Slide 1: Financial results Q4'20 and the full year 2020
Financial results Q4’20 and the full year 2020 25 March 2021 Cyfrowy Polsat S.A. Capital Group
Slide 2: Disclaimer
Disclaimer This presentation may include forward-looking statements, understood as all statements (other than statements of historical facts) regarding our financial results, business strategy, plans and objectives pertaining to our future operations (including development plans related to our produ
Slide 3: Agenda
Agenda 1. Key events in 2020 2. Long-term partnership with Cellnex Telecom 3. Operating results 4. Financial results 5. Summary of 2020 and objectives for 2021 3
Slide 4: Key events in 2020
1. Key events in 2020 Mirosław Błaszczyk President of the Management Board, Cyfrowy Polsat
Slide 5: Key events in 2020
Key events in 2020 By offering donations in the amount of PLN 50 million, together with Zygmunt Solorz we supported the Polish society and healthcare system in the fight against the coronavirus We paid out a record dividend in the amount of PLN 640 million, PLN 640m or PLN 1 per share We launched th
Slide 6: Long-term partnership with Cellnex Telecom
2. Long-term partnership with Cellnex Telecom Maciej Stec Vice President of the Management Board, Cyfrowy Polsat
Slide 7: Business transaction concept
2.1 Business transaction concept Maciej Stec Vice President of the Management Board, Cyfrowy Polsat
Slide 8: What are we selling?
What are we selling? Nationwide and optimal network combining all technological elements Active & passive infrastructure Key financials (2020A) 8k sites(1) Revenue PLN 958m 37k carriers(2) EBITDA after leases(4) PLN 452m 17k microwave antennas cash CAPEX PLN 433m 11k km fibre optics(3) initially low
Slide 9: What does the mobile business in Poland look like at the moment
What does the mobile business in Poland look like at the moment Low prices, falling margins and high capex Average monthly cost of using 4MNOs’ revenues and EBITDA(1,2) 4MNOS’ CAPEX(1) mobile services (2018, PLN) (PLN bn) (PLN bn) HU 430 25.8 GE 357 24.4 avg MNOs’ CZ 288 SL 46% capex as % of 287 EBI
Slide 10: Network sharing is the only alternative
Network sharing is the only alternative Something went wrong in the past… 10
Slide 11: Our major challenge for the future
Our major challenge for the future Data traffic Demand for new sites(1) (millions of GB per year) 5x increase to Almost 8k 25 exabytes per year new sites ca.38k 25 551 29 793 ca. 30k 5 353 2020F 2030F 2020F 2030F DYNAMIC INCREASE OF DATA TRANSFER REQUIRES 5G ROLL-OUT SPEED UP Source: the Company, An
Slide 12: 5G is our business opportunity
5G is our business opportunity ARPU increase based on higher quality of services provided 5G All-inclusive packages (TV / Internet / Mobile) and Value Added Services 5G BUNDLING Mobile offer as a commodity service (unlimited voice, SMS, MMS, Internet) 5G MOBILE OFFER 5G AS AN OPPORTUNITY FOR ARPU IN
Slide 13: Plus has already started investing in 5G
Plus has already started investing in 5G Polkomtel started Polkomtel All MNOs consent to sharing We are waiting investments by building expanding 5G passive and active 700 MHz for the 3.4-3.8 GHz the first true 5G network network spectrum in „Polish 5G” talks auction in Poland Unique opportunities b
Slide 14: How does the business model work?
2.2 How does the business model work? Maciej Stec Vice President of the Management Board, Cyfrowy Polsat
Slide 15: Why passive and active?
Why passive and active? Similar logic despite differences NetCo concept PASSIVE 2017 ACTIVE • Many completed transactions involving • Active infrastructure is an integral passive infrastructure in the past whole with the passive part – just • Real estate characteristics requires more frequent capex
Slide 16: How exactly does it work?
How exactly does it work? Interest alignment Demand for high-speed data transmission will drive our cooperation Polsat Group sees Polsat Group places NetCo and Polsat agree NetCo delivers new Customers of Plus and additional demand for order with NetCo for mark-to-market prices services as ordered.
Slide 17: Safe rules of cooperation
Safe rules of cooperation Key agreements regulating provision of services to Polsat Group based on ordered telco infrastructure (sites, carriers, transmission, etc.) Detailed MSA & SLA To be concluded for 25 years, subject to 15-year renewals PLK obliged to place orders for a specified number
Slide 18: NetCo is the future
NetCo is the future Best answer to market challenges, opportunities and expectations AN INDEPENDENT OPERATOR OF PASSIVE AND ACTIVE INFRASTRUCTURE WITH MANY TENANTS IS THE GAME-CHANGER 18
Slide 19: Expected impact on Polsat Group financials
2.3. Expected impact on Polsat Group financials Katarzyna Ostap-Tomann CFO, Cyfrowy Polsat
Slide 20: Transaction structure
Transaction structure • Cyfrowy Polsat and Polkomtel decided to sell disposal of a 99.99% stake jointly 99.99% stake in NetCo to Cellnex Poland, a subsidiary of the Spanish company Cellnex Telecom for the total price of PLN 7.1bn • The final cash proceeds will be adjusted by specified factors, in ac
Slide 21: Polsat Group converts to CAPEX light business model
Polsat Group converts to CAPEX light business model EBITDA reduction No IFRS 16 Lower CAPEX to be offset with Use of proceeds liability higher ARPU EBITDA(1) generated by Our future MSA is a service NetCo on cooperation To be discussed in the CAPEX/REVENUE ratio contract, no IFRS16 with Polsat Group
Slide 22: Operating results
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Slide 23: Media segment: TV and online
3.1 Media segment: TV and online Stanisław Janowski President of the Management Board, Telewizja Polsat
Slide 24: Strong position in the online business in Q4'20
Strong position in the online business in Q4’20 Average monthly number of users • We are a leading Internet Q4'19 (millions of RU) 21.4 21.8 20.9 21.6 Q4'20 publisher in Poland thanks to 19.7 17.7 17.8 16.1 17.7 the acquisition of Interia 9.9 • Our leading position in the web media: 19.7m users and
Slide 25: Viewership of our channels in Q4'20
Viewership of our channels in Q4’20 • Polsat Group and its main TV Audience shares(1) channel among the audience Main channels Thematic channels leaders in the commercial 15.4% 17.0% viewers’ group 9.5% 9.6% 6.6% 5.8% 7.0% Polsat TVN TVP2 TVP1 POLSAT(2) Discovery TVP Dynamics of audience share resul
Slide 26: Position on the advertising market in Q4'20
Position on the advertising market in Q4’20 Market expenditures on TV advertising • The dynamics of advertising and and sponsorship sponsorship revenues of TV Polsat 1,324 +2.4% 1,356 Group above the market trend • As a result, our share in the TV (mPLN) advertising and sponsorship market increased
Slide 27: Viewership of our channels in 2020
Viewership of our channels in 2020 • Viewership of Polsat Group Audience shares(1) channels in line with the Main channels Thematic channels strategy 14.4% 17.0% 9.5% 9.6% 6.4% 5.7% 7.8% Polsat TVN TVP2 TVP1 POLSAT(2) Discovery TVP Dynamics of audience share results(1) 2019 26.6% 26.6% 2020 24.3% 23
Slide 28: Position on the advertising market in 2020
Position on the advertising market in 2020 Market expenditures on TV advertising • The dynamics of advertising and and sponsorship sponsorship revenues of TV Polsat 4,382 -10.1% 3,938 Group above the market trend • As a result, our share in the TV (mPLN) advertising and sponsorship market increased
Slide 29: B2C and B2B services segment
3.2 B2C and B2B services segment Maciej Stec Vice President of the Management Board, Cyfrowy Polsat
Slide 30: Over 2 million customers of multiplay offer
Over 2 million customers of multiplay offer Number of multiplay customers • Consistent implementation of +4% our multiplay strategy results 1,993 2,048 2,065 45% 2 000 in a stable increase in the 43% 41% 37% 37% number of customers with 1 500 39% 35% 37% bundled services by 71K YoY 1 000 35% 33% 31%
Slide 31: Our customers use an increasing number of contract services
Our customers use an increasing number of contract services • Increase in the number of contract +4% services by 643K YoY 14.73m 15.17m 15.37m 1.8m • Dynamic growth of voice services was 1.8m 1.8m driven by the successful 5.0m 5.0m 5.0m implementation of our strategy of cross-selling and focusing on
Slide 32: Growth of ARPU thanks to multiplay strategy
Growth of ARPU thanks to the consistent implementation of our multiplay strategy • 5.0% YoY increase in ARPU 95 300% +5.0% resulting from the consistent 90 86.9 89.9 building of the value of the 85.6 85 existing customer base and an 80 2.72 2.77 increase in revenues from interconnection settlements
Slide 33: Dynamic growth of ARPU and stable prepaid base
Dynamic growth of ARPU and stable level of the prepaid services base 2.66m 2.67m 2.62m • Very good sales of voice services translate into stabilization of the prepaid base • Increase in ARPU as a result of an increase in revenues from voice calls and related Q4'19 Q3'20 Q4'20 interconnect settlement
Slide 34: Financial results
4. Financial results Katarzyna Ostap-Tomann CFO, Cyfrowy Polsat
Slide 35: Results of the Group in Q4'20
Results of the Group in Q4’20 revenue EBITDA and adjusted EBITDA1 5.8% 3,248 1,062 +6.2% 1,1271 3,069 1,126 Q4'19 Q4'20 Q4'19 Q4'20 LTM FCF net debt/EBITDA LTM -4.5% 2.91x 2.80x 1,334 1,274 Q4'19 Q4'20 Q4'19 Q4'20 Source: Consolidated financial statements for the year ended December 31, 2020 and int
Slide 36: Results of the Group in 2020
Results of the Group in 2020 revenue EBITDA and adjusted EBITDA1 +2.5% 4,197 +1.0% 4,238 11,676 11,963 4,192 2019 2020 2019 2020 LTM FCF net debt/EBITDA LTM -4.5% 2.91x 2.80x 1,334 1,274 2019 2020 2019 2020 Source: Consolidated financial statements for the year ended December 31, 2020 and internal a
Slide 37: Revenue and EBITDA – change drivers
Revenue and EBITDA – change drivers Revenue Adjusted EBITDA 1 and EBITDA +2% +1% 0% YoY change YoY change -5m +287m +41m +179 11,963 +111 4,197 +66 4,238 4,192 11,676 +57 +62 -12 -46 -60 -75 (mPLN) (mPLN) 36% 35% 35% Revenue Q1 Q2 Q3 Q4 Revenue EBITDA Q1 Q2 Q3 Q4 Adjusted COVID-19- EBITDA 2019 202
Slide 38: Growing operating CF finances fast roll-out of 5G network
Growing operating CF finances fast roll-out of 5G network mPLN Q4’20 FY’20 Adjusted FCF after interest Net cash from operating activities 1,029 3,252 Higher Advance smartphone No increase settlement of EBITDA EBITDA Net cash used in investing activities -425 -1,786 purchases in CIT 2019 growth growt
Slide 39: High level of cash despite intensified investments and dividend
High level of cash despite intensified investments and pay-out of the first tranche of the dividend FCF 2020: PLN 1,274m -1,295.7 3,251.7 -760.5 (mPLN) CAPEX1 /revenue -822.9 10.2% 1,000.0 -490.6 -232.5 1,365.8 -36.8 753.1 Cash and cash Net cash Net cash used in Payment of Acquisition Bonds issue Re
Slide 40: The Group's debt
The Group’s debt mPLN Carrying amount Debt structure4 as at 31 Dec. 2020 by instrument type by currency SFA (Tranche A and B) 9.300 Bonds Revolving Credit Facility (RCF) 335 18% Series B and C Bonds 1.998 PLN 100% Leasing and other 1.578 Banking debt Gross debt 13.212 82% Cash and cash equivalents1
Slide 41: Summary of 2020 and objectives for 2021
4. Summary of 2020 and objectives for 2021 Mirosław Błaszczyk President of the Management Board, Cyfrowy Polsat
Slide 42: Objectives for 2020 have been achieved
Objectives for 2020 have been achieved • Continuation of the development of the smartDOM strategy and multiplay strategy based on the concept „For everyone. Everywhere." • Continuation of investments in attractive content • Continuation of strategic and synergy-generating cooperation with Neti
Slide 43: We also implemented numerous additional important initiatives
We also implemented numerous additional important initiatives We accelerated the roll-out of our 5G network due to the growing demand for fast and reliable Internet connectivity among our customers We exploited the market opportunity to substantially strengthen our presence in the Internet We develo
Slide 44: Our expectations and goals for 2021
Our expectations and goals for 2021 Goals for 2021 1 Active promotion and sale of new 5G tariffs with the aim of continuation of building ARPU in the mobile services segment 2 Providing 5G network coverage to over 11 million inhabitants of Poland 3 Development of the new areas of activity in which w
Slide 45: Additional information
© _ 6. Additional information — a plus¢ Bipla N ET 1 A intena
Slide 46: Financial results Q4'20
© __ 6.1 Financial results Q4’20 plus¢ Bipla N ET 1 A intena
Slide 47: Results of the segment of B2C and B2B services
Results of the segment of B2C and B2B services mPLN Q4’20 YoY change • Sound ARPU, generating growth of retail revenue, along Revenue 2,669 116 5% with a high level of IC settlements and the early Operating costs(1) 1,750 53 3% results of sales of solar power solutions lead to a dynamic Adjusted EBI
Slide 48: Results of the media segment
Results of the media segment mPLN Q4’20 YoY change • TV advertising market rebound, combined with the consolidation Revenue 652 70 12% of the results of Interia.pl and TV Spectrum translates into a Operating costs(1) 447 52 13% dynamic growth of revenues from the segment, which enables EBITDA growth
Slide 49: Revenue structure
Revenue structure mPLN • Increase in retail revenue mainly as a result of the successful execution of our strategy aimed at building customer value, 3% which has been reflected in growth of ARPU from both contract 1,660 Retail revenue and prepaid customers. 1,618 • Higher wholesale revenues as a r
Slide 50: Operating costs structure
Operating costs structure mPLN • Higher technical costs and cost of settlements with telecommunication Technical costs and cost of settlements 615 6% operators mainly from higher interconnect costs related to higher with telecommunication operators 580 volumes of outgoing traffic, which was associ
Slide 51: Glossary
Glossary RGU (Revenue Single, active service of pay TV, Internet Access or mobile telephony provided in contract or prepaid model. Generating Unit) Natural person, legal entity or an organizational unit without legal personality who has at least one active service Customer provided in a contract mod
Slide 52: Contact
Contact Investor Relations Konstruktorska 4 02-673 Warsaw Phone: +48 (22) 426 85 62 / +48 (22) 356 65 20/ +48 (22) 337 93 14 Email: ir@cyfrowypolsat.pl www.grupapolsat.pl