Good afternoon, ladies and gentlemen, and a warm welcome to the results call of Cyfrowy Polsat Group for the first quarter of 2025.
Could I please have the next slide. Today's presentation will be made by Mr. Miroslaw Blaszczyk, the CEO of Cyfrowy Polsat; Mr. Maciej Stec, the Vice President of Cyfrowy Polsat responsible for Strategy; and Ms. Katarzyna Ostap-Tomann, CFO and Management Board member responsible for ESG. [Operator Instructions].
Thank you. Mr. Blaszczyk, the floor is yours.
Good morning. Welcome to Cyfrowy Polsat's First Quarter 2025 Earnings Conference. Today's presentation will follow our standard agenda. I will start by highlighting the key events of the past few months. Then Maciej will discuss the operational results of our business segments, and Kacha will present the financial results. I will conclude the presentation with a brief summary, and then we will move on to the Q&A session.
Let's move on to the key highlights of the past quarter. We started 2025 very well. Let me begin by underlining very good financial results of our group. Our revenue increased by nearly 4% to PLN 3.5 billion and adjusted EBITDA rose by almost 5% to PLN 809 million. In the first quarter, we made a partial prepayment of our bank loan in the amount of PLN 681 million using funds from the sale of a 10% stake in Asseco Poland. We are observing very good trends in the B2C and B2B service segment. We continue to successfully implement our multiplay strategy in this segment.
As a result, ARPU per B2C customer increased by 4.2% to PLN 77.7 and ARPU per business customer grew by 1.2% to over PLN 1,500. At the same time, we maintained a record low churn rate, which was only 6.8% in the first quarter. We also acquired one frequency block in the 700 megahertz band, which we won in the auction for PLN 363 million. We will use these frequencies as well as the block in the 3.6 gigahertz band acquired at the beginning of last year to expand our 5G network. It was also a very good quarter for the Media segment.
The success of the Spring programming schedule translated into very good viewership results for our TV channels. We recorded a 22.1% market share. Additionally, we achieved excellent results in the TV advertising market, which Maciej will show you in a moment. I'm also very pleased that Polsat-Interia Group was once again the leader in the Internet market in Poland. In the Green Energy segment, EBITDA increased by nearly 16% to PLN 57 million. Work on the Drzezewo wind farm is progressing very quickly and is well ahead of schedule. I'm pleased to inform you that 45 out of 63 turbines are already assembled. Moreover, last week, we started the technical commissioning of the first wind turbines on this farm. In the hydrogen chain area, in the first quarter of this year, we won tenders for the delivery of total of 41 hydrogen-powered buses to Krakow, Rybnik and Rzeszow, and we are participating in further tenders.
Before I pass the floor to Maciej for the operating results, let me say once again that the first quarter was a very good one for Polsat Plus Group, both in terms of operating results and financial results. Maciej please go ahead.
Thank you, Mirek. Hello, everyone. Indeed, just as Mirek said, we started 2025 really well. Let me begin by discussing the results of the Media segment now. Next slide, please.
In the first quarter of 2025, we achieved excellent results in both viewership figures and on the TV advertising market. As you can see on the slide, our channels reached 22.1% market share in the commercial target group, which is a great success. Our main channel Polsat recorded 7.5% audience share, while our thematic channels reached 14.6%. We also performed very well in the advertising market. While the market grew by 1%, we grew over 4x faster by 4.1%. As a result, our share in the TV advertising and sponsorship market increased to 28.7%.
Let's move on to the next slide. We are also seeing a strong performance in our online segment. We have a strong and stable presence in the online market with 21 million real users and 1.9 billion page views. We are successfully maintaining our strong position in this market. In the first quarter of 2025, Polsat-Interia Group was the #1 online publisher in Poland, and we were also the leader in the mobile category. Small screen devices are very important to us because today, more and more content is consumed on smartphones.
Let's take a look at the next slide. The very good results of the segment were driven by a successful spring programming schedule and attractive sport events. We based our spring lineup mostly on well-known proven formats such as Must Be the Music or Dancing with the Stars, popular TV series of our own production, coverage shows and additionally, the sports rights that we acquired last year are very popular among our viewers. Formula 1 races, Bundesliga and La Liga with 2 leading Polish players are very successful. Also, the UEFA conference and the Europa League were widely viewed, especially given that 2 Polish teams came quite far. Summing up, it was a very strong quarter for our Media segment. We posted growing viewership figures and solid growth of advertising revenue. Combined with cost control, this translated into very good financial results of the segment.
Next slide, please. Moving on to the B2C and B2B services segment. I can say that we had a very good quarter in this segment as well. Let's look at the results. Next slide, please. In the B2C and B2B segment, we consistently execute the multiplay strategy, which consists in upselling and cross-selling services to our customers. At the end of the first quarter of 2025, already over 2.5 million customers use our multiplay offering. This customer base increased by 2.4% year-over-year. This means that multiplay customers account for 44% of our total customer base. As mentioned, we successfully upsell products and services to this customer group. And as a result, at the end of the first quarter, they had 7.8 million services in total, up by 300,000 year-over-year. Our churn rate, the key indicator of our customer loyalty, continues to decline. At the end of March, churn fell to 6.8%. In my view, this is the best proof of the high quality of our services and satisfaction of our customers.
Next slide, please. We also saw continued growth of our base of contract services to 13.3 million in Q1 2025. We added 210,000 voice services, bringing the total up to 6.5 million. Our Internet base also grew by 145,000 services. This increase was driven primarily by the expansion of fixed Internet services. Our pay TV base is still facing some pressure, but we mitigated this with a growing number of pay TV services in IPTV and OTT technologies. These newer technologies are helping us offset the decline in traditional pay TV services. Can I have the next slide, please?
One of the focal points of our multiplay strategy is building customer value, and we have been doing that successfully over the past several years. In the first quarter of 2025, ARPU per contract B2C customer increased by 4.2%, reaching PLN 77.7. This was driven mainly by strong sales of mobile and Internet services as we saw on the previous slide. We also observed the growing saturation of our customer base with services, thanks to the effective cross-selling and upselling.
At the end of first quarter, this ratio increased to 2.32 services per customer. So a very good quarter in the B2C segment. Our ARPU is growing organically. We are building value and at the same time, churn remains on record low levels.
Next slide, please. In the Prepaid segment, we maintained a high base of 2.43 million provided services in a highly competitive market. However, our key focus is to build value in this customer segment. So despite the decrease in the RGU base, we are satisfied that we maintained a high ARPU of PLN 17 per service in the first quarter. In my opinion, this is a solid result in this tough segment.
Next slide, please. I'm also very pleased with our performance in B2B segment in the first quarter. This is also a very competitive market segment. As you can see, we consistently maintained a high and stable base of about 68,000 B2B customers. At the same time, ARPU per B2B customers increased by 1.2%, exceeding PLN 1,500, thanks to the tailor-made services that meet the exact needs of our customers.
Next slide, please. Now let's move on to our third business segment, Green Energy. Next slide, please. As you remember from our previous conference a couple of weeks ago, we have already achieved 2 goals in the area of green energy announced as a part of our Strategy 2023+. Firstly, we are a leading producer of clean green energy in Poland. Secondly, we have completed the full value chain based on green hydrogen, which we can now scale and adjust to market demand. Most importantly, we maintain our financial goal for this segment. We would like to generate approximately PLN 500 million in the green segment starting from 2026.
Next slide, please. Our green electricity production increased by 40% year-on-year, thanks to the launch of new wind capacity. In the first quarter of 2025 alone, we produced 278 gigawatt hours of electricity. Wind energy production more than doubled, reaching 105 gigawatt hours. Of course, this was the effect of commissioning an additional capacity of 123 megawatts at Przyrow and Czluchow wind farms in 2024. I'm also extremely happy with the progress that we are making at the construction site of the Drzezewo wind farm. Already, 45 out of 63 turbines are assembled. What's even more exciting, last week, we started technical commissioning of the first turbines at Drzezewo, and we produced the first energy from this farm.
Next slide, please. I'm pleased to report that in the first quarter of 2025, the Green Energy segment generated EBITDA of PLN 57 million, up by 15.8% year-over-year. This growth was primarily driven by higher production volumes resulting from the expansion of our wind farms. With 139 megawatts of capacity, the Drzezewo farm will double our capacity installed in wind power and will contribute significantly to EBITDA once we finished and launch commercially by the end of this year.
So to summarize, very good operating results and a very good quarter across all our business segments. In the Media segment, viewership increased to 22.1% and advertising revenue grew by 4.1%. This translated into very good financial results of this segment. In the B2C and B2B services segment, the multiplay customer base grew to nearly 2.53 million customers. ARPU per individual contract customer increased by 4.2% to PLN 77.7, and churn is at a record low level of 6.8%. We are seeing stable solid results in the prepaid and B2B segments.
In the Green Energy segment, we are finalizing our strategic investments. Production from renewable energy sources is steadily increasing and the segment's EBITDA is growing. We maintain our goal of approximately PLN 500 million EBITDA from green energy by 2026.
Thank you for your attention. I will now hand over to Kacha, who will talk about our group's financial results. Kacha. The floor is yours.
Thank you. Indeed, like Maciej said, this past quarter was very successful, and our excellent operating performance led to strong financial results. I'm very happy with these results, especially because it is the fifth quarter of growth in a row.
Let's move to the next slide, please. As we look at the first quarter results, you will see that our revenue increased by 3.7% to over PLN 3.5 billion, thanks to very good results across all our business segments. Growing revenue, combined with consistent control over cost resulted in like-for-like EBITDA growth by nearly 5% year-over-year to PLN 809 million. Net profit for the quarter settled at PLN 87 million. This quarter, it was significantly impacted by the noncash settlement related to the sale of Asseco shares. Our free cash flow for the last 12 months, adjusted for CapEx expenditures in the Green Energy segment, remained at an impressive level of nearly PLN 1.3 billion. Regarding our net debt-to-EBITDA ratio, there's been a slight increase from 3.59 to 3.62 posted at the end of 2024, mainly due to the fact that we are financing the development of the Drzezewo wind farm using our own funds. Can I have the next slide, please?
Let's examine the breakdown of our revenue and EBITDA drivers. I would like to underline that this quarter, we have full comparability because the Green Energy segment was already part of Polsat Plus Group in Q1 last year. The result of the B2C and B2B services segment is especially satisfying. Solid contribution to revenue is driven in particular by higher ARPU and higher retail revenue. EBITDA in this segment is relatively stable year-over-year, which is a very good signal.
In the Media segment, higher revenue from advertising was offset by lower revenue from sales of content. Despite this, the segment contributed strongly to EBITDA. This is the result of lower sports license cost.
In the Green Energy segment, growing revenue and EBITDA is the effect of more generation capacity in our wind farms. Solid contribution from the Real Estate segment to both revenue and EBITDA is the result of transferring apartments in Port Praski to customers. We have already completed this process. And in the coming quarters, I expect to see lower contribution from this segment.
Next slide, please. This graph presents the decomposition of free cash flow for the last 12 months. I'm happy to say that our group has a very good cash generation capacity despite still high interest cost. At the end of March 2025, we reported nearly PLN 1.3 billion of adjusted free cash flow for the last 12 months. After interest and excluded PLN 1 billion for development CapEx in the Green Energy segment, this is a very strong result. As I said, interest costs are still a burden. They amounted to almost PLN 1.4 billion over the past 12 months. Given the recent interest rate cut in Poland and the early partial prepayment of our bank loan, I expect to see savings at the level of debt service cost of about PLN 25 million to PLN 30 million in the second half of the year.
I would also like to draw your attention for a moment to the outflows related to telco frequency reservations. Over the last 12 months, we paid PLN 433 million for frequencies, and this includes the renewal of the 2.6 gigahertz band and the deposit paid for the 700 megahertz auction. I would like to flag that in Q2, we will pay the remaining PLN 213 million for the 700 megahertz block and probably at the turn of Q2 and Q3, we should receive a renewal decision for the 900 megahertz block. We estimate about PLN 700 million. After that, there are no more frequency renewals scheduled until 2029.
As you are aware, we disposed of the entire stake of Asseco shares for PLN 718 million in Q1. We adjust free cash flows for this item. Let's take a look at CapEx on the next slide. We focus on managing our investment expenditures across all business segments efficiently. The B2C and B2B services segment and the Media segment are CapEx light. Combined CapEx to revenue ratio for these 2 segments was 10% in the first quarter. This is a little higher than what we usually see, but this is a temporary increase related to IT and fixed network projects. I expect this ratio to meet our guidance of 6% to 7% in the full year.
We spent PLN 157 million in the green energy segment, most of the development of the Drzezewo wind farm. As Maciej said, the construction of this wind farm is progressing very quickly. And after we complete this project, CapEx in this segment should decrease significantly as maintenance CapEx in renewable energy sources is generally low.
Next slide, please. Lastly, let's address our group's debt. Our net debt-to-EBITDA ratio, excluding project financing, stands at 3.62. Including project financing liabilities, this ratio was at 3.85 net debt-to-EBITDA LTM, a little higher than at the end of 2024. Weighted average cost of interest on loans and bonds was 8.2% at the end of March, but this does not yet reflect the interest rate cuts that took place in May. If we were to take current [indiscernible] rates, this average cost should be below 8%. In February this year, we made an early prepayment of our bank debt in the amount of PLN 681 million.
We prepaid the nearest installments due in 2025, and we have prepaid part of the installments for 2026. This is reflected on the debt profile maturity that you see on the bottom of this slide. The debt structure by instrument and currency remains broadly stable.
In conclusion, this has been a really good quarter for the group. We posted a set of solid financial results. CapEx and net leverage are under control. I'm especially happy with our free cash flow. I think this is a very impressive result.
Thank you for your attention. Mirek, over to you for the summary.
Thank you very much. Let me briefly summarize this quarter. The first quarter was a very good quarter for the Polsat Plus Group, a strong start to 2025. We achieved very good financial results with adjusted EBITDA increasing by 4.8% to PLN 809 million. We achieved very good operating results in all our business segments.
In the B2C and B2B service segment, we consistently implemented our multiplay strategy, resulting in ARPU per B2C customer increasing by 4.2% year-on-year with a record low churn rate of only 6.8%. In the Media segment, our TV audience share increased to over 22%. We maintained a high share in the TV advertising market, and Polsat-Interia Group remains the leader in the Internet market.
Great results also in the Green Energy segment. We achieved PLN 57 million of EBITDA in the first quarter, which is 16% more than a year ago. We are focusing on finalizing the construction of our largest wind farm Drzezewo.
In summary, we have achieved the goals of our Strategy 2023+. We consistently implemented the multiplay strategy as we monetize our investment in green energy.
Thank you for your attention. We will now be happy to answer your questions.
Thank you very much. I have two questions coming from Nora from Erste on the question-and-answer panel. The first one is, at which level do you see the B2C ARPU growth in the coming periods?
Okay. This is me. Maciej here. As you know, we don't forecast, but I can give you directional. So if you take a look at last year, our ARPU growth was 4.8%. In Q1 2024, it was 4.4%. And Q1 2025, it was plus 4.2%. So I believe you can easily predict our ARPU and churn goals for this year.
And a follow-up question from Nora to the presentation. Could you please confirm that you expect interest savings of about PLN 25 million, PLN 30 million in the second half of 2025?
Yes, that's a correct estimation. Shall the regulators or National Bank of Poland not decrease the rates any further, then we expect PLN 25 million to PLN 30 million in the second half of the year as interest savings.
Those were the only two questions that have been posted so far. So if there aren't any more, thank you for your participation. And I pass over to Mr. Blaszczyk?
Ladies and gentlemen, thank you for your participation in today's presentation of the results of the Polsat Group. And I hope that we have answered all the questions. I wish you a nice day, and I hope to hear you from you during the next presentation of the results of our group for the second quarter of 2025. Thank you, and goodbye.
Thank you very much.
Thank you.
Thank you. Bye.
