Earnings call transcript: Polsat Plus Q2 2025 sees growth amid challenges

Polsat Plus Group, a key player in Poland’s telecom and media sector with a market capitalization of $566.21 million, announced its Q2 2025 earnings, reporting a 3.9% year-over-year increase in revenue to PLN 3.6 billion. Despite the revenue growth, the adjusted EBITDA saw a slight decline, dropping 2.4% to PLN 824 million. The company also reported a net profit of PLN 113 million. In the stock market, Cyfrowy Polsat SA’s shares experienced a minor decline, with a 0.17% decrease, closing at PLN 34.78. According to InvestingPro analysis, the stock appears to be trading above its Fair Value, with a P/E ratio of 19.4x.

Key Takeaways

• Revenue increased by 3.9% year-over-year, reaching PLN 3.6 billion.
• Adjusted EBITDA fell by 2.4%, totaling PLN 824 million.
• Net profit was reported at PLN 113 million.
• The company launched a new flexible multiplay offer to boost customer value.
• Market share in TV advertising stands strong at 28.4%.

Company Performance

Polsat Plus Group showcased a mixed performance in Q2 2025, with revenue growth driven by strategic initiatives in product offerings. The company has expanded its multiplay customer base, now exceeding 3 million, and introduced a new customer bundle strategy. However, the decline in adjusted EBITDA indicates ongoing challenges in managing operational costs.

Financial Highlights

• Revenue: PLN 3.6 billion, up 3.9% year-over-year
• Adjusted EBITDA: PLN 824 million, down 2.4% year-over-year
• Net Profit: PLN 113 million
• Free Cash Flow (last 12 months): Over PLN 1 billion
• Net Debt: PLN 12.1 billion

Outlook & Guidance

Looking ahead, Polsat Plus Group anticipates completing the Dzhevo wind farm by Q4 2025, which could lead to interest savings of PLN 30-40 million in the second half of the year. The company expects its CapEx to revenue ratio to remain around 7%, with no further frequency renewals planned until 2029.

Executive Commentary

CEO Andrea Bramchuk stated, "We delivered strong financial results with revenue reaching 3.6 billion zlotis." Maciek, the Business Segment Presenter, emphasized the potential of the new multiplay offer, saying, "Our new simple and flexible multiplayer offer is designed to further drive the value of our customers." CFO Katarzyna Ostabtaman noted, "We are slowly coming to an end of the intensive investment phase."

Risks and Challenges

• Potential digital tax regulation could impact profitability.
• Market saturation in equipment sales may limit growth.
• High net debt levels, with a peak expected in Q1 2025, could pose financial risks.
• Competitive pressures in the telecom and media landscape.
• Macroeconomic factors affecting consumer spending.

Q&A

During the earnings call, analysts inquired about the potential impact of digital tax regulations and the expected growth in equipment sales amid market saturation. Executives also addressed concerns about the company’s high net debt levels and the timing of its peak.

Full transcript - Cyfrowy Polsat SA (CPS) Q2 2025:

Conference Moderator, Polsat Plus Group: Good afternoon, and a warm welcome to Polsad Plus Group’s earnings conference for the 2025. Can I have the next slide, please? Before we begin, let me introduce our speakers for today. Andrea Bramchuk, President of the Management Board Matti Eestetz, Vice President for Strategy and Katarzyna Ostabtaman, Chief Financial Officer and Management Board Member responsible for ESG. To ensure a smooth discussion, please feel free to submit your questions via the q and a panel at any time during the presentation.

Kindly include your name with each question as we do not accept anonymous questions. Thank you in advance. Next slide, please. And now without further ado, let’s go ahead with the presentation. Andre, the floor is yours.

Andrea Bramchuk, President of Management Board, CEO, Polsat Plus Group: Good afternoon, ladies and gentlemen. Thank you for joining us today. It’s a pleasure to welcome you for the first time on the result call of Polsat Plus Group. Before we dive into today’s agenda, allow me to briefly introduce myself. My name is Andrea Bramchuk.

I have dedicated over twenty five years of my professional career to the telecommunication industry. For more than fifteen years, I have worked with Polsat Plus Group in various roles. For the past seven years, I have been CEO at NETIA, and currently, I am honored to additionally head Sefrove Polsat and Polkontel. Some of you may remember me from similar meetings when NETIA and Midas were publicly listed companies. Before we dive in the presentation, I would like to emphasize that my priorities uphold the the advanced long term strategy of our group, ensuring continued growth and stability for all our stakeholder.

Going over today agenda. First, we will highlight the main events in the second quarter. After that, we’ll discuss our operating and financial results. We will end in short summary and take your question. Let’s move to the next slide, please.

This was a solid, stable eight quarter for our group. In the telecommunications space, the main highlight was the launch of our new flexible multiply offer, which help us build the value of the customer base. Maciek will share more details about this soon. In our media segment, we saw strong growth in viewership, which aligned with long term strategy. This give us a solid position in the advertising market.

At the same time, our online division, Grupa Polsat Interia, remains the leader in the Polish Internet market. In green energy, I’m proud that we have finished the installation of all 63 turbines at the Zizevo wind farm, and most of them are already running in the test mode. Our company, Beopaliva Evodur, also won a capacity market auction secure 44 megawatts of capacity obligations starting in 02/1929. This contract is expected to bring in about 400,000,000 zlotis over seventeen years. We have also secured an invest loan of almost 1,000,000,000 zlotyk for the Jejuvu wind farm.

I am especially pleased because this show that the financing institution have strong confidence in our group, our management and our strategy. Now on the right side of this slide, you can see the numbers. We made PLN 3,600,000,000.0 in revenue this quarter, up nearly 4% compared to last year. Our adjusted EBITDA stayed strong at eight twenty four million zlotis. ARPU per b two c customer continue along a steady growth path up to 4.3% year on year.

We now have over 3,000,000 multiplayer customers using an updated definition, Maciek will explain soon, and this base is also growing. Our audience share went up to 22.5%, and our green energy production grow by over 40% to 314 gigawatt hours in the 2025. Let’s now move in the details. Maciek, the floor is yours.

Maciek, Business Segment Presenter, Polsat Plus Group: Good afternoon, and welcome. As always, it will be my pleasure to present the operating results of our business segment. Can I please have the next slide? I can say that this was a very good quarter for our media segment both in TV and in the Internet. Let’s move to the next slide, please.

I’m very satisfied with our viewership figures and our strong position in the advertising market this past quarter. Let’s get right to the numbers. The audience share of TV post ad group channels grew to 22.5%. Our thematic channels contributed a solid 15.2%, while our flagship channel, Pulsat, secured 7.3% of audience shares, proving that our programming choices are well received by our viewers. The advertising market grew by 3.2% year over year and I’m proud to report that our TV advertising revenues grew in line with the market increasing to million.

In Q2 twenty twenty five, we maintained a stable market share of 28.2%. It’s always better to look at the performance in the media segment over a long period of time to smooth out seasonal effects. So let’s see the results for the first half of the year. Can we have the next slide, please? Our performance over the past six months was also very good.

Our main channel delivered a solid 7.4% audience share in the commercial group, adding 14.9% of our thematic channels. We have a total of 22.3%, and that is an increase by half a percentage point versus last year. On the advertising market, we clearly outperformed the market in the first half of the year. Our advertising revenues grew by 3.7% year over year, outpacing market growth of 2.2%, which is an outstanding result. Our market share grew to 28.4%.

Next slide, please. Now let’s talk about the Internet. Once again, Polsat Interior Group is the number one Internet publisher in Poland. Not only that, we are also a leader in the mobile category. That is really good news because today everybody is basically glued to their smartphones and this is a prospective market for us.

Let’s look at the numbers. 21,000,000 real users and nearly 2,000,000,000 page views monthly. And these figures clearly demonstrate Postal Interior’s strong position in the online market and we will continue to strengthen our presence. Next slide, please. Our strong results in the media segment this quarter were driven by a very successful spring programming lineup and smart investments in engaging sport events.

We built our spring schedule around well known popular shows and series that our audience loves. On top of that, we offered our viewers many attractive sports broadcast that drew massive attention. The volleyball nash Nations League was a sensation, especially with the Polish team winning the championship. Tennis fans got a treat too. Sinky, Gashfiontek, take home the win Bledon title.

Of course, Formula one races and football, Bundesliga, La Liga, UEFA Europa, and conference leagues all remained hugely popular. Next slide, please. Let’s move on from media to telco. Next slide, please. As Andre said at the beginning of the presentation, one of the key highlights of this quarter was the introduction of our latest multiplay offering.

It’s simple, it’s ultra flexible, and most importantly, it’s designed to drive ARPU growth by letting customers mix and match what fits them best. Why is it so simple and transparent? You start with any two core services for just 80 zlotus. You can pick a mobile subscription with a 180 gigabytes of data or fixed line Internet up to 600 megabits per second or LTE five g mobile Internet with up to 600 gigabytes, or TV package with a PoleSat box and 85 channels. And if you want more, just add another service from our portfolio for 30 zlotys a month, maybe another core service to streaming platforms or the l package upgrade.

You get three services, you pay 110 zlotys, you get four services, you pay 140 zlotis and so on. Extra simple, no hidden catches. Bottom line, we’ve made it easy for customers to build their own bundle, get real value and see exactly what they are paying for, no surprises and no confusion. At the same time, our new multiplayer offer helps us focus even more strongly on driving ARPU growth going forward. Next slide, please.

The simplified multiplay strategy has led to a clearer definition of our multiplay customers. Under this new definition, we now have over 3,000,000 multiplay customers. Any customer using at least two services, any two services even of the same type from any company within our group is counted as a multiplayer customer. Previously, our definition only covered customers participating in loyalty programs such as, smart home within, individual companies. To give you a clearer picture, let’s look at the numbers.

In q two twenty twenty five, under the previous definition, we had over 2,500,000 multiplayer customers. We now also include 209,000 customers with two or more services across different companies and 268,000 customers with multiplayer services of the same type. This brings us, our total multiplayer customer base to a little over 3,000,000. On the bottom graph, we restated historical data to ensure transparency and comparability. Under the previous definition, in Q2 twenty four, we reported 2,477,000 multiplay customers, which was 43% of our customer base.

With the new definition, this number increased to 2,964,000, representing 51.5% of our base. In q two twenty five, under the old definition, we would have reported 2,536,000 multiplay customers, while using the new definition, we have 3,013,000 multiplay customers. I would like to underline that this updated definition is intended to give a clearer and more accurate view of our customer base and the potential ahead of us for saturating this base with additional products and services. Let’s move on the operating results on the next slide. So as I’ve already said, we have over 3,000,000 multiplayer customers and we maintain a high and stable base despite challenging market conditions.

This base increased by 1.7% or 49,000 multiplay customers year over year. Thanks to our successful upselling strategies, today 53% of our total customers use our multiplay offering. Our multiplay customers have 10,600,000 RGUs, up by 832,000 year over year. A larger part of this increase was driven by the uptake of additional services under our new multiplay offer. I’m also very happy with the evolution of our churn rate, which decreased to 7.1% in Q2 twenty five.

The consistently low level of churn reflects strong customer satisfaction and loyalty. I expect that the new multiplayer offer will help us keep churn low going forward. Let’s move to the next slide, please. We provide more than 13,000,000 contract services, 6,500,000 of which are mobile telephony services, 4,600,000 are pay TV services and 2,200,000 are Internet services. Growth of 1.5% year over year is driven mainly by mobile telephony, which increased by nearly 210,000 year over year.

We also recorded good sets of mobile and fixed Internet services up to 159,000. Pay TV remains under some pressure. However, growth in IPTV and OTT is helping offset the declines in traditional Pay TV. Let’s continue to the next slide, please. I’m excited to report a solid 4.3% year over year increase in ARPU per B2C customer to reaching 8.4 zlotis.

This growth was driven by our strong sales in mobile and Internet services as well as execution of our multiplay strategy. We also saw the RGU per customer’s ratio increased to 2.33 on the back of efficient upselling of products to our customer base as part of our multiplay strategy. If you think back to the slides showing our new multiplay offer, please notice that we have huge potential when it comes to saturating our customers with additional services. Next slide, please. We maintain a high base of prepaid

Conference Moderator, Polsat Plus Group: services with 2,380,000 RGUs in q two twenty five despite intense market competition. ARPU per prepaid RGU remains high at 17.7 zlotus in q two twenty five,

Maciek, Business Segment Presenter, Polsat Plus Group: maintain recording a small decline of 1.7% year over year from 18 zlotus in q two twenty four, but an increase from 17 zlotus in q one twenty five. Here, I would like to emphasize that our priority is to maintain value in this highly competitive market segment. In spite of the pressure that we are experiencing on the prepaid RGU base, RPO per RGU remains on a high relatively stable level demonstrating our ability to retain high value customers. Can I have the next slide please? In the b to b segment, we successfully maintained the scale of our customer base, which amounted to 68,000.

Despite a highly competitive environment, we have seen a 4% year over year increase in ARPU up to nearly PLN1550 per month. This growth demonstrates our effective management of the B2B portfolio and successful monetization strategies. And the next slide, please. Let’s now move to the performance of our last business segment, green energy. And next slide, please.

Diving straight into the operating results. This quarter we have seen remarkable growth in our renewable energy production. Green energy output increased by 41% year over year, reaching three fourteen gigawatt hours in Q2 twenty five and five ninety two gigawatt hours in 2025. This strong performance was driven by the expansion of our wind production capacity. Last year, we launched two wind farms, Schuhof in February and Shirov in June.

And what is important, we are also making excellent operational progress. One of our major achievements this quarter, as Andrei has already pointed out, is the near completion of the Dzheva wind farm with a capacity of 139 megawatts. All 63 turbines have been installed. And what is more important, 51 are already being tested. And the next slide, please.

In the green energy segment, we maintain a high stable level of EBITDA, 66,000,000 in Q2 and PLN 123,000,000 in the first half of the year. I’m satisfied with this performance given that we are operating in the environment characterized by low energy prices. Additionally, we have a challenging comparative base in 2024 following last year’s strong biomass sales. Please recall, the energy from biomass was contracted back in 2023 at higher prices, and we were able to secure favorable terms for the supply of biomass in 2024. Looking ahead, with the Zhejiwa wind farm almost completed and scheduled for commercial launch by the 2025, we will double our installed wind capacity.

This will further strengthen our future EBITDA and drive sustainable growth in the upcoming periods. Okay. Ladies and gentlemen, this was my last slide. Before I pass the floor over to Kasia, let me briefly sum up. We recorded solid operating results across the board the 2025.

In the media segment, audience shares were growing, thanks to our successful spring schedule, to 22.5%, And we significantly outperformed ad market in 2025 with the ad revenue increase by 3.7%. In the b2c and b2b services segment, customer both in B2C and in B2B continues in an upward trend by up 4.34% respectively. At the same time, we are very happy with the low level of churn, only 7.1% in Q2 twenty twenty five. Our new simple and flexible multiplayer offer is designed to further drive the value of our customers. In the energy segment, we have almost completed our key strategic projects and the priority for the upcoming quarters is to focus on monetizing our investments and delivering the promised EBITDA.

Thank you. And I hand over to Kasia for the discussion of our financial performance.

Katarzyna Ostabtaman, Chief Financial Officer, Polsat Plus Group: Thank you, Matte. Good afternoon, everyone. It’s a pleasure to be here with you today to present the financial results for the group for the 2025. Despite certain headwinds, we delivered a solid and stable set of results. Let’s take a closer look at the key financial indicators.

Next slide, please. On this slide, we have an overview of our key financials. Revenue increased by 3.9 year over year to nearly 3,600,000,000.0, mostly thanks to the contribution of the green energy segment. We posted stable adjusted EBITDA of $824,000,000, 2.4% less than last year. The key reason behind this slight decline are higher costs, in particular technical costs and marketing expenses related to the launch of our new offer.

Net profit settled at 113,000,000. The year over year decrease is driven by one off effects. Last year’s results included a gain on the sale of IP four addresses why this quarter was impacted by a noncash impairment of our photovoltaic panel stock. Free cash flow for the last twelve months adjusted for CapEx in the green energy segment reached over 1,000,000,000. This confirms our strong cash generation capacity even in an environment of elevated interest costs.

Our KeyBank covenant net debt to EBITDA increased slightly to 3.66, which is in line with our expectations as we continue to finance investment in Dzhevo wind farm using our own funds until recently. Can I have the next slide, please? Let’s move to the breakdown of the factors that shaped our financial results this quarter. Revenue increased by 136,000,000 year over year reaching PLN 3,590,000,000.00. As mentioned before, the highest contribution comes from the green energy segment.

This quarter, we delivered the first tranche of our hydrogen powered buses to Helm, which resulted in the recognition of revenue. The contribution of the other segments remained stable year over year. Adjusted EBITDA amounted to EUR $824,000,000, a stable and comparable result to the one posted a year ago. In the B2C and B2B Services segment, we continue to see good performance supported by higher ARPU and growing retail revenue. The decline in EBITDA in this area is mainly due to higher network costs and temporarily elevated marketing expenses associated with the launch of our new multiplayer offer, which Matchett presented in detail.

Next slide, please. Let’s take a look at our cash generation profile over the last twelve months. Adjusted free cash flow for the last twelve months after interest and excluding CapEx in the green energy segment amounted over 1,000,000,000 zlotis at the end of the second quarter. This is a very solid result, especially considering the still high cost of debt. It confirms the group’s strong ability to convert EBITDA into cash.

Over the past twelve months, interest costs amounted to PLN 1,400,000,000.0. While the recent interest rate cuts in Poland brought some relief, we still operate in one of the most expensive debt environment in Europe. We estimate that interest savings of the second half of the year may reach 30,000,000 to PLN 40,000,000, but the overall cost of debt service still remains high. We also recorded outflows related to telco frequency reservations. Over the past twelve months, we paid over 400,000,000 zlotis, including the renewal of the 2.6 gigahertz band and the deposit for the 700 megahertz auction.

I would like to flag that in q three, we will recognize about 200,000,000 zlotis for the settlement of the newly acquired 700 megahertz block, and we expect the 900 megahertz renewal in Q4 or at the turn of 2025 and 2026. After that, no further frequency renewals are scheduled until 2029. Let’s now take a look at CapEx on the next slide. The TMT space remains invariably CapEx light. CapEx to revenue ratio in this business area was 7% in the 2025 after a temporary spike earlier this year.

This is fully in line with our expectations. And I anticipate that this ratio will remain within 7% range for the full year. Turning to green energy, we are slowly coming to an end of the intensive investment phase. In Q2 alone, we invested 150,000,000 and over PLN 300,000,000 in the first half of the year. The vast majority of this CapEx was allocated to finalizing the Dzhevo wind farm.

As Maciek mentioned, all turbines are now installed, an achievement we are truly proud of, and the site is already generating energy in its testing phase. We expect to launch the project commercially by the fourth quarter. Once the final invoices for Gzevo are settled later this year, we will mark the successful completion of our major strategic investment in renewables. This means that the development phase and elevated CapEx in this segment are coming to an end, setting us up for a period of stable returns. Let’s move to the next slide.

On my last slide, let’s turn to the group’s debt. At the June 2025, our net debt stood at nearly 12,100,000,000.0 zlotis. Our net debt to EBITDA ratio came at 3.89 or 3.66 if you exclude project financing, both figures broadly stable compared to previous quarters. The good news is our average interest cost on loans and bonds dropped to 7.6%, thanks to recent interest rate cuts. Still, let me remind you that Poland remains one of the most expensive debt markets in Europe, so the cost of financing remains a headwind for us.

In February, we took a proactive step and made an early repayment of part of our bank debt. As a result, there are no further repayments scheduled under our loan agreement this year. As you can see on our debt maturity profile here, scheduled repayments will resume in 2026 with a bullet payment falling in 2028. All our bonds mature in 02/1930. The structure of our debt by instrument and currency remains unchanged with 68% in bank loans and 32 in bonds and the vast majority denominated in zloty.

To sum up, this was a solid quarter. Our financial results were stable and both CapEx and leverage are under control, in line with our strategic assumptions. That’s all from me, Andre. I’ll hand it over to you for a quick summary.

Andrea Bramchuk, President of Management Board, CEO, Polsat Plus Group: Thanks, Kasia and Maciek. Summing up today presentation, the 2025 was a good on for us. We delivered strong financial result with revenue reaching 3,600,000,000.0 zlotis and adjusted EBITDA at 824,000,000. As Majek discussed in details, we achieved very good operating result in the telecommunication sector. We are happy with our new simple and more flexible offer for customers designed to support our multiplay strategy.

We’ll continue our long term plan focused on the building customer value. In the media segment, we recorded growing viewership figures and very good performance on the advertising market. It was, the result of a successful spring program schedule and smart investment in the attractive and popular sport event. Finishing the installation of all 63 wind turbines at the Zhevo Wind farm, one of the biggest achievement this quarter. As Maciek mentioned, this project doubled our wind farm capacity and will support the results in our green energy segment going forward.

We also received a bank loan of nearly 1,000,000,000 zlotis for Jejuvo project. This shows the trust the financial institution have in our group and our long term strategy. I believe we are very well positioned to continue the consistent execution of our strategy across all our business in the future. Thank you very much for your attention. We are now happy to open the floor for any question you may have.

Q&A Moderator, Polsat Plus Group: Okay. We have two questions in the Q and A panel, both from Nora from Arista Group. Hi Nora, thanks for your questions. Nora’s first question is, what is your view on the planned digital tax? It seems that the idea is similar to the fair share debate between big tech and telecom companies.

If implemented, how would it impact Petrovipolsko?

Matti Eestetz, Vice President for Strategy, Polsat Plus Group: Okay. Hello. Matistas here. We believe it’s worth to regulate digital tax in Poland just to equal chances for Polish companies and have fair competition with global big tax. In terms of impact, the impact is dependent on the formula of digital tax, so it’s difficult to evaluate without the regulation now.

Q&A Moderator, Polsat Plus Group: Nora’s second question is, could you provide an outlook for equipment sales in the 2025?

Katarzyna Ostabtaman, Chief Financial Officer, Polsat Plus Group: As far as the equipment service is concerned, just please remember that this is what happens now on the market. This is the current market trend. Basically, people are buying more expensive expensive devices, but they’re using them for longer periods of time, which basically means that market is a bit saturated. In my opinion, the actually, I think we’re the best sellers among the four large, telecoms in the country. So, looking at our results and looking at the results of our competitors.

So basically, I think, the sales will improve a bit, but I wouldn’t expect, very sharp increases, very big sales of equipment. This is not something that’s going to happen. I would say more around the fourth quarter.

Q&A Moderator, Polsat Plus Group: Thank you. One more question from Laura. When is company expected to reach the peak of its net debt to EBITDA?

Katarzyna Ostabtaman, Chief Financial Officer, Polsat Plus Group: Probably around first quarter twenty twenty five.

Q&A Moderator, Polsat Plus Group: Okay. Thanks, Kasia. I don’t have any more questions in the q and a panel. So thank you all very much for participating in today’s conference. And Andre, I hand over to you.

Andrea Bramchuk, President of Management Board, CEO, Polsat Plus Group: Thank you very much for for our management team. And Kasia and Maciek prepared and explained the situation in the 2005. I believe that we have possibility to meet at our conference, read to our result for q three in autumn this year. And have a nice evening, if I say.

Q&A Moderator, Polsat Plus Group: Thank you. Bye.

Matti Eestetz, Vice President for Strategy, Polsat Plus Group: Thank you very much.

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