Annual
report 2020

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PL

Assumptions

2020 was the last year of implementation of the Orange.one strategic plan that we announced in September 2017, marking our new approach to long-term value creation. We aimed to become Poland’s first-choice telecommunications operator for consumers and businesses, at the same time creating a business model that will generate sustainable growth in sales and profits.

2020 completes Orange.one strategy…

Essential to the value-creation plan were heavy investment in the fibre network and pursuing a convergence strategy. Development of business lines with growth prospects, as well as exploring unique market opportunities were necessary to offset ongoing pressure on our revenues coming from legacy services – which once constituted the core of our operations, and which have been in structural decline for a number of years. At the same time, we were radically transforming our operations to be more agile, digital and flexible, with a strong online presence and highly automated processes.

Moreover, we were also changing our internal culture. We want to work harder for the benefit of our customers; to be obsessed with improving their experience with Orange. Culture change at Orange Polska is also aimed at improving the work environment, so that our employees better identify with our goals and values, and gain confidence in their future careers with Orange. Last but not least, our value creation is reflected in our responsible approach to environmental and social matters. Our investments in connectivity make a substantial contribution to the development of Poland’s modern, digital society.

…which has been implemented with great success

We believe that the Orange.one strategy has been a success.

In our opinion, Orange Polska has considerably improved its market position in all key segments of the market, and has become a much more efficient operator. The crucial element was our investment in the fibre network, which supports our convergent strategy and provides our long-term competitive advantage. At the end of 2020, 5 million households were connectable with our fibre network, meeting the strategic ambition we formulated in 2017. Our share of fibre customers has tripled over the last three years, reaching 27%. We have achieved a major customer-base increase in all key service categories: convergence, fixed broadband and mobile. Simultaneously, our value strategy and fibre expansion have driven a very significant improvement in ARPO trends.

We have met all the financial goals set in our strategy, reversing prolonged negative trends and returning to growth. Our key measure of operating profitability, EBITDAaL (or, previous to 2019, adjusted EBITDA), has been growing for the last three years, while our revenues have been growing for the last two years. This growth is a result of the implementation of our convergence strategy, monetisation of fibre network investments, steady focus on value generation in our commercial activities, ‘more for more’ pricing strategy and very high savings on costs. Operating profitability has been improving despite continued structural pressure on high-margin traditional fixed-line services, the erosion of which almost fully filters through to profits. The growing operating profitability has led to an increase in cash generation and a decrease in net debt and leverage ratio.

At the end of 2020, we were ranked the number-one operator in terms of customer satisfaction, which had also been our strategic ambition. The highest-ever absolute level of NPS is a consequence of our prolonged and consistent efforts to improve all the elements of the ‘customer journey’, from network connectivity to portfolio structure, sales and customer care. We also believe that there is room for improvement in certain areas, and we will address it in the next strategic period.

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