Letter of the President of the Management Board

 

Ladies and Gentlemen,

We are publishing the Annual Report of Polsat Plus Group for the year 2021 at an exceptional moment, not only from the perspective of our company, but also from the standpoint of the entire global economy, society, our employees, their friends and loved ones.

In 2020, our organization was tested by the pandemic. This time we are dealing with Russia's attack on Ukraine. We demonstrated our responsible approach by getting involved in the fight against the coronavirus and now, by being in solidarity with Ukraine. From the first days of the invasion we have been providing a range of free telecommunication services to refugees from Ukraine and have donated PLN 5 million to the “Polsat Foundation for Children of Ukraine” campaign. I would like to thank all the employees of Polsat Plus Group for their enormous personal involvement in providing assistance to the Ukrainian citizens.

Last year was a time of implementing projects which are crucial for our Group's further development.

As part of the Strategy 2023+ announced by us in December 2021, in addition to our operating segments which we have been successfully developing for many years, i.e., Connectivity under the Plus brand and Content under the Polsat brand, we have defined a new, future-oriented business segment of Clean Energy. Our goal is to produce and supply Poles with clean, green energy, including energy derived from, among others, the sun, the wind and biomass.

We are convinced that the energy transition is essential for the society, the economy and the environment, and we want to participate in this change. To achieve this goal, we plan to invest PLN 5 billion in green energy over 5 years, allocate PLN 0.8 billion to the purchase of ZE PAK's green assets and another PLN 0.5 billion to investments in green hydrogen, which is the zero-emission fuel of the future. Our planned total production capacity from renewable sources will reach 1,000 MW and will provide us with the ability to produce over 2 TWh of clean electricity every year. We estimate that this will contribute to the reduction of CO2 emissions by over 2 million tons annually.

What is more, our Group companies have been using green energy for several years. Today, more than 60% of the energy that we consume comes from renewable sources, and this share is growing every year. We plan to use energy solely from renewable sources starting from 2023 and we consistently strive to achieve this goal.

As always, we reach for the most advanced solutions. In connection with the necessity of conducting a global energy transformation, green hydrogen is indicated as a strategic fuel of the future. Apart from the possibility of using it in many branches of the economy, green hydrogen will accelerate the reduction of CO2 and other harmful particles emissions. As Polsat Plus Group we want to become the leading Polish producer of green hydrogen and build its complete, nation-wide value chain - from production in the electrolysis process using clean energy and water, through storage and transport, to its universal use.

Apart from investing in new business areas, we are committed to the further development of our Connectivity and Content segments. We continue to prioritize the development of the largest and best 5G network in Poland. Thanks to intensive work on 5G technology development, carried out in cooperation with our strategic partner Cellnex Telecom, more than 19 million people, i.e. more than half of Poland's population, already live within the reach of Plus' 5G network. At the end of 2021, the number of Plus 5G stations increased to 3,000, providing 5G coverage in 800 towns and cities, both large and small. Plus' 5G network, as the only one in Poland, operates in the 2600 MHz TDD band, dedicated exclusively for this technology. This solution enables Plus to offer the fastest 5G in Poland with the maximum technological speed of up to 600 Mb/s.

Last year, our Group also underwent a major change in its visual identification and marketing communications. The Polsat and Plus brands gained new logotypes, while the Cyfrowy Polsat brand was replaced by a new brand - Polsat Box. Ipla and Cyfrowy Polsat GO merged into one service - Polsat Box Go. A new service with Polsat content, Polsat Go, was also launched. Our Group has acquired a new name of Polsat Plus Group and a new logotype. A strategic harmonization of brands took place in the visual and communications area - the logotypes come from the same family and are similar, which facilitates their identification with our Group. The slogans "You rule. Choose your everything." are also common and consistent, as are the characteristic graphic themes used by each of our brands.

In line with the assumed development of services in every available technology, we systematically increase the availability of fiber-optic Internet access services offered by Netia, one of the top providers of such services. We are in the process of modernizing our network, we invest in connecting numerous new housing estates and, occasionally, we acquire networks of smaller local operators. The fastest access options are rapidly gaining popularity among our customers and, in consequence, a growing number of them use our IPTV services.

Polsat Plus Group, which creates unique Polish content, has a strong position on the market of TV broadcasters and Internet publishers. Telewizja Polsat, which provides 39 TV channels, is among the most popular TV stations and, in line with its strategic assumptions, maintains a share in viewership of 23-25%. In turn, Polsat-Interia Group occupies a strong position among the three largest domestic players in the area of Internet services.

Our services are present in every second Polish home. We have over 6 million contract customers and provide a total of over 20 million telecommunication and TV services, as well as a range of additional services, such as electricity sales, installation of photovoltaic systems or insurance. In our popular service bundling program – smartDOM - you can choose from products available in various technologies, in line with our idea of "For everyone. Everywhere." We offer fixed Internet in fiber optic technologies, LTE home Internet, 5G mobile Internet, satellite TV, cable IPTV and Internet TV with an OTT set-top box, as well as numerous mobile and fixed voice offers. Our two new streaming services, Polsat Box Go and Polsat Go, which combine live channels with an extensive library of on-demand content, enjoy growing popularity.

The execution of all these ambitious plans and projects would not be possible without the fantastic and extremely committed employees of Polsat Plus Group, the trust of our shareholders and partners who finance the development of our operations, as well as the full support of the Supervisory Boards and Management Boards of the Group's companies. I would like to thank everyone for their great ambitions, full professionalism and hard work.

This year has begun with many challenges which will certainly not be lacking in the coming months. I am convinced that together we will overcome them all successfully, developing our Polsat Plus Group and providing our customers with the services they expect, while at the same time keeping in mind our social commitment, which is particularly necessary at a time such as now. 

 

Yours faithfully,

 

Mirosław Błaszczyk

President of the Management Board, Cyfrowy Polsat S.A