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Introduction & Market Context
Orange Polska (WSE:OPL) presented its first-quarter 2025 results on April 24, showcasing a return to revenue growth after several quarters of decline. The Polish telecom operator reported solid commercial momentum in both mobile and fixed services, despite operating in an increasingly competitive market environment.
The company’s stock has shown strong momentum recently, with a 50% return over the past six months and a 42% gain year-to-date, according to available market data. This performance comes as Orange Polska successfully positions itself in the premium segment of the Polish telecommunications market.
Quarterly Performance Highlights
Orange Polska reported revenues of PLN 3,153 million in Q1 2025, representing a 2.3% year-over-year increase. This marks a significant turnaround from the negative growth trend observed throughout 2024 (Q1’24:-1.8%, Q2’24: -3.1%, Q3’24: -0.3%, Q4’24: -2.0%).
The company’s EBITDAaL (EBITDA after Leases) reached PLN 822 million, growing 2.9% compared to the same period last year, primarily driven by good growth in direct margin. However, net income declined by 15.7% to PLN 191 million, as higher EBITDAaL was offset by lower gains from real estate sales and increased depreciation.
As shown in the following financial results summary:
The company maintained solid commercial momentum across its service portfolio. Convergence ARPO (Average Revenue Per Offer) increased by 4.2% year-over-year to PLN 127.0, while fixed broadband-only ARPO grew by 4.6% to PLN 68.5. Mobile-only handset ARPO also showed positive growth of 1.3% to PLN 29.8.
The following slide illustrates the strong commercial performance across key segments:
Detailed Financial Analysis
Core telecom services were the main driver of revenue growth, increasing by 7.3% year-over-year. IT and Integration Services (IT&IS) showed particularly strong performance with 19% growth, driven by contracts for integration services. However, equipment sales declined by 14%, reflecting lower market demand.
The revenue evolution breakdown reveals the significant contribution of convergent services and mobile & fixed broadband-only services to overall growth:
EBITDAaL growth of 2.9% was primarily driven by a 3% increase in direct margin, thanks to strong performance in core business. However, this was partially offset by a 3% increase in indirect costs, impacted by labor costs, though partly mitigated by transformation efforts and lower energy costs.
The following chart illustrates the EBITDAaL evolution:
Orange Polska’s organic cash flow was negative at PLN -89 million in Q1 2025, compared to PLN 22 million in Q1 2024. This decline was attributed to seasonally high payments for capex and opex, higher capital expenditures, and lower proceeds from asset sales. The company’s net debt increased slightly to PLN 3,999 million as of March 2025, with a net debt/EBITDAaL ratio of 1.2x.
The cash flow and balance sheet details are presented in the following slide:
Strategic Initiatives & Outlook
A key strategic achievement in Q1 2025 was Orange Polska’s acquisition of two blocks of 700MHz 5G spectrum at the starting reserve price, strengthening its network capabilities. The company also launched an enhanced fibre+TV offer to boost commercial momentum in the competitive fixed broadband market.
CEO Liudmila Climoc emphasized the company’s commitment to maintaining commercial momentum while executing cost-saving initiatives. "Commercial success is a key fuel for our profits generation," Climoc stated during the earnings call, highlighting the company’s focus on growing shareholder value through strong financial outputs and higher dividends.
Forward-Looking Statements
Orange Polska confirmed its guidance for 2025, projecting low single-digit growth for both revenues and EBITDAaL, with eCAPEX expected to be between PLN 1.8-1.9 billion.
The company outlined its forward focus on three key areas: maintaining solid commercial and financial performance, sustaining good commercial momentum in mobile and fixed services to gain new customers, and executing cost savings initiatives for 2025 while launching a new transformation wave for 2026 and beyond.
As shown in the following guidance slide:
Despite the positive outlook, Orange Polska faces several challenges, including market saturation in the mobile segment, increased competition in the fiber market, and rising indirect costs. The company’s ability to manage these challenges while executing its transformation initiatives will be crucial for sustaining its growth trajectory.
The Polish telecommunications market remains highly competitive, particularly in the fiber segment, but Orange Polska’s focus on premium services and convergent offerings positions it well to navigate these challenges while delivering on its financial targets for 2025.
Full presentation:
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