Bulletin
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Strategy 2020
On January 13, 2011, Netia announced the main assumptions of its operational strategy towards year 2020 together with the long-term financial outlook and a newly adopted distribution policy. An update to Strategy 2020 key directions was presented on November 6, 2014.
Netia’s strategy in focused on stabilizing financial performance of Netia Group in the residential customers segment (B2C) through increased penetration of bundled services in own network, including networks upgraded to the NGA standard, and taking advantage of an opportunity to change the revenue trend along with transformation of the product portfolio and competences in the business customers segment (B2B) while performing separation of the network assets.
Mission
We deliver the world on-line
Vision
Netia Group, after profitable transformation, will be the preferred choice for on-line services thanks to:
- Delivering business customers integrated tele informatics solutions based on data transmission and data centers
- Offering residential customers bundled services based on multimedia platforms in own network
- Infrastructure and network assets dedicated to business and residential market segments
- Passionate employees, inspired by the Company’s values
Key strategic directions in the B2C segment
- Concentration on defending segment’s value, i.e., intensive retention activities within the existing customer base at relatively lower customer service cost
- Acquisition of customers in own network and optimization of an average subscriber acquisition cost through more optimal cost-mix between the sales channels
- Maximization of own network value, without further intense modernization, through increased penetration of TV-bundled service offerings (2P/3P) and use of mobile solutions in retention activities (targeted level of services per customer in the segment: 2.0x)
- Targeted penetration of services per a residential customer increased to 2.0x
- Increased penetration of services in own network thanks to geo-marketing
- Search for an optimal cost model in operations of the residential market segment
Key strategic directions in the B2B segment
- Plans to stabilize revenues in short-term and to increase the scale of operations in long-term through changes to the structure of the product portfolio including, among others, lowering exposure to voice services,
- Dynamic growth in the ‘new data’ and ICT segments – developing data centers and cloud computing services, including potential selective acquisitions of competences and/or infrastructure in this area,
- Partnerships in convergent services aimed at offering full scale of telecommunications and data transmission services,
- Use of market potential in wholesale services through full utilization of own network infrastructure,
- Reorganization of sales force and sales processes operating model,
- Search for an optimal costs model in operations of the business market segmentt
Moreover, within its Strategy 2020 Netia Group intends to separate all network assets attributable to the B2C and B2B segments while simultaneously simplifying and modernizing selected network systems, with an aim to reduce costs of network maintenance. Furthermore, IT systems are to be optimized, with particular focus on processes directly supporting commercial activities of the B2C and B2B business segments.
Execution of Strategy 2020 is expected to facilitate higher cost efficiency in managing the operating segments, full identification of assets, costs and investment outlays within B2C and B2B divisions, and increased strategic potential of single components of the Netia Group, depending on the Polish market developments and consolidation scenarios.
Distribution to shareholders within the scope of generated cash flows and capital reserves continue to be a strategic goal of the Netia Group, and thus distribution policy remains unchanged.
The presentation on 3Q 2014 results and Strategy 2020 update is enclosed in the attachment.
Guidance for 2014
| 2014 Guidance |
|
|---|---|
| Revenues (PLN m) | 1,675 |
| Adjusted EBITDA (PLN m) | 505 |
| Adjusted EBITDA margin (%) | 30.1% |
Adjusted EBIT (PLN m) | 75 |
Capital investments (excl. M&A and integration capex)(PLN m) | 215 |
| Capital investments (excl. M&A and integration capex) to sales (%) | 12.8% |
| Adjusted operating free cash flow (OpFCF)1(PLN m) | 290 |
1 Adjusted EBITDA less capital investments excluding acquisitions and Dialog and Crowley integration related capex.
The
above guidance excludes the impact of one-off integration costs and
one-off integration capex related to the acquisitions of Telefonia
Dialog SA group and Crowley Data Poland Sp. z o.o. in December 2011, originally estimated at up to PLN 8m and up to PLN 14m,
respectively.
Current report on the 2014 guidance (dated February 20, 2014) is enclosed in the attachment.
Current report on the updated 2014 guidance (dated August 28, 2014) is enclosed in the attachment.
Disclaimer:
The
information regarding Netia’s strategy contained above does not constitute a forecast of results within the meaning of the Regulation dated 19 February 2009 on current and periodic information to be disclosed by issuers of securities and on conditions under which such information may be recognized as being equivalent to information required by the regulations of law of a state which is not a member state (Polish Journal of Laws (Dz. U.) of 2009, No. 33, item 259 as amended). None of the information contained above is a recommendation to purchase or sell financial instruments within the meaning of the Regulation of the Minister of Finance on information constituting recommendations regarding financial instruments or their issuers, dated 19 October 2005 (Polish Journal of Laws (Dz. U.) of 2005, No. 206, item 1715). For a more detailed description of the risks involved in investing in Netia’s securities, please see Netia’s annual financial report of February 20, 2014. Subject to the obligations referred to herein, Netia is not required to publicly update or revise any of its forecasts and assumptions of the strategic objectives.
Guidance as of November 6, 2014.