Letter from the Chairman of Supervisory Board

Dear stakeholders,

The most important development for Orange Polska in 2021 was the announcement of a new strategy for 2021–2024. The Supervisory Board and its Committees were involved in an intensive dialogue with the Management Board during the preparation thereof. The main target of our previous strategic plan was to reverse multi-year negative business trends. Our new .Grow strategy focuses on maintaining growth, laying the foundation for new sources of business expansion in the next strategic period, and further transforming the Company’s corporate culture. The strategy was well received by the financial markets, which was reflected in the share price growth in subsequent weeks.

The excellent operational and financial performance in 2021 confirms that the first year of implementation of our new strategy was a very big step towards its success. Income growth was driven by strong growth in revenues from core telecom services and ICT. The Management Board’s decision to return to remunerating shareholders symbolically underscores the Company’s sustainable turnaround and our confidence in solid prospects for future growth. Complementing the new strategy, the Supervisory Board adopted the new Long Term Incentive Programme, linked to the rise in the Company’s value, to further motivate senior executives and better align their activities with the interest of the shareholders.

Another major development in 2021 was the completion of the FiberCo project, related to the establishment of the joint venture Światłowód Inwestycje. The Supervisory Board was also heavily involved in this initiative. I consider this a textbook example of an infrastructure-related transaction that combines short-term benefits (proceeds of almost PLN 1.4 billion, of which two-thirds were received on closing) with long-term ones (further significant expansion in the reach of the fibre network, which is the key element of Orange Polska’s commercial strategy). The Supervisory Board would like to commend all of the Company’s teams, which relentlessly delivered in every complex step of the project.

Orange Polska has long been the leader in promoting and implementing the principles of sustainable growth. Last year, these efforts gained a new strategic dimension with the climate policy adopted by the Management Board and discussed at a meeting of the Strategy Committee of the Supervisory Board. Committed to achieving climate neutrality, we will actively reduce CO₂ emissions, mainly by increasing the share of energy from renewable sources. Further active contracting of wind energy from its producers seems particularly important in the context of the crisis in the energy market.

Like every year, the Supervisory Board was also involved in all other decisions of key significance for Orange Polska. We monitored the Management Board’s governance in managing the business to ensure that these activities were lawful and compliant with legal provisions and internal standards and policies, as well as appropriate and efficient. At each meeting, the Supervisory Board discussed in detail the Company’s current financial and operational results in comparison to the budget adopted at the beginning of the year. More details of the Supervisory Board’s assessment of Orange Polska are presented further in this chapter.

The frequency with which the Supervisory Board and its Committees meet means that we are in close contact with the Management Board. In 2021, seven meetings of the Supervisory Board and as many as 18 meetings of its Committees took place – more than in previous years, owing to work on a new strategy and the Światłowód Inwestycje (FiberCo) project. The average participation rate was 97.4%. To adjust to the limitations imposed by the COVID-19 pandemic, for the second consecutive year we enabled shareholders to both participate and vote in the General Meeting in a fully remote way.

Looking forward to 2022, in the opinion of the Supervisory Board, the key tasks for the Management Board include: meeting the challenges of the .Grow strategy goals in an exceptionally difficult macroeconomic environment, particularly considering the crisis in energy prices; obtaining 5G spectrum; and implementing a new hybrid work model in (hopefully) postpandemic conditions.

As I write these words, a humanitarian tragedy has been unfolding in Ukraine for several weeks. The Supervisory Board and all of us at Orange Polska are deeply moved by this. Under such sad circumstances, connectivity becomes an absolute priority. And Orange Polska’s employees have demonstrated a great commitment, offering support and assistance with an open heart. We have been helping Ukrainian refugees to contact their relatives, providing shelter and care to them, and supporting the government services and NGOs that assist refugees.

While there are clear challenges, I am fully confident that we have the adequate resources and assets to meet them – a task in which the management will be supported by the Supervisory Board. Operating in an attractive market, we are guided in our activities by long-term value creation for all our stakeholders.

Maciej Witucki
Chairman of the Supervisory Board

Annual Report 2021

Risk management

Our approach to corporate governance

Letter from the Chairman of Supervisory Board

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