Earnings Call: Q4 2020

Mar 25, 2021

Good morning. Good afternoon, ladies and gentlemen. Welcome to Polsat Group's 2020 Financial Results. For today, we've got a very interesting agenda because apart from the financial results, we will also discuss the details of the partnership with Cellnex Telecom that we recently negotiated. And the Q and A session will follow the presentation. You are welcome to post the questions in the chat session during the presentation, and we will answer them afterwards. Right now, I will give the floor to Mr. Stavros Narbasi, CEO of Sefrovic Polsat. Ladies and gentlemen, Good afternoon, and welcome to Polsat Group's results call for the Q4 and the full year 2020. I will start today's meeting with an overview of the most important events in 2020. Then we will present the details of our long term partnership with Cellnex. After that, as usual, We present the operating results of our business segments and our financial performance in the Q4 and the full year. A short summary and outlook for 2021 from me will end the presentation. Okay. To the first point on today's agenda. Let me sum up the key events of 2020 for you. 2020 was an unusual year for all of us Because of the worldwide coronavirus pandemic, security of our employees and customers suddenly became an absolute priority. We decided to contribute to the fight against this pandemic and its negative impacts, and we did so by donating together with our main shareholder, Mr. Sigmund Solos, over PLN 50,000,000 to the Polish society and the health care system. Those of you who are shareholders of Stifelrobl Polsat received a record high dividend this year. We paid a total of PLN640 million of 1 swater per every share. This historically high level of dividend payout Took place alongside all our other operating projects, which I will discuss in a moment and despite the COVID pandemic. This proves the resilience of Polsat Group. 2020 was the year of 5 gs development. In Poland, this trend was accelerated with high connectivity needs of our customers exposed by the pandemic. I'm proud to say that we were the 1st and so far the only operator on the Polish market to launch a true 5 gs network with transmission speed of up to 600 megabytes bus per second. We have been rolling out our 5 gs network intensively over the past months. And thanks to our efforts, Already 7,000,000 poles are within its footprint, and this is only the beginning of our activities in this field. 2020 was also the year when we significantly strengthened our position on Internet market By acquiring Entevia Group in July and consistently integrating it with Polsat Group Structures, We are consequently building our position in this promising market segment. And the last but probably the most interesting event that Occurred recently was a deal with Cellnex. I believe that our approach to this deal is highly innovative Because as far as I am aware, this is an unprecedented transaction where both passive and active infrastructure is being sold. I'm convinced that the long term partnership with Cellnex will allow us to deploy our 5 gs network at an even more dynamic pace in the most cost efficient manner. As a result, our customers will enjoy State of the art connectivity services. I know that you want to know more details on this last topic, So let me give the floor to Maciek, who was the mastermind of this project, who developed the concept and who saw this project through. Hello, everyone. Thank you very much, Mirek. It's my pleasure to present this exciting project and and Promising Long Term Corporation with Cellnex. So let's start with the business concept of the Netco deal as we call it. So what are we selling? We are selling Polconta Infrastructure, Our 1 100%. This unit is the owner of a fully equipped nationwide Well optimized mobile telecom infrastructure, which combines all technological elements, both passive and active. Infrastructure consists of 8,000 sites, 37,000 carriers, 17,000 microwave antennas And uses over 11,000 of fiber optic connections. What are the key financials of this business? In 2020, our Continental Infrastructure generated PLN 90,58,000,000 of revenue and PLN 452,000,000 of EBITDA. It's EBITDA after leases, so under the old accounting standard, Cash CapEx amounted to PLN433 million. What's important to notice here is that EBITDA was Fully reinvested into CapEx on the network rollout. I will focus your attention on a tenancy ratio, which starts at very low level, 1.17 times only. It means only 17% of our sites are co shared with other operators. Such a low tenancy ratio gives the owner of this network a very Sensible potential to improve its efficiency, and we believe all market players can benefit from it. Please Also note that key assets stay with us, namely all frequencies that we collected so far, The core network that is crucial for managing end user customers' experience as well as know how important for supervising the cooperation process, All this stays in Polsat Group. It's very important to pay attention to this fact. Let's look at this deal in the context of the Polish 4 MNO telco market, a highly competitive market, both on the commercial And on the technological side, if we look at the left side, we can see that high competition translated into very low prices, Actually, the lowest in Europe. A tariff with unlimited voice and messaging and small package of data can be bought in Poland for PLN 30, 6 times cheaper than the European average. In the middle of the slide, we have a snapshot of revenues and EBITDA 4 MNOs in a 5 year perspective, low prices with high popularity of mobile services in Poland allow for limited top line growth. However, what we see here are falling margins from EUR 8,100,000,000 in 2015 to EUR 7,500,000,000 in 2019 during the period of rapidly growing popularization of LTE. Let's add CapEx to this picture. On the right hand side, you can see that according to our estimates, the 4 MNOs Spend approximately PLN3.4 billion every year on their infrastructure, and it's important that consumes 46% of EBITDA. I will say this picture is pretty stable, but not very optimistic. We have very low ARPU, falling margins, high CapEx levels, which means that the market has to be Cost oriented. So we are in a situation which requires seeking for cost optimizations. And over the past years, All the M and Os have been optimizing everything. We've optimized marketing, headcount, Sales networks, customer care areas, the only cost component that hasn't been optimized so far is cost of infrastructure. The sector has only one alternative to do it efficiently, and it's network sharing. Here you can see how this network optimization looks in real life at present. Obviously, network sharing is not very popular in Poland yet. You can come across similar situation as presented here pretty frequently in Poland, which means something went clearly wrong. We really believe that network sharing is the only alternative for the future because We should not be seeing such a picture going forward, especially in the concept of the challenges that are ahead of us over the next 10 years. So what are these challenges? As you all know, each of us consumes more and more data, And the COVID situation has accelerated this demand. Analysis Mason assumes data traffic in Poland will grow 5 times Over next 10 years from 5 exabytes in 2020 to over 25 exabytes in 2,030, and the future networks needs to cope with this trend. In order to do so, we estimate that market participants We'll have to find almost 8,000 new sites over the next 10 years and share them far more openly than in the past. So to sum up, The dynamically growing demand for data transmission requires faster development of the 5 gs network. Of course, addressing the demand of our customers for growing data transmissions through 5 gs is key. 5 gs is also a huge business opportunity because the Polish AMN market is in the turning point. After 20 years of continuous price focus battle, the market participants revised an approach to pricing, and 5 gs can accelerate this positive trend. This slide shows how we built ARPU and how we will build in the future. The basic element is our mobile offer. As I have said earlier, in Poland, we faced a situation of very low prices So basic connectivity that include unlimited voice services and data packs. In order to build value, we attempt to upgrade our customers to higher tariffs step by step. The second element, which you know exactly, it's our strategy that significantly contributes to ARPU is bundling through our SmartHome program. As a fully convergent operator, we generate incremental value by offering all inclusive packages composed of TV, Internet and voice, plus a package of value added services. We are very successful in executing this strategy. And As I will show you in the second part of the presentation when I will present operating results. But the real game changer in this context Can be 5 gs, a technology with many new future uses, which comes in a moment when consumers And appreciate the importance of reliable connectivity. 5 gs can be the trigger that unlocks our ARPU growth, And this ARPU growth will be generated from a higher quality of services and demand for fast data transmission. However, for 5 gs to be able to drive ARPU growth, rapid deployment of the 5 gs network is a must. The 5 gs network is right around the corner. Look at this time line. We have already started building 5 gs, thanks The unique possibility offered by our 50 megahertz block in the 2.6 gigahertz TDD band. In May 2020, we put on air The first 100 5 gs sites in 7 major cities in Poland. We saw how it well worked, And we decided to accelerate 5 gs rollout. And by December 2020, we already had 10 50 5 gs equipped sites and reached 7,000,000 people. In 2021, we plan to go further. We want to have over 1700 5 gs equipped This year covering over 11,000,000 poles jointly. I can say that if the sales of the 5 gs tariffs continue at the pace They are selling at the moment, we may decide to accelerate network rollout even more. Another important thing is a project called Polish 5 gs, initiated by 4 MNOs jointly with the Polish government. This project is about developing and cost sharing a countrywide 5 gs network based on the 700 Megahertz band. What's relevant is that all 4 MNOs consented to sharing both Active and passive infrastructures in this project. Under the condition that we build 1 common and shared network, it will be able to provide Transfers as fast as 200 megabits per second also the rural areas. The last piece of the puzzle is the 3.5 gigahertz auction that we are still waiting for. These frequencies are crucial for building capacity of the 5 gs network With those frequencies, speeds up to 1.2 gigabits per second are attainable in mobile Internet. So 5 gs is crucial for our business. It gives a chance to build ARPU and answers to demands of our customers, The 5 fold increase in data transmission I told you about. The rapid expansion of 5 gs network ensuring it's crucial for our customers and the whole telecom haircut, which we believe truly. Now perhaps the most interesting part, let me tell you about the business model Our long term partnership with Cellnex Telecom, what was our rationale behind offering both passive and active components of our network? Considering that we have secured the key assets, the frequencies, the core network and the know how, Then a similar logic applies to both passive and active. Looking from the left, I'm pretty sure you know a lot About past network sharing, incremental transactions took place so far both in Europe as well as globally. They don't differ much from real estate ones with tower sale and long term straightforward contracts attached. But in our opinion, it's only a half way there approach and real value can be unlocked The active component is added to the passive one. Actually, both layers are highly complementary and go Hand in hand, the major difference refers to CapEx renewal cycles that are more frequent in the active layer. Roughly speaking, the And in this context, We are perfectly placed, our opinion, on accelerate active network sharing processes. What needs to be emphasized here It's the fact that we worked out a very safe MSA, so master service agreement, which is supported by guaranteed SLA Service level agreement providing coverts for us and our customers. We strongly believe passive and active network sharing will become a new form of Corporation between MNOs as this is the only alternative to optimize our cost of investment while deploying 5 gs. This is unique concept. As far as I know, there hasn't been such a transaction worldwide. So probably, this is the first transaction of this kind. We will be very proud if we are trendsetters here. How will this business work on a daily basis? Of course, demand for connectivity is going to be the key driver for this cooperation. And Looking from the left, the first step is that we observe increased demand for connectivity from our customers, and we see that they are willing to pay for this. So there is positive impact on our top line. So we move to step 2. We placed an order with Netco to provide us with additional services such as sites, carriers or transmission. Then we go to step 3, is to sit down at the table and agree on mark to market price for the services that we need. Then we go to step 4. Netco delivers the new services. What's important, we control Network quality and user experience because we control the core network. This brings us to step 5. Our customers Can enjoy higher capacity and or coverage of an even faster network. In a word, both Polsat Group and Cellnex are highly interested in monetizing 5 gs efficiently. Let me underline that we will be Paying for the infrastructure ordered, not the volume of transmitted data. Let's look at our safety tools. We are fully aware we need to secure the interest of our customers in the future and ensure safe routes of cooperation between ourselves and Cellnex. We have negotiated detailed MSA and SLA agreements, which regulate the procedures For service provision for Polsat Group on an order basis, the deal will be concluded for 25 years. We have an option to renew For another 15 years, we are obliged to place orders for specified numbers of new sites and carriers. But given that we want to deploy our 5 gs network at a rapid pace, this is not an issue for us. As regards corporate governance, there are 3 key elements in place: the golden share and noncompetitive clauses and the right to buyback. We retained the Golden Share, which means that Netco shareholders have to be anonymous to take any key decisions relating to the Netco assets. The non competition clause ensures that we have to approve any sale of net cash share, and obviously, And the final element, something I hope we will never have to use is the option to buy back net cost Under certain specified circumstances for a fair price, including a discount agreed between the parties. I think that at a governance level, this deal is highly transparent and reflects a natural partnership. And now my last slide is a truly exciting transaction because we strongly believe that netco is the future. This is the best possible answer to market challenges, opportunities and expectations, not only in Poland, but also globally. I can summarize it shortly. An independent, passive and active Multi tenant operator is a real game changer for the mobile business. It reduces tanks to market, saves CapEx and brings benefits to all tenants. It's really exciting time for us. Thank you very much. Thank you, Maciej, for this comprehensive and interesting summary of this exciting deal with Helnex. My congratulations. Kasia, can you please explain the expected impact of the financials of Pulsar Group? This indeed is a great deal, and we're looking forward to it. A quick review of the structure of the transaction. Again, things you're most likely familiar with, so let's go through it quickly. The deal consists of the sale of 99 0.99 stake in our subsidiary, Polkomtel Infrastructura, Netco in short, To Cellnex Polska, a subsidiary of Cellnex Telecom, for a consideration of approximately 7,100,000,000 slots. The deal provides for a locked book mechanism so the final cash settlement will be adjusted for certain agreed factors. The transaction is, of course, conditional and requires the consent of the Polish anti monopoly office for Cellnex to take over the assets and the concept of our lenders. We're looking to close the deal by the end of October 2021. Like Patrick already said, we retained EUR 0.01 of the share capital of NETCO, the golden share which gives us special rights. After we finalize the transaction, the business profile of Pulsar Group will definitely change. The group will adopt an after flight business model with approximately 7% CapEx to revenue ratio versus historical over 10% or 13% expected in 2021. We sort of returned to the roots as both media and pay TV businesses are also CapEx light ones. The CapEx lightness of our business model will result from the fact that Netco takes full maintenance and development of passive and active components of our current and future mobile access networks, 2 gs, 3 gs, 4 gs and 5 gs. As you all perfectly know, deploying 5 gs is not an easy task. It requires heavy CapEx investments as 5 gs requires really dense network. Our estimate says that in order to meet Fivefold growth of data demand over the years to come, netco will have to invest approximately PLN 2,500,000,000 to PLN 3,000,000,000 in the next 5 years. This figure includes both maintenance and development CapEx. Naturally, Cellnex will charge us for this investment. Actually, the Scale of our payment will be determined by numerous factors, including number of new sites and carriers ordered, Future prices of the active equipment, etcetera. The project team has developed a very complex settlement model that determines our final payment in favor of Cermex. However, we do understand you need To get a feeling of the scale of our future cost. So if we take EBITDA after leases of PLN 4.6 PLN 50,000,000, 4.60 million. As a starting point, we estimate our annual net payment to Cellnex Express as the consolidated EBITDA after leases will grow 6% to 8% per annum until 2025. Whether 6% or 8% would be applicable, it is dependent on the scale of our orders placed in Netco. So on the safe side, I would recommend you to apply 8% growth rate in the 1st years as we really want to build 5 gs as fast as possible. We will naturally monitor this process closely, And we intend to provide you with more precise estimates as soon as we see how fast the new investment process progresses. Another key subject to remember is an expected positive contribution of 5 gs tariffs to our top line. We started offering this service in the beginning of the year with Clear premium pricing strategy applied. If the demand for 5 gs is strong, we will be more and more interested in fast deployment of 5 gs technology. At the end of the day, this scenario will be beneficial for us as well as for our future network partner. 2 more subject worth commenting. The MSA is a service type agreement and which means IFRS 16 liability shall not be recognized. The second topic is use of proceeds. However, as of today, I will not elaborate On that given the transaction is conditional and it is definitely too early to allocate the cash proceeds. So to sum up, a very interesting transaction that converts Pulsat Group business model into a CapEx light one that secures a possibility to provide state of the art connectivity to our customers. Thank you, Kasia. Now let's switch to a more standard section of our presentation. Staszek, please start with Media segment Thank you, Mirek. Coming back from our strategic projects To our day to day business, I would like to present the result of our Media segment for 2020. First, let's take a look at our online business, which is performing very well. I'm very pleased to say that the integration of interior with Polestar Group is going very smoothly and according to our expectations. We have already joined the advertising, sports and news editorial teams, and this cooperation is very efficient. We also To support this with some numbers, as you can see, On the top graph, we hold a strong 3rd position on the market with nearly 20,000,000 real users per month on average in Q4. We also continue to grow the number of our page views up to EUR 1,700,000,000 in Q4. At the end All of these actions are aimed at delivering synergies as promised, and I believe we are well on the track. Turning to the results of our TV business in Q4. Thanks to our attractive autumn programming schedule, we recorded excellent viewership figures. The main channel, Pulsat, had 9.5% of audiences, which particularly put us on the podium exactly with TVN. Our thematic channels also had strong viewership of 15.4%. As an outcome, 25% viewer For the group, which is the top range of our strategic target of 23%, 25%. Even though we were also in a lockdown in Poland for most of Q4, this time the advertising market did not react in panic as it did in Q1 when it recorded a quite dramatic fall of over 35%. As you can see on the top chart, The broad market returned to the growth path with growth dynamics of 2.4% in Q4. Pulsar Group delivered strong result, growing 4 0.5% year on year. As a result, our piece of the TV ad pie increased to 29.2%, which I find as a very strong result. Looking at the big picture from a 12 month perspective, our viewership result We're stable in the full year and in line with our strategy. Our overall audience share of almost 24% in 2020 is right in the middle of our target corridor of 23%, 25%. Both our main channel and thematic channels Held our top position, gaining 9.5% 13.4%, respectively. Very satisfactory viewership results, in my opinion, and precisely in line with our long term strategic assumptions. Looking at the ad market in 2020, the full year results came in according to The broad market declined by roughly 10%, which clearly results from the 1st lockdown in spring. Last time, I said we were successfully bridging the gap caused by the ad market breakdown in Q2. The bottom chart proves this by showing that we have performed better than the market and recorded a decrease in ad revenues of a little over 8%, which translated into a high market share of 28.5%. That's All from me on the operating results of the Media segment in 2020. To sum it up, it was a very tough year in Media Business We have dramatically weak ad market caused by COVID, especially in spring. We've had to react fast and adjust our cost to the new reality. Still, we were ready to re launch productions as soon as ad market rebounded in the second half of the year. In the meantime, we also managed to buy and start integrating InteriPL, which is an exciting project. As a result, in the full year perspective, our top line was fully rebuilt. And finally, we delivered slightly growing full year EBITDA results of the segment, which Kasia will tell you more about. Thank you for your attention, and let me pass the floor to Maciej, who will discuss the operating performance of our B2B and B2C segment. Thank you, Sascha, and congratulations on the very good results in the Media segment. I realize 2020 was extremely challenging for you and for your team. However, the full year results clearly show you did a great job in the Media segment. But let's see if B2C and B2B segment performs well. As usual, I will start with SmartDome, our multiplay product. Please notice that despite the fact that almost 40% of our Total customers' base is saturated with bundled services. We continue to grow our multiplay customer base in Q4 For 2020 at stable pace of 4% year on year, we are continuously upselling our products and services to this group of customers, which Brings the total number of RGU owned by them to nearly 6,400,000. And what's The most important, our multiplay strategy results in high satisfaction of our customers reflected in very low levels of churn, which amounted to 6.5% in Q4. High customer satisfaction allows After the quarter, total growth at a stable rate of 4% year on year, reaching almost euros 15,400,000 in Q4 2020. Exactly like in the previous quarters, this growth was driven by mobile telephony RGUs and demand for M2M services. We also saw some additional demand for Internet services, especially during the lockdowns, while we why our pay TV RGUs are very stable. We saw this quarter more than 640,000 services additionally, which we are very proud of. Please note, the strong results were delivered despite the second Lockdown that started in Poland in the end of October 2020 and is basically in place until today. For a significant amount of this time, shopping malls have been closed and as a result of our points of sales, so lower customer traffic. For these reasons, Q4 of 2020 was a lot different than in the past years, but still successful for our company. Let's look at ARPU performance, which makes me especially happy. It grows by PLN 4.3 year on year this time. Naturally, you need to work for a few years to gain such an excellent result in ARPU performance. In Q4 2020, ARPU grew by 5% year on year to almost NOK 90 per customer. For me, this result is a big success, and it proves that our strategy focused on building customer value is working very well. So Where does this growth come from? Most importantly, we are successfully upselling services to our customers. As you can see on the graph, RGUs saturation increased to 2.77 RGUs per customer. Additionally, in Q4, we saw a lot of interest in our pay per view services triggered by more sports Events heard by us in this model. And the 3rd growth factor comes from the fact that during the second lock We observed a similar effect as in the spring that is higher voice traffic, which means that higher interconnect is Still a factor that contributes positively to ARPU growth. And looking a bit forward, I believe really Our new 5 gs tariffs will be an additional contributor to maintain this highly favorable trend in 2021. My final point is the prepaid segment of our business. Our prepaid SGU base remained at a Stable level of about EUR 2,600,000 in Q4, mainly on the back of solid sales of mobile services. ARPU, on the other hand, grew steeply by 7.4% to PLN21.8. In 2020, we made some adjustment to our prepaid tariffs in order to adapt them to the current favorable market situation, and this had a positive impact on our ARPU. Also, like I said before, during lockdowns, people tend to Moreover, the phone and please remember that prepaid plans are frequently settled in a pay as you go model, which translates directly into ARPU growth. And last but not least, in Q4, we earned more pay per view events, which which were well received by our customers. Okay. To sum up, very good operating results, Stable organic growth in all business lines despite the pandemic year and very strong RPO performance, both in contract and prepaid services. I believe we have a very good momentum, while new 5 gs tariffs will support it in the quarters to come. That's all from me today. Kasia will now tell you about our financial results, which I'm sure fully reflect our very good operating performance. Thank you. Staszek and Maciek, great job on the excellent operating results, especially in the context of building Your operating success has translated into an additional 179,000,000 zlot of revenue in Q4 for Pulsar Group, which allowed us not only For our employees who really stood up to the challenge during this difficult year and to finance various special projects, but also to deliver a strong healthy growth of EBITDA at the level of 6% per annum to over PLN 1,100,000,000. Such solid finances gave us the comfort to invest more intensively than we used to in the past. As Macchi said, we embarked on the 5 gs project, a project we think is very important for the future of this company. Obviously, the high pace of investments entailed higher CapEx. As a result, LTM free cash flow Was just a little under EUR 1,300,000,000 lots. And lastly, debt leverage. As you can see, we lowered the leverage to 2.8 percent net debt to EBITDA in spite of the Interia acquisition in July and the payout of the first tranche of dividends for 2019 in Q4. I'm really happy to say that we also delivered growth on both The top and bottom line in the full year perspective. Revenue increased by 2.5% to almost PLN 12,000,000,000 and EBITDA adjusted for COVID expenses and donations Grew by 1% to over 4,200,000,000 slots. I think this is a very satisfactory result Given what happened in Q2 on the advertising market and given COVID negatively impacted our distribution channels, I think it is worth looking on the next slide, which shows revenue and EBITDA decomposition by quarters. After the spring lockdown, we systematically and successfully rebuilt both revenues and EBITDA in Q3 and Q4. The solid growth of revenues that you can see on this slide was driven mainly by a healthy growth of RPU, As Matti described earlier, a successful integration of Interia that added over PLN 20,000,000 to our bottom line in the second half of the year. As Mirek described at the beginning of this presentation, we decided it was our duty to support the Polish society and Health Care System in their efforts to mitigate the effects of COVID, and we donated a significant amount to this cause. Still, including the sizable donations, our EBITDA came flat for the full year. Turning to the analysis of the free cash flow. I'm very happy with the level of cash that we generated in both the full year and Q4. Our healthy operating and financial results prompted us to accelerate our investment into our strategic project, The rollout of the 5 gs network. In Q4, we spent a total of PLN 430,000,000 in CapEx, well exceeding our standard CapEx levels. Despite this, Q4 was still definitely the strongest quarter In terms of cash generation, the intensification of CapEx Expenditures that I just mentioned is visible on the next slide. Please recall that when we reported our results For 9 months in November, I flagged that we expected higher CapEx in Q4 and promised to give and more precise guidance for 2021. Last time, we reported CapEx to revenue ratio of 9% for 9 months. In the full year, this ratio increased to 10.2%, which means that Q4 alone was approximately 13%. I think this is the level that you should be expecting also in 2021 pro form a assuming a full year consolidation of Netco. The annual reported result will depend on the timing of closing on the infrastructure sales After this date, Pusat Group will convert into CapEx light business model. Significant one off outflows in 2020 Include the acquisition of Interia in July 2020 for approximately EUR 420,000,000 and the payout of the 1st tranche of dividend for the year 2019 in the amount of DKK 224,000,000. Still, our cash position has almost doubled over the last 12 months. The last point I would like to touch upon is that As you can see, the leverage at the end of 2020 was 2.8 net debt to EBITDA. In my opinion, our debt position is very comfortable at the moment. All of our debt is denominated in Polish lotis, and the current low interest rate environment in Poland translate into a low cost of our financing. As a reminder, we are returning to regular capital repayments of PLN 200,000,000 per quarter in June 2021. So in a word, we posted yet another strong quarter, and our solid financials enabled us to invest in many strategic projects, among them intensive 5 gs rollout. Still, we were able to pay a record High dividend to our investors and reduce our leverage ratio to 2.8 EBITDA only. But let me leave the summary of the year to Mirek. Thank you. Thank you, Kasia. Macik, Stasik, Kasia. Congratulations to you all on the strong results, both operational and financial of Polsat Group. It has been a very challenging year and our results make me really proud. It is my pleasure to say that we have achieved all the objectives that we have set for 2020. We have continued to develop the core of our strategy that is our multiplay offer based on the concept for everyone, everywhere. This strategy continues to be the key factor driving the growth of our Multiplier base and ARPU. 2020 was an exceptionally difficult year on the media market as Starcek described. Despite this, we maintained a strong position in terms of viewership, greatly thanks to our well oriented investments into attractive content. I'm also very pleased with the way our operational cooperation with NETIA is developing and the synergies we are achieving together. We observed the effects of the synergies in day to day operating activities. The same goes for our cooperation with Aseco in the area of comprehensive Strategic IT Solutions. The project of building the integrated IT system that Daseko is developing for us moves forward, and I'm happy with the progress and efficiency of this project. Our latest project And maybe one of the most important ones is the 5 gs network rollout. We are able to put on the first To 5 gs network in Poland in my 2020, thanks to our existing portfolio of frequencies without having to wait for the 3.5 gigahertz auction. But I will come back to 5 gs topic on my next slide. Moving on to our last objective for 2020, financials. We have recorded a Strong quarter and closed the year 2020 with excellent results in spite of the pandemic. High margins, Stable EBITDA and solid cash generation make it possible for us to pursue strategic goals and share profits with our shareholders' projects at the same time. But we also executed more than initially assumed. The first thing to comment is our 5 gs rollout acceleration. COVID created a sudden and strong demand for additional connectivity. Our customers need fast and reliable connectivity. During the lockdowns, connectivity was often the only way to be able to continue everyday life, education, work and business. So we decided to accelerate our 5 gs rollout to meet this growing demand. Over 1,000 5 gs enabled sites We're already at the end of December. In 2020, we also decided To take advantage of a business opportunity that arose, namely we acquired Entevia Group. And by doing so, We gained a solid foothold on the online market. Moreover, Stashek started integrating interior business to Pulsar Structures, which translated into fast delivery of the synergies as promised. The biggest project was connected with mobile infrastructure. In 2020, we developed a unique and innovative concept centered around the idea of sharing Active and passive infrastructure. We believe that network sharing is not an option. It is a must if the mobile sector wants to deliver 5 gs in a cost efficient manner. We believe that our planned long term cooperation with Sernex, our infrastructural partner, We soon attract our mobile operators to join the project because it makes economic sense for everyone. What's also very important, we remember about the social responsibility of our companies. Even though this point is in the last on my slide, I think it was one of the most important initiatives that we have undertaken in the past year. The pandemic made us realize the extent of our responsibility towards the society, towards our stakeholders, our customers, employees. With this in mind, together with our main shareholder, Mr. Sigmund Solos, We have donated a total of PLN 50,000,000 to the Polish society and Polish health care system to support them in the fight against COVID. So even though it was not easier for the business, it was absolutely clear for us that we need to support the polysociety in the daily challenges. To finish off, I would like to give you an insight into our plans and ambitions for the year 2021. In the context of the 5 gs revolution, our deal with Sernex and the new premium 5 gs Thales, we want to concentrate on this technology. Firstly, we want to actively promote and sell our new 5 gs tariffs. We believe This is the path to rebuild APRU step by step and consequently to rebuild the value of the mobile market in Poland. Like Maciek said, the key element needed to do so is an efficient high quality network. So that is what we are going to build. In 2021, we want our 5 gs network to cover over 11,000,000 inhabitants of Poland. Over the last years, we have entered into new areas of businesses, the fixed line broadband market through Netia, The online markets through interior.pl and the photovoltaic markets through SLL. We are going to look carefully at these branches of our activities and develop them consistently. We are especially eager for the photovoltaic projects as they address environmental and climate changes issues that are crucial worldwide. Let's not forget Our flagship program, smart home and multiply strategy centered around the idea for everyone everywhere, which will, of course, remain in the center of our attention also in 2021. Investments into attractive content proved to be a good strategy in TV Broadcasting segment. So we plan to continue along this path also in 2021. As you saw in our ARPU performance this time, unique content is clearly the fuel also for our B2C business. We are also looking forward to our successful cooperation with Aseco with respect to the implementation of comprehensive and strategic IT Solutions. And last but not least, we aim to maintain strong financial results and generate a solid stream of cash, which will enable us to pay attractive dividends to our shareholders. Ladies and gentlemen, thank you for your attention. This concludes our presentation and brings us to the Q and A session. Thank Ladies and gentlemen, right now we've got the time to begin our Q and A session. So to ask your question, please I can see the question coming from Tito Kram from Barclays, Ditesh, the floor is yours. Good afternoon, and thank you all for the presentation And also for taking my questions. Just I have just a couple of questions, if I may. And the first one is on the Cellnex transaction. I know that you currently cannot give much more color on the use of proceeds from the deal, but I was wondering when you could when we could expect To get a little bit more clarity, is there a chance you could provide us with an update before the transaction is expected to close in October or rather at that point in the future? And just in general, are changes to shareholder compensation generally on the table given the improved leverage outlook after such a transaction. And also, when looking at other potential uses of proceeds, namely acquisitions, but also in general, would you focus again more on Acquiring majority stakes in adjacent businesses or rather on minority strategic stakes such as recently in Aseco and potentially in the pre IPO investment. And the second topic, just to very quickly ask, on the advertising markets. So I see you have consistently grown your market share in terms of advertising revenues over the last three quarters. Do you expect this to continue in 2021? And you see a positive impact potentially in the first half of the year compared to the overall market development. Good afternoon, Tito. Thank you for your questions. I will answer the first question. Actually, until the transaction is finally concluded, we will not share with you Any news or thoughts or whatever about the use of proceeds because We think it would be a bit too early. We finalize the transaction, then we'll give you an update on the use of the proceeds. Hello, Mati Stetsis here. And coming to The second question is, if something fits to our strategy, like, for example, Neti or Interiant, then we would like to acquire majority stakes in such a business because this is purely our Strategic that we would like to control over such a business. For example, like you mentioned about like a second deal, Like a tactic one, so then we guarantee ourselves access to IT services, which are more and more important On the market and access to IT services means for us time to market. And we believe that Telecom Media business is going, especially Business is going more to IT in the nearest future. And for example, transactions which we are doing The diligence now, so it's Obuviev. It's like for us, of course, pre IPO, but also the knowledge about e commerce business. So we've acquired, for example, Interia, and we will we are open just to invest in e commerce businesses because it's we believe that this Very high potential in the future. So then we have scalable business just to observe and learn how to do this. So it's Like millions of unique users, very good EBITDA results And pre IPO investment and observing such a business, it's a very good learning curve for us for the future. So It depends on the strategic point of view for such a businesses, then we can do strategic investment, tactic investment or just Investment and the knowledge for the future. Okay. Regarding the financial impact of the CernaX Transaction or our outlook and CapEx to revenue ratio, well, actually, the 7% On the annual basis, we expect after the transaction is concluded, which basically means given that the transaction This concluded in 2021, the 7% will be visible for the 2022 as a whole year. I mean, naturally from the mathematical perspective, it's not possible in 2021. Q1 in 2021 will be around 13%. Sascha, could you elaborate about advertising market? I think Tasiak got disconnected. So if you can wait for a moment for Tasiak to rejoin, okay? Right now, we will pass the floor to Mr. Pavel Spiga, BankSec Securities. Pavel, please continue. Sorry, I was on mute. Good afternoon. I have a couple of questions from me. The first is, I want to ask about the How the deal with Cellnex alters your attitude to the dividend? You show us clearly during the presentation that You have now more asset line business model and lower CapEx, let's say, business model. Therefore, Your dividend capacity seems to be much bigger right now. So what's your attitude here? Do you want to pay off more dividend than previously? Good afternoon, Pavel. It's really nice to hear from you. As far as the dividend is concerned, please note that for 2020, we have a dividend policy in place. So I think we'd rather Stick to this dividend. And as far as the future dividend policy is concerned, we'll share that after the 1st quarter, as I said, answering to Tito's, any use of proceeds from the Cellnex transactions will be discussed after the transaction is concluded. Okay. The second question is about I want to ask, I mean, maybe Could you give us more details on how 2 firms, I mean, you and Herbuvir could cooperate in future? As we mentioned in our daily report, the current report, it's for us, it's I'm sorry. It's the pre IPO investment. So we, obviously, we just We'd like to buy it in a reasonable price, we believe, so with reasonable valuation. So we buy only 10%. So now we are in Process of due diligence, so we decided about it probably shortly. But For us, it's like knowledge about e commerce business, some scalable business with very big potential. We really believe in our Bouvier strategy. So nowadays, they have like millions of unique users, very good operational results, very good Financial results and very good position just to grow during next 2 or 3 years and Have permanent business for the future, so we would like to learn from this. But of course, we count that it's very good Investment also, pre IPO investment. I see. But you don't look at Elbovia as So purely financial investment, right? You want to create some synergies between your media power in Poland and Eobovia, right? We will be only minority shareholders, so we would like to learn from Bouvier results and how to do e commerce. So this is mostly the business For us, it's not about like simple synergies between us because Eero Bouvier needs to build a business. So whatever they would they need to grow their business, which is very important. So they need to decide how to allocate marketing budgets because This is probably your question, and they need to manage this business for IPO. Okay. And do we maybe Screen environment right now for more opportunities like EOBUVA, do you have more appetites now for the acquisitions in the Internet field? When we have something to say, so then we as Fast as we can, let me inform you. So not the pipeline. Okay. I see. And my last question will be about Interia. Could you give me the impact of Interia on 4 quarter figures? Pavel, there are 6 because we Consolidate Interia as of the 2nd quarter as of the 3rd quarter, so for 2 quarters is Over EUR 20,000,000 EBITDA impact of Entarea for to our group. Okay. Thank you. I mean, 3rd and 4th quarter. 3rd and 4th quarters. Okay. And maybe very last question, sorry. Could you give us more color on what you what's your plan for Interia for 2021 for the coming months. I can answer because Satek has probably So that's what we announced you when we just made this transaction. It's still valid. So we would like to double EBITDA, and this is our plan for this year. So make all the synergies, which we just announced in When we made the transaction, and it was like that we will do this like in 2021. So that's what we aim for. Okay. Thank you very much for your answers. Thank you. Right now, I can see 2 questions from Norangi, Erste Bank Research. The first question refers to the guidance for 2021 EBITDA, and I will read the question. Do you see realistic to repeat the the level of 2020 in 2021, including the impact of Netco. Nora, I will clarify the question Here because if you take pro form a of our whole group For 2021, which basically means pro form a as Netco would be the part of the group for the whole 2021, I can see the realistic repeat of the EBITDA. If we're talking about net Leaving the group at certain time of the year, I honestly don't know because this is the mathematical question. And the second question from Nora, Do you know about potential tenants who would be interested in network sharing with the company we are disposing off? How high tenancy ratio is targeted by Cellnex after the deal? To be honest, it's probably not a question to us, but because we have focused on our transaction. But that's what we believe and what we presented Today for you, it's like that we really believe that network sharing is the only one the only alternative for the future for M and Os, especially in Poland, when we take a look at like very low ARPU, the lowest in European Union, when we take like falling margin, Then when we see the very big CapEx stated like the 46% of EBITDA of MNO, so we believe Really, this is the only cost which is not optimized by MNOs on the market. So we really believe in this business On passive and active infrastructure and with independent operators, so then everyone can have access just to this Network, which is important. So I believe that the currency ratio will be much higher in the future, and it will be good for the Whole market because it reduces time to market for everyone, so we can build 5 gs network more effectively. So this is one thing. The second thing, it saves CapEx and brings benefits to all tenants. So I believe the rationale behind this transaction and then Operation by independent, passive and active infrastructure provider is really game changer for the market. Thank you, Maciej. Right now, I've got the confirmation that Tasi is back with us. So Titus, if I can ask you to reconnect and to ask you a question about the advertising market again, please? Yes, of course. And first, thank you for answering the other questions. That was all very clear. And just on the advertising market, so to repeat it, So kind of on a year on year basis, over the last three quarters, you have consistently grown your market share. And I just wondered, do you expect this to continue To some extent, in 2021, in terms of market share of total advertising revenues, or do you see any kind of positive impact, especially in the first half, Given that you have been growing quite strongly over the last three quarters. I think it's possible. We're doing honestly, we're doing everything to make it possible. There are 2 issues. So one is like Price increase in terms of standard advertising and the second option, the second area It's just increasing the volume of granted content. And in the long term, it is still possible. Thank you very much. Thank you very much. I can still see the hands up by Titus and Pablo. If you have any follow ups, please continue. I do not see the follow ups, and I do not See any questions on the chat as well. So thank you very much for the meeting. We will be talking about our Q1 results in mid May. And right now, I give the floor to Mr. President. Thank you very much Thank you for participating in today's presentation, and I would like to wish you good health and well-being and see you and hear you during the next presentation of the results for Q1 2021. Thank you, and have a nice day. Thank you very much. Thank you very much. Bye bye. Thank you. Thank you.