Earnings call transcript: Orange Polska Q2 2025 sees revenue growth amid competitive market

Orange Polska reported its second-quarter 2025 financial results, showcasing a steady performance with a 1.1% increase in revenues year-over-year. The company highlighted growth in its core telecom services and significant improvements in its EBITDA. Despite facing a competitive market, the company’s stock price rose by 1.47% following the earnings announcement.

Key Takeaways

• Revenues increased by 1.1% year-over-year in Q2 2025.
• EBITDA grew by 4.3% compared to the previous year.
• The company confirmed its full-year guidance and future strategic initiatives.
• Stock price rose 1.47% post-earnings announcement.
• 5G network expansion continues with nearly 50% of Poland covered.

Company Performance

Orange Polska demonstrated resilience in a highly competitive telecom market in Poland. The company reported a 1.1% year-over-year increase in revenues for Q2 2025, driven by a nearly 7% rise in core telecom services revenues. The company continues to expand its 5G network, now covering almost half of Poland’s population, and has maintained its leadership in the B2B mobile services segment.

Financial Highlights

• Revenue: Increased by 1.1% year-over-year in Q2 2025.
• EBITDA: Grew by 4.3% year-over-year.
• Net income: Increased by almost 2% in H1 2025.
• Prepaid ARPU: Grew by 14%.
• Organic cash flow in H1: Over 340 million PLN.

Outlook & Guidance

Orange Polska confirmed its full-year guidance, projecting an organic cash flow target of over 900 million PLN. With its next earnings report due on August 29, 2025, investors following InvestingPro insights have access to 12 additional key investment tips and comprehensive analysis. The company is preparing to launch attractive offers for the back-to-school and Christmas seasons and is focused on cost efficiency and exploring opportunities in defense and cybersecurity sectors.

Executive Commentary

"Our commercial success is underpinned by continuous investment in mobile and fixed infrastructure," said Ludmila Kimok, CEO. Jacek Kunitsky, CFO, expressed satisfaction with the EBITDA growth in Q2, emphasizing the importance of combining commercial success with improving efficiency to enhance shareholder value.

Risks and Challenges

• Competitive Market: The Polish telecom market remains highly competitive with aggressive pricing strategies.
• Market Saturation: Potential saturation in the high-broadband market could impact future growth.
• Economic Pressures: Macroeconomic factors may affect consumer spending and investment capabilities.

Orange Polska’s strategic focus on network expansion and maintaining market leadership positions it well in a challenging environment, as demonstrated by its solid financial performance and positive market reaction. With a beta of 1.03, the stock shows market-like volatility. For deeper insights into Orange Polska’s performance and future potential, InvestingPro subscribers can access the comprehensive Pro Research Report, offering expert analysis and actionable intelligence for smarter investment decisions.

Full transcript - Orange Polska SA (OPL) Q2 2025:

Lasse Kivashko, Investor Relations, Orange Polska: Morning. Thank you for standing by, and let me welcome you to Orange Polska Results Conference for the 2025. My name is Lasse Kivashko, and I’m in charge of Investor Relations. The format of the call will be as usually a presentation made by the management team followed by a Q and A session. Speakers for today will be Ludmila Kimok, the CEO of Orange Polska and Yapek Kunitsky, CFO.

I’m passing now the floor to Lunila to begin the presentation.

Ludmila Kimok, CEO, Orange Polska: Thank you, Leshiek. Good morning. Welcome to our conference summarizing 2025. And I start with Slide four, key messages. So first of all, I’m very pleased to say that performance on our core telecom business maintained its good momentum in the second quarter.

Our commercial results are strong and especially on consumer market, where customer bases and are poor where continues to grow at a very healthy pace. Our commercial success is underpinned by continuous investment in mobile and fixed infrastructure that we develop for our customers. Fiber, I will I will address more in a moment on the dedicated slide. On the mobile front, we are progressing with five g deployment for c band spectrum. We already cover nearly 50% of population in Poland.

And this month, we we have launched first base stations on a newly acquired 700 megahertz spectrum. And with this spectrum, we expand the coverage beyond big cities. In a result, our commitment to delivering the best connectivity at home, at work, or on the move has been validated by independent test benchmarks, where Orange five g and Orange FTTF FTTH fiber networks, again, were ranked as number one in the 2025. And as well, I’m very satisfied with our sales deal of Orange Energia. On one hand, it confirms focus on co business, which we outlined in our Lead the Future strategy.

And on other hand, Orange Energia is taken over by the renowned industrial player who will ensure its further development. And finally, our financial results were very good in second quarter on all levels, with growth of revenues, of EBITDA, net profit, and cash generation. And as usually, let’s zoom on our commercial activity on the next slide. So talking about commercial performance in q two, it was very strong across all key telecom services, reflected in a consistent healthy pace of growth of our customer bases. In convergence and fiber, bases has increased with 513%, respectively, with a sustainable rate of increase, which we are reporting quarter by quarter.

We achieved it despite fierce competition as some market players attempt to win the market with aggressive volume oriented strategies. And we are coping well in this environment and continue to gain share in very, very high broadband market. We’re successfully addressing local geo targeted competitive battles, responding to the need for higher speeds and for TV and for the content. In mobile net adds, customer additions were really outstanding in second quarter. We delivered the highest net adds in last three years.

These both consumer and business segments contributing to to this achievement. We’re also benefiting from wide portfolio of brand and personalized AI enabled offering, which help us to strengthen customer loyalty. On ARPO side, in Convergent and Fixed Broadband only, our offers maintain strong between 45% growth rates as well, you know, as we are keeping very good balance between volume and value in our commercial strategy. So as you can see, our point mobile is flat year on year in second quarter. This is a combination of two factors, good growth in b to c in consumer, and the decline of ARPU in b to b.

And let me dig more into the details. In b to b, we are dealing with a tougher competitive environment. Orange is the leader with the highest market share in this segment, and we are defending against very intensified price competition. On another side, in b two c, in consumer, our poor is growing. In the main Orange brand, this growth exceeds 4%, benefiting from our regular price adjustments.

In the same time, consumer base was growing also thanks to the increasing share of our b brands, new and flex, which this corresponding contribution of lower levels are poor. This well our two steps approach, which we were describing can lead the future. First, to acquire customers, to build new relationships, and further, we grow the value, and we upsell to conversions. These results demonstrate that we have right commercial strategies, and we are coping well this challenging competitive environment. And as commercial growth is essential for our future value creation.

So let’s move now on slide six. And here, talking about infrastructure. Svetlavut and Vystica, our fiber core joint venture, just finished its fourth year of operations, and we are very satisfied with its performance. We can describe its development as exemplary one on the European landscape. Business plan is on track.

And this year, the investment program that was initiated in 2021 will be completed. And within this plan, 1,700,000 households get access to fiber, mostly outside big cities in the areas with low infrastructure competition. Is very effective in converting these home fast to homes connected. There are already 22 retail operators that provide services on its network, and it serves around 700,000 active customers, which implies more than 30% of infrastructure take up rate. So a very solid achievement, as you can see.

And based on this success of first investment program, we decided together with our investment partner that there is more potential for Sverdrupovt and Diztitsy. And in June, our fiber core raised 3,700,000,000.0 zloty to refinance the outstanding debt and to secure funds for the second investment plan. This plan will include the rollout to half a million of new households over the next three years and to another 200,200 in the following few years to densify already covered areas. And as a result, Shwetlow in the CTSA network intend intends to reach coverage of 3,100,000 households in Poland. Our cooperation model with Sverdrup and Wissitza will not change under the new plan.

Orange Polska will continue building the network and rendering a number of services for Svetlavot and Vytica. And to point out that regarding reconsolidation option for for Orange, which we had, its timing has been adjusted in line with the new investment horizon. And now, it covers the period between 2029 and 02/1932. This new short level indices investment plan is a key element for our expansion plans for fiber access network. As according to Live the Future, you remember that we plan to grow from 9,500,000 households covered by Orange Fiber today to 12,000,000 connectable by the 2028.

So this being said, I want to hand over the floor to Jacek.

Jacek Kunitsky, CFO, Orange Polska: Thank you, Usmira. Good morning, everyone. Let’s start the financial review on Slide eight with the highlights of our performance. I’m pleased with the financial results of the second quarter. We have increased our revenues, profits and cash generation.

Revenues were up one dot 1% year over year, fueled by a solid growth of the core telecom services at almost 7%. In turn, this strong performance of the core business drove the EBITDA to a 4.3% year on year growth in the second quarter and to 3.6% for the six months of the year. The net income was almost 2% up in H1. This was mainly due to higher EBITDA coupled with a 70,000,000 estimated gain on the disposal of our energy trading subsidiary. The eCapEx amounted to 800,000,000 zloty in the first semester with almost 300,000,000 invested into the fiber and mobile access networks so in line with our strategic priorities.

Its year on year growth was due to lower proceeds from disposal of real estate. We have a back end loaded schedule of property sales this year and expected peak of proceeds in the 2025. The organic cash flow in H1 reflected solid cash from operating activities offset by higher cash CapEx and low cash coming in from the above mentioned sale of real estate assets. My overall takeaway from this is after the first ’6 months of twenty twenty five, we are on track to deliver our full year objectives and create further value for shareholders. Let’s now review the results in more detail, starting with the top line.

Our Q2 revenues have increased by 1.1%, a very solid growth dynamic of the most important revenue streams. The key driver of this core telecom services increased by almost 7% year on year. It was driven by consistent growth of our main customer bases and ARPUs as discussed by Twail and Miwa. This year, it was additionally boosted by a 14% growth of the prepaid ARPU and a similar uplift of its revenues. This reflects the prepaid price adjustments that we had made in the fourth quarter of last year and in the 2025, and these were applied to roughly 60% of the customer base.

The IT and IS revenues were stable in the second quarter after they had captured very solid growth in the 2025. This is a combination of two factors. First, our ICT subsidiaries have increased revenues, which is encouraging given the challenging market environment. This was, however, offset by a decrease of revenues year over year from wholesale SMS service. Here, we need to note that this is measured versus a very high comparable base of 2024 when we benefited from a surge of activity of some retailers in both the 2024.

Q2 was the last quarter in which we consolidated the results of Orange and Energia. Starting from the third quarter, we will compare our year on year dynamic to a pro form a of ’24. We’ll provide the comparative figures in the KPI file that you can always find on the Investor Relations website. To sum up on the revenues, first, we’re happy with the pace of growth of the core telecom services. Second, the outlook for ICT is gradually improving, and I am cautiously optimistic in this area even if q three will still be affected by the high comparative base of the wholesale SMS service from last year.

Profitable revenue growth is the main driver of our EBITDA. Let’s now take a look at the latter, the EBITDA on Slide 10. The EBITDA for Q2 has increased by a strong 4.3% year over year. The increase was driven by solid growth of the direct margin. This predominantly reflected the consistent growth of margin from the core telecom services mentioned a minute ago.

Our direct margin amounted to almost 57% of revenues. So this is well in line with our goal to keep it and drive it above 55. Indirect costs were slightly lower versus q two of last year. They reflected the pay rise pressure on work per costs and higher advertising spend that was needed to support our good commercial progress. This was offset by additional margin from the fiber rollout project.

This was enabled by further operating progress in this key final year of the first rollout agreement as well as by signing of the second investment plan with Schwarzenegger Investiture. This last point allows a much more gradual decrease of our production capacity instead of having to make a hard stop at the 2025. In turn, this makes the entire project more profitable, and we have reflected this in our Q2 results. We’re happy to continue this cooperation with Sviatuva Votin this year on rollout number one, but also on the newly signed rollout number two well beyond, 2025 or 2026. I also note that the amount of the rollout margin reevaluations that we have made in h one was practically the same as in h one of last year.

So it had no material impact on the year to date EBITDA evolution between the years. To sum up, we are happy with the EBITDA growth in Q2. We’re happy with the sources of this growth and namely the good solid recurrent growth of the direct margin. And we’re confident that with the 3.6% growth in H1, we are on track to deliver the full year objective. Let’s now turn to net income on slide 11.

It has exceeded 460,000,000 in h one, so up by 2% year over year. Let me now walk you through its underlying drivers and also through the one offs. The underlying growth stems from the consistent increase of the EBITDA, up by PLN 60,000,000 in H1. This is partly offset by higher depreciation as we have a progressively changing asset mix and by higher financial costs, a consequence of last year’s debt refinancing. The net impact of this is slightly positive, confirming the solid fundamentals for us to increase the net income.

Obviously, the net income was also affected in h one by some important one offs. It decreased year over year due to provisions for significant risks and restructuring and due to lower gain from the sale of real estate that I mentioned a minute ago, which is linked more with the timing of the expected real estate sales between two years. This negative impact of both of these was nearly offset by the estimated gain on the sale of the energy trading subsidiary. The bottom line for us is that we have solid underlying factors that are driving our net performance, our net income performance upwards. And we focus on these in order to achieve higher net income in the future.

Let’s now switch to CapEx, which amounted to 800,000,000 zloty in h one. Considering the typical h one, h two phasing, this is in line with our full year objectives. It increased by 18 dot 6% year over year with the difference stemming mostly from lower proceeds from real estate disposal as we have discussed it already. Capital spending was on a comparable base on a comparable level to last year. In line with our strategic priorities, we allocated almost 40% of CapEx to access network.

In fixed, this is fiber rollout in the white zones and dedicated connections for the large b to b clients. In mobile, we are deploying the five g network, and we are completing the renewal of our radio access networks with the bulk of the latter project to be finalized still this year. Another 30% of investments were dedicated to call and fixed networks as we are expanding our capacity in order to serve the growing traffic demand. Finally, we’ve spent just over 30% of capital expenses on IT with a focus on projects to support process efficiency through digitalization, both on the front desk as well as in the technical and field maintenance areas. Finally, over to cash flow on Page 13.

We have generated just over 340,000,000 of organic cash flow in h one. This was less than a year ago mainly due to 100,000,000 less cash in from real estate disposal due to the timing difference that I mentioned early on. This apart, cash generation was solid with growing cash from operating activity with a positive year over year difference on working capital requirement even if this latter one was offset by an increased cash CapEx. We are satisfied with cash generation in H1. We expect a solid organic cash flow in H2.

And once again, we are eyeing to achieve over EUR 900,000,000 of organic cash flow in the full year. Moreover, we have maintained a very sound balance sheet and we have already secured the refinancing of the debt that was due to mature in 2026. This concludes the financial review. And now I hand the floor back to Luniva for the conclusions.

Ludmila Kimok, CEO, Orange Polska: Thank you, Jasvik. So summarizing our presentation, I would like to emphasize on our strong commercial and financial performance in second quarter and overall in first part of the year, which is allowing us to confirm our full year guidance. And going forward, our priorities do not change. Firstly, we intend to maintain good commercial momentum. We are preparing attractive offers for our customers in the upcoming two peak commercial seasons for back to school and for Christmas.

We are also focused on a progressive turnaround of our b to b. In IT and AS, we see better projects pipeline for the second half of the year. The turnaround is more difficult in telecom services due to challenging market environment. On the second as a second priority, we are starting to work on our plans for 2026, including preparation of transformation initiatives, which will support our cost efficiency in the years to come. And a combination of commercial success and improving efficiency is the right recipe for growth of shareholder value in our new strategy.

This is all from us, and now we are ready to take your questions.

Lasse Kivashko, Investor Relations, Orange Polska: Yes. If you are if you are dialed in via the phone and would like to ask a question, please press star two on your keypad and wait for your name to be called. You may also ask a question, a voice or text question, using the webcast window. So once again, to ask a question, press star 2 on the keypad or press the question button on the on the platform. We have the first question coming from the line of Martin Novak from Ipopema.

Martin, your line is open.

Martin Novak, Analyst, Ipopema: Good morning. Thank you for the presentation. Two questions from my side. Could you please comment in more details about the the reason behind creation of this 23,000,000 provisions below EBITDA on a significant risks and reorganization cost, and why this wasn’t included in EBITDA exactly? The second question regarding the recent antimonopoly mortgage doc proceedings with the case regarding presentation of pricing in mobile contract including discount.

What is your estimated potential maxima maximal fee on this on this case and if it was related to the provision that we made. And the last question regarding the comment about being ready to benefit from the spending on military and defense purposes. I guess it was in the press statement or press conference that the a month ago. What products exactly or services do you plan to offer in that within that area? Thank you.

Jacek Kunitsky, CFO, Orange Polska: So maybe, thank you for your question first. Welcome. I will take the first two questions, and maybe, Ludwig, I will give you the floor for the for the third one. So the provision that you mentioned, it is linked with provisions for risks, claims, litigations. And, well, we place large provisions of this sort below the EBDA because they do not stem from the standard business that we that we, you know, do on a recurrent quarter by quarter basis.

So this is to distinguish, this. Obviously, for commercial sensitivity reasons and in order not to prejudice any outcomes of any risk provisions. I am not at liberty to comment which case does this particular provision regards of potential risks that that you may imagine. And likewise, I am not inclined to comment or discuss the n t well, the consumer protection office inquiry into the presentation of the discounts that you had mentioned other than than to say that as with, you know, all of the questions that we get from Waukeek, we are always working closely and proactively with the office to make sure that we are able to address any concerns that they might have in an amicable way. But I I am not at liberty to to get into the details of these proceedings and our discussions with the regulatory office.

And then your your third question, I guess Was on the on the military defense. Yeah.

Ludmila Kimok, CEO, Orange Polska: Yeah. What what we see, there is clearly growing potential with spendings, growing dedicated to defense and cybersecurity, which we believe we see it as a great opportunity for us because we are well positioned as a solid and reliable partner for both public sector and private entities, which require specific expertise, specific knowledge, we are fully fully equipped with this knowledge. And, you know, I will not go into the particular bids or, you know, like because we we will not comment as ahead. But just to to let you know that we are we see it rather in in all in a very transversal and, I would say, convergent way because we we do combine unique competencies on the market of telco infrastructure, telco solutions, and ICT solutions. For instance, we are we have a strategic cooperation with minister of defense.

We are delivering critical infrastructure and the ICT services for, you know, for for the purposes of national security. We are the largest provider of mobile telephony services for for military. And, you know, we are enhancing our network to bring it to the, you know, to the coverage in the areas which are critical and of strategic importance of the defense. Or I can give you another example, which we we were implementing in in the past. It was IT specialized IT solution for military hospitals to, you know, to to support the quality of of health care.

So we see it holistic as connectivity, infrastructure, you know, solutions which are, you know, accompanying, you know, the I ICT domain and cybersecurity need as a whole.

Martin Novak, Analyst, Ipopema: Thank you.

Lasse Kivashko, Investor Relations, Orange Polska: Thank you. Next question coming from the line of Dominik Nisch from Trigon from McClarsky. Dominik, your line is open.

Dominik Nisch, Analyst, Trigon: Thank you. Good good morning. So two questions from from me. One regarding Fiber Co agreement and the second on on SMS bulk service. So maybe starting with with Fiber Co.

We see that your previous agreement had, like, over 300,000 homes passed per year, and now we we see around 100,000 per year. So the question is, do you expect that cost per com passed may be visibly higher in the in the new agreements, like twice as high on average? And, also, what I’m trying to to understand asking this is is what’s the overall impact on your on your p and l because you calculated this this extra margin in in the second quarter. So just wondering how how will it look like compared to the previous agreements on average.

Jacek Kunitsky, CFO, Orange Polska: Thank you. So, Dominique, regarding the I guess, question regarding the second rollout agreement.

David Gulzynski, Analyst, PKOBP: Mhmm.

Jacek Kunitsky, CFO, Orange Polska: And the second rollout agreement, it is for a half a million of households passed. I think that the the the two items that I would mention, it is a front end loaded agreement. So I would expect us to be aiming to deliver, let’s say, something close to 300,000 in the first year in 2026, and then it would slow down progressively in 2027 and in 2028. You know, it’s it’s it’s it’s tough to say what exactly will be the profitability because we were surprised in a number of times in the profitability of the first one. Right now, I would assume that we should have a relatively comparable gain per one line as as as we have had so far.

So that that would not be that of a difference. And without getting into too much of the, you know, commercially commercial aspects of this agreement, you can basically assume that we’re eyeing quite a high number, something like up to 300,000 in 2026, and then, you know, you’re you’re getting down to your one twenties and below 100 in the in the in the next, two years. So I I hope that will help a little bit for you to be able to to model this.

Dominik Nisch, Analyst, Trigon: Yes. Of course. Thank you. So so that’s that’s clear. And the second is on on your SMS bulk service for business customers.

You mentioned it twice in the presentation that you had this high base related to to marketing campaigns of some of

Lasse Kivashko, Investor Relations, Orange Polska: your

Dominik Nisch, Analyst, Trigon: clients. So this was significant profit margin booked there. And my question is how much of SMS revenue you still generate, like, in the first half of the year? ’25. Does it still still a visible amount?

Because we saw last week a guidance by Belgian Telecom Proximus in their global CPaaS business that this this SMS revenue is is really falling, and they cut their guidance visibly because SMS is moving is replaced by by RCS, WhatsApp, and other channels. So I guess this this also affects your business. So what’s what’s your current state in in in ’25? How much do you do you make on this?

Jacek Kunitsky, CFO, Orange Polska: Right. So here, I think the best way to to answer your question is to start off with why we were mentioning this this item at all. So it’s it’s not to do with the level of the wholesale SMSs that that we are doing, but it’s it’s rather linked with the fact that in the second and third quarter of last year, we had a surge of these SMSs linked with some specific clients and campaigns by by by some clients. And that had, you know, that had boosted our margins, I would say, by something like 15,000,000 per quarter in q two and in q three. And so that is now represented as a high comparable base in q two numbers that you see.

We will continue to see it in q three, and then the base of comparison becomes much more normalized, when we will start comparing ourselves in the last quarter of the year because quarter four of last year was already past the peak of this particular product, I

Dominik Nisch, Analyst, Trigon: would say,

Jacek Kunitsky, CFO, Orange Polska: And then, you know, when when we look on the the revenues, you know, right now, we are making about 40,000,000 zloty per semester.

Ludmila Kimok, CEO, Orange Polska: For bulk SMS?

Jacek Kunitsky, CFO, Orange Polska: For bulk SMS. This is this is not SMS overall. And as you know, SMS overall, it would be a little bit less relevant question because most of them are within the package that we that we offer. Which unlimited. Yeah.

Which, you know, it’s unlimited, and it it it’s it’s equally unlimited as the data is. So it it doesn’t matter so much if the if the end user is using more of WhatsApp or more of SMS. It’s the wholesale SMS that I was referring to. Obviously, we make a little bit more from the entire SMS of mobile.

Dominik Nisch, Analyst, Trigon: Yeah. So it’s, like, 20,000,000 per quarter. Yeah. That’s that’s clear. Great.

So thank you.

Jacek Kunitsky, CFO, Orange Polska: Thanks.

Lasse Kivashko, Investor Relations, Orange Polska: Thanks, Dominique. Next question coming from the line of David Gulzynski from PKOBP. David, your line is open.

David Gulzynski, Analyst, PKOBP: Hi. Thank you for taking my questions. I have three, actually. First one on EBITDA, like, some outlook on the second half half of the year in terms of FDA after lease performance because, like, because of, like, large number of one offs that were reported in second half last year. I mean, both, like, related to Fiber Co and in some cost positions, namely, like, wages and in interconnect.

I I just wonder if you think that, like, keeping positive EBITDA after with Dynamics will be possible or or it’s it should it would be rather challenging for you. It’s the first question. So maybe take one by one if you can.

Jacek Kunitsky, CFO, Orange Polska: Okay. Thank you for your question. Yes. Last year included several nonrecurring items in well, that affected the APD, but, you know, the the then I I don’t think you would find an a semester without one offs and and and and the h one being not exempt. I I would mention two things.

First of all, when we are looking at the h one results of this year, even if you were to take out the fiber rollout catch up margin from both years, h one of this year and h one of of last year, you would you would get to a very comparable evolution as we are reporting because this catch up was practically the same for for for both years. So it does give a a a relatively good picture on the on the underlying performance. And then looking at h two, I would still assume that we are eyeing for growth. I would, you know, I would say that for for h two, we we depending on the success of of of the of the business, depending on the success of of the ICT, which is always, less repeatable and subject to to to any surprises that we might have. I I would assume that something around two percent, you know, EBITDA growth for the stand alone h two is is is something that we could be considering.

And I and I guess this is relatively close to what what the consensus is, assuming, at at the moment.

David Gulzynski, Analyst, PKOBP: Okay. Thank you. Thank you so much. Second question on, second question, on the, like, new offer from T Mobile, recently. I I mean, quite aggressive, like, like or unified mobile offerings, just one package, and aggressive promotions for FTTH.

Like, do you see some you know, like, how do you see the impact of this new offering on the market in the, you know, midterm, let’s say? And do you see any, like, signs how successful they are in acquiring clients, or maybe, like, you observed some slowdown in your acquisitions in third quarter? Thank you.

Ludmila Kimok, CEO, Orange Polska: Thank you for the question. I will take it. So first, to to mention, we are pretty confident in what we are going to do and and in our current performance. And I will not comment on, you know, particular strategy strategies of of our competitors. And let’s see.

We are looking with interest also how market will react on it. Yes. I not exactly probably what you are you would like for me to get, but this is what we can comment for the moment.

David Gulzynski, Analyst, PKOBP: Okay. I understand you see, like, no clear, like, signs or differences in client acquisition in your KPIs as well.

Ludmila Kimok, CEO, Orange Polska: Market is very competitive in Poland, and we see it in in T Mobile offers and all players offers which which are coming and yeah. So, yeah, let’s see how market and how customers will be acting on it.

David Gulzynski, Analyst, PKOBP: Okay. Thank you. And third question is on, like, if I understood correctly, you delayed the decision about a fiber to reconsolidation to like, until 2029 at earliest. And I wonder if that, like, make you like, that impacts your dividend policy in this short term term. Yeah.

So it’s like because because the balance balance sheet looks looks safe.

Jacek Kunitsky, CFO, Orange Polska: So on this particular point, what I would mention is we delayed the decision well, the the we delayed the the option a little bit. You know, previously, it the the the option windows were between 2029 ’7 and 2029. Now they are between 2029 and 2032. And the the basic thinking is here that we’d like to see the the network and the asset in its final stage before we are taking a decision whether we, you know, whether we want to reconsolidate or not. And then regarding the dividend and and, you know, obviously, you appreciate that we will be more talkative about this in February.

But we are not linking the dividend decision to a particular constraint on the balance sheet side. And as you as you well know, the the current level of indebtedness is very low, and and it does not pose a a hurdle itself as in, you know, net debt to EBD even even if I were to adjust it by the by the fiber core impact, it’s not the only item that we’re looking at. What is predominantly our area of analysis is how do we view our financial performance going forward? How do you view our cash flows going forward on a sustainable basis so that they are able to finance over a long time the the dividends And in this context, the change of the potential timing for the Fibreco reconsolidation is not a big factor here because, anyway, we need to keep the flexibility of the balance sheet to be able to reconsolidate.

But, anyway, we know that this flexibility is here with us. And and unless something changes in the balance substantially, it is not the balance sheet that is the, I would say, limiting factor for the dividend. And, obviously, we are working all the time to make sure that we do create more EBITDA, more cash flows, and more possibilities to serve the dividend to to to shareholders. And that is, from the outset, the plan of the Lead the Future strategy.

David Gulzynski, Analyst, PKOBP: K. Great. Thank you for this call.

Lasse Kivashko, Investor Relations, Orange Polska: Thank you. Thank you. We have some questions that came to us online. I will need a question from Pavel Pokalski from Santander. May I ask for updated guidance for coming quarters concerning other operating profits or Fiberco catch ups?

Also, what would change there under new three year agreement? I think we partly already answered that. And maybe I will read next question from Pablo as well. The 43,000,000 write off booked in q two twenty five should be rewarded. Please give us more color.

I think this has been answered, so no no reason to to to repeat it. And and another question, I noticed 6,600,000,000.0 maximum pledge on Stratoh Boot Investiture higher by by $08,000,000,000. Where this amount comes from, and does it relate to project evaluation or maximum loan capacity?

Jacek Kunitsky, CFO, Orange Polska: Thank you. So on the numerous questions, I will start one by one, and I will start with the coming quarters. So when you take a look at our other operating income, you see that it contains, well, variety of items. It’s not only the Fiber Co. And also, the Fiber Co doesn’t only have a catch up mechanism, but it has a recurring part.

So I guess, you know, if if if we take the q two number, which is at one fifty six, we know that there was a 75,000,000 catch up within this. But we also are aware that, for example, this particular quarter, the sale of copper was not particularly great. So I wouldn’t be surprised. I mean, the line can be volatile, and and the nature of other operating profit, I wouldn’t be surprised to see this area, you know, being in the range of, let’s say, 100,000,000 quarter after quarter subject to any surprises that we might have. You know, we will be finalizing the we

David Gulzynski, Analyst, PKOBP: will

Jacek Kunitsky, CFO, Orange Polska: be finalizing the rollout number one. There is always a possibility that we will need to readjust the profit upwards or downwards when we when we close it. I don’t think this would be anything remotely as material as the adjustment that we have done right now because the adjustment that we have done right now, it had a clear and very big trigger, which was signing of the second, agreement. And it it just you know, a, we have more operating data for the for the route number one, and, b, we are not faced anymore with the prospect of having to make a hard stop at the end of the year because the agreement ends, but we will be able to progressively adjust our production capacity to the to the production volumes that we see. And as you remember from the previous questions, it is a progressive decrease of the expected production year after year.

Not yet any decrease of production in 2026. Between July ’28 are definitely going to be with a lower production. And this progressive pace and dynamics of that program allows us to manage the the the winding down of the of the machinery, the system, the processes, the ecosystem that is there to deliver this in a much more controlled and in a much less costly way. So this was the clear trigger for the h one positive, you know, reassessment of this project profitability. The new agreement, I think we’ve discussed it a little bit.

We we would assume 300,000 households in year one, and then you may assume something close to, you know, the the the numbers that I was mentioning before, so, like, one twenty in ’27 and close to 80,000 in 2028. You may assume that any profitability profile that we get would be broadly in line with this. But then, again, you know, we we we need to wait and to see how we how we adjust. So that is that is, I think, the question on the other operating income and the new three year agreement. The write off, I think, we we have answered.

And, I mean, on the pledge, it’s it’s a it’s a standard, you know, it’s a standard mechanism that you assign when taking out the loans, and it’s it’s linked with the refinancing that Shkatovaudhut Investiture has conducted during the course of h one, and this refinancing is well, obviously, it contains this this standard mechanism. What is important is that this refinancing allows Strativovut University to have a fully funded business plan for the upcoming rollout.

Lasse Kivashko, Investor Relations, Orange Polska: Okay. We have a question from Macie Bobrovskiy from BDM, but this is a question about us providing more information on defense spending tenders in which we like to bid. So this already been covered in the previous question. Another question came from Jakob Viscardi from Bosch. I will read you the question.

Do you anticipate moving the additional network rollout margin for Fiber Co. Below EBITDA at some point in the future? Once the potential for demonstrating new margin contribution is exhausted and the accumulated base starts to weigh on EBITDA growth potential.

Jacek Kunitsky, CFO, Orange Polska: This would be similar to how gains on real estate were previously treated. So thank you very much, Jakob, for your question. Nope. I do not assume that we will move the rollout margin below the EPTA. It is part of our activity.

It is with us, and we are doing this this rollout from 2021. So it’s with us for five years now. It’s going to be with us for another three years at least. It’s it’s part of the it has it has grown to be a big, big project and a part of our business processes. So I do not assume we will move this anyway in anyway below the APT.

Lasse Kivashko, Investor Relations, Orange Polska: Thank you. That exhausts our q and a session. Thank you very much for the participation, and enjoy rest of the summer. And talk to you in October. Thank you.

Ludmila Kimok, CEO, Orange Polska: Thank you very much. Thank you. Bye bye.

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