H’20 yoy 2Q’20 yoy key points +8% yoy growth of core revenues driven by revenues 5,632 +1.7% 2,828 +2.5% resilient telco services and another strong quarter for IT/IS EBITDAaL 1,401 +8.0% 728 +10.0% Direct margin trend affected by higher provisions
Slide 14: Revenue growth thanks to resilience of core telecom services, strong IT/IS
Revenue growth thanks to resilience of core telecom services, strong IT/IS and surge in mobile voice wholesale traffic Revenue evolution Mobile only revenue trend affected by c.50% yoy lower yoy change +9.2%* +8.1%* roaming revenues; roaming and pre-paid to affect 2H core First ever growth (+0.5
Slide 15: 2Q EBITDAaL +10% yoy reflecting underlying turnaround and mitigating measures
2Q EBITDAaL +10% yoy reflecting underlying turnaround supported by significant impact of mitigating measures Direct margin affected by the pandemic: EBITDAaL evolution Reflects strong performance on core service (yoy change in PLNm) revenues and IT/IS 728 Affected by pandemic related provision
Slide 16: 2Q flat bottom line reflects higher depreciation, lower disposal gains and financial costs
2Q flat bottom line reflects higher depreciation, lower gains on asset disposals and lower financial costs in PLNm 1H’20 1H’19 Change 2Q’20 2Q’19 Change EBITDAaL 1,401 1,297 +104 728 662 +66 D&A of PPE and intangible assets -1,244 -1,158 -86 -636 -575 -61 add-back interest expense on lease 32 33 -1
Slide 17: 1H eCapex reflects slowdown of investments to offset low proceeds from asset sales
1H eCapex reflects slowdown of investments to offset potentially low proceeds from sale of assets in 2H Investment areas (in PLNm) Capex 1,019 847 Mobile Network 131 Fibre capex down 19% yoy reflecting: Lower investments in backbone for future FTTH program (incl. CPE) 123 network rollout 363 L
Slide 18: Cash flow in 2Q reflects strong EBITDAaL growth and shift of PLN 120m of payments
Cash flow in 2Q reflects strong EBITDAaL growth and shift of some PLN 120m of payments to 2H (visible in working capital) in PLNm 1H’20 1H’19 Change 2Q’20 2Q’19 Change Net cash flow from operating activities 1,406 1,244 +162 695 591 +104 before change in working capital Change in working capital 192
Slide 19: Net debt lower by PLN 300 million
Net debt lower by PLN 300 million Debt after hedging breakdown net debt evolution fixed vs floating in PLNm interest rate currency exposure 6,087 100% fixed 100% PLN -360 5,786 +59 end Organic Debt & end Dec 2019 cash flow derivatives MtM June 2020 1.9 years – debt average duration valuation chang
Slide 20: Conclusions
Conclusions Jean-François Fallacher Chief Executive Officer 20
Slide 21: 1H results prove resilience of our business. Full-year plans confirmed
1H results prove resilience of our business and ability to adapt. Full-year plans confirmed despite cautious outlook for 2H Strong commercial and financial results in 2Q Monetisation of more for more strategy coupled with ongoing cost transformation Illustration of strength of OPL fundamentals
Slide 22: Q&A
Q&A 22
Slide 23: 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 24: 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