Selected financial data

Orange Polska Group selected financial information for the year ended 31 December 2021

As published on 16 February 2022

The full report on Consolidated full year 2021 results is available on our website.

CONSOLIDATED INCOME STATEMENT

(in PLN millions, except for earnings per share)	Note	12 months ended 31 December 2021	12 months ended 31 December 2020
Revenue	6	11,928	11,508
External purchases	7.1	(6,786)	(6,535)
Labour expense	7.2	(1,421)	(1,359)
Other operating expense	7.3	(571)	(448)
Other operating income	7.3	358	260
Impairment of receivables and contract assets	20	(67)	(151)
Gain on the loss of control of Światłowód Inwestycje	4	1,543	–
Gains on disposal of assets	8	52	61
Employment termination expense	17	(119)	13
Depreciation and impairment of right-of-use assets	14.1	(509)	(434)
Depreciation, amortisation and impairment of property, plant and equipment and intangible assets	11,12	(2,221)	(2,511)
Share of profit of joint venture	13	24	–
Operating income		2,211	404
Interest income	20	34	33
Interest expense on lease liabilities	20	(53)	(62)
Other interest expense and financial charges	20	(200)	(216)
Discounting expense	20	(66)	(43)
Foreign exchange gains/(losses)	20	4	(54)
Finance costs, net		(281)	(342)
Income tax		(258)	(16)
Net income	28.1	1,672	46
Net income attributable to owners of Orange Polska S.A.		1,672	46
Net income attributable to non-controlling interests		–	–
Earnings per share (in PLN) (basic and diluted)	35.4	1.27	0.04
Weighted average number of shares (in millions)	29.1	1,321	1,312

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(in PLN millions)	Note	12 months ended 31 December 2021	12 months ended 31 December 2020
Net income		1,672	46
Items that will not be reclassified to profit or loss
Actuarial gains/(losses) on post-employment benefits	19	8	(3)
Income tax relating to items not to be reclassified		(2)	1
Items that may be reclassified subsequently to profit or loss
Gains/(losses) on cash flow hedges	25	376	13
Losses on receivables at fair value through other comprehensive income		(6)	–
Income tax relating to items that may be reclassified		(69)	2
Share of other comprehensive income of joint venture, net of tax		22	–
Other comprehensive income/(loss), net of tax		329	(13)
Total comprehensive income		2,001	33
Total comprehensive income attributable to owners of Orange Polska S.A		2,001	33
Total comprehensive income attributable to non-controlling interests		–	–

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(in PLN millions)	Note	At 31 December 2021	At 31 December 2020
ASSETS
Goodwill	10	2,285	2,285
Other intangible assets	11	3,984	4,184
Property, plant and equipment	12	9,728	10,301
Right-of-use assets	14.1	2,834	2,768
Investment in joint venture	13	1,333	–
Trade receivables	15.1	354	382
Contract assets	15.2	89	70
Contract costs	15.3	127	106
Derivatives	25	273	–
Other assets	16	432	41
Deferred tax assets	28.2	581	800
Total non-current assets		22,020	20,937
Inventories		281	230
Trade receivables	15.1	1,853	1,850
Contract assets	15.2	95	87
Contract costs	15.3	397	368
Derivatives	25	3	147
Income tax receivables		31	–
Other assets	16	450	240
Prepaid expenses		94	83
Cash and cash equivalents	24	933	358
Total current assets		4,137	3,363
TOTAL ASSETS		26,157	24,300
EQUITY AND LIABILITIES
Share capital	29.1	3,937	3,937
Share premium		832	832
Other reserves		191	(123)
Retained earnings		7,649	5,951
Equity attributable to owners of Orange Polska S.A.		12,609	10,597
Non-controlling interests		2	2
Total equity		12,611	10,599
Trade payables	18.1	99	242
Lease liabilities	23, 27.6	2,302	2,216
Loans from related party	22	4,938	2,406
Other financial liabilities at amortised cost		28	2
Derivatives	25	3	100
Provisions	17	739	657
Contract liabilities	15.4	993	338
Employee benefits	19	73	53
Other liabilities	18.2	18	50
Total non-current liabilities		9,193	6,064
Trade payables	18.1	2,400	2,236
Lease liabilities	23, 27.6	528	488
Loans from related party	22	12	3,584
Other financial liabilities at amortised cost		33	19
Derivatives	25	2	32
Provisions	17	258	254
Contract liabilities	15.4	607	476
Employee benefits	19	171	204
Income tax liabilities		2	18
Other liabilities	18.2	340	326
Total current liabilities		4,353	7,637
TOTAL EQUITY AND LIABILITIES		26,157	24,300

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(in PLN millions)	Share capital	Share premium	Other reserves
(in PLN millions)	Share capital	Share premium	Cash flow hedge reserve	Actuarial gains/ (losses) on post employment benefits	Losses on receivables at fair value through other comprehensive income	Deferred tax	Share of other reserves of joint venture	Retained earnings	Equity attributable to owners of OPL S.A.	Non-controlling interests	Total equity
Balance at 1 January 2021	3,937	832	(89)	(62)	–	28	–	5,951	10,597	2	10,599
Net income	–	–	–	–	–	–	–	1,672	1,672	–	1,672
Other comprehensive income	–	–	376	8	(6)	(71)	22	–	329	–	329
Total comprehensive income for the 12 months ended 31 December 2021	–	–	376	8	(6)	(71)	22	1,672	2,001	–	2,001
Share-based payments (transactions with the owner, see Note 29.3)	–	–	–		–	–	–	26	26	–	26
Transfer to inventories	–	–	(18)	–	–	3	–	–	(15)	–	(15)
Balance at 31 December 2021	3,937	832	269	(54)	(6)	(40)	22	7,649	12,609	2	12,611
Balance at 1 January 2020	3,937	832	(50)	(59)	–	20	–	5,875	10,555	2	10,557
Net income	–	–	–	–	–	–	–	46	46	–	46
Other comprehensive loss	–	–	(13)	(3)	–	3	–	–	(13)	–	(13)
Total comprehensive income for the 12 months ended 31 December 2020	–	–	(13)	(3)	–	3	–	46	33	–	33
Share-based payments (transactions with the owner, see Note 29.3)	–	–	–	–	–	–	–	3	3	–	3
Transfer to inventories	–	–	(26)	–	–	5	–	–	(21)	–	(21)
Other movements (see Note 29.4)	–	–	–	–	–	–	–	27	27	–	27
Balance at 31 December 2020	3,937	832	(89)	(62)	–	28	–	5,951	10,597	2	10,599

CONSOLIDATED STATEMENT OF CASH FLOWS

(in PLN millions)	Note	12 months ended 31 December 2021	12 months ended 31 December 2020
OPERATING ACTIVITIES
Net income		1,672	46
Adjustments to reconcile net income to cash from operating activities
Gains on loss of control and disposal of assets	4,8	(1,595)	(61)
Depreciation, amortisation and impairment of property, plant and equipment, intangible assets and right-of-use assets	11,12,14.1	2,730	2,945
Share of profit of joint venture	13	(24)	–
Finance costs, net	20	281	342
Income tax	28.1	258	16
Change in provisions and allowances		(7)	(150)
Operating foreign exchange and derivatives (gains)/losses, net		3	(10)
Change in working capital
Increase in inventories, gross	15.1	(51)	(5)
Decrease in trade receivables, gross	15.2	75	383
(Increase)/decrease in contract assets, gross	15.3	(28)	26
Increase in contract costs	15.4	(50)	(46)
Increase/(decrease) in trade payables		100	(64)
Increase/(decrease) in contract liabilities		86	(1)
Increase in prepaid expenses and other assets		(104)	(22)
Increase/(decrease) in other payables		99	(33)
Interest received		30	33
Interest paid and interest rate effect paid on derivatives, net		(342)	(370)
Exchange rate effect received on derivatives, net		4	2
Income tax paid		(36)	(26)
Net cash provided by operating activities		3,101	3,005

(in PLN millions)	Note	12 months ended 31 December 2021	12 months ended 31 December 2020
INVESTING ACTIVITIES
Payments for purchases of property, plant and equipment and intangible assets	11,12	(1,995)	(2,015)
Investment grants received	18.2	109	177
Investment grants paid to property, plant and equipment and intangible assets suppliers	18.2	(204)	(221)
Exchange rate effect received on derivatives economically hedging capital expenditures, net		7	10
Proceeds from sale of property, plant and equipment and intangible assets		196	60
Proceeds from loss of control of Światłowód Inwestycje, net of cash and transaction costs	4	872	–
Income tax paid in relation to loss of control of Światłowód Inwestycje	4	(122)	–
VAT paid in relation to loss of control of Światłowód Inwestycje	4	(157)	–
Cash paid for acquisition of subsidiaries, net of cash acquired	4	(22)	(75)
Receipts from loan to joint venture and other financial instruments, net	4	160	–
Net cash used in investing activities		(1,156)	(2,064)
FINANCING ACTIVITIES
Proceeds from long-term debt	23	26	–
Repayment of long-term loans from related party	23	(101)	–
Repayment of lease liabilities	23	(481)	(421)
Repayment of revolving credit line and other debt, net	23	(906)	(568)
Exchange rate effect received on derivatives hedging debt, net	23	91	–
Net cash used in financing activities		(1,371)	(989)
Net change in cash and cash equivalents		574	(48)
Effects of exchange rate changes on cash and cash equivalents		1	2
Cash and cash equivalents at the beginning of the period	24	358	404
Cash and cash equivalents at the end of the period	24	933	358

The Group reports a single operating segment as decisions about resources to be allocated and assessment of performance are made on a consolidated basis. Group performance is currently evaluated by the Management Board based on revenue, EBITDAaL, net income, eCapex (economic capital expenditures), organic cash flows, net financial debt and net financial debt to EBITDAaL ratio based on cumulative EBITDAaL for the last four quarters.

Since the calculation of EBITDAaL, eCapex, organic cash flows, and net financial debt is not defined by IFRS, these performance measures may not be comparable to similar indicators used by other entities. The methodology adopted by the Group is presented below.

Starting from 2021, the Group has a joint venture accounted for using the equity method and definitions of performance measures have been supplemented taking into account the impact of the joint venture on the Group performance: share of profits/losses of joint venture and elimination of margin (unrealised profit) earned on asset related transactions with joint venture are excluded from EBITDAaL calculation.

Additionally, the Group has clarified a treatment of the rights of perpetual usufruct of land in calculation of performance measures. The rights of perpetual usufruct of land which on initial recognition were classified as property, plant and equipment and were subsequently, on adoption of IFRS 16, reclassified to right-of-use assets, are treated similarly to property, plant and equipment in business decisions made by the Management Board. Consequently, impairment and result on disposal of these rights is excluded from EBITDAaL calculation, while proceeds accrued on their disposal offset capital expenditures. The clarifications of definitions described above do not require any restatements in calculation of performance measures for the comparative period.

EBITDAaL is the key measure of operating profitability used by the Management Board and corresponds to operating income before gains on disposal of assets, depreciation, amortisation and impairment of property, plant and equipment and intangible assets, impairment of the rights of perpetual usufruct of land historically recognised as property, plant and equipment and subsequently reclassified to rightof-use assets and share of profits/losses of associates and joint ventures, decreased by interest expense on lease liabilities and adjusted for the impact of deconsolidation of subsidiaries, costs related to acquisition, disposal and integration of businesses, employment termination programs, restructuring costs, elimination of margin earned on asset related transactions with joint ventures and associates accounted for using the equity method, significant claims, litigation and other risks as well as other significant nonrecurring items. eCapex (economic capital expenditures) is the key measure of resources allocation used by the Management Board and represents acquisitions of property, plant and equipment and intangible assets excluding telecommunications licences, decreased by the proceeds accrued on disposal of these assets as well as on disposal of the rights of perpetual usufruct of land historically recognised as property, plant and equipment (‘proceeds accrued on disposal of assets’). eCapex does not include acquisitions of right-of-use assets.

Organic cash flows are the key measure of cash flow generation used by the Management Board and correspond to net cash provided by operating activities decreased by payments for purchases of property, plant and equipment and intangible assets and repayment of lease liabilities, increased/decreased by impact of net exchange rate effect received/paid on derivatives economically hedging capital expenditures and lease liabilities and proceeds from sale of property, plant and equipment and intangible assets and adjusted for the payments for acquisition of telecommunications licences, payments for costs related to acquisition, disposal and integration of businesses not included in purchase price and payments relating to significant claims, litigation and other risks. Cash flows arising from obtaining or losing control of subsidiaries or other businesses, including significant tax cash flows specifically identified with these transactions, are classified as investing activities and by definition are not included in organic cash flows.

Net financial debt and net financial debt to EBITDAaL ratio are the key measures of indebtedness and liquidity used by the Management Board. The calculation of net financial debt is presented in Note 21.

Basic financial data of the operating segment is presented below:

(in PLN millions)	12 months ended 31 December 2021	12 months ended 31 December 2020
Revenue	11,928	11,508
EBITDAaL	2,963	2,797
Net income	1,672	46
eCapex	1,737	1,801
Organic cash flows	867	642

(in PLN millions)	12 months ended 31 December 2021	12 months ended 31 December 2020
Net financial debt (in PLN millions, see Note 21)	4,076	5,549
Net financial debt/EBITDAaL ratio	1.4	2.0

Calculation of performance measures of the operating segment is presented below:

(in PLN millions)	12 months ended 31 December 2021	12 months ended 31 December 2020
Operating income	2,211	404
Less gain on the loss of control of Światłowód Inwestycje	(1,543)	–
Less gains on disposal of assets	(52)	(61)
Add-back of depreciation, amortisation and impairment of property, plant and equipment and intangible assets¹	2,255	2,511
Less share of profit of joint venture adjusted for elimination of margin earned on asset related transactions with joint venture	(9)	–
Less interest expense on lease liabilities	(53)	(62)
Adjustment for the impact of employment termination programs	129	(22)
Adjustment for the costs related to acquisition, disposal and integration of subsidiaries (see Note 4)	25	27
EBITDAaL	2,963	2,797

¹⁾ Includes impairment of rights of perpetual usufruct of land historically recognised as property, plant and equipment, subsequently reclassified to right-of-use assets (PLN 34 million in 2021).

(in PLN millions)	12 months ended 31 December 2021	12 months ended 31 December 2020
Acquisitions of property, plant and equipment and intangible assets	2,211	1,893
Proceeds accrued on disposal of assets	(274)	(92)
eCapex	1,737	1,801

(in PLN millions)	12 months ended 31 December 2021	12 months ended 31 December 2020
Net cash provided by operating activities	3,101	3,005
Payments for purchases of property, plant and equipment and intangible assets	(1,995)	(2,015)
Exchange rate effect received on derivatives economically hedging capital expenditures, net	7	10
Proceeds from sale of property, plant and equipment and intangible assets	196	60
Repayment of lease liabilities	(481)	(421)
Adjustment for payment for costs related to acquisition, disposal and integration of subsidiaries (see Note 4)	39	3
Organic cash flows	867	642

Annual Report 2021

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