2015 Annual Report

fot. APA Wojciechowski
Cyfrowy Polsat Group
Annual Report
2015
Letter of Supervisory Board Chairman
“Most of all, I am glad that the process of consolidation of the Group advanced as planned and in line with our assumptions. The full operational, organizational and structural consolidation of Cyfrowy Polsat and Polkomtel is almost compete thus allowing the Group to focus entirely on the implementation of its strategy and the pursuit of its business goals”
Letter of CEO
„The Group’s strategy, which has been consistently pursued for years, remains unchanged. Our superior goal, apart from the regular development of products and services in a manner aligned with market trends and users’ new needs, is to maintain leadership on the entertainment and telecommunications markets.”
The largest media and telecommunication group
in Central and Eastern Europe with
market capitalization of PLN 13.4bn
Our key numbers
16.5m active services
12.6m contract services
5.9m contract customers
1.0m smartDOM customers
3.0m total number of RGUs
PLN 87.3 revenue per customer
4.3m average monthly number of users of IPLA
1.8m LTE internet users
96.8% of Poles within our LTE coverage
24.6% audience share (main channel and thematic channels)
26.0% TV ad market share
Main goals 2015
Growth in the number of contract RGUs implying growth of contract ARPU
Growth in Polsat channels viewership and dynamic growth of advertising revenue
Maintaining high margins, decreasing indebtedness and increasing FCF levels
Achievment of operating and financial synergies
Financial results
Revenue 9,823 m PLN
EBITDA 3,685 m PLN
Free Cash Flow 1,305 m PLN after payments of interests from on loans and bonds
EBITDA margin 37.5%
Net debt/EBITDA 2.84
NET PROFIT 1,163.4 m PLN
Key events 2015
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec

Polkomtel signed an agreement with Ericsson regarding the implementation of a new platform - Next Generation IN-Prepaid and the maintenance of the existing platform NGIN-Postpaid.

Polsat Group received an award for its smartDOM program. The Silver award in the Telecommunications category was presented to Cyfrowy Polsat and Plus for their joint advertising campaign Saving by adding.

The results of the LTE auction were announced by the Office of Electronic Communications. Polkomtel won 4 spectrum blocks in 2600 MHz band for the price of PLN 155.7 million in total.

Polkomtel filed applications for the reservation of the spectrum from the 2600 MHz bandwidth.

Cyfrowy Polsat and Plus restored the promotion offering the second product at half price and the third product for even as little as 1 zloty as part of its smartDOM program.

Cyfrowy Polsat migrated to the latest signal compression system relying on MPEG-4 standard.

The new information portal, www.polsatnews.pl, was launched.

In 2015 the number of the downloads of the application for the biggest IPLA Internet TV in the version for Android OS exceeded 5 million.

On December 8, 2015 the Supervisory Board appointed Mr. Tobias Solorz, the hitherto Vice-President of the Management Board, to the position of President of the Management Board, and Mr. Tomasz Gillner-Gorywoda, the hitherto President of the Management Board, to the position of Member of the Management Board. Furthermore, the Supervisory Board also appointed Ms. Agnieszka Odorowicz to the position of Member of the Management Board as of March 1, 2016.

A new satellite TV channel of Polsat Group, Polsat 1, was launched. It is addressed to Poles who live abroad.

Cyfrowy Polsat's customers of the LTE Internet access service have been offered the possibility of buying the HBO GO service offering premium TV content.

On February 27, 2015 Telewizja Polsat Sp. z o.o. acquired 100% of shares of Radio PIN S.A.

www.grupapolsat.pl is the new corporate information service of Polsat Group launched in March.

Starting from March customers of Plus and Cyfrowy Polsat have been the first in Poland to enjoy LTE Internet access offered in the 800 MHz frequency band.

In 2015 TV Polsat acquired numerous rights to coverage of sports events.

The Management Board of the WSE decided to introduce 243,932,490 Series J shares of the Company to trading on the main market.

Polsat Group made an additional repayment of part of Polkomtel’s term loan in the amount of PLN 600 million.

Teleaudio Dwa and InterPhone Service joined Cyfrowy Polsat Group.

Plus introduced HD Voice technology for all of its customers throughout the country.

The Annual General Meeting of the Company appointed members of the Supervisory Board for a subsequent three-year term of office.

The list of the channels available on our platform was extended by TVN’s thematic channels offered in HD quality, including TVN 24 HD, TVN Turbo HD, TVN Style HD and TVN Fabuła HD.

Thinking of people with hearing impairment, IPLA developed the functionality of subtitles and extended the library of materials with subtitles by content from TV Polsat offer.

Polkomtel and Ericsson carried out a joint test of aggregation of three spectrum bands in the LTE-Advanced standard and achieved data download rates up to 450 Mbps.

Polsat Group made a pre-term repayment in the amount of PLN 1 billion on account of Cyfrowy Polsat’s term loan.

On July 21, 2015 Cyfrowy Polsat informed of the issue of one million unsecured series A corporate bearer bonds with a total nominal value of one billion zloty.

Plus runs an advertising campaign endorsing Polish men’s national volleyball team, the winners of the Volleyball Men’s World Championship.

In September TV Polsat finished the construction of a modern studio designed for the production of TV shows.

Plus became the first mobile operator in Poland to enable access to HBO GO for its customers, who have mobile services subscriptions with Internet access or mobile subscriptions for LTE Internet access.

Plus is the first telecommunication operator in Poland to offer its customers a service in the field of telemedicine called Ja+Zdrowie (I + Health).

For the second time in history, Polsat Group was recognized by the British financial magazine, Euromoney, in the ranking of the "Best Managed Companies in Central & Eastern Europe 2015”.

Cyfrowy Polsat and ADB entered into cooperation with the purpose of jointly developing state-of-the-art TV services and solutions.

Plus became the first mobile operator on the market to run a trial of the innovative Wi-Fi Calling solution which enables voice calls wherever there exists Wi-Fi coverage.

  • Pay TV
  • Video online
  • Telecommunications
  • Bundled services (smartDOM)
  • Broadcasting

Pay TV

Market share 60% share in the DTH market
in Poland
Active pay TV services 4.5 m including940 k Multiroom HD services

Video online

IPLA over 5m downloads of IPLA
active IPLA users on average 4.3m per month in 2015

Telecommunications

Mobile telephony 10.1m active mobile telephony services
Contract services 6.5m
Prepaid services 3.6m
Smartphones 88% of total sold handsets in Plus in 2015
coverage of LTE Internet 96.8% provided by Polsat Group
Mobile Internet 1.8m users

Bundled services (smartDOM)

smartDOM 1m customers of the smartDOM program at the end of 2015
Bundled services use 17% of the Group's customers

Broadcasting

Total audience share 24.6% main channel and thematic channels
Advertising 26% Group’s share in the Polish TV advertising market