Ladies and gentlemen, good afternoon and welcome to the earnings call of Polsat Plus Group for the third quarter of 2024. Could I have the next slide, please? Today's presentation will be delivered to you by Mr. Mirosław Błaszczyk, CEO of Cyfrowy Polsat, Mr. Maciej Stec, Vice President responsible for Strategy, and Ms. Katarzyna Ostap-Tomann, CFO and Management Board member responsible for ESG. As usual, after the presentation, we will hold a Q&A session. I encourage you to post your questions in the chat section in advance. Thank you. Mr. Błaszczyk, the floor is yours.
Good afternoon, ladies and gentlemen, and welcome. The agenda of today's meeting is as follows: I will open the presentation with the key events of the third quarter of 2024. After that, Maciej will present the operating results of our business segments, and Kasia will present our financial results. After a short summary, we will be happy to answer your questions. Next slide, please. Key events of the past quarter. Let's go to the next slide. I'm very pleased to say that in the third quarter of 2024, we maintained a high growth rate of ARPU in a competitive market. ARPU per B2C customer grew by 5%, while ARPU per B2B customer grew by 4%. As a result, our core revenue stream, retail revenues, recorded an increase by 3.6% year-over-year. The third quarter was also an excellent quarter in terms of our financial results.
We posted a 12.7% increase in adjusted EBITDA. This was driven by the implementation of our Strategy 2023+ and by strong operating performance and cost control. In an effort to provide the highest quality of services, we expanded our 5G+ network to over 3,800 transmitters. Today, over 25 million people in Poland are within the reach of our 5G network, while 60 million can use the 5G Ultra network, which offers transfer speed comparable to fiber optic. We also focused on strengthening the content offer for our viewers. In particular, we acquired exclusive broadcasting rights to the Formula 1 Grand Prix races in the years 2025 to 2028. We are also moving forward dynamically with the execution of our Strategy 2023+. In the third quarter of 2024, we completed the installation of our 2.5 MW electrolyzer located in Konin and started test production of green hydrogen.
This is a big milestone for us in the development of the complete value chain of an economy based on green hydrogen. We also won two new tenders for the supply of our hydrogen-powered buses, the NesoBus. Konin contracted five buses, while the Upper Silesia Metropolitan Area placed an order for eight buses. This brings the total of hydrogen buses sold up to 69 units, which is a very impressive result. These were the main highlights of the past quarter. Maciej will now present the details of our operating performance. Maciej, the floor is yours.
Thanks, Mirek. Today, it will be my pleasure to present the results of all our operating segments, starting with the Media segment, TV and online. Let's move on the next slide, please. Here we have the viewership results of our TV channels and our position in the advertising market in the third quarter of 2024. In the beginning of the third quarter, we had accumulation of highly popular sporting events. There were the UEFA European Championships, and soon after that, the Olympic Games in Paris. Our competitors held broadcasting rights to both these events, and this had an impact on our operating results in the Media segment in Q3, particularly in terms of slower growth in TV advertising. We are very pleased with our viewership figures, which were relatively stable compared to last year, considering the popularity of the UEFA Euro matches and the Olympics.
Our main channel, Polsat, recorded 6.7% of audience shares, while our group of thematic channels had 15% in the commercial target group. This gave TV Polsat Group a total of 21.7% in the third quarter, and this result is aligned with our long-term strategy. In terms of market expenditures on TV advertising and sponsorship, the broad market recorded a solid increase of 7.5%, while our advertising revenue increased by 3% in the third quarter, giving us a market share of 27.6%. Let's move on the next slide and look at our performance in the first nine months of 2024. As I mentioned, it's always better to analyze the TV market over a longer time horizon because it helps to smooth out seasonal effects such as the accumulated impact of sporting events that I talked about before.
Our position in terms of audience shares in nine months is also very good. Our entire portfolio of channels maintained high stable audience shares of 21.8%, where our main channel had 7%, while our thematic channels had 14.8%. These viewership figures translated into a solid growth of our TV advertising revenue by 5.2% year-on-year to PLN 965 million . At the same time, the market increased by over 7%, and as a result, our share in the TV advertising and sponsorship markets settled at 28% after nine months of 2024. Let's move on to the online business. Can I have the next slide, please? We are effectively building our position in the online market.
Polsat-Interia Group is one of the three largest players in this market in Poland. In the third quarter of 2024, the average monthly number of users reached 19.4 million, and the number of page views exceeded 1.8 billion. As you can see, all the players recorded slightly lower results compared to last year, and this is the result of a change in the methodology of measuring performance in the online market. I'm particularly happy with Polsat-Interia Group's successes in 2024. This year, we secured a top position in the mobile category for seven out of 10 months. What's more, in October, Polsat-Interia Group ranked second in terms of reach among online portals, with only a slight loss to the leading position. Can I have the next slide, please?
Our autumn schedules are going according to the plan, and we are satisfied with viewing figures, but what is very important for us, we are strengthening the offer of our sports channels, which are the key for our whole group. As you can see on this slide, we have an extensive portfolio of diverse sports rights to meet the different expectations of our viewers. As Mirek said in the introduction, we are very proud that we have recently acquired rights to the most exciting and widely viewed Formula 1 races. We also have a strong position in football. Apart from UEFA Europa League and Conference League, we will also broadcast one of the best football leagues in Europe, like Spanish La Liga and Italian Serie A, and we have also bought the rights to the German Bundesliga and the French Ligue 1.
Apart from the new sports rights, we offer a vast amount of other sporting events: tennis, football, volleyball, basketball, or ice hockey. All this is available to our customers on 11 dedicated sports channels, Polsat Sport channels and Eleven Sports channels, and can be accessed on any device. To sum up the performance in the Media segment, we posted good results in terms of audience shares in both the third quarter and the first nine months of 2024, in line with our long-term strategy. We maintain a strong position on a growing TV advertising market despite the temporary headwinds. We continue to strengthen our position in the online market by developing our online leg of the business. Next slide, please. Let's now have a look at the operating results of the B2C and B2B services segment. Can I have the next slide, please?
In this segment, we continue to focus on the efficient and consistent implementation of our multi-play strategy. Our main goal is building customer value and customer loyalty. Our performance in this area is the best demonstrated by the continued growth of our multi-play customers' base and its share in the total customer base. Already, 2.5 million customers, that is 43% of all our customers, use two or more of our products. The number of services contracted by this group reached 7.6 million services in the third quarter of 2024, up by 202,000 compared to last year. As I said, the successful implementation of our multi-play strategy also results in strong customer loyalty. This can be seen in a consistently low level of churn. At the end of the third quarter, churn decreased to 7.2%.
We believe that further saturation of the customer base with bundled services will support keeping the churn rate low in the future. Can I have the next slide, please? We have recorded a good quarter in terms of contracted RGUs. We already provide over 13.1 million contracted RGUs to our B2C customers, 75,000 more than a year ago. This was driven particularly by very good sales of mobile voice services, up by 165,000 to 6.4 million. The number of internet access services grew to 2.1 million, recording an increase of 79,000 year-on-year. What's more important, we are steadily increasing the share of fixed internet access services. At the same time, the pay TV base remains under pressure from a lower number of satellite TV services provided and fading out of the low-margin IPLA product.
We mitigate these trends by an increasing number of pay TV services provided in IPTV and OTT technology. Next slide, please. Average revenue per contract B2C customer remains on a dynamic growth path, recording an increase by 5% year-over-year. At the end of the third quarter, it reached the level of PLN 77.2 . The saturation of our customer base with the services is steadily growing and reached the level of 2.28 services per customer at the end of the third quarter. I believe these figures reflect the successful execution of our multi-play strategy based on cross-selling and upselling our products. ARPU was also supported by the growing demand for data due to the popularization of 5G. I'm especially pleased with the evolution of ARPU in a challenging macroeconomic environment and continued pressure on the customer. Next slide, please.
In the prepaid segment, we provided 2.6 million services at the end of the third quarter. I would like to underline that we maintain a high and stable base in a highly competitive market segment. Despite a slightly lower base, ARPU per prepaid services remains stable at PLN 17.8 , which is, in my opinion, a very good result in the prepaid market. Next slide, please. In the B2B segment, as in all other customer segments, we focus on building customer value and fostering customer satisfaction and loyalty. Thanks to this approach, ARPU per B2B customer increased by 4% year-on-year, exceeding PLN 1,500 . We maintain a stable base of over 68,000 B2B customers, and I'm very satisfied with these results because the B2B market is highly competitive in Poland. Before we move to green energy, let me briefly sum up our results in the B2C and B2B services segment.
This was a very good quarter for us. We are consistently growing our multi-play customer base and our RGU base increased by 75,000 year-on-year. I'm also extremely pleased with ARPU and churn, which reflect our efforts targeted at building customer value and loyalty. ARPU in both B2C and B2B is growing at a healthy pace, 5% and 4% respectively, while ARPU in prepaid remains high in a competitive environment. At the same time, churn decreased to only 7.2%. Next slide, please. We are dynamically progressing with the implementation of our Strategy 2023+. The contribution of the Green Energy Segment to our group is already significant, but it will continue to grow over time. Next slide, please. We already have over 337 MW installed in all our renewable units, out of which 150 MW is in wind power capacity, the most efficient and the cheapest renewable energy source.
We are currently focused on finishing our biggest wind project, Drzeżewo, with over 138 MW of capacity. Regarding the green hydrogen value chain, as Mirek mentioned earlier, I'm pleased to announce that our 2.5-MW PEM electrolyzers have started test production. As a reminder, this unit has the capacity to produce 1,000 kg of green hydrogen per day. Also, our 0.5 MW alkaline electrolyzers, designed from scratch and capable of producing 200 kg of hydrogen daily, are in the final testing phase. Additionally, we launched our fourth publicly accessible hydrogen refueling station in Gdynia. Two more stations in Wrocław and Lublin are almost completed, and we plan to open them by the end of this year. We are preparing for the construction of more stations with the support of EU funding.
Thirty of our NesoBuses are already in use in public transportation in Rybnik and Gdańsk, and another 39 units are contracted by Konin and the GZM Metropolis in Upper Silesia. Next slide, please. As you can see on the slide, the implementation of our renewable energy projects, especially wind farms, translates into dynamic increases in production of clean green energy. In the third quarter, we already produced more than 300 GWh of electricity from our all renewable sources, up by 57% year-on-year. Since the beginning of 2024, total production amounted to 722 GWh, that is 49% more than a year ago. The main growth driver was the increase in wind generation capacity. As I already mentioned, our priority at the moment is the completion of the Drzeżewo wind farm with 139 MW of capacity.
This project will double our wind power by the end of next year. The construction of this wind farm is progressing according to the schedule, and we will start installing turbines from the beginning of 2025. Next slide, please. The increase in production is directly reflected in the financial results of the Green Energy Segment. In the third quarter of 2024, we sold over 300 GWh of clean energy that we produced ourselves for an average price of PLN 594 per MWh. In nine months of 2024, we sold 722 GWh of energy products for an average price of PLN 600 per MWh. As a result, the Green Energy Segment generated PLN 82 million of EBITDA in the third quarter of 2024 alone, while in nine months of 2024, EBITDA exceeded PLN 200 million. I'm extremely pleased with this result.
I would like to remind you that we guided for PLN 500 million-PLN 600 million of incremental EBITDA per year from the green energy business in 2026, and we are on track to deliver this promise. Next slide, please. So, to wrap up our performance in the Green Energy Segment, we are dynamically executing our Strategy 2023+ by launching our renewable energy projects according to the schedule and within assumed budgets. We have already achieved our goal for 2024: 337 MW of installed capacity, almost half of which is wind power. Once the Drzeżewo wind farm is completed in 2025, we will double installed capacity in wind farms. What's more important is that already this year, our renewable energy sources have the potential to produce over 1.3 TWh of energy, while in 2025, this figure will exceed 1.7 TWh to reach our strategic goal in 2026: 2 TWh .
The good operational and financial results of this segment allow me to sustain our guidance that in 2026, the Green Energy Segment will generate incremental EBITDA of PLN 500 million-PLN 600 million. Thank you very much, and I pass the floor to Kasia, who will show you how our operating results translated into our financial results. Kasia, please go ahead.
Thank you. Maciek showed you very strong operating results in all our business segments, and these results translated into very good financial performance. Next slide, please. On this slide, we present a high-level overview of the group's financial results in the third quarter of 2024. Total revenue increased by 3.6% to over PLN 3.5 million, and EBITDA adjusted for one-offs and the sale of the last tranche of IPv4 addresses increased by an impressive 12.7% year-over-year. I will discuss drivers behind this growth on the next slide.
In the third quarter of 2024, we posted PLN 250 million of net profit. The increase in net profit was driven, among other things, by a steep drop in depreciation and amortization costs. We finished amortizing customer relationships that were recognized following the acquisition of Polkomtel in 2014. Additionally, net profit was supported by lower finance costs, mostly related to the non-cash valuation of our euro-denominated debt and higher gains on investment activities. I'm very happy with free cash flow generation over the last 12 months. Excluding CapEx on the development of our renewable and hydrogen projects, last 12 months' free cash flow amounted to PLN 1.1 billion at the end of the third quarter. The net debt-to-EBITDA ratio, excluding project financing, remains under control and amounted to 3.4 at the end of the third quarter.
Compared to the previous quarter, this ratio increased slightly by 0.1, but is considerably lower than I expected. Next slide, please. As I mentioned on the previous slide, total revenue increased by 3.6% year-on-year. The B2C and B2B services segment contributed PLN 37 million to this result, mainly on the back of higher retail revenue. In the Green Energy Segment, higher revenue from the sale of our own energy was offset by lower revenue from the energy resale. The change on consolidation adjustment is perhaps not intuitive this quarter. This increase results from a change of methodology in intra-group eliminations following the growing scale of green energy from our own production for resale to third parties in the B2C and B2B segment.
If we look at the decomposition of adjusted EBITDA in Q3, we can see that the Green Energy Segment and the Media segment strongly contribute to EBITDA growth. In the Media segment, EBITDA is higher by PLN 61 million, and this is driven mainly by lower costs of sport licenses, as we no longer have the UEFA Champions League rights. EBITDA in the Green Energy Segment increased by PLN 56 million year-over-year, following the organic growth of this segment, which was discussed in detail by Maciek. In B2C and B2B services segment, EBITDA was negatively impacted by a write-off of our stock of photovoltaic panels.
Since we are looking at the performance by business segment on this slide, I would like to flag that we have completed the construction of a residential project in Port Praski, and we have started to transfer ownership of the apartments to our customers in November. This means that in the fourth quarter of 2024 and the first quarter of 2025, we will see a strong injection of revenue and EBITDA in the real estate segment because almost 70% of this investment is sold out already. Can I have the next slide, please? As I already said, I'm very satisfied with our last 12 months' free cash flow results for this quarter. The increase in cash flow generation is driven mostly by improved cash flows from operating activities despite continued pressure from high interest rates on our debt service cost.
Over the last 12 months, non-recurring events included the acquisition of the C-band in January, payments for one-off acquisitions, mostly for shares in Pantanomo in our real estate segment, and finally, the gain on the disposal of IPv4 addresses and shares in Muzo.fm. Last 12 months' free cash flow adjusted for interest and after non-recurring events amounted to PLN 162 million. Excluding CapEx in the Green Energy Segment, which was over PLN 940 million over the past 12 months, last 12 months' free cash flow exceeded PLN 1.1 billion. Next slide, please. Looking a little deeper into our capital investments, you will see that in the TMT space, we consistently remain CapEx-light. The CapEx-to-revenue ratio remains at a low level of about 6%. In the Green Energy Segment, CapEx amounted to PLN 277 million in the third quarter and PLN 532 million in the nine months of 2024.
Please recall that Maciek said about installing turbines at the Drzeżewo wind farm at the turn of the year. With this in mind, I expect to see intensified capital expenditures in this segment towards the end of the year. I would also like to flag that there is a chance that part of this CapEx might slide over to 2025 due to the timing of the delivery of the turbines and the holiday season. Next slide, please. On this slide, we summarize the key information regarding the growth in indebtedness. Net debt-to-EBITDA last 12 months, excluding project financing, settled at 3.4. If we include project financing, this ratio is a little higher, 3.64, given that our operating performance measured by EBITDA is better than I expected, and CapEx spending in the Green Energy Segment is a bit slower. It's unlikely that we will exceed four times net debt-to-EBITDA this year.
The weighted average interest cost of loans and bonds remains relatively stable at 8.4%. The structure of our debt by instrument and by currency is also unchanged. Bonds constitute about one-third of our debt, and the rest are bank loans. 16% is denominated in euro and 84% in the Polish zloty. In terms of our debt maturity, I would like to highlight that we started repaying capital under our senior facilities agreement this quarter, PLN 155 million. Capital installments are scheduled until 2027, and in 2028, there is a bullet repayment planned on our bank loans. Our bonds mature in 2030. This brings me to the end of my part of the presentation. This was a very good quarter. I'm especially pleased to see solid retail revenue growth in the B2C and B2B services segment and the growing contribution of the Green Energy Segment to consolidated results.
Anticipating your questions, given the improving performance in the B2C and B2B segment, very good financial performance of the Green Energy Segment, and the accelerated recognition of revenue from apartment sales, it seems that I was too conservative at the beginning of the year in my EBITDA guidance. I believe that 2024 EBITDA will be higher than the 2023 EBITDA. Thank you, and ove r to Mirek for the summary.
Thank you very much, Kasia and Maciek. This was indeed an excellent quarter, both in terms of operations and financials. Next slide, please. In the B2C and B2B service segment, we are consistently building the value and loyalty of our customers. This is reflected in growing ARPU of B2C and B2B customers by 5% and 4%, respectively, and in a very low churn rate of only 7.2%.
Strong operational performance translates into a solid growth of our retail revenue in the third quarter, up by 3.6%. In the Media segment, we maintain high and stable viewership figures and a strong position on the advertising market in line with our long-term strategy. We also aim to strengthen our sports offering by including the broadcasting rights to Formula 1 races, the German Bundesliga, and the French Ligue 1 in our portfolio. The Green Energy Segment is performing very well. We have started test production of green hydrogen at our electrolysis plant in Konin, and we have opened our fourth publicly available hydrogen refueling station in Gdynia. Our new business is delivering excellent financial results. In the third quarter alone, EBITDA of this segment amounted to PLN 82 million , and in nine months of 2024, EBITDA exceeded PLN 200 million . Let me repeat what Maciek already said.
We reiterate our guidance on PLN 500 million-PLN 600 million of EBITDA in this segment in 2026. The third quarter was a very good quarter for the group financially. Total revenue increased by 3.6%, adjusted EBITDA increased by 12.7%, and our net debt-to-EBITDA ratio remains under control at 3.4% at the end of the quarter. I'm extremely happy with this quarter's results, and I'm confident and optimistic for the coming quarters. Thank you for your attention, and let's open the Q&A session.
Thank you. I have a couple of questions in the chat section that I will read as they were posted. The first four questions come from Nora Nagy. Good afternoon. Thanks for the presentation. I have four questions. Number one, is it not expected to reach a 4.0 net debt-to-EBITDA this year or not at all, meaning that in 2025 neither?
As far as 2024 is concerned, we're not expecting to reach 4.0. As far as 2025, actually, I wouldn't like to commit strongly to an answer yes or no because it depends on the pace of the spending and the pace of the money incoming. So I really cannot give you any guidance on that at the moment. It will be increasing, but I'm not sure at the moment how it will go.
Nora's second question. Are the nine-month results in energy segment better than expected or in line with your targets?
Hi, hello. Results in Energy segment are better than we expected. This is very important, but there are three reasons for that.
One reason is that energy transition in Poland from black energy to renewables to green energy is slower than we expected, which gave us the opportunity to get better prices for the energy, especially when we opened wind farms. This is the key issue. The second, we've executed both projects, wind farms like Człuchów and Przyrów much ahead of schedule, which is very important because every quarter is very important, and it was like 123 MW, which we've executed ahead of schedule. And that's why it's better than expected. And you need to be, of course, that's what I mentioned in the presentation, is that we are now building the Drzeżewo project, which is 138.6 MW capacity, pre-installed capacity, and it will double our wind farms.
Here we are a little bit ahead of schedule again because in the presentation, I said that we will install the turbines like early January, but in fact, we have roads, everything prepared for parts today, and some parts we have in place, so if the winter is not so heavy, I can say that we can start a little bit earlier, and this project is scheduled just to be delivered till the end of next year, so these are the reasons, so they are better than expected, but what is important, these results are better for the future also, so faster, higher price, and long-term, so this is the strategy, so I believe that that's what I mentioned in the presentation. We sustained our incremental EBITDA contribution to our results in 2026 between PLN 500 million to PLN 600 million on a yearly basis and long-term, which is important. Thank you.
Thank you. Nora's third question. What is the outlook for adjusted EBITDA next year?
It's a bit too soon to say what is the outlook for the EBITDA for the next year. However, you can see that the results of the company quarter to quarter are improving, but I just would like to assure you that we, the management, and a few thousand of our employees, we're really working towards improving this EBITDA. So we'll see, but at the moment, it's a bit too soon to say.
Thank you. And Nora's last question. Is there any update you can give us on the family dispute?
Hi. We don't comment news concerning our shareholders. We focus on building value of our group, and we are more than happy to talk with you about it. Cyfrowy Polsat and its capital group operate consistently according to plan and in normal operating mode. Additionally, the company is not a party to ongoing proceedings. Thank you.
Thank you. One question from Piotr Jurga. How much Green Energy Segment CapEx shall we expect for the whole period from the fourth quarter 2024 till 2025 year-end?
I t will probably be over PLN 1 billion because Drzeżewo, which is our largest project, is a bit below PLN 1 billion to go. And then it depends on the other projects that we'll have in the pipeline. But the largest one, it's Drzeżewo, and it's a bit below a billion to go, still to go. Yeah, but in the end of 2025.
Yeah, but this is a big project because it's 63 turbines in place. So this is a big project. It will double our energy capacity in wind farms. And as you can see, this is like the lowest renewable cost of production of renewable energy in Poland. So because it's windy in Poland and the efficiency of these wind farms is very high.
I don't have any more questions in the chat section, so I will pass the floor over to Mr. Błaszczyk for a goodbye.
Thank you for participating in today's presentation of the operational and financial results of our Polsat Plus Group for the third quarter of 2024. I hope that we have answered all your questions. Thank you again, and for the next meeting next year. I wish you a nice weekend. Thank you.