Report of the Management Board
on the activities of Cyfrowy Polsat S.A.

and Cyfrowy Polsat S.A. Capital Group
for the financial year ended
December 31, 2024

 

 

 

 

 

 

Warsaw, April 10, 2025

 

Disclaimers

General information

Cyfrowy Polsat S.A. (the "Company", "Cyfrowy Polsat"), with its registered office in Warsaw, 4a Łubinowa Street, is entered in the Register of Entrepreneurs of the National Court Register kept by the District Court for the City of Warsaw, XIV Economic Department of the National Court Register, KRS number KRS 0000010078. The Company is the parent company of Cyfrowy Polsat S.A. Capital Group (“Polsat Plus Group”).

This constitutes the report of Cyfrowy Polsat Capital Group S.A. (the “Report”) prepared as required by Article 60 sections 1(3) and (2) and Articles 70 and 71 of the Ordinance of the Minister of Finance of March 29, 2018 regarding current and periodic information to be submitted by issuers of securities, and the conditions for recognizing equivalence of information required under non-member states regulations (the “Ordinance”). Pursuant to Article 71 section 8 of the Ordinance, the information required for the report on the activities of the parent company referred to in Article 70 section 1 (4) of the Ordinance is also included in this report of the Management Board on the activities of Polsat Plus Group.

Presentation of financial data and other information

References to the Company or Cyfrowy Polsat contained in this Management Board’s report on the activities of the Company and Polsat Plus Group apply to Cyfrowy Polsat S.A., while all references to the Group or Polsat Plus Group apply to Cyfrowy Polsat S.A. and its consolidated subsidiaries. Expressions such as "we," "us," "our" and similar apply generally to the Group, unless it is clear from the context that they apply only to the Company. A glossary of terms used in this document is presented at the end of this Report.

This Report contains financial statements and financial information relating to the Company and the Group. In particular, this Report contains consolidated and standalone financial statements for the year ended December 31, 2024, prepared in accordance with International Financial Reporting Standards as approved for use in the European Union ("IFRS") and are presented in millions of zlotys. The financial statements attached to this Report have been audited by an independent auditor.

Certain financial data contained in this Report have been subject to rounding adjustments. Accordingly, certain numbers presented as the sum may not conform exactly to the arithmetical sum of their components.

Forward-looking statements

This Report contains forward looking statements relating to future expectations, understood as all statements (other than statements of historical facts) regarding our financial results, business strategy, plans and objectives pertaining to our future operations (including development plans related to our products and services). These statements are expressed, without limitation, through words such as "may," "will," "expect," "anticipate," "believe," "estimate" and similar words used in this Report. Such forward-looking statements do not constitute a guarantee of future performance and involve risks and uncertainties which may affect the fulfilment of these expectations, as by their nature they are subject to many factors, risks and uncertainties. Accordingly, actual results may differ materially from those expressed or implied by the forward-looking statements. Even if our financial results, business strategy, plans and objectives pertaining to our future operations are consistent with the forward-looking statements included herein, this does not necessarily mean that these statements will be true for subsequent periods. These forward-looking statements express our position only as at the date of this Report.

The cautionary statements set out above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We expressly disclaim any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations, change of circumstances on which any such statement is based or any event that occurred after the date of this Report.

In this Report, we disclose important factors which may impact our future operating activities and financial results that could cause our actual results to differ materially from our expectations.

Industry and market data

In this Report, we set out information relating to our business and the markets in which we and our competitors operate. The information regarding the market, its size, the market share, the market position, the growth rates and other industry data relating to our business and markets in which we operate consists of data and reports compiled by various third-party entities, including other operators present on the Polish market, and our internal estimates. We believe that industry publications, surveys and forecasts we use are reliable, but we have not independently verified them and cannot guarantee their accuracy or completeness.

Moreover, in numerous cases we have made statements in this Report regarding our industry and our position in the industry based on our own experience and our examination of market conditions. We cannot guarantee that any of these assumptions properly reflect our market position. Our internal surveys have not been verified by any independent sources.

Financial data overview

The following tables set out selected consolidated and standalone financial data for the three- and twelve-month periods ended December 31, 2024 and December 31, 2023. This information should be read in conjunction with the consolidated and standalone financial statements for the year ended December 31, 2024 (including notes thereto) and the information included in item 4 of this Report – Operating and financial review.

Selected financial data:

•        from the consolidated income statement and the consolidated cash flow statement for the three-month periods ended December 31, 2024 and December 31, 2023 have been converted into euro at a rate of PLN 4.3070 per EUR 1.00 (average exchange rate in the period from October 1, 2024 to December 31, 2024 announced by the NBP);

•        from the consolidated and standalone income statement and the consolidated cash flow statement for the twelve-month periods ended December 31, 2024 and December 31, 2023 have been converted into euro at a rate of PLN 4.3064 per EUR 1.00 (average exchange rate in the period from January 1, 2024 to December 31, 2024 announced by the NBP);

•        from the consolidated and standalone balance sheet data as of December 31, 2024 and December 31, 2023 have been converted into euro at a rate of PLN 4.2730 per EUR 1.00 (average exchange rate on December 31, 2024 published by the NBP).

Such recalculations shall not be viewed as a representation that such zloty amounts actually represent such euro amounts or could be or could have been converted into euro at the rates indicated or at any other rate.

It should be noted that the consolidated financial data for the three- and twelve-month periods ended December 31, 2024 and December 31, 2023 are not comparable due to acquisitions and changes to the Group’s structure in the period from January 1, 2023 to December 31, 2024, which are described in detail in item 1.4. - Changes in the organizational structure of Polsat Plus Group and their effects – of this Report, as well as in item 1.5. of the report of the Management Board on the activities of Cyfrowy Polsat S.A. Capital Group in 2023.

Consolidated income statement

	12 months ended December 31			12 months ended December 31
	2024	2023		2024	2023
	mPLN	mPLN		mEUR	mEUR
Revenue	14,265.9	13,626.3		3,312.7	3,164.2
Operating costs	(12,629.3)	(12,488.8)		(2,932.7)	(2,900.0)
Gain on disposal of a subsidiary and an associate	10.0	219.7		2.3	51.0
Other operating income/(cost), net	119.6	(45.6)		27.8	(10.6)
Profit from operating activities	1,766.2	1,311.6		410.1	304.6
Finance income	426.2	452.7	(1)	99.0	105.1
Finance costs	(1,112.2)	(1,372.2)	(1)	(258.2)	(318.6)
Share of the profit of associates accounted for using the equity method	(0.7)	29.7		(0.2)	6.9
Gross profit for the period	1,079.5	421.8		250.7	98.0
Income tax	(302.2)	(110.2)		(70.2)	(25.6)
Net profit for the period	777.3	311.6		180.5	72.4
Net profit attributable to equity holders of the Parent	710.5	278.5		165.0	64.7
Net profit attributable to non-controlling interest	66.8	33.1		15.5	7.7
Basic and diluted earnings per share in PLN (not in millions)	1.41	0.57		0.33	0.13
Weighted number of issued shares (not in millions)	550,703,531	550,703,531		550,703,531	550,703,531
EBITDA(2)	3,437.6	3,231.2		798.3	750.3
EBITDA margin	24.1%	23.7%		24.1%	23.7%
Headcount(3)	8,219	8,020		n/a	n/a

 

 

	3 months ended December 31			3 months ended December 31
	2024	2023		2024	2023
	mPLN	mPLN		mEUR	mEUR
Revenue	3,827.1	3,681.5		888.6	854.8
Operating costs	(3,439.4)	(3,486.7)		(798.6)	(809.5)
Gain on disposal of a subsidiary and an associate	-	(0.4)		-	(0.1)
Other operating income/(cost), net	(39.7)	(22.2)		(9.2)	(5.2)
Profit from operating activities	348.0	172.2		80.8	40.0
Finance income	122.2	368.8	(1)	28.4	85.6
Finance costs	(246.4)	(414.6)	(1)	(57.2)	(96.3)
Gross profit for the period	223.8	126.4		52.0	29.3
Income tax	(56.1)	3.9		(13.0)	0.9
Net profit for the period	167.7	130.3		39.0	30.2
Net profit attributable to equity holders of the Parent	135.1	100.5		31.4	23.3
Net profit attributable to non-controlling interest	32.6	29.8		7.6	6.9
Basic and diluted earnings per share in PLN (not in millions)	0.30	0.24		0.07	0.05
Weighted number of issued shares (not in millions)	550,703,531	550,703,531		550,703,531	550,703,531
EBITDA(2)	739.9	676.7		171.8	157.1
EBITDA margin	19.3%	18.4%		19.3%	18.4%
Headcount(3)	8,246	8,202		n/a	n/a

(1)	In 2024, there was a change in the presentation of finance income and finance costs, resulting in a restatement of the comparative figures. This change did not affect the previously reported net profit amounts.
(2)	We define EBITDA as net profit/(loss) as determined in accordance with IFRS, before depreciation and amortization (other than for programming rights), impairment charges and reversals on property, plant and equipment and intangible assets, net value of disposed property, plant and equipment and intangible assets, revenue obtained from interest, finance costs, positive/(negative) exchange rate differences, income taxes and share of net results of joint ventures. The reconciling item between EBITDA and reported operating profit/ (loss) is depreciation and amortization expense and impairment charges and reversals on property, plant and equipment and intangible assets and net value of disposed property, plant and equipment and intangible assets.
(3)	Average employment presented in full time equivalents excluding workers who did not perform work in the reporting period due to long-term absences.

 

Consolidated cash flow statement

	12 months ended December 31
	2024	2023		2024	2023
	mPLN	mPLN		mEUR	mEUR
Net cash from operating activities	3,427.2	2,392.4		795.8	555.5
Net cash used in investing activities, incl.:	(2,174.0)	(2,215.7)		(504.8)	(514.5)
Capital expenditures(1)	(1,784.2)	(1,601.9)		(414.3)	(372.0)
Net cash used in financing activities	(1,882.5)	2,336.2		(437.1)	542.5
Net increase/(decrease) in cash and cash equivalents	(629.3)	2,512.9		(146.1)	583.5
Cash and cash equivalents at the end of the period	2,687.1	3,325.7		624.0	772.3

(1)

Capital expenditures represent payments for our investments in property, plant and equipment and intangible assets. Excludes expenditures on purchase of reception equipment leased to our customers, which are reflected in the cash flow from operating activities, or payments for concessions, which are reported in a separate line of our cash flow statement.

Consolidated balance sheet

	Dec. 31 2024	Dec. 31 2023		Dec. 31 2024	Dec. 31 2023
	mPLN	mPLN		mEUR	mEUR
Cash and cash equivalents(1)	2,687.1	3,325.7		628.9	778.3
Assets	37,468.0	37,176.7		8,768.6	8,700.4
Non-current liabilities, incl.:	14,705.4	15,354.9		3,441.5	3,593.5
Non-current financial liabilities(2)	13,316.3	13,934.3		3,116.4	3,261.0
Current liabilities, incl.:	5,693.3	5,515.8		1,332.4	1,290.8
Current financial liabilities(2)	1,863.9	1,629.6		436.2	381.4
Equity	17,069.3	16,305.2		3,994.7	3,815.9
Share capital	25.6	25.6		6.0	6.0

(1)	Includes Cash and cash equivalents, Deposits and Restricted cash.
(2)	Includes Loans and borrowings, Issued bonds and Lease liabilities.

 

Standalone income statement

	12 months ended December 31			12 months ended December 31
	2024	2023		2024	2023
	mPLN	mPLN		mEUR	mEUR
Revenue	2,242.1	2,245.3		520.6	521.4
Operating costs	(2,089.8)	(2,064.1)		(485.3)	(479.3)
Other operating income/(cost), net	9.8	(9.6)		2.3	(2.3)
Profit from operating activities	162.1	171.6		37.6	39.8
Finance income	1,074.3	1,163.3	(1)	249.5	270.1
Finance costs	(785.1)	(677.1)	(1)	(182.3)	(157.2)
Gross profit for the period	451.3	657.8		104.8	152.7
Income tax	(45.5)	(18.2)		(10.6)	(4.2)
Net profit for the period	405.8	639.6		94.2	148.5
Basic and diluted earnings per share in PLN (not in millions)	0.74	1.16		0.17	0.27
Weighted number of issued shares (not in millions)	550,703,531	550,703,531		550,703,531	550,703,531
EBITDA(2)	364.2	348.7		84.6	81.0
EBITDA margin	16.2%	15.5%		16.2%	15.5%
Headcount(3)	962	966		n/a	n/a

(1)	In 2024, there was a change in the presentation of finance income and finance costs, resulting in a restatement of the comparative figures. This change did not affect the previously reported net profit amounts.
(2)	We define EBITDA as net profit/(loss) as determined in accordance with IFRS, before depreciation and amortization (other than for programming rights), impairment charges and reversals on property, plant and equipment and intangible assets, net value of disposed property, plant and equipment and intangible assets, revenue obtained from interest, finance costs, positive/(negative) exchange rate differences, income taxes and share of net results of joint ventures. The reconciling item between EBITDA and reported operating profit/ (loss) is depreciation and amortization expense and impairment charges and reversals on property, plant and equipment and intangible assets and net value of disposed property, plant and equipment and intangible assets.
(3)	Average employment presented in full time equivalents excluding workers who did not perform work in the reporting period due to long-term absences.

Standalone cash flow statement

	12 months ended December 31
	2024	2023		2024	2023
	mPLN	mPLN		mEUR	mEUR
Net cash from operating activities	366.3	241.4		85.1	56.1
Net cash used in investing activities, incl.:	6.1	(1,282.0)		1.4	(297.7)
Capital expenditures(1)	(59.5)	(61.6)		(13.8)	(14.3)
Net cash used in financing activities	(895.3)	2,803.5		(207.9)	651.0
Net increase/(decrease) in cash and cash equivalents	(522.9)	1,762.9		(121.4)	409.4
Cash and cash equivalents at the end of the period	1,352.1	1,883.6		314.0	437.4

(1)

Capital expenditures represent payments for our investments in property, plant and equipment and intangible assets. Excludes expenditures on purchase of reception equipment leased to our customers, which are reflected in the cash flow from operating activities, or payments for concessions, which are reported in a separate line of our cash flow statement.

 

Standalone balance sheet

	Dec. 31 2024	Dec. 31 2023		Dec. 31 2024	Dec. 31 2023
	mPLN	mPLN		mEUR	mEUR
Cash and cash equivalents(1)	1,352.1	1,883.6		316.4	440.8
Assets	19,798.3	19,732.9		4,633.3	4,618.0
Non-current liabilities, incl.:	5,922.1	6,116.3		1,385.9	1,431.4
Non-current financial liabilities(2)	5,669.3	6,017.3		1,326.8	1,408.2
Current liabilities, incl.:	1,360.7	1,506.7		318.5	352.6
Current financial liabilities(2)	564.2	583.5		132.0	136.6
Equity	12,515.5	12,109.9		2,929.0	2,834.0
Share capital	25.6	25.6		6.0	6.0

(1)	Includes Cash and cash equivalents, Deposits and Restricted cash.
(2)	Includes Loans and borrowings, Issued bonds and Lease liabilities.

 

1.               Characteristics of Polsat Plus Group

1.1.        Who we are

Polsat Plus Group is Poland’s largest media and telecommunications group and the leader in the Polish entertainment and telecommunications markets. We are the leading pay TV provider and one of the leading telecommunications operators in the country. We are also one of Poland’s largest content producers and hold a leading position among TV broadcasters in terms of both audience and advertising market shares. We offer a complete package of multimedia services designed for the entire family and a wide array of wholesale services to other telecommunications and television operators, and broadcasters. In addition, based on our Strategy 2023+, we have expanded our business activities into the production and distribution of clean energy.

Our operating activities include four business segments: the B2C and B2B services segment, the media segment: television and online, the real estate segment (from April 1, 2022) and the green energy segment (from July 3, 2023). The portfolio of services and products offered by Group companies includes:

•        pay TV services offered under the ‘Polsat Box’ brand by Cyfrowy Polsat – the largest pay TV provider in Poland – and our subsidiary Netia. We offer our customers access to over 160 TV channels broadcast in satellite, terrestrial and Internet (IPTV, OTT) technologies as well as modern OTT services, Multiroom and online video services through our streaming service ‘Polsat Box Go’;

•        telecommunication services, including voice and data transmission services, as well as various added services (VAS). We provide mobile telecommunication services under the ‘Plus’ brand through Polkomtel – one of Poland’s leading telecommunications operators - and fixed-line telecommunication services mainly through Netia. We also offer business customers a range of advanced solutions designed to streamline processes and increase efficiency, including cloud solutions;

•        mobile broadband Internet, offered under the ‘Plus’ brand in the state-of-the-art 5G, LTE Advanced and LTE technologies. Over 26 million residents of Poland are within the coverage of our Plus 5G network;

•        fixed-line broadband Internet reaching nearly 11 million homes passed, offered under the ‘Netia’ and ‘Plus’ brands based on our nationwide access infrastructure as well as wholesale access to networks of other operators;

•        broadcasting and television production through Telewizja Polsat Group, the leading commercial TV broadcaster on the Polish market, offering 43 own popular TV channels, including our main channel POLSAT, one of the leading FTA channels in Poland;

•        Internet media through one of the three largest horizontal portals in Poland, Interia.pl, as well as an extensive portfolio of thematic portals;

•        wholesale services to other operators, including, among others, network interconnection, IP and voice traffic transit, lease of lines, and national and international roaming services;

•        production and sale of energy from renewable sources such as wind, solar and biomass. Within the green energy segment, we are also developing a value chain based on green hydrogen, including its production, storage, transportation and distribution and sales, as well as the construction of hydrogen refuelling stations and the sale of hydrogen-powered buses;

•        activities on the real estate market, consisting mainly in the implementation of construction projects as well as the sale, rental and management of real estate. Our flagship project is the Port Praski investment located in the strict centre of Warsaw.

1.2.        Strategy 2023+

We are a Polish company and we offer high quality commodities for a reasonable price to the inhabitants of Poland. For everyone. Everywhere.

We believe that high-speed and reliable Internet within easy reach means freedom for everyone and everywhere. We believe in locally produced, unique content available wherever, whenever and on whatever device you want. We believe that the transition towards clean and affordable energy, in particular energy produced from renewable sources, is what our country needs and that it creates new development opportunities for our Group.

We want to create and deliver high quality commodities: high-speed and reliable connectivity, the most attractive and unique content and entertainment, clean and affordable energy and other services and commodities for the home and for individual and business customers, using state-of-the-art technologies to provide top quality services that meet the changing needs and expectations of our customers, so as to maintain the highest possible level of their satisfaction. Concurrently, in line with the concept of ESG, we want to create the value of our Company in a sustainable manner taking into account and addressing environmental, social, responsible and transparent business issues, to the benefit of local society and all our Stakeholders.

The superior goal of our strategy is the permanent, long-term growth of the value of Cyfrowy Polsat S.A. for its Shareholders. We intend to achieve this goal by implementing the key elements of our operating strategy based on three pillars and supported by an effective financial policy.

PILLAR I - CONNECTIVITY		PILLAR II - CONTENT	PILLAR III – CLEAN ENERGY
High-speed and reliable connectivity is critical to our work, education and entertainment. Easy communication with friends and family		Attractive content and excellent user experience ensure entertainment wherever, whenever and on whatever device you want	Affordable, clean energy is essential to the daily functioning and further development of the Polish society and economy
•	growth of revenue from services provided to individual and business customers through the consistent building of our customer base value by maximizing the number of users of our services as well as the number of services offered to each customer and simultaneously increasing average revenue per user (ARPU) and maintaining a high level of customer satisfaction		•	building a position on the clean, energy market, in particular from the sun, wind, biomass and building a complete value chain of a hydrogen-based economy, which creates opportunities to build a new stream of revenues for Polsat Plus Group and will bring tangible social benefits in the form of greenhouse gas emissions reduction
•	growth of revenue from produced and purchased video content by expanding its distribution, including a search for new channels of exploitation of rights, maintaining the audience shares of channels produced by us
•	use of opportunities arising from the advancing technological changes and market opportunities to expand the scope of our products and services		•	analysis of additional development opportunities in other prospective directions
•	effective management of the cost base of our integrated capital group by exploiting its inherent synergies and economies of scale
•	effective management of the Group’s finances, including its capital resources

Growth of revenue from services provided to individual and business customers through the consistent building of our customer base value by maximizing the number of users of our services as well as the number of services offered to each customer and simultaneously increasing average revenue per user (ARPU) and maintaining a high level of customer satisfaction

Our goal is to effectively build revenue from the sale of products, services and commodities to our customers. By actively predicting new trends and reacting to the occurring market changes, we will continue to create products that will satisfy the evolving needs of our customers.

The factor that will have a positive impact on revenue is the possibility of cross-selling our existing and future products and services to the customer base of Polsat Plus Group. We create a unique portfolio of products and services which is targeted at customer bases of companies composing our Group. Properly addressed, both through the sale of additional single products or a multiplay offer, this potential may gradually increase the number of services per individual user, thus increasing revenue per customer and at the same time favorably impacting the level of satisfaction of our customers.

The integrated services market in Poland is still developing, especially outside big cities and therefore it has substantial growth potential. We intend to continue expanding our portfolio of products and services, relying both on own projects, as well as on strategic alliances or acquisitions. We trust that a comprehensive and unique offer of combined services (television offered in diversified access technologies including a model based on online applications, mobile Internet based in particular on the cutting-edge 5G technology, high-speed fixed broadband with high throughputs and voice services) and the possibility of up-selling additional services (e.g. premium content services, entertainment services as well as other services or solutions for the home), when provided via diversified distribution platforms, will be decisive from the point of view of our competitive edge. It will also enable us to retain our existing customer base and offer an opportunity to acquire new customers on the pay TV, telecommunication and energy markets as well as in the area of other services for the home and for individual and business customers.

Growth of revenue from produced and purchased video content by expanding its distribution, including a search for new channels of exploitation of rights and maintaining the audience shares of the channels that we produce

The channels we produce and broadcast enjoy strong, well-established positions on the Polish TV and high ratings in their respective target groups. Our goal is to maintain our audience share at a stable level and consistently enhance our viewer profile. We believe that by making sensible investments in programming and wider distribution of our own content we will be able to gradually improve our viewer profile. This in turn will have a positive effect on the pricing of advertising airtime that we offer.

The second crucial element in building the segment's value is the widest possible distribution of produced and purchased TV content, both in terms of the customer groups it reaches (FTA, pay TV and online access) and the technologies they use (terrestrial, satellite, Internet, mobile). We want to invest in development and build the market position of our content brands, which will then be distributed via a number of channels adjusted to the evolving needs of our customers. These efforts, in our opinion, will not only allow us to maximize benefits of the wide-scale distribution of our video content, but will also ensure a higher level of satisfaction among our customers and viewers, who will have more freedom to decide what, where and when to watch.

Use of opportunities arising from the advancing technological changes and market opportunities to expand the scope of our products and services

We seek to offer wide accessibility to our products and services to each of our existing and potential new customers. Therefore, beside the continuous development of technologies which have built the scale of our company in the past, we pay attention to the development of new products which are meant to facilitate the availability of our content and the services we offer. For everyone. Everywhere.

The intertwining of the telecommunication and media worlds, in particular the wide availability of high-speed mobile transfer technologies as well as the constantly improving quality of fixed-broadband connections, allows us to develop equipment and technologies which break the limitations with regard to accessibility or ownership of certain telecommunication infrastructure. The OTT (over-the-top) technologies are expanding distribution markets for content producers and we intend to actively leverage on that. We invest in new technologies, equipment and applications, and we pursue opportunities to enter strategic alliances or acquisitions, with a view to facilitating access to the content we produce for our customers. We also intend to leverage on the changes on the Polish content market and take advantage of the opportunities presented by the evolving needs and expectations of Polish consumers, as well as changes in the ways of media consumption triggered by cutting-edge data transmission technologies to offer our customers an extensive range of services adjusted to their needs and expectations. By developing our content and telecommunication offer and expanding it to include complementary products and services, we seek to acquire new customers, build ARPU and improve customer satisfaction and loyalty.

An effective combination of telecommunication and content products provides new opportunities for distribution of content. Thanks to this combination, attractive content and a wide range of our services can be delivered through a variety of reliable distribution channels – via satellite (DTH), digital terrestrial television (DVB-T2 HEVC), Internet television (OTT), Internet platforms, applications and portals (video online), mobile (5G, LTE Advanced and LTE) and fixed-line (IPTV) technologies – to all consumer devices from TV sets through PCs and tablets to smartphones.

Modern technology advancement is also a critical factor contributing to the transition in our country towards clean, zero and low-emission energy. We want to be an active participant of this transition. We intend to take advantage of emerging market opportunities and invest in technological innovations because we believe that they are essential to accelerate the energy transition and decarbonization in Poland. We set ourselves ambitious goals with respect to the construction of zero and low-emission sources of electric energy that on the one hand constitute an opportunity to continue the development of our business in the mid and long-term, and on the other support the sustainable development of the Polish society and economy.

Concurrently, we will analyse in detail emerging market and investment opportunities, such as investments in unique real estate or prospective business projects that have potential to generate high rates of return in the mid-term. We believe that such projects present an attractive opportunity to invest available funds.

Building a position on the clean energy market, in particular from the sun, wind, biomass and building a complete value chain of a hydrogen-based economy, which creates opportunities to build a new stream of revenues for Polsat Plus Group and brings tangible social benefits in the form of greenhouse gas emissions reduction

With a view to strengthening our unique offer of integrated services we have decided to establish a new, third strategic pillar based on clean energy. We believe that the transition towards clean, zero and low-emission energy in Poland is a perfect moment to enter this prospective market by new players and creates new development possibilities for Polsat Plus Group. We believe that investments in the development of clean, renewable energy sources constitute a practical implementation of the ESG concept and can bring our Group, our Stakeholders and the local society tangible economic and social benefits, in particular in the form of greenhouse gas emissions reduction. Our investment plan foresees the installation of capacity between 2022 and 2026 that will enable the production of nearly 2 TWh of clean energy, which will contribute to the reduction of greenhouse gas emissions by almost 2 million tons of CO2 equivalent annually.

We want to build a new stream of revenue from the sale of clean energy to business and individual customers. We expect that demand for clean energy in Poland will exhibit a strong, upward trend in the following years. This trend will be supported by a set of factors, including the consistent regulatory policy implemented at the European Union level and directed at achieving climate neutrality by 2050, the changing geopolitical situation and increasing demand for energy resulting from Poland’s economic growth. To build and successively strengthen our position on the energy market in Poland we intend to invest in projects related to the production of energy from wind farms, photovoltaics and biomass. We also want to invest in the future by building a complete value chain of a hydrogen-based economy, which may contribute significantly to the reduction of harmful substance emissions (including CO2).

Effective management of the cost base of our capital group by exploiting its inherent synergies and economies of scale

We are convinced that building a closely integrated group that combines connectivity, content and energy services offers an opportunity for tangible synergies and for securing significant competitive advantages. We implement numerous projects aimed at simplifying the Group’s structure by integrating relevant teams and harmonizing business processes and IT systems in the entire Group, which enables us to achieve tangible cost synergies. On a continuous basis we pursue optimization efforts aimed at adapting our cost base to current market conditions and our Group’s situation.

We believe that our engagement in the clean energy sector will also generate sizeable synergies and in the mid- and long-term will support operating in-line with a sustainable business-model. In particular, access to clean energy at lower prices will allow us to further optimize the costs of our operating activities and will also help us strengthen our relationships with B2B and B2C customers interested in purchasing clean energy, which will have a positive impact on the results of our strategy.

Effective management of the Group’s finances, including its capital resources

Our financial policy and capital resources management policy define the method of using funds generated from our operations. To guarantee the continuity and stability of the Group’s operations the generated free cash flow is used in the first place for financing current operations and for investments indispensable for the development of the Group. Simultaneously, we continually exploit arising development possibilities and investment opportunities, which allow us to make our products and services more attractive, provide new methods of their distribution or create additional value for our Shareholders.

Our capital resources management policy assumes maintaining a balance between leveraging on emerging market and investment opportunities and regular dividend payouts to Shareholders of the Company. Concurrently, we intend to maintain the indebtedness of Polsat Plus Group at a safe level, ensuring an optimal structure of financing of our operating activities using debt financing.

1.3.        Development prospects

Development prospects in the B2C and B2B services segment

As the largest media and telecommunications group in Poland we have gathered under one roof all the key assets which allow us to offer customers a unique portfolio of products and services. In line with our strategy, we focus on marketing and sales activities aimed at cross-selling standalone products and services to the customer base of Polsat Plus Group and at selling our bundled services offer. We see our future development path in this strategy. We think that along with the development of modern fixed-line and nationwide radio infrastructures, connectivity will continue to shape not only the telecommunications market but also the content distribution market.

We develop our portfolio of integrated services. In our opinion, the Polish bundled services market has significant growth potential, particularly in less urbanised areas. Our customers are increasingly interested in bundled services, a trend reflected in the very good sales results of our bundled services offer. We are convinced that our combination of telecommunication services, including high quality broadband Internet access in both 5G as well as fibre optic technologies, with pay TV and other services for home and office will allow us to benefit from the growth potential of the Polish bundled services market. By increasing the number of services sold to each customer we can generate growth of average revenue per customer (ARPU) and effectively increase our customers’ loyalty as reflected by the churn rate. 

We expand the reach of fixed broadband Internet. We currently reach ca. 3.4 million households in Poland with our own fixed-line access infrastructure. In addition, cooperation with fixed-line network operators extended the coverage of Plus fixed-line Internet to nearly 11 million households. Currently, more than 8.5 million households have access to Plus fibre Internet with a capacity of up to 1 Gbps. We believe that the expansion of Plus' fibre optic coverage will strengthen our position in the telecommunications market by enabling further development of our bundled service offering and will contribute to customer retention and a reduction in the churn rate.

We address our convergent offering to new target groups. We use our infrastructure and cooperation with wholesale operators of fibre optic network to expand the reach of services provided by Polsat Plus Group in fixed-line technologies. We develop new TV products, such as, for example, television in IPTV and OTT technologies, which, in our opinion, will become an attractive alternative to offers of cable operators. We are of the opinion that assets owned by Polsat Plus Group, such as a widespread sales network and own advertising channels, shall allow us to achieve satisfying sales results on our fixed-line services while maintaining cost efficiency of operations.

We consistently strengthen our market position as the aggregator and distributor of content. We offer a unique, hard to duplicate and at the same time highly attractive content, which distinguishes us in the pay TV market. The content we offer and wide range of Polsat Plus Group’s services are delivered through a variety of reliable distribution channels – via satellite (DTH), digital terrestrial television (DVB-T2 HEVC), 5G and LTE mobile technologies and fixed-line technologies (FTTH, HFC, ETTH, xDSL, OTT, IPTV) – to all consumer devices, from TV sets and PCs to tablets and smartphones. We closely study the evolution of our customers’ expectations and work to satisfy their growing needs. We focus on building the IPTV and OTT pay TV offers as we believe it represents a significant step in Polsat Plus Group’s continued development on the pay TV market. The services live up to customers’ expectations by offering an access to a wide range of the unique content in flexible tariff plans and short subscription periods.

Development prospects in the media segment

We are the leading group on the Polish TV broadcasting market in terms of audience shares, advertising revenue and advertising market share. At the same time, Polsat Media, our advertising sales office, is currently the largest broker on the television market with 94 TV channels in its portfolio and full advertising service of Interia.pl Group web services.

The audience shares of thematic channels are growing continuously as the process of fragmentation of the Polish television market continues to progress. We view this as an opportunity to strengthen our broad portfolio of channels for the whole family, expanding and strengthening our distribution network on cable and satellite operator platforms, both in the B2C and B2B segments. We own the largest pay TV customer base in Poland, which gives us a competitive advantage. We believe that our presence on all significant satellite platforms and distribution by cable TV operators will result in maintaining high audience shares of our channels, which will allow us to grow at least in line with the TV advertising market and increase revenues from cable and satellite operators.

Our strategy is aimed at the widest possible distribution of content using the latest devices and technologies. We monetize our content through distribution via our Polsat Box Go online video service which is one of the leading streaming platforms in Poland, as well as through Internet portals belonging to the Group, particularly those associated with Interia.pl. In parallel, we are open to partnerships and cooperation with other entities distributing TV channels either in the traditional or online pay TV models. As a result, Polsat Plus Group’s TV channels are available in the offers of the majority of cable, satellite or IPTV operators in Poland. In addition, access to our Polsat Box Go service, which offers TV Polsat channels, can also be found in the offer of selected telecommunication operators who prefer to build their content offerings in the OTT application model. The wholesale sales of content produced by Telewizja Polsat’s channels represents a significant and increasing revenue stream of the media segment.

We invest in the attractiveness of our TV channels by continuously building our viewers’ profile. We place great weight on offering content in Telewizja Polsat’s channels that meets preferences of viewers from our target groups. We constantly invest in producing the most attractive entertainment, film or news content and, simultaneously, we closely monitor the market of sports rights and film licenses. These actions are aimed at maintaining high viewership of our channels while building an attractive, from the advertisers’ perspective, profile of our viewers. We also believe that thanks to possible synergies within the largest integrated media and telecommunication group in Poland in fields such as purchase of content, distribution, sales and marketing, we are able to strengthen our position on the broadcasting and television production market.

We expand our presence on the media market beyond the TV segment. We expand thematic portals which use the unique content produced by our TV channels and dedicated editorial offices. We invest in the development of our portals, especially “Polsatnews.pl” and “Polsatsport.pl”. In turn, Interia.pl Group, acquired by us in July 2020, is the leading player on the Polish online media market. Following the acquisition of Interia we became one of the key entities on the Polish online and television advertising market, offering unique marketing and cross-media solutions. In parallel, we believe that strengthening the cooperation between Telewizja Polsat - a top video content producer, Interia.pl Group - a leading entity on the online media market in the country and Polsat Media – the largest broker on the Polish advertising market, will bring additional synergies solidifying our position on the perspective online advertising market.

Development prospects in the green energy segment

Growing demand for clean energy. We expect demand for clean energy in Poland to show a strong upward trend in the coming years. This development will be supported by several factors, in particular a consistent climate policy of the European Union aimed at achieving climate neutrality by 2050, the changing geopolitical situation, growing demand for electricity resulting from the economic development of our country, as well as Increasing restrictions on the use of conventional energy sources. An additional factor supporting the development of the RES sector is the ‘Energy Policy of Poland until 2040’, which envisages increasing the share of RES in gross final energy consumption to at least 23% in 2030.

Development of installed RES capacity. In order to build and successively strengthen our position on the clean energy market in Poland we invest in projects focused on energy production from wind, solar and biomass. At the end of 2024, the Group had a total of 337.5 MW of installed capacity, of which 150.1 MW were onshore wind farms, 105 MW were biomass units, and 82.4 MW were photovoltaic farms. The Drzeżewo and Dobra wind farm projects, currently under construction, will double the installed capacity in wind power over the next year, significantly increasing the potential for clean energy generation.

We expect that the renewable energy projects implemented as part of Strategy 2023+ will allow us to achieve production capacities of 1.7 TWh by the end of 2026 and generate approximately PLN 500 million EBITDA with lower investment expenditures than originally anticipated. The production of clean green energy by Polsat Plus Group will contribute to the reduction of greenhouse gas emissions by nearly 2 million tonnes of CO2 equivalent annually.

Development of a green hydrogen value chain. The realisation of the complete green hydrogen value chain within Polsat Plus Group is in line with the objectives of the "Polish Hydrogen Strategy until 2030 with an outlook to 2040", the "Hydrogen Strategy for a Climate Neutral Europe", in particular the strategic direction to achieve carbon neutrality in the European Union. Interest in the use of zero emission hydrogen is growing worldwide. Hydrogen is used as a raw material, as a fuel, as an energy carrier and as an energy store. Hydrogen has the potential to decarbonise a number of economic sectors, in particular the transport sector, by providing an ultra-pure fuel with no harmful emissions to the atmosphere. As part of the RepowerEU strategy for affordable, secure and sustainable energy, the European Commission wants to further accelerate the development of the renewable hydrogen market. According to this plan, the EU should increase the production of hydrogen from renewable sources to 20 megatonnes per year by 2030, up from the 10 megatonnes per year proposed in the 2020 hydrogen strategy.

Development prospects in the real estate segment

The entire concept of Port Praski perfectly meets the needs of modern users – both individual and business. The location, the highest level of urban planning and architecture, including the consideration of sustainable development trends, as well as the high quality of execution, make Port Praski one of the most attractive investments in the real estate segment in Poland.

In 2025, we continue the process of designing and obtaining administrative decisions that will enable the implementation of further residential investments in Port Praski. Among them is a building at Krowia 1-3 Street, with a total residential area of approximately 7.3 thousand m2, which we plan to complete in the second half of 2027.

Preparatory work on the Doki investment is underway, which we plan to complete based on the Act on the preparation and implementation of housing investments and accompanying investments. In 2024, we conducted a dialogue process about this investment with local stakeholders, and we are currently continuing design work, which also includes public areas located right by the water. According to current plans, the Doki residential complex consists of 1,270 apartments in 10 buildings with a total usable floor area of approx. 65.5 thousand m2.

We are continuing the adaptation of a historic building at Okrzei street for the needs of a four-star AC Hotel Warsaw Port Praski hotel from the Marriott International chain. The planned completion date for this project is the end of 2026.

We have started work on the concept of an office building at Sierakowskiego street, for which building conditions have been issued. For subsequent office buildings – planned in the Citi area – we will strive to implement them in accordance with the conditions specified in the new local spatial development plan for this area of Warsaw, which is currently being developed.

The pace of investment implementation in the Port Praski area, as well as their exact characteristics, will depend significantly on the pace of obtaining the necessary approvals and administrative permits.

1.4.        Composition and structure of Polsat Plus Group

The following table presents the companies from Polsat Plus Group as at specific dates, indicating the consolidation method.

Company	Registered office	Activity	Share in voting rights (%)(1) as at
			December 31, 2024	December 31, 2023
B2C and B2B services segment
Parent Company
Cyfrowy Polsat S.A.	Łubinowa 4a, 03-878 Warsaw	radio, TV and telecommunication activities	n/a	n/a
Subsidiaries consolidated using the full consolidation method
Polkomtel Sp. z o.o.	Konstruktorska 4, 02-673 Warsaw	telecommunication activities	100%	100%
Polkomtel Business Development Sp. z o.o.	Konstruktorska 4, 02-673 Warsaw	other activities supporting financial services, gaseous fuels trading activities	100%	100%
Premium Mobile Sp. z o.o.	Al. Stanów Zjednoczonych 61A, 04-028 Warsaw	telecommunication activities	100%	100%
Saveadvisor Sp. z o.o.	Warszawska 18, 35-205 Rzeszów	call center services	-	100%
Liberty Poland S.A.	Al. Stanów Zjednoczonych 61, 04-028 Warsaw	telecommunication activities	100%	100%
Interphone Service Sp. z o.o.	Inwestorów 8, 39-300 Mielec	production of set-top boxes	100%	100%
Sferia S.A.	Al. Stanów Zjednoczonych 61A, 04-028 Warsaw	telecommunication activities	51%	51%
Teleaudio Dwa Sp. z o.o. Sp.k.	Al. Stanów Zjednoczonych 61, 04-028 Warsaw	call center and premium-rate services	100%	100%
Netia S.A.	Poleczki 13, 02-822 Warsaw	telecommunication activities	100%	100%
Netia 2 Sp. z o.o.	Poleczki 13, 02-822 Warsaw	telecommunication activities	100%	100%
TK Telekom Sp. z o.o.	Kijowska 10/12A, 03-743 Warsaw	telecommunication activities	100%	100%
Petrotel Sp. z o.o.	Chemików 7, 09-411 Płock	telecommunication activities	100%	100%
Enterpol Sp. z o.o.	Braci Wieniawskich 5, 20-844 Lublin	telecommunication activities	-	100%
Oktawave S.A.	Poleczki 13, 02-822 Warsaw	website management	100%	100%
Plus Finanse Sp. z o.o.	Konstruktorska 4, 02-673 Warsaw	other monetary intermediation	100%	100%
Plus Pay Sp. z o.o.	Konstruktorska 4, 02-673 Warsaw	monetary intermediation	100%	100%
Esoleo Sp. z o.o.	Al. Wyścigowa 6, 02-681 Warsaw	technical services	100%	51.25%
Alledo Express Sp. z o.o.	Broniwoja 3/85, 02-655 Warsaw	rental services	100%	51.25%
Alledo Parts Sp. z o.o.	Broniwoja 3/85, 02-655 Warsaw	wholesale	100%	51.25%
Alledo Parts Sp. z o.o. Sp.k.	Broniwoja 3/85, 02-655 Warsaw	wholesale	100%	51.25%
Alledo Setup Sp. z o.o.	Broniwoja 3/85, 02-655 Warsaw	technical services	100%	51.25%
Alledo Setup Sp. z o.o. Sp.k.	Broniwoja 3/85, 02-655 Warsaw	technical services	100%	51.25%
CPSPV1 Sp. z o.o.	Łubinowa 4a, 03-878 Warsaw	technical services	-	100%
CPSPV2 Sp. z o.o.	Łubinowa 4a, 03-878 Warsaw	technical services	-	100%
Orsen Holding Ltd.	Level 2 West, Mercury Tower, Elia Zammit Street, St. Julian’s STJ 3155, Malta	holding activities	100%	100%
Orsen Ltd.	Level 2 West, Mercury Tower, Elia Zammit Street, St. Julian’s STJ 3155, Malta	holding activities	100%	100%
Dwa Sp. z o.o.	Al. Stanów Zjednoczonych 61, 04-028 Warsaw	holding activities	100%	100%
IB 1 FIZAN	Mokotowska 49, 00-542 Warsaw	finance activities	(2)	(2)
Altalog Sp. z o.o.	Al. Stanów Zjednoczonych 61A, 04-028 Warsaw	software	66%	66%
Plus Flota Sp. z o.o.	Konstruktorska 4, 02-673 Warsaw	management and rental services	100%	100%
Netshare Media Group Sp. z o.o.	Ostrobramska 77, 04-175 Warsaw	advertising activities	100%	100%
BCAST Sp. z o.o.	Rakowiecka 41/21, 02-521 Warsaw	telecommunication activities	80.01%	70.02%
INFO-TV-FM Sp. z o.o.	Łubinowa 4a, 03-878 Warsaw	radio and television activities	100%	100%
Stork 5 Sp. z o.o.	Łubinowa 4A, 03-878 Warszawa	holding activities	100%	100%
Swan 5 Sp. z o.o.	Łubinowa 4A, 03-878 Warszawa	agriculture activities	100%	100%
Vindix S.A.	Al. Stanów Zjednoczonych 61A, 04-028 Warsaw	other financial services	100%	100%
Vindix Investments Sp. z o. o.	Al. Stanów Zjednoczonych 61A, 04-028 Warsaw	other financial services	100%	100%
Direct Collection Sp. z o.o.	Al. Stanów Zjednoczonych 61A, 04-028 Warsaw	other financial services	100%	100%
Vindix Sp. z o.o.	Heroiv UPA 73 ż, 79018, Lviv	call center services	100%	100%
Vindix NSFIZ	Mokotowska 49, 00-542 Warsaw	financial services	(2)	(2)
Mag7soft Sp. z o.o.	Al. Stanów Zjednoczonych 61A, 04-028 Warsaw	software activities	100%	100%

Media segment: television and online
Subsidiaries consolidated using the full consolidation method
Telewizja Polsat Sp. z o.o.	Ostrobramska 77, 04-175 Warsaw	television broadcasting and production	100%	100%
Polsat Media Sp. z o.o.	Ostrobramska 77, 04-175 Warsaw	media	100%	100%
Polsat License Ltd.	Alte Landstrasse 17, 8863 Buttikon, Switzerland	media	100%	100%
Polsat Investments Ltd.	3, Krinou Agios Athanasios, 4103 Limassol, Cyprus	media	100%	100%
Polsat Ltd.	238A King Street, W6 0RF London, Great Britain	media	100%	100%
Muzo.fm Sp. z o.o.	Al. Stanów Zjednoczonych 61A, 04-028 Warsaw	media	-	100%
Eleven Sports Network Sp. z o.o.	Plac Europejski 2, 00-844 Warsaw	media	100%	100%
TV Spektrum Sp. z o.o.	Ostrobramska 77,  04-175 Warsaw	media	100%	100%
TVO Sp. z o.o.	Kielecka 5, 81-303 Gdynia	retail sales	75.96%	75.96%
Grupa Interia.pl Sp. z o.o.	Os. Teatralne 9a,  31-946 Cracow	holding activities	100%	100%
Interia.pl Sp. z o.o.	Os. Teatralne 9a,  31-946 Cracow	web portals activities	100%	100%
Mobiem Polska Sp. z o.o. in liquidation	Fabryczna 5a, 00-446 Warsaw	holding activities	100%	100%
Mobiem Sp. z o.o.	Fabryczna 5a, 00-446 Warsaw	advertising activities	100%	100%
Polot Media Sp. z o.o.	Solskiego 55, 52-401 Wrocław	consulting	60%	60%
Polot Media Sp. z o.o. Sp.k.	Solskiego 55, 52-401 Wrocław	movie and TV production	60%	60%
Polsat Talenty Sp. z o.o.	Ostrobramska 77, 04-175 Warsaw	cooperation with artists and presenters	100%	100%
Antyweb Sp. z o.o.	Sarmacka 12C/14, 02-972 Warsaw	web portals activities	79.88%	79.88%
naEKRANIE.pl Sp. z o.o.	Fabryczna 5a, 00-446 Warsaw	media	60%	60%
4FUN Sp. z o.o.	Fabryczna 5a, 00-446 Warsaw	media	60%	60%
Subsidiaries consolidated using the equity method
Polski Operator Telewizyjny Sp. z o.o.	Wiertnicza 166, 02-952 Warsaw	technical services	50%	50%
Polsat Boxing Promotion Sp. z o.o.	Ostrobramska 77, 04-175 Warsaw	movie and TV production	24%	24%
Green Energy segment
Subsidiaries consolidated using the full consolidation method
PAK-Polska Czysta Energia Sp. z o. o.	Kazimierska 45, 62-510 Konin	holding activity	50.5%	50.5%
PAK-PCE Człuchów Sp. z o.o.	Kazimierska 45, 62-510 Konin	production of electricity	50.5%	50.5%
PAK-PCE Farma Wiatrowa Okonek Sp. z o.o.	Kazimierska 45, 62-510 Konin	holding activity	-	50.5%
PAK-PCE Farma Wiatrowa Jastrowie Sp. z o.o.	Kazimierska 45, 62-510 Konin	holding activity	-	50.5%
Eviva Lębork Sp. z o.o.	Kazimierska 45, 62-510 Konin	production of electricity	-	50.5%
Eviva Drzeżewo Sp. z o.o.	Kazimierska 45, 62-510 Konin	production of electricity	50.5%	50.5%
MESE Sp. z o.o.	Al. Stanów Zjednoczonych 61A, 04-028 Warsaw	movie and TV production	-	55.45%
PCE OZE 1 Sp. z o.o.	Kazimierska 45, 62-510 Konin	production of electricity	50.5%	50.5%
PCE OZE 2 Sp. z o.o.	Kazimierska 45, 62-510 Konin	production of electricity	50.5%	50.5%
PCE OZE 3 Sp. z o.o.	Kazimierska 45, 62-510 Konin	production of electricity	50.5%	50.5%
PCE OZE 4 Sp. z o.o.	Kazimierska 45, 62-510 Konin	production of electricity	50.5%	50.5%
PCE OZE 6 Sp. z o.o.	Kazimierska 45, 62-510 Konin	production of electricity	50.5%	50.5%
Exion Hydrogen Polskie Elektrolizery Sp. z o.o.	Ku Ujściu 19, 80-701 Gdańsk	manufacture of electrical equipment	50.4%	50.4%
Exion Hydrogen Belgium BV	Slachthuisstraat 120, bus 12, 2300 Turnhout Belgia	manufacture of electrical equipment	50.4%	50.4%
PAK-PCE Fotowoltaika Sp. z o.o.	Kazimierska 45, 62-510 Konin	production of electricity	50.5%	50.5%
PAK-VOLT S.A.	Al. Stanów Zjednoczonych 61A, 04-028 Warszawa	trade of electricity	50.5%	50.5%
PG Hydrogen Sp. z o.o.	Konstruktorska 4, 02-673 Warsaw	manufacture of engines and turbines	26.26%	26.26%
PAK-PCE Biopaliwa i Wodór Sp. z o.o.	Przemysłowa 158, 62-510 Konin	production of electricity	50.5%	50.5%
PAK-PCE Wiatr Sp. z o.o.	Kazimierska 45, 62-510 Konin	production of electricity	50.5%	50.5%
PAK-PCE Polski Autobus Wodorowy Sp. z o.o.	Kazimierska 45, 62-510 Konin	manufacture of buses	50.5%	50.5%
PAK-PCE Stacje H2 Sp. z o.o.	Kazimierska 45, 62-510 Konin	retail sale of hydrogen	50.5%	50.5%
PAK-PCE Przyrów Sp. z o.o.	Częstochowska 7A, 42-248 Przyrów	production of electricity	50.5%	50.5%
PAK-PCE Dobra Sp. z o.o.	Kazimierska 45, 62-510 Konin	production of electricity	50.5%	50.5%
PAK-PCE Kazimierz Biskupi Sp. z o.o.	Kazimierska 45, 62-510 Konin	production of electricity	50.5%	50.5%
PAK-PCE Miłosław  Sp. z o.o.	Al. Wojska Polskiego 68, 70-479 Szczecin	production of electricity	50.5%	50.5%
Global Continental Sp. z o.o.	Legionów 18, 97-200 Tomaszów Mazowiecki	production of electricity	50.5%	-
Real Estate segment
Subsidiaries consolidated using the full consolidation method
Port Praski Sp. z o.o.	Krowia 6, 03-711 Warsaw	implementation of construction projects	66.94%	66.94%
Port Praski Nowe Inwestycje Sp. z o.o.	Krowia 6, 03-711 Warsaw	real estate management	66.94%	66.94%
Port Praski Office Park Sp. z o.o.	Krowia 6, 03-711 Warsaw	implementation of construction projects	77.52%	77.52%
Port Praski City Sp. z o.o.	Krowia 6, 03-711 Warsaw	implementation of construction projects	77.52%	77.52%
Port Praski City III Sp. z o.o.	Krowia 6, 03-711 Warsaw	implementation of construction projects	77.52%	77.52%
Port Praski City IV Sp. z o.o.	Krowia 6, 03-711 Warsaw	implementation of construction projects	77.52%	77.52%
Port Praski Sp. z o.o. S.K.A.	Krowia 6, 03-711 Warsaw	implementation of construction projects	77.52%	77.52%
Port Praski Education Sp. z o.o.	Krowia 6, 03-711 Warsaw	implementation of construction projects	77.52%	77.52%
Port Praski Doki Sp. z o.o.	Krowia 6, 03-711 Warsaw	implementation of construction projects	77.52%	77.52%
Port Praski Doki II Sp. z o.o.	Krowia 6, 03-711 Warsaw	implementation of construction projects	77.52%	77.52%
Port Praski Media Park Sp. z o.o.	Krowia 6, 03-711 Warsaw	implementation of construction projects	77.52%	77.52%
Port Praski II Sp. z o.o.	Krowia 6, 03-711 Warsaw	implementation of construction projects	77.52%	77.52%
Port Praski Hotel Sp. z o.o.	Krowia 6, 03-711 Warsaw	hotel services	77.52%	77.52%
Pantanomo Limited	3 KRINOU, Limassol 4103, Cypr	holding activities	77.52%	77.52%
Port Praski Medical Center Sp. z o.o.	Postępu 14, 02-676 Warsaw	implementation of construction projects	77.52%	77.52%
Port Praski City II Sp. z o.o.	Postępu 14, 02-676 Warsaw	implementation of construction projects	77.52%	77.52%
Laris Investments Sp. z o.o.	Pańska 77/79, 00-834 Warsaw	real estate rental	66.94%	66.94%
Laris Development Sp. z o.o.	Pańska 77/79, 00-834 Warsaw	implementation of construction projects	66.94%	66.94%
Laris Technologies Sp. z o.o.	Pańska 77/79, 00-834 Warsaw	property rental and management	66.94%	66.94%
SPV Baletowa Sp. z o.o.	Pańska 77/79, 00-834 Warsaw	implementation of construction projects	-	66.94%
Megadex Development Sp. z o.o.	Gdańska 14/1 01-691 Warsaw	property rental and management	-	66.94%
Megadex Expo Sp. z o.o.	Adama Mickiewicza 63, 01-625 Warsaw	property rental and management	66.94%	66.94%
Centrum Zdrowia i Relaksu Verano Sp. z o.o.	Sikorskiego 8, 78-100 Kołobrzeg	hotel services	66.94%	66.94%
Subsidiaries consolidated using the equity method
Pollytag S.A.	Wielopole 6, 80-556 Gdańsk	sale of wood and construction materials	31.12%	31.12%

(1)     Including direct and indirect shares.

(2)     Cyfrowy Polsat indirectly holds 100% of certificates.

Additionally, the following entities were included in the consolidated financial statements for 2024:

Company	Registered office	Activity	Share in voting rights (%) as at
			December 31, 2024	December 31, 2023
Karpacka Telewizja Kablowa Sp. z o.o.(2)	Warszawska 220, 26-600 Radom	dormant	99%	99%
Polskie Badania Internetu Sp. z o.o. (3)	Al. Jerozolimskie 65/79, 00-697 Warsaw	web portals activities	21.43%	21.43%
Asseco Poland S.A.	Olchowa 14, 35-322 Rzeszów	software activities	10,13%	10,13%
Pluszak Sp. z o.o.	Domaniewska 47, 02-672 Warsaw	retail sales	9%	9%
Towerlink Poland Sp. z o.o.	Marcina Kasprzaka 4, 01-211 Warsaw	telecommunication activities	0.01%	0.01%
Megadex SPV Sp. z o.o.	Adama Mickiewicza 63, 01-625 Warsaw	other financial services	7.02%	7.02%
Neo Energia Przykona X             Sp. z o.o.	Franciszka Klimczaka 1, 02-797 Warsaw	other consulting	0.51%	-
Energia Przykona Sp. z o.o.	Franciszka Klimczaka 1, 02-797 Warsaw	electricity distribution	0.51%	-
Stocznia Remontowa Nauta S.A.	Budowniczych 10, 81-336 Gdynia	repair and maintenance of ships and boats	0.03%	0.03%

(1)     Investment accounted for at cost less any accumulated impairment losses.

(2)    Not material and therefore not included into the valuation using the equity method.

Changes in the organizational structure of Polsat Plus Group and their effects

From January 1, 2024 until the date of publication of this Report, i.e. April 10, 2025, changes presented in the table below were implemented in the structure of Polsat Plus Group.

Date	Description
B2C and B2B services segment
January 5, 2024	Merger of Netia S.A. (acquiring company) with Enterpol Sp. z o.o. (acquired company)
March 14, 2024	Acquisition of additional 10% of shares in BCAST Sp. z o.o. by Cyfrowy Polsat. Following this transaction, Cyfrowy Polsat S.A. holds 80.01% of shares in BCAST Sp. z o.o.
April 30, 2024	Merger of Polkomtel Business Development Sp. z o.o. (acquiring company) with CPSPV1 Sp. z o.o. and CPSPV2 Sp. z o.o. (acquired companies)
August 30, 2024	Merger of Premium Mobile Sp. z o.o. (acquiring company) with Saveadvisor Sp. z o.o. (acquired company)
December 5, 2024	Acquisition of 48.75% of shares in Esoleo Sp. z o.o. by Cyfrowy Polsat
January 17, 2025	Acquisition of 100% of shares in Archiplex Sp. z o.o. by Cyfrowy Polsat
January 31, 2025	Disposal of 100% of shares in Alledo Express Sp. z o.o. by Esoleo Sp. z o.o.
January 31, 2025	Disposal of ca.10.0% of shares in Asseco Poland S.A. by Cyfrowy Polsat
February 5, 2025	Disposal of 0.13% of shares in Asseco Poland S.A. by Cyfrowy Polsat
Media segment
March 27, 2024	Disposal of 100% of shares in Muzo.fm Sp. z o.o. by Telewizja Polsat
January 17, 2025	Application for deletion of Mobiem Polska Sp. z o.o. in liquidation from the register of entrepreneurs
Green energy segment
January 3, 2024	Merger of Eviva Drzeżewo Sp. z o.o. (acquiring company) with Eviva Lębork Sp. z o.o. (acquired company)
January 31, 2024	Merger of PAK-PCE Wiatr Sp. z o.o. (acquiring company) with PAK-PCE FW Jastrowie Sp. z o.o., PAK-PCE FW Okonek Sp. z o.o. and Mese Sp. z o.o. (acquired companies)
June 27, 2024	Acquisition of 1% of shares in Energia Przykona Sp. z o.o. by PAK-Polska Czysta Energia Sp. z o.o.
June 27, 2024	Acquisition of 1% of shares in Neo Energia Przykona X Sp. z o.o. by PAK-Polska Czysta Energia Sp. z o.o.
November 4, 2024	Acquisition of 100% of shares in Global Continental Sp. z o.o. by PAK-Polska Czysta Energia Sp. z o.o.
Real estate segment
January 18, 2024	Merger of Laris Development Sp. z o.o. (acquiring company) with SPV Baletowa Sp. z o.o. (acquired company)
October 15, 2024	Merger of Megadex Development Sp. z o.o. (acquiring company) with Megadex Expo Sp. z o.o. (acquired company)
December 30, 2024	Merger of Laris Investments Sp. z o.o. (acquiring company) with Megadex Development Sp. z o.o. (acquired company)

The changes described above are the effect of the systematically executed process of steady optimization of the capital structure of the Group. The changes in the Group’s structure entail, among other things, improved efficiency of financial management on the consolidated level through the simplification and streamlining of intragroup financial flows and the elimination of redundant costs.

2.   Our business

2.1.        Our products and services

2.1.1.     B2C and B2B services segment

In the B2C and B2B services segment, we offer a wide range of high-quality pay TV and telecommunications services to individual and business customers and we also conduct operations on the telecommunications wholesale market.

Services for individual customers

Bundling of services is one of the strongest trends on the Polish media and telecommunications market. In keeping with the rapidly changing market environment and customers’ expectations, seeking media and telecommunications services at affordable prices from a single operator with one contract, one bill and one fee, we consistently implement our multiplay strategy, we are consistently implementing our multiplay strategy, which allows us to bundle our core products and services of pay TV, telephony and broadband Internet access with additional services and products in a simple and flexible manner. The successful implementation of the multiplay strategy supports the maintenance of a high level of customer loyalty, thereby reducing the churn rate and contributing to an increase in the average revenue per user.

Pay TV and online video. We are the leading pay TV provider in Poland. We provide pay TV services under the ‘Polsat Box’, ‘Netia’ and ‘Polsat Box Go’ brands in all available technologies such as satellite (DTH), Internet (IPTV and OTT) and terrestrial (in DVB-T2 HEVC standard). In addition, we provide additional services aimed at building customer value such as paid premium content channels (Polsat Sport Premium and Eleven Sports), our OTT platform Polsat Box Go, access to the Disney+ (under a subscription contract), Max and FilmBox platforms, online video services, Multiroom, catch-up TV and nPVR services.

Our programming strategy is to offer a wide range of channels that appeal to the whole family at attractive prices. Our customers have access to over 160 TV channels which focus on diverse topics: general, sports, movie, lifestyle, education, music, news/information and children’s channels. The contract pay TV satellite services consist of basic packages, which vary in the number of available channels and additional services depending on the subscription amount, and are offered for a fixed period of time, usually 24 months, with the possibility of renting high quality decoders line. We also offer the opportunity to purchase add-on packages, including premium content packages, which are available for a fixed or indefinite period of time, providing freedom to customize the offering.

The Group's programming offer, as well as content from external producers and broadcasters, is also available through our Polsat Box Go service and application, which are adapted to the main operating systems and a wide range of consumer devices. Polsat Box Go provides users with content in one of two paid models. The first one is single access, in which the customer pays a fixed amount for the opportunity to view a specific material. The second model includes access to packages of materials and/or channels in return for a monthly access fee. Due to the flexibility of the offer, Polsat Box Go subscriptions are considered as prepaid services.

We provide pay TV services based on a long-term contract with Eutelsat S.A. regarding the use of capacity on eight transponders on Hot Bird satellites. Our broadcasting centre located in Warsaw enables us to transmit TV channels in SD, HD and 4K quality. We also have a backup broadcasting centre located in Radom, which guarantees broadcasting continuity. Access to TV channels offered in our DTH pay TV packages is secured by conditional access systems (CAS) from Nagravision SA and Irdeto B.V. Moreover, Irdeto secures digital content transmitted using DVB-T2 and IPTV technologies. Furthermore, Irdeto provides us with specialized and complete monitoring of the Internet enabling the collection and analysis of occurrences that may infringe copyrights of entities in our Group.

Mobile voice services are provided by us mainly through our subsidiary Polkomtel, Plus network operator and one of the leading Polish telecommunications operators, under the Plus umbrella brand as well as under the Plush, Premium Mobile, Netia and a2mobile brands. The offer for individual contract customers is standardized and includes a variety of tariff plans. As part of the monthly subscription fee, the customer receives unlimited calls, SMS and MMS, as well as tariff-based data packages or additional minutes, SMS and GB for roaming. To complement our core offering, we have an extensive portfolio of value-added services (VAS). Contracts are concluded for a fixed period, usually 24 months, although the Plush sub-brand and the Premium Mobile offer also allow customers to conclude contracts for an indefinite period. Our contract mobile offering is complemented by an extensive portfolio of smartphones supporting 5G, LTE Advanced and LTE technologies offered in an instalment plan.

Prepaid voice offers allow our customers to access the mobile network after purchasing and registering the appropriate starter (SIM card with an allocated amount to use for mobile services). With prepaid offers, there are no fixed monthly commitments and customers only need to top up their accounts when they want to use the services.

Fixed-line voice services are provided under the Netia and Plus brands based mainly on the landline infrastructure of our subsidiary Netia. The dedicated retail offering of fixed-line telephony includes both business customers, including institutions, medium and large enterprises and small companies, as well as individual customers.

We offer broadband Internet access services in both mobile technology, under the Plus, Premium Mobile and Netia brands, and fixed line technology, under the Netia and Plus brands, based on the wireline infrastructure of our subsidiary Netia and wholesale access to the wireline networks of other operators. Our Internet access service offering is universal in nature, providing access to the Internet via all mobile or fixed technologies supported by the network for a single subscription fee.

Mobile Internet is offered by us under the Plus, Premium Mobile, Plush and Netia brands in both postpaid and prepaid contract models. Almost 100% of Poles are covered by our LTE Plus Internet service, nearly 70% by 5G and over 45% by 5G Ultra networks. Dedicated contract tariff plans offer basic mobile broadband Internet access. These contract plans are based on a monthly subscription and allow for a defined data transmission limit. Under our contract plans customers may purchase or lease Internet access devices (including dongle modems, fixed and mobile routers, Home Internet Sets). In addition, our offer includes tablets laptops and other devices, which can be purchased in an instalment plan, as well as tariffs without equipment. Contracts are concluded for a fixed term, usually for 24 months.

We also offer tariffs based on a prepaid model which allow customers to receive a specific data package, whose size and period of validity are determined by the value of the top-up.

Plus has a range of 5G routers to meet different needs, from mobile routers to home routers and ODU-IDU (Outdoor Unit Indoor Unit) solutions. With the Home Internet Set available in our range, we can offer our customers a product based on wireless technology that constitutes a substitute for fixed-line Internet. The Home Internet Set works perfectly in non-typical locations where the signal strength is low, as well as in all the places where no fixed-line access to the Internet is offered via cable connection. Based on a special technical solution ODU-IDU, the Home Internet Set consists of an external modem (ODU) and an internal Wi-Fi router (IDU). The signal is transmitted over a cable from the ODU modem to a Wi-Fi IDU router, which distributes the signal to all the rooms ensuring wireless access to the Internet. This solution provides better network coverage and, as a result, higher transfer quality than traditional modems and routers.

Fixed-line Internet access in provided by us under the Netia and Plus brands, based on the wireline infrastructure of our subsidiary Netia and wholesale access to the wireline networks of other operators. The reach of Netia's own network extends to 3.4 million households and when taking into account agreements for wholesale access to fixed-line networks with Orange Polska, Światłowód Inwestycje, Nexera, Tauron, Fibrehost, Vectra and Polski światłowód Otwarty we are able to reach about 11 million households/address points. Over 8.5 million households already have access to a connection speed of at least 1 Gbps.

The fixed-line Internet offer includes access to high-speed Internet, provided mostly in fibre optic technologies. The service is provided in four technologies depending on the available infrastructure: copper (CU), Ethernet (ETTH), cable (HFC) and fibre optic (PON). Offer varies depending on speed and additional options selected, including TV, mobile and streaming services.

Retail sales channels. Retail customers can buy our services and products from our physical sales network, which as of December 31, 2024, consisted of 791 points of sale located throughout the country. We also carry out sales to retail customers through online sales channels and our call centres available 24/7.

Customer service. In a highly competitive market, the quality of customer service is an important factor that often determines the choice of a particular operator and therefore we consistently improve the quality of our customer service using the latest technologies. The core of customer service is the call centre. It consists of eight separate centres integrated through a system of intelligent call distribution, providing 24-hour customer service on all days of the year. Within the Group, we have about 1,650 telephone desks and about 920 back-office desks for handling written and electronic requests (including handling technical requests). We are actively developing alternative channels of contact through social media, chat and online forums.

We also provide customer service using advanced self-service solutions to manage subscriber accounts in a effective and efficient way. These solutions are offered in a form of such online services and mobile applications as iPolsatBox, iPlus and Netia Online. These tools provide a 24-hour access to functionalities facilitating the management of telecommunications services, such as information on billing, current offers, current usage, they allow to purchase additional packages and services, effect online payments and modify contact details. Moreover, our services include a technical support section, FAQs, an online contact form and an online communication channel.

Customer retention. The aim of the customer retention process is to increase the loyalty of subscribers, reduce the turnover of our own base and the churn rate, i.e. to effectively secure and build revenue from Polsat Plus Group's customer base. Thanks to our extensive analytical tools, we learn about the needs of our customers and use this knowledge to develop dedicated proactive and reactive processes that are implemented as part of customer retention. Retention can be implemented at any time and through any sales channel.

With the aim of maximising revenue from the base, we start our retention process as early as during the contract period by proposing changes to the contract terms to customers. In addition, through our broad product portfolio, we consistently seek to bundle customers by up-selling other services available within the Group's portfolio.

Solutions for business customers

Under the Plus and Netia brands, we offer business customers comprehensive solutions tailored to the needs of each industry. Our offer is aimed at all business segments, and our services support the operations of large business entities (corporations, state institutions), small and medium-sized businesses, and SOHO (Small Office / Home Office).

The Group's B2B division has an extensive sales structure that ensures convenient contact and efficient implementation of services. Our customers are supported by business experts dedicated to serving individual entities, and the implementation of advanced solutions and technologies is carried out by experienced engineers.

The broad B2B portfolio enables reliable and secure connectivity and modern business practices for both internal resource management and customer contact management. The portfolio of services for business customers includes, among others, telephony services, mobile and fixed broadband access, digital leased lines, VPN and Ethernet networks and data centre services, cybersecurity solutions (antyDDoS, UTM) and IT outsourcing (physical colocation and cloud services), IP telephony services with cloud virtual private branch exchange, integrated communications services and video communications. We also implement cutting-edge Internet of Things solutions, including a dedicated nationwide narrow-band IoT (NBIoT) wireless network that enables data collection in hard-to-reach or limited range locations.

Based on regular analysis, we are implementing further solutions that allow companies to become modern and technological enterprises. In 2024, we were the first operator in Poland to introduce Ericsson's 5G independent private campus networks, ensuring the highest levels of security, speed and reliability of operation. In 2024, we also implemented one of the most modern platforms in the Polish market for the implementation of the call recording (Nagrywanie Rozmów) service, which is a key system for the financial sector.

Wholesale business on telecommunication market

As part of our wholesale business we offer network interconnection, international and national roaming, services to MVNOs, shared access to network assets, lease of network infrastructure, as well as other telecommunications services provided to other telecommunications companies in Poland and abroad.

Exchange of traffic between operators (network interconnection). Our telecommunications infrastructure used in interconnection cooperation enables us to effectively manage telecommunications traffic routing from and to networks of all operators domestically and abroad. As at December 31, 2024, Polkomtel was party to 23 interconnection agreements with national and foreign operators with respect to voice calls. Such a number of interconnection relations allows for reducing our costs of call termination in the networks of other operators, while maintaining the highest quality of telecommunication services for our end-users with respect to traffic, both initiated and terminated in our network.

In 2024, we implemented new, lower rates of wholesale settlements in all our interconnection relations following the implementation of uniform maximum Union-wide mobile voice termination rates (MTR). In parallel, just as in previous years, active steps were taken in relations with domestic and foreign operators to reduce the costs of wholesale termination of voice calls and text messages incurred by us.

In 2024, Polkomtel has actively increased the number of agreements for the purchase of wholesale access to local loops in the networks of fixed operators under the Bitsream Access model, which enables the provision of retail Internet access services based on the fixed access infrastructure of other operators. In 2024 the coverage of the fixed Internet access service was extended by the access networks of Vectra S.A. and Tauron Obsługa Klienta Sp. z o.o.

In connection with the entry into force of the Act on the Prevention of Abuse of Electronic Communications, Polkomtel, in cooperation with the other mobile operators in Poland, implemented and launched globally unique solutions to prevent telecommunication abuse in the area of voice calls and text messages (SMS) - phishing, smishing, CLI spoofing. Thanks to these solutions, Polkomtel subscribers received additional protection against receiving voice calls in which the person initiating the call pretends to be someone else by changing the subscriber number displayed on the phone of the person receiving the call. On the other hand, in the area of SMS, the solutions adopted aim to protect users against fraudulent use of the SMS service, such as phishing and smishing, and consist in blocking SMS with content defined by the CSIRT NASK as being used for telecommunications fraud. At the same time, in cooperation with the CSIRT NASK, additional control rules are applied to the sender identification overrides used when sending text messages.

International roaming. Within our wholesale business we provide international roaming services to foreign mobile operators that allow customers of foreign mobile telecommunications network operators to use mobile telecommunications services (voice calls, texting and multimedia messages (SMSs and MMSs) and data transmission) when logged to our network and outside their home network. We also enter into international roaming wholesale agreements to provide, both to our own customers and the customers of MVNOs’ partners operating on our network, international roaming services in the networks of our roaming partners.

As present, Polkomtel offers roaming services in 546 networks in 232 countries and regions as well as on ships, ferries and aircraft decks. Fast Internet access (LTE) is possible in 458 networks in 204 countries. Polkomtel’s customers may use services in 5G in 234 networks in 105 countries.

Due to the shutting down of 2G and 3G services by roaming partners, and to provide our customers with high quality voice roaming connection, we continue to open VoLTE roaming, in which voice calls are made using LTE technology. The service is currently available on 83 networks in 45 countries, including the US. This improves the quality of service for our subscribers and reduces wholesale roaming costs due to the elimination of voice call termination costs.

Virtual operators (MVNOs). We provide operators present in Poland with wholesale access to our mobile telecommunications network based on all network technologies available to Plus subscribers, such as 5G, VoLTE and VoWIFI, both domestically and on international roaming. This type of cooperation is used mainly by operators who do not own complete technical infrastructure required to provide telecommunications services (including frequency allocations). Polkomtel was the first mobile operator in Poland to open its network to MVNOs (already in 2006) and since then it sustains the leading position in this telecommunications market segment. MVNO business is an important part of Polsat Plus Group's wholesale sales. Currently, more than 1 million end users use the Polkomtel network through MVNO partners' offers.

As part of the cooperation with MVNOs, we provide wholesale services including voice calls, text messaging (SMS) and data transmission (including MMS services), premium rate services, value-added services, international roaming (including 5G and VOLTE roaming), services provided to specific governmental authorities and agencies, hosting services on our billing platform, MVNO customer support, handling claims of MVNOs’ customers, access to SIM cards, eSIM terminals and Plus’s telephone card recharging sales channels as well as other services resulting from the needs and selected technical model of cooperation.

Technology and infrastructure of telecommunication services

Mobile Network. Our mobile telecommunication network enables nationwide access to a number of various technologies, including GSM/GPRS/EDGE (2G technologies), UMTS/HSPA +/HSPA + Dual Carrier (3G technologies), LTE/LTE Advanced (4G technologies) and the most modern 5G technology. We provide these services based on frequency bands and a core network owned by our subsidiary Polkomtel, while in the radio and transmission area we closely cooperate with Towerlink Poland, a member of the Spanish Cellnex Group with whom we entered into an agreement in July 2021 to sell 99.99% of the shares of our subsidiary Polkomtel Infrastruktura.

The Master Services Agreement signed by us was concluded for 25 years, with an option of extension for additional 15-year periods. Under the terms of the agreement, the mobile telecommunications network used by us is developed in the radio and transmission areas using services provided by Towerlink Poland. These services provide access to infrastructure enabling our customers to use all currently available technologies based on all frequency bands held by us. Towerlink Poland’s monthly remuneration is dependent mainly on the number of sites and active infrastructure systems used within the active layer of the infrastructure and on new orders for additional services. In parallel to the service agreement, a detailed Service Level Agreement has been concluded, which ensures the highest quality both in terms of implementing new network projects and maintaining the existing services provided to Polsat Plus Group. Effective enforcement of the quality parameters required by the SLA is possible at the level of the systems monitoring the condition of the network on an ongoing basis contained in our core network, which remains the property of Polsat Plus Group. This allows us to continuously provide our customers with the highest quality of service.

Our core network ensures central handling of customer services, integrating them for the 2G/3G/4G/5G technologies (Single Core). In this way, we are able to provide customers with access to our services irrespective of the radio technology applied, enabling an evolutionary transition of voice services from 2G (GSM), through 3G (including higher quality voice services), to 4G (with voice services based on CSFB or VoLTE) and 5G. The same strategy is used for data transmission services, enabling customers to use the broadband Internet access both in the 3G (HSPA+, HSPA+ Dual Carrier) as well as the 4G (LTE/LTE Advanced) and 5G (2600 MHz TDD) networks. The core network architecture facilitates effective and easy capacity expansion to match the growth of the customer base and increased service demand.

Telecommunications frequency reservations are the Group's key intangible assets which enable us to provide mobile voice and mobile Internet access services. Network parameters such as signal coverage and throughput are dependent on the frequency reservations held. These parameters are critical to the quality of mobile services provided and therefore have an impact on our ability to acquire and retain customers, shape our offering and the level of revenue from sales. Mobile services are at the core of our offering to individual and business customers, particularly our bundled services, around which the Group is building a multiplay strategy focused on building customer value and revenue growth.

Currently, there is no regulatory requirement to hold a license to provide mobile telecommunications services and the right to use frequencies results from issued frequency allocation decisions and can be extended for further periods by the President of the Office of Electronic Communications (UKE). Within our B2C and B2B services segment, based on frequency allocations issued by the President of UKE our subsidiary Polkomtel is entitled to use frequencies in the 900 MHz, 1800 MHz, 2100 MHz, 2600 MHz FDD and TDD, 420 MHz and 3600 MHz bands (for more details see item 2.2.1. – Mobile telephony market in Poland). All frequency allocations are technology neutral and can also be used to provide services in each of the technologies currently in use (2G, 3G, 4G or 5G).

Fixed-line network. Our fixed-line network is based on DWDM transport, which in its backbone layer contains 260 nodes, including 200 nodes with automatic GMPLS protection/restoration, thus guarantying very high level of network reliability. The maximum throughput of a single DWDM span is 34TB. The modern DWDM network is characterized by higher channel throughout and band capacity which ensures links with speeds of 100G/200G/400G/600G and ultra-low latency, and can carry 1.2TB channels. The network is equipped with automatic fault location diagnostics (GPS coordinates) with integrated OTDR components, which enables significant reduction of fault clearing time.

There are over 600 DWDM/CWDM access nodes enabling connections to end users in metropolitan networks and to B2B customers in operation.

As part of the DWDM transmission network, international links to Frankfurt, Berlin, Prague and Lviv were launched, and DWDM access to the main data centres in Poland was provided. Additionally, our transmission network has the possibility of encrypting client connections and establishing virtual transport networks for other operators.

The IP layer of our network is based on 8 backbone nodes which provide interconnection points to Tier1 operators, XSP operators, IP traffic exchange points, content providers and Cloud infrastructure. The IP backbone aggregates Carrier Ethernet traffic, B2C customer traffic and its own CDN for the purposes of the IPTV services provided by Polsat Plus Group.

The Carrier Ethernet layer, based on IP MPLS technology, consists of 180 distribution routers connected by 100G lines and over 3,000 access switches with 10G ports. This allows us to reach customers throughout the country and abroad with our services. Within the Carrier Ethernet network we provide services compliant with MEF CE 2.0 certification/standard.

We provide Internet access services for B2C customers via our own access network comprising 1,400 DSLAM access nodes (in xDSL and SuperVector technologies), two metropolitan areas with the cable HFC network (DOCSIS 3.x), nearly 12,500 access switches performing ETTH access and 840 FTTH nodes. Currently, we are in the process of upgrading our access network based on two main fibre optic technologies: FTTH (Fibre to the Home, i.e. fibre optic access to every apartment) using GPON (passive optical network) technology and FTTB (Fibre to the Building), in which fibre reaches every building and subscriber access is provided using Gigabit Ethernet technology.

2.1.2.     Media segment: television and online

Broadcasting and television production

Our offering. Our activities in broadcasting and television production include primarily production, acquisition and broadcasting of information, sports and entertainment programs as well as TV series and feature films broadcast on television channels. Our portfolio comprises 43 own channels including our flagship channel POLSAT. Moreover, there is a group of 5 cooperating channels which are related with Polsat Plus Group either by capital links or joint broadcasting projects. The Group’s channels are delivered both over multiplexes in the terrestrial network (free of charge) and over cable, satellite or IP network (paid).

We have a portfolio of channels that appeal to key audience segments, we maintain a strong position in the news television segment and a leading position in sports programming. Our offer is addressed to the entire family. With a view to maintaining our overall audience and advertising market share, we focus on developing our portfolio of thematic channels and increasing the appeal of the content we offer to our viewers.

Scheduling. We tailor our programs and programming schedules to the interests of the group, that considering its demographic characteristics, we believe is most attractive to advertisers as well as to maintain viewer loyalty. It is especially important in the time slot between early afternoon and ‘prime time’, which is the period of highest viewership. To achieve this goal, each day (from Monday to Friday) we plan stable slots so that the viewer can remember the programming scheme of the channel. This strategy is implemented between 3pm and 8pm. A strong line-up of movies, reality shows, talent shows and popular series dominates after 8 pm.

Our scheduling is based on two schedules that are key from the point of view of generating advertising revenue: the spring (March-May) and autumn (September-November) schedules. That is when we broadcast premieres. In the summer and winter, we schedule mainly re-runs of the content premiering in the high season, although recently it has become an increasingly common custom to introduce premieres into the programming offer also outside the regular season scheduling.

Sources of Polish programming. We aim to diversify sources of Polish content, enabling us to efficiently manage production costs. Thanks to that we can choose those offers from a wide range of proposals which are both attractive and cost-effective in order to ensure successful scheduling. In case of formats owned by us, we cooperate with external producers, both Polish and foreign ones.

Polish programs are primarily commissioned to independent external producers. However, we also create programs in-house. Approximately 60% of our programming hours consist of Polish content.

Programs supported by in-house production include news and journalistic programs as well as special events. Also, sports channels, which are based primarily on the broadcasting of sports events for which we have acquired the rights, are produced with TV Polsat's own resources. As a leading commercial broadcaster and content creator, Telewizja Polsat uses the latest technologies and equipment.

We have the largest production facilities in Poland, including, most importantly, 7 state-of-the-art TV studios, 3 shooting halls with a surface area of 1200 m2, 1600 m2 and 2400 m2, a fleet of digital broadcast trucks adapted to produce major sporting and performing events, modern satellite trucks for transmitting TV signals directly from venues, comprehensive IT systems to support program production, data storage, framed graphics generation, program library maintenance and license management.

Commissioned programs are sub-contracted, when justifiable, to third-party production companies to provide us with additional support for implementing them and avoid increasing overhead costs. In most cases we use a standard template for all production contracts. When the production of TV programs is commissioned to external producers, the contracts generally include the transfer of ownership of the work to TV Polsat. The producer’s fees include production fees as well as fees for the transfer of copyrights, related intellectual property rights to the program (or, alternatively, for granting the license) and for granted authorizations and consents. All production and license agreements have definite terms, the number of reruns within the Group, typically covering the time of production with the possibility for extensions.

Sources of foreign programming. We purchase programming licenses from foreign providers primarily for films, series and sports. The purchase of foreign formats for local productions, both entertainment and feature films, is done with an eye toward the possibility of broadcasting on different antennas. Our key partners for movie and series licenses are the world’s major movie studios. Usually, these contracts have terms of two to three years as well as for film packages and are denominated in U.S. dollars or euro. We acquire broadcasting rights under one of two types of contractual arrangements. The first are volume contracts, which involve the acquisition of a specified volume of films or series, while the second constitute spot contracts. In both cases, the negotiations involve specific titles.

Purchase of sports broadcasting rights. We acquire sports rights by participating in a bidding process or tender contest. The duration of license contracts usually relates to playing seasons for each event. Typically, they are concluded for a 3-year term on the territory of Poland and denominated in euro. We leverage the acquired sports rights by offering broadcasts to our viewers and subscribers, including on specially created dedicated Polsat Sport Premium channels and Eleven Sports Network sports channels. In addition, the sports content is sold as program packages to pay TV operators active on the Polish market as well as directly to customers through OTT applications (among others, ELEVEN SPORTS and Polsat Box Go).

Important sports licenses purchased by the Group include broadcasting rights to the football and volleyball competitions. We offer football fans broadcasts of the Europa League and the UEFA Conference League matches, qualifiers to the UEFA European Championships and the FIFA World Championships as well as the football Nations League. As for volleyball, we offer the biggest and most prestigious volleyball tournaments – the men’s and women’s World Volleyball Championships, games of the volleyball Nations League, the men’s and women’s Europe Volleyball Championships, the club volleyball competitions of Polish Plus Liga and Tauron Liga and volleyball matches of CEV Champions League and other European cups involving Polish volleyball teams.

Through our subsidiary Eleven Sports Network we have access to attractive sports rights which include, among others, the prestigious Formula 1® races, as well as the Spanish LALIGA EA SPORTS, the French Ligue 1 McDonald's, the German Bundesliga and DFB-Pokal, Liga Portugal, the Belgian Jupiler Pro League and speedway matches of the Polish PGE Ekstraliga.

We also have a strong position in tennis: we broadcast the prestigious Grand Slam tournament at Wimbledon, all the men's ATP tournaments and the national team competition in the United Cup (with Iga Swiatek and Hubert Hurkacz). We also offer boxing and mixed martial arts galas (UFC, FEN, Babilon), competition between the world's best female and male athletes in the Diamond League and World Athletics Series, the thrilling MotoGP motor racing competition and many other disciplines.

Under the existing agreement with the International Volleyball Federation FIVB until 2032 we will broadcast the most important events in the world and national team volleyball. The package of acquired rights includes the Volleyball Nations League (260 matches in total during the season) and men’s and women’s World Championship, which starting from 2025 will be held every two years.

Furthermore, we have been holding broadcasting rights purchased from PLPS (Polish Professional Volleyball League) to Plus League and Tauron League matches already for a decade. In 2020, we extended this contract for another four seasons until 2027/2028.

In the area of other sports, we concluded, among others, an agreement with Handball Association in Poland for Polish national team matches and the Polish Handball Cup. We also have an agreement for the broadcast of ORLEN Super League and ORLEN Women's Super League handball matches, the license agreement with the Polish Basketball League for the broadcast of the Energa Basket League until the end of the 2029/2030 season and acquired exclusive rights to broadcast the Ice Hockey World Championship.

Programming assets. Programming assets include acquired formats, licences and broadcasting rights to films, series, news and entertainment programmes, capitalised costs of our outsourced program production, capitalised rights to sports events and advances (including advances for sports rights). Program assets form the basis of the Group's program offering and have a significant impact on the level of advertising revenues and revenues from the sale of channels to cable and satellite operators. 

Sale of advertising and sponsoring on the TV market

We offer the sale of spots in commercial blocks and program sponsorship in the form of presented sponsorship boards placed on program trailers, before and after the resumption of the program after a commercial break or at the end of the program.

Advertising time is sold in a form of GRP sales and monthly rate-card sales. GRP sales are based on delivering a specified audience to the advertiser based on viewership results. The valuation of the service is based on fixed price per one rating point. Rate-card sales are based on a broadcaster’s official rate-card for individual advertising breaks. The terms of cooperation with customers include negotiation of prices per GRP point (for individual months) and discounts depending on the declared amount of annual expenses.

Sponsor projects are sold throughout the year on the basis of a project created together with a client. Prices and discount conditions are negotiated individually for each customer and each sponsor campaign.

Forecasts of advertising break audience are prepared for each month based on the overall TV audience, the channel’s share in the overall audience and seasonality (prices of commercials are highest from October to November, before Christmas season, and lowest from January to February and from July to August). In 2024, rate-card sales accounted for 67.5% of all advertising sales on our main channel, POLSAT.

In turn, pricing of sponsoring is based on the relevance of the subject matter of the program to the sponsor’s needs and the target group, the quality of our programs, recognition of brands and the attractiveness of the broadcast slot. As a result, sponsorship revenue is not directly dependent on the economy, as is the case with advertising revenue. 

TV channels of Polsat Plus Group

Channel	Description	Signal distribution	Technical reach 2024 (1)
POLSAT	The main channel, broadcast since December 5, 1992, was the first commercial channel in Poland to obtain a nationwide license for analogue broadcasting. POLSAT is one of the leading Polish TV channels in terms of shares in the commercial audience group. POLSAT broadcasts daily, 24/7. The channel is available via digital terrestrial TV on the second multiplex (MUX-2) and on local multiplexes (MUX-L4 and MUX-TVS). The channel features a broad selection of films, entertainment shows, news and commentaries, Polish and foreign TV series, as well as popular sporting events.	terrestrial / cable/ satellite	98.4%
General interest
Super Polsat	Channel offering entertainment and information programs, movies, series and live sports coverage.	terrestrial / cable/ satellite	97.5%
Polsat 1	Channel addressed to Poles living abroad, broadcasts various productions from the libraries of the channels: Polsat, TV4, Polsat Cafe and Polsat Play.	satellite	n/a
Polsat 2	Channel broadcasting reruns of programs that premiered on our other channels.	cable/ satellite	75.1%
TV4	Nationwide entertainment channel, the programming offer of which includes feature movies, series, entertainment and popular science programs.	terrestrial / cable/ satellite	99.6%
TV6	Nationwide entertainment channel broadcasting popular foreign formats, as well as series, entertainment programs and feature movies from Polsat’s library.	terrestrial / cable/ satellite	97.7%
Nowa TV	Universal TV channel airing lifestyle programs, series, news, journalistic shows and cabaret skits.	terrestrial / cable/ satellite	95.0%
Polsat X	Universal TV channel. Its diversified programming offer includes movies and documentaries as well as entertainment shows. Around 75% of airing time is occupied by program reruns.	satellite	n/a
Polsat Reality	Universal TV channel. Its diversified programming offer includes movies and documentaries as well as entertainment shows. Around 75% of airing time is occupied by program reruns.	satellite	n/a
Sports
Polsat Sport 1	The first sports channel of Polsat Plus Group broadcasting major sports events in Poland and worldwide (volleyball, athletics, football, world class boxing and MMA contests), which include live broadcasts.	cable/ satellite	59.4%
Polsat Sport 2	The channel broadcasts volleyball matches (including the Tauron 1st League), football (including the Dutch Eredivisie and the American MLS), basketball or tournaments from the ATP series.	cable/ satellite	50.4%
Polsat Sport 3	The channel is an extension of Polsat Sport 1 and Polsat Sport 2. Viewers can watch all the most popular sports, with football, volleyball, martial arts and tennis in the forefront.	cable/ satellite	46.7%
Polsat Sport Fight	Channel dedicated to martial arts, broadcasting, among others, professional boxing galas and mixed martial arts, as well as coverages of Polsat Boxing Night.	satellite	39.9%
Eleven Sports 1 Eleven Sports 1 4K	Sports channel dedicated mainly to football. The most interesting live events, matches from the best European leagues, championships and qualifying games. Eleven Sports 1 HD broadcasts 24 hours a day, in HD quality and with Polish commentary. Since November 2017 the channel is also available in 4K technology.	cable/ satellite	20.3%
Eleven Sports 2	Channel that broadcasts large sports events and offers sports fans premium quality entertainment. The channel broadcasts 24 hours a day, in HD quality and with Polish commentary.	cable/ satellite	20.4%
Eleven Sports 3	Channel offering the most important European football live matches. In addition, the channel presents documentary films about sports and reruns of the most interesting events broadcasted by the Eleven Sports 1 and Eleven Sports 2 channels.	cable/ satellite	n/a
Eleven Sports 4	Channel broadcasting large sports events, documentary films about sports and reruns of the most interesting events broadcasted by the Eleven Sports 1, Eleven Sports 2 and Eleven Sports 3 channels.	cable/ satellite	n/a
Polsat Sport Premium 1	Premium sports channel. Launched in August 2018 in connection with the Group’s acquisition of rights to the UEFA Champions League. The channel is offered in a package with four Polsat Sport Premium PPV services aired during matches. Broadcasts without ads, in Super HD quality.	satellite	n/a
Polsat Sport Premium 2	Premium sports channel. Launched in August 2018 in connection with the Group’s acquisition of rights to the UEFA Champions League. The channel is offered in a package with four Polsat Sport Premium PPV services aired during \ matches. Broadcasts without ads, in Super HD quality.	satellite	n/a
Movies
Polsat Film	Movie channel broadcasting movie hits from the libraries of major US movie studios as well as non-mainstream movies.	cable/ satellite	67.4%
Polsat Film 2	Movie channel, an extension to Polsat Film’s programming offer airing movies, documentaries, cartoons and series. Around 65% of airing time is occupied by program reruns.	satellite	n/a
Polsat Seriale	Channel created for and dedicated to women. The programming offer includes feature movies as well as popular Polish and foreign series.	cable/ satellite	62.0%
Music
Eska TV	Music and entertainment channel broadcasting the latest music clips, exclusive interviews, gossip about show biz stars and information about musical events. Available in digital terrestrial television.	terrestrial / cable/ satellite	97.6%
Eska TV Extra	Channel broadcasting recent hits and the greatest pop music hits of the last 20 years.	cable/ satellite	69.5%
Eska Rock TV	Channel offering music defined as mainstream pop-rock, classic rock and alternative rock.	cable/ satellite	59.1%
Polo TV	Channel broadcasting the greatest hits of disco polo and dance, coverage of the most famous festivals of disco dance, concerts and euro disco hits, italo disco and dance music from the 80s and the 90s. Available in digital terrestrial television.	terrestrial / cable/ satellite	97.7%
Polsat Music	Channel broadcasting rock and pop music as well as the best video clips, both classics and novelties.	cable/ satellite	63.3%
Vox Music TV	Music and entertainment channel broadcasting disco hits from the 80s and the 90s, italo disco, euro dance and disco polo. The channel’s programming offer also includes programs devoted to pop stars and hit lists.	cable/ satellite	68.6%
Disco Polo Music	Music channel broadcasting disco polo, dance and festive music.	cable/ satellite	64.8%
4FUN.TV	Music TV channel aimed at viewers interested in the latest trends. The channel is characterized by strong interaction with viewers. In the channel portfolio of the Group from July 2023.	cable/ satellite	71.6%
4FUN DANCE	Channel broadcasting Polish dance music - disco polo and dance. In the channel portfolio of the Group from July 2023.	cable/ satellite	70.2%
4FUN KIDS	Music educational and interactive channel for children. In the channel portfolio of the Group from July 2023.	cable/ satellite	70.1%

News
Polsat News		24-hour news and journalism channel broadcasting live shows and covering primarily news from Poland and key international events.	cable/ satellite	71.9%
Polsat News 2		News channel offering debates on politics, business and world economy, as well as programs on culture, society, current and international affairs.	cable/ satellite	69.0%
Wydarzenia24		News channel produced in cooperation with Polsat News, ‘Wydarzenia’ news service and Interia.pl portal. Provides the most up-to-date information about events in Poland and abroad. Available on digital terrestrial television from January 10, 2024.	terrestrial / cable/ satellite	75.0%
Polsat News Polityka		A news and current affairs channel broadcasting programs on Polish politics since January 10, 2024. Broadcasts live the proceedings of the Sejm, the Senate, press conferences, the work of committees, interviews with politicians.	cable/ satellite	86.8%
Lifestyle
Polsat Cafe		Channel dedicated to women, focusing on lifestyle, fashion and gossip as well as reality shows.	cable/ satellite	68.1%
Polsat Play		Channel dedicated to men, focusing on consumer gadgets, the automotive industry, angling. Presents historical facts, addresses social issues, shows the lives of ordinary people.	cable/ satellite	64.5%
Polsat Games		Channel dedicated to gamers. Addressed not only to fans of computer games or e-sports, but also to enthusiasts of new technologies and animation. The channel’s programming includes original gaming programs, coverage from e-sports tournaments, Japanese animated series and documentaries.	cable/ satellite	57.8%
Polsat Rodzina		Family channel for three generations: from children, via parents, to grandparents, and living anywhere in Poland. The channel helps to deal with challenges of the modern world. Its programming includes informative programs, educational cartoons, series and Christian matters programs.	cable/ satellite	50.0%
TV Okazje		Channel broadcasting 24 hours a day, dedicated to teleshopping and broadcasting spots that encourage shopping.	cable/ satellite	n/a
Popular science
Fokus TV		A popular science channel for the whole family. The channel's mission is to share knowledge in an entertaining and accessible way.	terrestrial / cable/ satellite	97.7%
Polsat Doku		Documentary channel broadcasting historical and scientific programs, addressed to viewers interested in the problems of today’s world, travel and nature.	cable/ satellite	55.8%
Channels cooperating with Cyfrowy Polsat Plus Group (non-consolidated)
CI Polsat	Criminal channel that takes its viewers to the world of crime providing insight into criminal laboratories, police archives and courtrooms. The channel is a joint project of Polsat Plus Group and A+E Networks UK.
Polsat Viasat Explore	Channel dedicated to men, simple-unusual people, who work hard and have fun while making their dreams come true. Polsat Viasat Explore operates based on cooperation with Viasat World.
Polsat Viasat Nature	Nature channel targeting the entire family, which allows viewers to accompany wildlife researchers, veterinary doctors and celebrities in their journeys developing knowledge on dangerous predators, domestic pets and wild animals from around the world. Polsat Viasat Nature operates based on cooperation with Viasat World.
Polsat Viasat History	Channel offering viewers a journey to the past through high-quality programs, that entertain and educate at the same time. The content features historical events that influenced world history. Polsat Viasat History operates based on cooperation with Viasat World.
Polsat Comedy Central Extra	Channel broadcasting Polish and foreign comedy series and cabaret programs, launched in March 2020 as a result of cooperation between TV Polsat and ViacomCBS (currently Paramount). Previously the channel was aired under the name Comedy Central Family.

(1)	Nielsen Media, average TV household coverage, arithmetic average of monthly coverage in 2024.

How do we distribute our Group's TV channels? We broadcast TV channels through digital terrestrial television (over free multiplexes), cable TV networks and digital satellite platforms (in particular, through our platform Polsat Box) and over IP networks (paid). Certain channels are available as online streams on our platform Polsat Box Go.

Broadcasting licenses. Broadcasting licenses are a key intangible asset in the Group’s business model, enabling us to distribute our televised programs. This, in turn, allows us to generate advertising revenue, thereby impacting our overall income levels. In our media segment, our subsidiary Television Polsat along with its subsidiaries disposes of broadcasting licenses for 44 channels, including 9 universal broadcasting licenses and 35 broadcasting licenses for thematic TV channels. Five broadcasting licenses are for terrestrial broadcasting only (POLSAT, TV4, Nowa TV, Fokus TV and Wydarzenia24 channels), four broadcasting licenses are for terrestrial broadcasting DTT and satellite broadcasting (Super Polsat, TV6, Polo TV and Eska TV channels) and the remaining broadcasting licenses are for satellite broadcasting only. Our broadcasting licenses were granted by the National Broadcasting Council (KRRiT). 

Terrestrial transmission. POLSAT, our main channel, and the channels Super Polsat, TV4 and TV6 are broadcast via a nationwide network of digital terrestrial transmitters within the MUX-2. Other channels of Polsat Plus Group, i.e. Eska TV, Polo TV and Fokus TV, are distributed by networks of transmitters within the MUX-1 multiplex, on which the channel Wydarzenia24 has been broadcast since January 10, 2024. POLSAT's main channel is also broadcast on local multiplexes: MUX-L4 and MUX-L7. In addition, our channel Nowa TV is broadcast on the nationwide MUX-8. MUX-4 is reserved for our subsidiary INFO-TV-FM, which uses it to broadcast TV and radio channels in the DVB-T2 standard as part of the encrypted Polsat Box package, including Polsat Sport, Polsat Sport Extra, Eleven Sports, Eurosport, Polsat News and others. Since January 10, 2024, the multiplex has been broadcasting the free-to-air news channel Polsat News Polityka, which replaced the channel Wydarzenia24. The remaining channels of Telewizja Polsat are broadcast via digital satellite platforms, cable TV networks and IPTV distributors.

Restrictions on programming and advertising. The Broadcasting Act also imposes certain restrictions on broadcasting time, the content of programming and advertising aired by Polish TV broadcasters. All of these restrictions are usually described in detail in the broadcasting licenses granted by the KRRiT. In particular, the restrictions are related to the percentage share of programming originally produced in the Polish language, obtained from independent producers and of European origin, protection of minor viewers  from inappropriate content, the identification, placement and total air time of commercials between and during other programming, as well as the placement of commercials for specific products.

Additionally, the Broadcasting Act imposes on broadcasters the duty to ensure that their media services are accessible to people with visual or hearing disabilities.

Internet media

Our offering. We develop thematic web portals which leverage on the unique content produced by our TV channels and dedicated editorial teams. Among portals established by us the most important role is played by the portals ‘PolsatNews.pl’ and ‘PolsatSport.pl’. We also develop the Polsat Box Go portal - a TV Everywhere service offering access to streaming linear channels and a wide range of VOD content, also available as a mobile application and on Smart TV. In turn, Interia.pl Group, acquired by us in July 2020, is a leading player on the Polish market of new generation media.

The portal ‘Interia.pl’, which belongs to the Group, is one of the three largest horizontal portals in Poland, comprising a multitude of thematic services. It provides with a vast selection of the highest quality information, entertainment, social and communication services. Currently, the Interia portfolio includes about 20 thematic websites dedicated to sports and economy events, ecology and nature, technology, automotive, weather, education, health and fashion tips, music and movies, and more as well as one of the country's first email services, with approximately 2.5 million monthly users. In addition, Interia Group includes a number of non-domain thematic websites, such as ‘Pomponik.pl’ (entertainment service), ‘Smaker.pl’ (culinary service) and ‘Deccoria.pl’ (interior and garden service). In parallel, thanks to the ‘Pogoda.Interia.pl‘ weather forecast service, which is one of the leaders in its category, we became one of top online weather forecast services in Poland.

Since the acquisition of Interia.pl Group, the monthly average number of page and app users for the combined Polsat-Interia media group increased from 18 million in the third quarter of 2020 to nearly 21 million in the fourth quarter of 2023. In the same period, the average monthly number of page and app views increased from about 1.5 billion to over 1.8 billion (data for the third quarter of 2020 according to the Gremius/PBI study; data for the fourth quarter of 2024 according to the Mediapanel study).

Sale of online advertising

Our Polsat Media advertising agency offers various types of online advertising, such as graphic (display) advertising, video advertising, email marketing, sponsored articles and influencer marketing.

There are two basic models of selling advertising space. In the direct model Polsat Media sells advertising space to an advertiser directly, and in the programmatic model advertising space is put up for auction in which a given advertisement can be purchased by any advertiser (open market) or by selected advertisers only (private marketplace).

Polsat Media sells advertisements in two payment settlement models. In the page view model, a customer purchases a defined number of advertisement issues or buys constant presence of the advertisement in a certain place of a website for a defined period of time. In the efficiency model, an advertiser pays only for specified actions of a user. In our case, the most commonly used performance model is the click-based model. The customer pays for a certain number of clicks on their ads on our sites, regardless of how many of their ads were displayed by us in total to achieve that goal. In case of non-standard formats, the prices are set individually.

•        Polsat Media Display - presentation of the advertising message through a variety of graphic forms, placed in strictly defined locations next to the Group's articles and editorial productions;

•        Polsat Media Video - the broadcast of TV video spots as advertisements that precede the airing of the actual video material. This form of advertising is characterized by high visibility and effectiveness;

•        Polsat Media Digital Audio - broadcasting audio spots before or during the broadcasts of the largest Polish radio stations that broadcast their programs on the Internet;

•        Polsat Media Mobile - an advertising network created from popular apps and games installed on users' end devices. By identifying these devices, the network has one of the most precise systems for targeting mobile ads in apps;

•        Adretail - Poland's largest platform for publishing digital advertising newspapers and catalogues based on advanced technological solutions in the field of cross-device user identification and online-to-offline conversion analysis;

•        PERFOads - performance campaign advertising service offering. It is based on the most popular display placements, email marketing and advertising feeds;

•        Polsat Media AdFusion - a comprehensive solution for advertisers that combines different advertising formats and billing models to allow more effective online campaigns, including the promotion of apps and increasing the number of visits to stationary shops.

Wholesale activities in the media segment

Sale of TV/online advertising and sponsorship. As part of our wholesale business, we sell advertising time on our own channels as well as on channels owned by other broadcasters. Revenue generated from selling advertising time is an essential source of revenue for the media segment (approximately 67% in 2024). Almost all of our advertising revenue is collected through our subsidiary Polsat Media, which acts as our advertising agent (sales house). Polsat Media is responsible for sales of our advertising time, sponsorship, campaign planning, after‑sales analysis, market research and analysis, development of new products and, most importantly, enhancing relationships with existing and potential advertisers.

In 2024, Polsat Media carried out the sale of advertising time on our TV channels and 57 channels of other broadcasters outside our Group. Polsat Media often works with international media houses that operate as intermediaries, negotiating purchase conditions and conducting campaigns for their customers. The sale of advertising time is carried out both through annual contracts entered into with media houses, as well as individual direct customers. Similarly to other nationwide broadcasters in Poland, Polsat Media has a stable group of advertisers that it works with.

In addition to providing advice on the scheduling of advertisements on our channels, Polsat Media sales force cooperates closely with advertisers to design special campaigns, such as sponsorship campaigns, product placement and related cross‑promotional opportunities.

Polsat Media also offers a comprehensive array of non-TV products, including: Polsat Media Online (video and display advertising) including comprehensive advertising services to Interia.pl Group, Polsat Media AdScreen (digital OOH media), Polsat Media AdTube (a platform which group popular Internet authors) and Polsat Media Digital Audio (audio advertising in the Internet).

Sale of broadcasting rights to TV channels. The second largest source of revenue in our media segment are agreements with cable TV networks and satellite TV operators to broadcast our channels, which comprised 28% of total revenue in this business segment in 2024. Our agreements with cable TV networks and satellite TV operators are generally non-exclusive licenses for the broadcasting of our channels. Under typical licenses, operators agree to pay us a monthly license fee, the amount of which generally depends on the number of customers who receive our programs. Our channels are distributed by the majority of Polish cable networks, including such operators as Vectra, UPC, Inea, Toya and by all major satellite platforms (with the exception of selected sports channels, which are exclusive to the Polsat Box Go platform), as well as using the IPTV technology (Polsat Box, Orange Polska, Netia) and selected OTT platforms.

2.1.3.     Green energy segment

We started operations in the green energy segment on July 3, 2023, when we acquired control of PAK-PCE and its subsidiaries. In the green energy segment, we are active in the production and trading of low- and zero-carbon energy from wind, photovoltaic and biomass sources. In addition, we are pursuing pioneering hydrogen projects, including the production of green hydrogen, the development of hydrogen infrastructure, and the construction and sale of hydrogen-powered buses.

Low- and zero-carbon energy production. In line with our strategy, we are investing in the development of renewable energy production capacity, which is carried out by special purpose companies concentrated within the structures of PAK-PCE Group.

As at the end of 2024, the Group's generation assets included a photovoltaic farm with capacity of 82.4 MWp and 4 wind farms with a total capacity of 150.1 MW. The Group's energy producer is also Biopaliwa i Wodór sp. z o.o., which uses 2 biomass units located in Konin with a total generating capacity of 105 MW (50 MW and 55 MW) to produce electricity and heat from biomass. At the same time, in accordance with the strategic assumptions, other RES projects are under construction - wind farms in Drzeżewo with capacity of 138.6 MW and Dobra with capacity of 7.8 MW.

One of the Group's biomass units benefits from a support program, the so-called green certificates, which in case of this unit is valid until 2027. The number of certificates received depends on the production level and is sold to other market participants, providing an additional source of revenue in the green energy segment. In addition, the latter of our biomass units has a power contract that allows it to generate revenue from the electricity market mechanism. The contract was concluded for a period of 17 years for a capacity of 40 MW at a base price of PLN 259.87/kW/year. The value of the concluded power contract for the first year of delivery in 2024 is PLN 10.4 million. In the case of the biomass unit currently benefiting from green certificate support, its participation in the capacity market mechanism will be possible after the end of the support period, i.e. from 2028. For this purpose, the unit takes part in annual capacity market auctions. So far, two auctions have been held for 2028 and 2029, in which a capacity contract was concluded for this unit.

Energy sales and trading. Electricity is sold and traded with the leading participation of our subsidiary PAK-VOLT S.A., which serves as the Group's energy hub. The main activities of PAK-VOLT include:

•        sale and commercial balancing of electricity and gaseous fuels to wholesale and final consumers (excluding households);

•        purchase and sale of electricity and guarantees of origin from low-carbon sources - biomass units owned by PAK-PCE Biopaliwa i Wodór Sp. z o.o;

•        purchase and sale of electricity and guarantees of origin from renewable sources - photovoltaic and wind farms owned, inter alia, by PAK-Polska Czysta Energia Sp. z o.o. under long-term Power Purchase Agreements (PPAs);

•        purchase of electricity from non-Group renewable sources - micro and small photovoltaic and cogeneration systems from end users;

•        trading of electricity and gaseous fuels on TGE S.A. and on the technical balancing market.

The concessions for the sale and trading of electricity and gaseous fuels are a key intangible asset in the Group's business model, enabling us to generate revenue from our green energy business.

PAK-VOLT's electricity trading activities are conducted on the basis of license No. OEE/171/9255/W/1/2/99/MS dated May 25, 1999, issued by decision of the President of the Energy Regulatory Office for the period from May 25, 1999 to December 31, 2030. The license allows the company to trade and sell electricity throughout the country.

The company also conducts business activities in the field of trading with gaseous fuels on the basis of concession No. OPG/223/9255/W/DRG/2013/MSa dated March 4, 2013, granted by decision of the President of the Energy Regulatory Office (URE) for the period from July 1, 2023 to December 31, 2030. The concession allows for the trading and sale of gaseous fuels throughout the country.

The green energy produced by the Group's renewable energy plants is sold mainly under bilateral power purchase agreements through PAK-VOLT, which resells the energy to end users or on the Polish Power Exchange (TGE S.A.). Based on the concluded PPAs, the end users of the energy produced by the Miłosław, Kazimierz Biskupi and Człuchów wind farms and the Brudzew/Cambria photovoltaic farm are the companies of Polsat Plus Group, which, in line with the ESG strategy of Polsat Plus Group, aim to decarbonize their operations by systematically increasing the share of renewable energy sources in their energy mix. In addition, in October 2023, we signed a 10-year fPPA to sell green energy from the Przyrów wind farm to Google Cloud.

In addition, PAK-VOLT has a portfolio of non-Group customers with whom it has bilateral agreements for the sale of electricity, gaseous fuels and the repurchase of energy from RES micro-installations.

Wholesale customers - PAK-VOLT's customers who are trading companies or distribution system operators that also trade in electricity.

Retail customers - PAK-VOLT's customers who are micro, small, medium and large companies from:

•        manufacturing and processing industries such as industrial production, automotive production, consumer electronics production, chemical production, food production and construction,

•        service sectors such as transport, communications, utilities and trade.

Green hydrogen production and distribution. As part of the green energy segment, we are also building a full value chain of the green hydrogen economy, i.e. hydrogen produced by electrolysis based on electricity from renewable energy installations, i.e. wind, photovoltaic and biomass.

Our company Biopaliwa i Wodór is implementing a project to build a hydrogen plant in Konin, next to a biomass power plant, the energy from which is used to produce hydrogen. In December 2024 we commissioned our first electrolyser using PEM technology with a capacity of 2.5 MW and the ability to produce approximately 1,000 kg of green hydrogen per day. In the next stages, we intend to expand the production capacity of our hydrogen plant in Konin. We will also launch the production of hydrogen from the first Polish alkaline electrolyser with a capacity of 0.5 MW and a production capacity of 200 kg of hydrogen per day. The design of these electrolysers allows for modular combinations, which makes it possible to increase the production capacity depending on the demand for hydrogen.

The model for the sale of hydrogen is based on contracts with municipal (public) transport companies, which issue tenders for the supply of hydrogen, in which a Group company competes and provides hydrogen and the option of refuelling at stationary stations, as is the case in Rybnik. The company also offers a model in which it provides a package that includes a hydrogen station, a hydrogen bus, and a supply of green hydrogen, with billing based on kilometres driven by the hydrogen bus.

At the same time, we are developing the infrastructure needed to transport, store and distribute hydrogen. Hydrogen is stored and transported in the Group's own hydrogen buses with capacities of more than 1,000 kg. Hydrogen is transported to filling stations. Our subsidiary PAK-PCE Stacje H2 is investing in the construction of a network of hydrogen refuelling stations. Currently, there are 6 Group-owned public hydrogen refuelling stations operating under the Neso brand – in Gdańsk, Gdynia, Lublin, Rybnik, Warsaw and Wrocław. In addition, we operate 5 mobile hydrogen refuelling stations. We are planning to further expand the network of Neso stationary hydrogen refuelling stations with a further 5 stations located along TEN-T (Trans-European Transport Network) roads, for which we have received a grant from the European Climate, Infrastructure and Environment Executive Agency (CINEA).

Production and distribution of hydrogen buses. Together with ZE PAK, we have developed an innovative, environmentally friendly hydrogen bus, the NesoBus (where "Neso" stands for the Polish phrase "Nie Emituje Spalin i Oczyszcza", meaning "Does not emit exhaust and cleans the air"). The hydrogen buses are manufactured in the Group's production plant located in the Economic Activity Zone in Świdnik. The plant was commissioned in the third quarter of 2023 and can produce approximately 100 buses per year. Activities related to the production and sale of hydrogen buses are concentrated in our subsidiary PAK- PCE Polski Autobus Wodorowy.

We believe that the importance of hydrogen in the low-carbon economic model will grow, and one area with significant potential is public transportation. Considering that cities and agglomerations aim to decarbonize their public transport fleets, reinforced by current regulations requiring an increasing share of low-emission vehicles in the transport fleet, we intend to target our offer precisely at them. At present, the company can boast the deliveries of buses for the cities of Rybnik, Gdańsk and Konin, as well as the execution of other orders resulting from won tenders. In addition to the buses themselves, thanks to the presence in the Group of companies engaged in the production and distribution of hydrogen, we can offer a comprehensive service of providing cities with a complete value chain of hydrogen, refuelling stations and hydrogen buses. We are competing in city tenders and building the NesoBus brand and awareness. The main competitive advantages of NesoBus are very low CO2 emissions, no emissions of other harmful substances as a side effect of fuel combustion, ease of use (short refuelling time) and the relatively long range possible on a single refuelling. We see great potential in the possibility of offering the hydrogen bus in foreign markets.

2.1.4.     Real estate segment

In the real estate segment, we are engaged in real estate development and construction, as well as commercial leasing and property management.

Our key investment in the real estate segment is Port Praski, which is being developed in the centre of Warsaw, on the right bank of the Vistula River, on an area of over 36 hectares. It is a very attractive part of the capital due to its central location and, at the same time, proximity to the river and green areas and excellent transportation links thanks to the nearby metro, railway, and pedestrian-cyclist bridge over the Vistula River. We are developing a modern, multifunctional residential complex in this area, offering both comfortable apartments and inclusive public spaces, cultural and entertainment venues and, in the future, office spaces. The investments in Port Praski are being carried out by special purpose vehicles centred around our subsidiary, Port Praski Sp. z o.o.

We are a developer with many years of experience. Between 2014 and 2024 we constructed and delivered 10 projects in Port Praski comprising a total of 923 residential units with a total area of over 70 thousand m2 and residential area of ca. 53 thousand m2. In the fourth quarter of 2024, we completed the construction of a project located at Sierakowskiego Street 1 and 3 with a total residential area of approximately 11 thousand m2, in which more than 73% of the 174 units have been sold as of the date of this Report. In 2024, we continued the process of designing and obtaining the administrative decisions for the development of another project at 1-3 Krowia Street with a total residential area of approximately 7.3 thousand m2, which is scheduled for completion in the second half of 2027.

To increase the attractiveness of Port Praski, we are taking care to provide residents with high quality services and commercial facilities. To this end, the first floors of the projects we are developing include service premises that we lease to entities operating, among others, in the fields of gastronomy, culture, education, medical care or entertainment. There are already 35 retail and service outlets in Port Praski, and by the end of 2026 the adaptation of the historic building on Okrzei Street is due to be completed, where the four-star AC Hotel Warsaw Port Praski of the Marriott International chain is being built.

Medium and long-term development plans for Port Praski include its further expansion with the Doki estate and public spaces located on the waterfront, as well as the City business centre located on the part of the plot closest to the Stadion Narodowy metro station.

Our current business model involves the pre-sale of residential units upon receipt of a building permit for a new development. Customers sign development agreements that establish a prepayment schedule based on construction progress. Funds paid by customers are accumulated in dedicated escrow accounts and used to finance subsequent phases of construction. These funds are recognized in the statement of cash flows at the time of payment, whereas, in accordance with accounting principles, revenues and expenses related to the sale of apartments are not recognized in the income statement until the apartment is handed over to the customer. As a result, high-margin revenue from housing sales and EBITDA do not represent a regular, recurring stream and are highly dependent on the pace of housing development. On the other hand, we have regular cash flows from leasing commercial space. We sign multi-year leases with tenants, typically for a period of approximately five years, resulting in stable and predictable rental income.

Within Port Praski Group there are also specialized construction companies, which provide services to other Polsat Plus Group companies, such as, for example the construction of a recording studio for the media section or new hydrogen stations for the energy section.

2.2.        Competitive environment and key market trends

2.2.1.     Mobile telephony market in Poland

Market value and growth dynamics

The Polish mobile telephony market is a mature market characterized by a high level of saturation with services and competition. Based on the estimates published by PMR, in 2023 the number of mobile telephony SIM cards exceeded 60 million, which translated statistically into ca. 1.6 SIM cards per capita. Starting from 2017, the level of SIM card penetration is in a visible upward trend and, at the same time, the share of postpaid SIM cards in the structure of the Polish mobile market has been clearly growing and at the end of 2023 it reached 72%. In addition, MNOs are experiencing significant growth in the number of contract customers, a direct result of operators' strategies focused on migrating customers from prepaid services. The growing number of SIM cards in Poland is also influenced by the growing development of the M2M (machine-to-machine) segment, and in 2022 alone a campaign to give free starters to Ukrainian citizens caused a surge in the number of prepaid cards.

Mobile telephony remains the largest segment of the Polish telecommunications market, with a share in the total market revenue of over 58% in 2023. PMR is forecasting that the value of the mobile telephony market in Poland in 2024, expressed as the sum of operators’ retail and wholesale revenues (including revenue from sales of equipment and other revenue) was nearly PLN 29 billion (+1.3% YoY).

The value of the average revenue per SIM card in mobile telephony (ARPU per SIM) was in a long-term downward trend, reaching its lowest point in 2019 (CAGR 5Y -2.9%). The main factors were competitive pressure, regulatory reductions in wholesale rates for terminating voice and text messages (MTR), and regulations regarding international roaming. However, according to PMR estimates, in 2023 the average revenue per SIM card in the retail market, excluding low-margin M2M cards, was 30.6 PLN. This is the fourth consecutive year that the ARPU per SIM card in the retail market has increased (CAGR 5Y +3.9%). Nevertheless, it remains one of the lowest levels among EU member states.

The breaking of the long-term downward trend in ARPU levels is due to changes in the offering tactics of individual MNOs noted in recent years. As of 2019, one of the most important trends in the Polish mobile market remains the gradual introduction of price list adjustments according to the more-for-more strategy, which involves offering larger data packages in exchange for higher prices. For many years telecoms have carried on an aggressive price war, which resulted in the current level of prices for telecommunication services, which is the lowest in Europe. Current strategies of main mobile telecommunication operators are evolving towards building value and increasing revenue and profitability, which is related to a large degree to extensive infrastructure investments into frequencies, LTE and 5G networks as well as continued high inflationary pressure on costs in 2022-2023. In our opinion, this is a very positive change which should have a positive impact on the value of the mobile telephony market in the years to come, thus enabling the continuation of the investments aimed at expanding mobile network coverage and data throughputs to cope with the growing demand for data transmission.

The impact of the introduced changes in price levels are clearly reflected in the value of the retail mobile market. According to PMR estimates, this segment of the telecom market has been growing consistently since 2019 and was worth PLN 19.1 billion (+7.8% YoY) in 2024. The vast majority of the value, over 80%, is generated by contract customers. The operators' focus on contract service customers is driven by a desire to reduce turnover in the customer base and to help stabilize the revenue stream in the medium term. Bundling of voice services with non-mobile services, like pay TV (VOD) or broadband Internet access via fixed-line connections, usually on the basis of wholesale agreements, is an equally important trend.

Dynamic growth of use of mobile Internet access on smartphones is becoming an increasingly important market trend. This is due to the growing penetration of smartphones in the mobile subscriber base and the systematic improvement of network quality parameters, including through the use of 5G technology. According to PMR, total mobile data transmission increased by nearly 16% YoY in 2024 and reached 11.4 million GB and in parallel, the average monthly data usage is on the rise. In 2024 a mobile network customer consumed an average of 16.0 GB of data, over three times more than in 2018.

Telecommunication operators' wholesale revenues have remained under pressure since 2020 as a result of the European Commission's successive cuts in maximum mobile termination rates (MTRs), from PLN 0.043 per minute in 2020 to PLN 0.009 per minute after the last cut which took effect on January 1, 2024. As a result, the value of the wholesale telecom market segment remains on a downward trend and is estimated by PMR to decrease in 2024 by 19% YoY. 

After strong increases in 2022 (+14.5% YoY) and 2023 (+9.0% YoY), operator revenues from equipment sales recorded a decline in 2024. According to the PMR report, these revenues reached PLN 6.9 billion in 2024 (-4.8% YoY). This was primarily due to growing sales in the e-commerce channel, which compete with operators' offers.

Competitive environment

The Polish mobile telephony market is relatively polarized and highly competitive. Four leading infrastructural operators operate on the Polish market: Polkomtel (Plus network) which is part of Polsat Plus Group, Orange Polska (Orange network), T-Mobile Polska (T-Mobile network) and P4 (Play network). In addition, there are many MVNOs in the market, but their share both in terms of revenue and number of customers is relatively low.

Mobile Network Operators (MNO). Four MNOs operate commercially in Poland based on allocated frequency bands and the infrastructure necessary to provide mobile telephony services on their own, that is Polkomtel, Orange, T-Mobile and P4. According to PMR’s estimates, the above-mentioned operators together accounted for approximately 99% of total revenue generated on the Polish mobile telephony market in 2024.

Source: PMR, Telecommunication market in Poland, 2024

Polkomtel operates under the umbrella Plus brand and owns a Plush sub-brand. Since 2014 it has been a member of Polsat Plus Group. Orange Polska operates under Orange umbrella brand and also has Orange Flex and nju.mobile sub-brands. Apart from the operations on the mobile market, Orange Polska is also the leading Polish fixed-line telephony operator, currently focusing its strategy on the development of broadband access services based on the fibre optic infrastructure delivered to retail and wholesale clients. P4 operates under Play umbrella brand and also owns several additional sub-brands, i.e. Play na Kartę, Fakt Mobile and Virgin Mobile. In 2020 the French group Iliad acquired in total 100% of shares of Play Communications, a company which controls P4, and in April 2022, P4 completed the acquisition of cable operator UPC Polska. Thus, P4, from an operator focused on mobile services, has become an important player in the market for convergent services, including those based on fixed-line broadband services.

T-Mobile operates under the T-Mobile umbrella brand and also uses additional brands such as Heyah and tuBiedronka. T-Mobile currently provides fixed-line telephony services addressed to business customers based on the infrastructure of GTS Poland, a company it acquired in 2014. T-Mobile currently offers fibre access services to residential customers based on wholesale access agreements with other operators.

Frequency allocations. Telecommunications frequency reservations are the Group's key intangible assets which enable it to provide mobile voice and mobile Internet access services. Network parameters such as signal coverage and throughput are dependent on the frequency reservations held.

The table below provides key information on frequency reservations held by mobile infrastructure operators in Poland.

MNO	Frequency band	Size of allocated band	Allocation decision expiry date
Polkomtel	900 MHz	2x5 MHz	December 31, 2038
		2x9 MHz	February 24, 2026
	1800 MHz	2x9.6 MHz + 2x0.4 MHz	September 14, 2029
		2x19.6 MHz + 2x0.2 MHz	December 31, 2037
	2100 MHz	2x14.8 MHz + 4x0.1 MHz	December 31, 2037
	2600 MHz	1x50 MHz	December 31, 2039
		2x20 MHz	January 25, 2031
	3600 MHz	1x100 Mhz	November 30, 2038
	420 MHz	2x2.5 MHz	December 31, 2035
Orange	800 MHz	2x10 MHz	January 25, 2031
	900 MHz	2x6.8 MHz	July 6, 2029
	1800 MHz	2x9.6 MHz + 2x0.4 MHz	August 22, 2027
	2100 MHz	2x14.8 MHz + 4x0.1 MHz	December 31, 2037
	2600 MHz	2x15 MHz	January 25, 2031
	3600 MHz	1x100 Mhz	November 30, 2038
T-Mobile	800 MHz	2x10 MHz	June 23, 2031
	900 MHz	2x9 MHz	February 28, 2026
	1800 MHz	2x10 MHz	December 31, 2027
		2x9.6 MHz + 4x0.2 MHz	August 12, 2029
	2100 MHz	2x14.8 MHz + 4x0.1 MHz	December 31, 2037
	2600 MHz	2x15 MHz	January 25, 2031
	3600 MHz	1x100 Mhz	November 30, 2038
P4	800 MHz	2x5 MHz	June 23, 2031
	900 MHz	2x5 MHz	December 31, 2038
	1800 MHz	2x15 MHz	December 31, 2027
	2100 MHz	2x14.8 MHz + 4x0.1 MHz	December 31, 2037
	2600 MHz	2x20 MHz	January 25, 2031
	3600 MHz	1x100 MHz	November 30, 2038

Source: Own analysis based on UKE’s summary dated February 20, 2025.

Mobile infrastructure. In recent years the worldwide trend of separation and monetization of mobile infrastructure has intensified, among others due to operators’ expectations that the development of state-of-the-art 5G technology will entail a need of intensive roll-out of the mobile network, thus requiring considerable capital expenditures. The cooperation of mobile operators and possible involvement of independent infrastructure operators may help to significantly decrease costs related to the development of mobile technology, most of all as a result of infrastructure sharing and its optimum roll out.

In Poland, the first example of the above-mentioned trend was the infrastructural cooperation established between two MNO operators. For the purpose of planning, building and maintaining a mobile telecommunications network, and participating in related tenders, Orange Poland and T-Mobile formed a joint venture in 2011 under the name NetWorks! Networks! manages both operators' radio access network with approximately 12,000 base stations in 2023.

Recently, the global telecommunication market, to a larger degree than before, moved towards involvement of specialized, independent infrastructure operators for cooperation in order to optimize and develop mobile telecommunication infrastructure. In Poland, Cellnex Telecom is successfully building the position of an independent infrastructure operator. In March 2021, Cellnex acquired from Play a 60% stake in On Tower Poland which controls the passive mobile infrastructure built by Play. Furthermore, in July 2021 Cellnex acquired mobile infrastructure in passive and active layers from Polsat Plus Group. It is expected that the cooperation between mobile operators and independent infrastructure operators should contribute to increasing the pace of 5G network roll-out in a cost-effective way.

Mobile virtual network operators (MVNOs) are the operators who provide mobile telephony and/or mobile data transmission services but do not hold any frequency allocations on their own and do not need to have their own infrastructure to provide such services. Under the MVNO business model existing infrastructural operators provide frequency resources and the necessary infrastructure to MVNOs. According to the UKE report, 139 operators provided mobile services under the MVNO model in 2023, whereas in 2017 operations of this type were declared by only 31 entities. A fourfold growth of the number of MVNO operators is due to the appearance on the market of companies that have agreements with a mobile operator (MNO) and re-sell services to other smaller operators.

Despite a substantial number of MVNOs operating on the Polish market, none of them has significant market power. According to the PMR report, the total revenues of all MVNOs in 2024 accounted for only 1.3% of the total value of the Polish mobile services market.

At the same time, it should be noted that some MVNOs build the scale of their operations with the intention of re-selling their businesses to MNOs. Such decisions may be made in particular when, despite a relative market success, MVNOs are not able to ensure satisfying profitability of their business. This phenomenon was apparent when P4 took control over Virgin Mobile in 2020 and UPC Polska in 2023, or when Polkomtel took control over Premium Mobile in 2021.

Development forecasts for the mobile telephony market

PMR forecasts that the mobile market, as measured by total operator revenues, including equipment sales and other revenues, will grow at an average annual rate of 2.4% (CAGR 2024-2029) until 2029, when its value will reach PLN 33.6 billion.

The upward repositioning of prices, initiated in mid-2019, will continue to be a key factor setting the direction of further development of the mobile market in Poland in the years to come. This trend is likely to be supported by the implementation and commercial launch of 5G services by all operators in Poland as a result of an auction which took place in late 2023. What is also important is the extension of mobile operators’ activities to new areas, including sale of dedicated equipment and bundling of voice services with TV or fixed-line Internet access services. Additional positive factors will be the continued migration of customers from prepaid to postpaid offers and growing revenues from roaming as well as stabilisation of revenues from equipment sales at a high level. At the same time, 2024 was the last year of regulatory pressure on wholesale revenues resulting from the reduction of maximum MTRs and FTRs.

Analysing the retail mobile services market, only (excluding wholesale revenue and revenue from the sale of equipment), PMR expects clear, positive dynamics in the years 2024-2029 (CAGR +3.8%), which is derived from the mobile services pricing increases initiated in the years 2019-2022 within the more-for-more strategy, as well as migration of users to more expensive 5G tariffs.

According to PMR estimates, the SIM card base in Poland will grow organically in the years 2024-2029, and in the long term the market will stabilize, mainly due to the growing number of M2M cards.

Due to the high level of competition on the market and high penetration with services, taking over customers from competitors will be the main factor driving the growth of mobile customer bases, in PMR’s opinion. Number porting between networks is possible since 2009. According to the data published by UKE, 1.5 million users changed operators in 2022. It should be noted that, following a few years of downward trend observed on the MNP market, in the years 2021-2024 the volume of phone numbers ported between networks stabilized. In our opinion, it is proof of market maturity and equalization of price levels between individual operators’ offers, as well as of the increasing loyalty of customers bases to their operator, resulting from, among others, the popularization of bundled offers.

2.2.2.     Broadband Internet access market in Poland

Broadband Internet access services can be provided through a wide range of different solutions based on fixed-line technologies, including, among others, xDSL, cable modems, LAN-Ethernet, fibre optic links and WLAN, or mobile technologies such as mobile modems or routers operating, for example, in the LTE, 5G or satellite technologies. In Poland broadband Internet access is provided through fixed-line and wireless networks.

Based on the estimates published in the PMR reports, there were 9.8 million active lines of fixed-line broadband Internet access in Poland in 2024 (+3.4% YoY) while 9.0 million customers used dedicated mobile Internet through a dedicated mobile data transmission card (excluding data transmission in smartphones made under voice tariff plans). According to PMR, the penetration of mobile Internet access services per number of residents in Poland stood at around 95% in 2024, while excluding smartphone data transmission the penetration rate was ca. 24%. Penetration of fixed-line broadband Internet services per number of residents has been steadily increasing since 2020 and was around 26% in 2024.

A visible slowdown in the growth dynamics of the dedicated mobile Internet access is related mainly to the growing popularity of data transmission in voice tariff plans, driven by the growing sizes of data packs offered to customers as well as higher penetration of these offers. Over 80% of smartphone users actively use mobile data transmission. PMR estimates the number of mobile Internet users using mobile data transmission in 2024 at 26.6 million (+2.6% YoY). Moreover, there is a noticeable increase in the saturation of smartphones supporting 5G technology.

Despite increasing popularity of data transmission service in smartphones, dedicated wireless access will remain, in our view, a meaningful segment of the Internet market due to the fact that it is widely used in Poland in the mobile-for-fixed model. This is caused by Poland’s low urbanization level and relatively underdeveloped fixed-line infrastructure, which means in practice that in many locations wireless Internet is the only available option of access. For the same reason, dedicated mobile access and fixed-line access are rather complementary than substitutional services in Poland.

PMR estimates that the value of the fixed internet access market amounted to PLN 6 billion in 2024. The important drivers behind this growth were increasing demand for high-speed connections and  development of fibre optic infrastructure. At the same time market value growth was driven by higher service prices which were among others associated with higher throughput of lines offered to customers thanks to the popularization of fibre optic solutions, as well as the price increases implemented by mobile operators in connection with the “more-for-more” strategy. As a result of the above factors, there was a high growth in ARPU from fixed internet services (+4.0% YoY), which, according to PMR forecasts, clearly exceeded PLN 50 in 2024. In turn, the value of the dedicated mobile Internet access market and data transmission services in voice tariffs in 2024 is estimated by PMR at approximately PLN 8.5 billion (+6.6% YoY). Nearly three-quarters of this amount is attributed to the latter segment, i.e., data transmission services on mobile phones.

Fixed broadband Internet access

In Poland, availability of fixed-line broadband Internet access services is limited mainly to urban areas. Outside urban areas, fixed-line broadband services are offered only to a limited extent, which is due to historical underinvestment resulting primarily from the high cost of build-out of local loops and the strategies adopted by leading fixed-line operators.

The fastest-growing and most popular wired access technology is fibre optic access (FTTx), with a market share in fixed internet access in terms of the number of subscribers estimated by PMR to be over 50% in 2024. According to UKE data, there were approx. 4.6 million fibre-optic Internet users in Poland at the end of 2023, generating revenues of PLN 2.9 billion.

The reason for the increasing popularity of fibre optic lines is the highest data throughput ensured currently by this technology, offering data transmission speed of up to 1 Gbps (Netia, Orange Polska, Play, Inea) or even as much as 8 Gbps (Orange Polska), as well as the operators’ sales strategies which are focused on promoting fibre optic Internet access, also as part of their convergent offers. At present fibre optic technology is the investment priority for a majority of telecommunication operators. Orange Polska, the dominant market player on the fixed-line Internet access market, owns currently the most extensive fibre optic infrastructure which was reaching ca. 8.9 million of households as of end of 2024 (including paid access provided to Orange by third parties). Netia is successively executing its investment plan consisting in a comprehensive modernization of its access network, which currently covers approximately 3.4 million households and is dominated by the fibre optic technology. In the area of wholesale access, an important role is played by Polski Światłowód Otwarty (PŚO). It is purely a wholesale operator, established by Play, which offers retail operators in Poland open access to its broadband network. PŚO's coverage was 4.1 million households in 2024, and the target plan is to reach more than 6 million households.

The factor which stimulates investments in fibre optic technologies are projects implemented as part of the government’s “Digital Poland Operating Program” (Program Operacyjny Polska Cyfrowa – POPC), an initiative which is subsidized from European Union funds. The main goal of the program is to strengthen the digital foundations for social and economic development of the country, such as broadband Internet access, effective and user-friendly public e-services and constantly growing level of the society’s digital competence. One of the priorities is to eliminate differences in access to fast broadband networks between rural and urban areas, resulting in all Polish households gaining access to fast broadband connections. Most of the investments covered by this program assume providing access to the broadband network with at least 30 Mbps throughput capacity. Orange Polska, Fiberhost (Inea’s infrastructural unit), Nexera and Tauron are among the players carrying out investments in broadband networks under the POPC program. Currently, the POPC program's assumptions continue under the KPO (National Reconstruction Plan) and FERC (European Funds Program for Digital Development 2021-2027).

As indicated in PMR’s report, the market of Internet access relying on fibre optic technology is currently significantly fragmented, which is demonstrated by the fact that the largest providers who operate on this market (Orange, Play, Netia, Inea, T-Mobile and Vectra Group) controlled about half of it in 2023. Hence, telecommunication operators are currently seeking consolidation possibilities with smaller local companies. At the same time, models of commercial cooperation between operators in the field of use of existing fibre optic network resources are sought. Granting wholesale access to fibre optic infrastructure in an open model constitutes an increasingly visible trend on the Polish market, which supports growth strategies based on convergence.

At the same time, it is worth mentioning that thanks to recent substantial investments in fibre optic infrastructure roll-out and the popularization of this type of infrastructure in times of the COVID-19 pandemic, Poland has been closing the gap to European Union countries. According to the ranking published by the FTTH Council Europe, Poland achieved fibre optic network penetration at the level of 61.3% as of September 2023, compared to the average penetration for the 27 EU states and the United Kingdom of 69.9%. In the most advanced European countries penetration with FTTH reached 96% (Romania) and 92% (Spain, Bulgaria).

The second most popular fixed-line access technology is Cable technology (CATV) (ca. 26% of market share in 2024, on a market defined as comprising solely fixed technologies). UPC Polska and Vectra - Multimedia Group.

The xDSL technology continues to be a popular fixed-line access type in Poland, with a share on the fixed-line Internet market estimated by PMR at ca. 9.5% in 2024. Orange is the dominant player operating in this technology. Simultaneously, Orange consistently pursues the strategy of developing its fibre optic networks. The second largest xDSL operator is Netia, a Polsat Plus Group company.

Mobile broadband Internet access

The market of broadband Internet access based on mobile technologies (defined as access via modems or dedicated SIM cards integrated with laptop computers or tablets) is divided roughly equally between the four mobile MNO operators: Orange, Polkomtel, P4 and T-Mobile.

A clearly visible trend on the market is the dynamic growth of users of mobile Internet access on mobile phones under voice tariff plans (data transmission), at the expense of dedicated mobile Internet access (via a modem or a SIM card). According to PMR estimates, the number of users of mobile Internet on smartphones amounted to 26.6 million in 2024, generating ca. 73% of the value of the mobile market in Poland. The dynamic growth of this market segment is driven mainly by the popularization of smartphones and increasingly bigger data packs offered in voice tariffs, supported by the “more-for-more” strategy, which has been pursued by mobile operators since 2019, growing demand for data transmission on mobile devices as well as investments carried out by mobile operators with the view to increasing quality parameters of their networks, including the roll out of 5G networks. COVID-19, and the associated increase in the importance of data services on phones, formed an additional factor which has had positive influence on the growth of this market segment.

Compared with other EU Member States, the Polish mobile broadband market is quite extensive. This is related to a relatively low quality of the existing fixed-line infrastructure in Poland, which makes mobile broadband technology more attractive to numerous Internet users as it offers better quality parameters in their respective areas of residence. Moreover, Poland's low urbanization level often makes mobile access the only technology available in less densely populated areas due to the cost of building infrastructure to enable access via fixed technologies. Therefore, in our opinion, dedicated mobile Internet access will remain an important segment of the Internet access market in Poland, especially in view of the distribution of frequencies from the 3.6-3.8 GHz band in late 2023 and early 2024 and the consequent intensification of investment in the construction of 5G networks in Poland.

As forecasted by PMR, the years 2024-2029 will see strong growth of the segment of Internet access and value added services on mobile phones (CAGR 2024-2029 at the level of 5.7% in terms of value growth), At the same time PMR expects data transmission traffic in mobile networks to grow in the subsequent years from ca. 11.4 EB in 2024 to ca. 22.6 EB in 2029. The forecasted strong traffic growth, in combination the growing mobile ARPU (the more-for-more strategy), will translate into growth of mobile operators’ revenues in further years.

Development forecasts for the broadband Internet access market

According to PMR forecasts, the ratio between the number of subscribers of fixed Internet access and dedicated mobile access will gradually turn in favour of fixed access. PMR forecasts that in 2029 11 million Internet users will use fixed technologies, while over 9 million will use mobile technologies. Further investments in the roll-out of the last mile, by both mobile and fixed-line operators, in particular investments in developing fibre optic networks as well as further development of 5G technology, will be the most significant factors. According to PMR forecasts, in 2024-2029 the value of the fixed-line broadband market will demonstrate continuous positive average annual dynamics of ca. 5.3% (CAGR 2024-2029), reaching the level of PLN 7.6 billion in 2029. In case of dedicated mobile Internet access (excluding data transmission in voice tariff plans), PMR forecasts that the market will grow at 1.8% per year on average (CAGR 2024-2029) and it will reach the value of PLN 2.5 billion in 2029.

In the area of fixed-line broadband access, fibre optic technology (FTTx) is going to gain importance the fastest. It will replace the obsolete copper infrastructure to a significant extent as a result of large scale investments of fixed-line operators. In our opinion, in the coming years these investments will lead to a gradual growth of the number of users of fixed links with higher quality parameters. PMR estimates that in 2029, fibre optic technologies will dominate the total number of fixed connections (3/4 of the market). The second most popular technology will remain the connections offered by cable operators.

2.2.3.     Pay TV market in Poland

Market value and growth dynamics

The Polish pay TV market is a mature market characterized by a high degree of penetration estimated by PMR at nearly 60% of households in 2024. On the other hand, pay TV operators actively increase the loyalty of their subscriber bases, mainly through service packaging, i.e. by combining pay TV with telecommunication services (Internet, phone), or developing and offering to customers their own online video services as a complementary service to the core offering. This trend leads to an increasingly strong interpenetration of pay TV and telecommunication markets.

Both in terms of the number of subscribers and value, the situation on the Polish pay TV market is stable. According to PMR estimates, in 2023 the market value decreased slightly for the second year in a row to PLN 6.2 billion. In parallel, the customer base remained stable at the level of approximately 10.4 million subscribers. At the same time ARPU from pay TV services in Poland continues to be among the lowest in Europe. In this context the strategy of competing for customers with the merit and quality of the offered content rather than with price is one of the key trends affecting the value of the pay TV market. Operators expand their offers by adding premium packages and proposing attractive film or sports content, which leads to higher ARPU from a stable base. Also the dynamically growing IPTV segment, and the systematically increasing penetration of customer base with VOD services, which in 2023 for the first time exceeded the penetration of pay TV services, are the factors influencing the value of pay TV market.

The market for VOD and OTT video-on-demand services is growing rapidly in Poland. PMR estimates that the household penetration of paid VOD services in 2023 stood at around 69%. It is worth noting that there is a trend of coexistence of traditional pay TV and VOD services in Poland, as a result of which the growing penetration of VOD services does not translate into a decrease in the percentage of households using pay TV. The value of the entire VOD market in Poland amounted to over PLN 2.6 billion (+25% YoY).

Competitive environment

Pay TV services in Poland are offered by satellite platform operators (DTH), cable TV operators as well as by IPTV providers. According to our estimates, sector data and PMR forecasts, in 2023 operators of satellite TV platforms had the dominant share, both in terms of the number of subscribers and revenue, on the pay TV market – approximately 46% in terms of subscriber base, followed by digital cable TV operators with approximately 35%. IPTV is the pay TV market segment which demonstrates the strongest growth and its market share increased to ca. 19%. At the same time, paid VOD services are becoming an increasingly important part of the pay TV market in Poland.

Source: Based on own estimates, sector data and PMR estimates

Pay TV services provided by operators of satellite platforms and cable TV are in principle substitutes. At the same time competition between the two technologies of access to pay TV services is restricted due to different geographical reach of each of these services. DTH operators are able to provide their services to both, the customers who live in cities as well as to those living in less densely populated and rural areas without incurring significant additional costs, whereas cable TV operators concentrate on the inhabitants of densely inhabited areas where highly developed fixed-line network infrastructure already exists or in locations where the establishment of such infrastructure involves a relatively low cost per customer. Since cable infrastructure in Polish towns with up to 20 thousand inhabitants, as well as in suburban and rural areas which are inhabited by more than half of Poland’s population, is poorly developed, hence these areas are not attractive for cable TV operators, and they remain the natural target markets for DTH.

DTH operators. According to our estimates and PMR forecasts, the subscriber base of the DTH market in Poland remains under moderate pressure and in 2023 was just under 4.8 million (-4.4% YoY). DTH platforms are losing users in favour of the more advanced technologically IPTV offers, especially in areas with access to high quality broadband infrastructure.

Three DTH platforms operate in Poland: Polsat Box (until August 2021 it operated under the Cyfrowy Polsat brand), Canal+ (operating until September 2019 under the nc+ brand) and Orange, while the market is practically divided between the first two. Orange does not offer pay TV as a standalone service but only as an add-on to its integrated offer. Based on own and PMR forecasts, we estimate that at the end of 2023 the share held in the Polish pay TV market by our platform Polsat Box, in terms of the number of subscribers, was approximately 30%.

In less populated rural and suburban areas, where cable and broadband infrastructure is underdeveloped, digital terrestrial TV with around 30 channels aired in the DVB-T standard until June 2022 and from June 2022 also in DVB-T2/HEVC standard, presents a real alternative to satellite pay TV services. PMR estimates that the percentage of households that rely exclusively on free-to-air terrestrial TV is around 33% and will remain at that level for the next few years. However, it is worth noting that the pay TV offer surpasses alternative solutions, such as digital terrestrial TV, in terms of the quality of the programming offer. Dedicated and premium content, exclusive content available only from a given operator, live programs, or coverage of attractive sports events remain the key distinctive features.

Cable TV operators. The Polish cable TV market is strongly fragmented, with nearly 300 companies operating on it, according to UKE. The four dominating players, however, are: Play (after taking over UPC), Vectra Group, Inea and Toya. PMR estimates that in 2023 the combined share held in the Polish cable TV market by these three operators amounted to nearly 97% in terms of the number of subscribers.

The Polish cable operator market is undergoing a process of consolidation, which increases the chances of building a strong convergent offering and leveraging the potential of customer bases. In recent years, the Polish market has seen three transactions that are significant in terms of size.  In 2018, Polsat Plus Group took control of Netia, 2020 saw the consolidation of Poland's second and third largest cable operators, i.e. Vectra and Multimedia Poland, and 2022 the completion of mobile operator Play's acquisition of control of UPC.

Digital television through the IP protocol (IPTV). The leading IPTV providers in Poland are Orange Polska and Netia, a company belonging to Polsat Plus Group. The remaining part of the IPTV market is fragmented between Vectra Group and local Internet service providers (ISPs). The predominant model of sale of IPTV services on the market relies on bundling of the service, especially with broadband Internet access.

The value of the IPTV market reached nearly PLN 907 million in 2023 (+15.0% YoY), with the number of subscribers reaching about 2.0 billion (+13.6% YoY). IPTV is the most rapidly growing segment of the pay TV market, among others due to the improving quality of broadband connections, fibre optic networks in particular, following infrastructural investments. Despite the high growth dynamics, IPTV market still encounters barriers, mainly due to technological obstacles which result from still restricted coverage of advanced infrastructure capable of offering sufficient data throughputs for providing IPTV services, especially outside big cities.

IPTV development enhances competition between IPTV operators and cable TV operators, especially in big cities where high quality broadband infrastructure exists, including fibre optic links. In less populated areas, on which DTH operators focus their activities, the influence of the expansion of IPTV is less pronounced due to the underdeveloped infrastructure for broadband Internet access. At the same time it is worth stressing that the effect of outflow of DTH and cable TV subscribers is to some extent compensated for by the migration of these customers to the IPTV standard, as a result of which the total pay TV subscriber base in Poland remains stable.

Video on demand. The popularity of streaming services offering video-on-demand content is growing in Poland. The development of OTT and VOD services in Poland is positively influenced by the progressive improvement of the quality of broadband connections and, consequently, the speed of data transmission as well as by the changing preferences of consumers who want to access their favourite content anytime, on any device, anywhere. The dynamic growth of the paid sVOD market is also influenced by the increasing range of content available exclusively on a given platform.

The Polish VOD market is dynamic and highly fragmented. Several dozen online services operate on the market, including those offered by TV broadcasters, DTH satellite platform operators, cable TV networks or telecommunication operators as well as by global players. According to PMR estimates, in 2023 Netflix remained the undisputed leader in terms of subscriptions, followed by Player and Max platforms on the podium. Simultaneously, after a strong debut in 2021, Viaplay, which based its content offering on numerous sports rights, announced its exit from all markets outside Scandinavia, including Poland, already in July 2023 due to financial problems. Other major players in the Polish market include Disney+, Prime Video and CDA Premium. VOD services are available in free (aVOD) or paid models, mainly based on a monthly subscription purchased directly from the platform operator (sVOD) and sales in the so-called operator channel, i.e. VOD subscriptions are purchased and paid for as part of the telecommunications bill. In Poland, there is a growing trend among sVOD users to subscribe to more than one service at a time. The number of sVOD subscriptions per household is steadily increasing, reaching 2.3 in 2023.

In Poland, a major challenge in the sVOD market is the phenomenon of account sharing, i.e. the use of a single subscription by several households, which limits the ability of platform operators to monetize content. According to PMR estimates that nearly half of households with an access to sVOD services in 2023 were using someone else's subscription. The first operator to combat this phenomenon is Netflix, which restricted subscription sharing options at the end of May 2023.

Despite dynamic growth in recent years, OTT and VOD services in Poland exert limited substitution pressure on the pay TV market. PMR's research shows that VOD is more of a complementary service to traditional pay TV. An important factor contributing to this trend is the popularity of the distribution of VOD services in the operator channel. The majority of the most popular VOD services are available from telecom and pay TV operators. In addition, pay TV operators are effectively competing with global VOD players by developing their own VOD platforms and offering Polish-language content better suited for local audiences, premium content or exclusive sports broadcasts. Bundling of services is also important, especially the bundling of TV services with Internet access, which has a positive effect on the loyalty of pay TV users.

Development forecasts for the pay TV market

According to PMR forecasts, the value of the pay TV market in Poland will slowly increase between 2024 and 2029 (with a compound annual growth rate (CAGR +0.7%), despite a slight erosion of the subscriber base (CAGR 2024-2029 -0.6%). At the same time, a further dynamic increase in the number of households using paid access to VOD services is expected. The market should remain under the influence of three major trends: high market penetration of pay TV services, dynamic growth of IPTV technology and limited competition from free-to-air terrestrial TV and VOD services.

According to PMR, in the years 2024-2029 satellite platforms will continue to be the largest segment of the pay TV market in Poland, reaching about 38% market share in terms of the number of subscribers by the end of the forecast period. Cable operators will remain the second largest segment with a market share of about 32% at the end of the forecast period. Thanks to the highest growth dynamics IPTV services will systematically gain importance, on the back of the dynamic development of broadband Internet access networks, including fibre optic networks. According to PMR by the end of 2029 IPTV operators will have a market share of around 30% in terms of the number of subscribers.

The number of VOD users in Poland will continue to grow in the coming years, mainly due to the growth of subscriptions in the paid model. PMR estimates that the number of VOD users in Poland will reach 19.7 million by 2029, with over 90% being users of paid VOD services, particularly sVOD. As a result, the value of the market for paid VOD services in Poland will grow, with the growth rate of this segment gradually slowing down over time as a result of increasing saturation and market competitiveness.

Pay TV operators will aim to increase their competitiveness by proposing unique offers to their customers. Bundled offers containing telecommunication and content services combined with sales of equipment (tablets, smartphones, laptops, TV sets) and supplementary services as well as an extended offer of exclusive content are of key importance for the enhancement of customer loyalty and own customer base retention. Access to broadband Internet, including fibre optic access, is a particularly important element, which at the time of the pandemic became key from the point of view of maintaining customer loyalty. In this context, infrastructure investments aimed at increasing the coverage and quality of broadband networks are becoming increasingly important. Offering premium content will continue to be crucial, as, on the one hand, it will attract subscribers looking for unique, high-quality content, and on the other it will support ARPU growth.

A clearly visible trend in the Polish pay TV market in 2022-2023 was the modification of price lists by all major players, dictated, among other factors, by persistent inflationary pressures. The increases concerned both TV packages and additional fees, such as the rental of a set-top box or the use of services based on another operator's infrastructure. The increase in pay TV prices in Poland will have a positive impact on the value of the market but may also lead to a higher incidence of cord-cutting and migration of customers to terrestrial TV or VOD platforms.

State-of-the-art technologies will continue to gain in importance at a fast pace as they enable operators to provide personalized content (such as content on demand) via the Internet, to mobile devices. Substitution pressure from independent providers of OTT and VOD services present on the market (e.g., Netflix, CDA, HBO MAX or Amazon Prime) will continue to be limited in Poland. Moreover, pay TV providers will compete with the offers of the above-mentioned services by developing their own VOD platforms, which are complementary to traditional TV services, and by introducing mobile solutions. We think that in upcoming years VOD services will supplement and extend the offers available on the market instead of substituting linear TV.

It can be expected that the Polish pay TV market will continue to see consolidation trends, both within the sector as well as between cable TV and telecommunication operators, which can be exemplified by the finalized in 2022 acquisition of UPC cable TV by P4, telecommunication operator.

2.2.4.     Bundled services market in Poland

Market value and development forecasts

Service bundling has been one of the strongest trends on Polish media and telecommunications market for several years. Operators develop their offers of bundled services in response to the changing preferences of customers, who seek media and telecommunications services from one provider at affordable prices, under one contract, with one subscription fee and one invoice. At the same time, given the high level of saturation of the pay TV and mobile telephony markets, bundling of services plays a key role in retaining existing customers. Offering bundled services allows operators to increase customer loyalty and, consequently, reduce churn rates. It also contributes to the growth of average revenue per customer.

The Polish multi-play services market has been growing systematically both by volume and value. According to PMR’s estimates, the number of services sold in packages in the years 2014-2023 recorded an average annual growth rate of nearly 9%, increasing to 38.1 million at the end of 2023, while the total number of subscribers (both individual and business) using bundled services was estimated at over 14 million, of which 8.7 million were households.

In the coming years, the market for integrated services will continue to grow, both in terms of volume and value. This is due to the fact that the bundling of services has become a strategic objective for players in the telecommunications and pay TV markets. PMR expects the number of subscribers of bundled services to grow at a much slower rate in the coming years (CAGR 2023-2029 of +0.9% for the retail segment). In parallel, the growth rate of the value of the bundled services market will gradually slow down, and the forecast average annual growth rate of the retail market in value terms in 2023-2029 will be 3.2%. Growth will be driven by continued ARPU growth path and increasing household penetration of integrated services. A factor supporting further growth of the bundled services market will be an increase in the quality of services stimulated by the development of fibre optic networks and the expansion of 5G networks.

Source: PMR, Integrated Telecommunications Services in Poland 2024.

In subsequent years, the development of the Polish market of bundled services will be influenced not only by the low level of saturation of this market with services but also by the systematic roll out of fixed-line infrastructure and improving quality of network access, in particular higher throughput. The increased demand for higher-bandwidth Internet connections initiated during the pandemic period has solidified in the market, partly as a result of many companies maintaining remote or hybrid work and will be further supported by EU funds flowing into Poland under the National Recovery and Resilience Plan. This creates the potential for reselling additional services to the retail market as part of a bundle. In particular, the prospects for offering IPTV/OTT pay TV services and video-on-demand content are improving.

Operators’ strategies based on combining telecommunication and media services with services from outside the telecommunications sector are also an important factor. The bundled offers of leading operators on the Polish market comprise, among others, additional services, such as the sale of electricity, as well as financial and insurance products. Consolidation trends, observed on the media and telecommunications market, may also affect the development of the bundled services market, enriching the convergent offers available to customers.

Market structure

Bundled services in Poland are provided primarily by cable TV operators and telecommunications service providers. According to PMR, at the end of 2023 over 85% of the bundled services market, in terms of the number of subscribers, was held by four major players – Polsat Plus Group, Play-UPC partnership, Orange and T-Mobile. According to PMR estimates, Polsat Plus Group was the leader in this market, with a 28.0% share at the end of 2023.

When analyzing the structure of bundled services in Poland, one should bear in mind that the majority of operators provide multiplay services on the basis of wholesale agreements with other operators since they themselves do not have the relevant infrastructure or supporting business services to be able to create a complete portfolio of convergent services. For example, T-Mobile provides fixed-line broadband Internet access using, among others, the infrastructure of Orange Polska. Cable TV operators, in turn, offer mobile voice services in an MVNO model and acquire the entire content for their TV services from third party TV production companies. Our important competitive advantage on this market comes from the fact that within Polsat Plus Group we have all the assets which are required to be able to offer customers a fully convergent offer of telecommunication and TV services, enriched with unique content which we produce ourselves.

Both fixed-line telecommunication and cable TV operators offer their bundled services mainly in large and medium sized cities, mainly due to the geographical limitations of their landline access infrastructure. The multi-play services market in Poland is, in turn, relatively underdeveloped in less urbanized areas and therefore has the potential to grow rapidly in the suburbs, small towns and rural areas. In addition to the low penetration rate of multi-play services in less densely populated areas, Internet services provided by cable operators typically suffer in quality of service due to the limitations of the existing infrastructure. This creates an opportunity for satellite pay TV providers, such as Polsat Box, who are not bound by geographic reach, to become the leading providers of high-quality multi-play services to consumers in suburbs, small towns and rural areas in Poland.

2.2.5.     TV broadcasting and online media market in Poland

TV broadcasting market. The Polish TV broadcasting market consists of state‑owned and private commercial broadcasters airing both at the regional and national levels. A significant number of stations are offered through paid channels, such as cable networks and DTH platforms. The Polish TV broadcasting market is supervised by the National Broadcasting Council (KRRiT) which grants broadcasting licenses and supervises the operations of Polish TV broadcasters (such as checking compliance with license terms for specific channels).

The Polish TV market remains dominated by the four largest terrestrial channels: POLSAT, TVN, TVP1 and TVP2. There is a clear trend towards the fragmentation of the TV market. The importance of smaller broadcasters available on multiplexes was growing, mainly at the expense of the abovementioned four largest TV channels. According to Nielsen Media data, in 2024 the collective audience share in the 16-59 age group for the four leading channels totalled 24.8%, compared to 26.6% in 2023.

In 2024, our main channel POLSAT had an all-day audience share of 7.1% in the 16-59 age group. Average annual technical coverage was 98.4%. Other channels of the Polsat Group had a 14.9% combined audience share. The channels of Polsat Group, apart from the main channel, include 42 channels with competitive offers on various market segments (including sports, channels dedicated to female and male audiences, information, music, games, e-sport). They include channels distributed by cable and satellite networks, as well as nine channels available through DTT (digital terrestrial television).

In 2024, POLSAT’s main competitor, TVN achieved an 7.6% all-day audience share in the 16-59 age group and had 99.7% average annual technical coverage. TVN channel, launched in 1997, currently belongs to Warner Bros. Discovery Group. TVN Warner Bros. Discovery Group’s 24 thematic channels achieved a 15.4% combined all-day audience share in 2024.

TVP Group broadcasts 16 channels, including TVP1 and TVP2, and is also one of the main players on the Polish TV advertising market. In 2024, the main channels of TVP Group had 5.2% (TVP1) and 4.8% (TVP2) all-day audience shares in the 16-59 age group. The technical coverage of both channels reached 99.6% of households in Poland. Except advertising revenue, as the national state‑owned broadcaster, TVP receives additional revenue from license fees mandatorily charged to Polish TV viewers under the License Fees Act of April 21, 2005, as well as compensation granted by the National Broadcasting Council. Revenue from license fees and compensation from the National Broadcasting Council constituted 71% of total revenue of TVP group in 2023.

Digital Terrestrial TV. Starting from July 2013, terrestrial television is broadcast digitally in the Digital Video Broadcasting – Terrestrial (DVB-T) technology and from 2022 also in DVB-T2/HEVC standard. A multiplex, or MUX, is a term used to describe the package of radio and TV channels, possibly enriched by additional services, transmitted digitally on a specific band. Currently, digital television is offered in Poland on five free multiplexes (MUX-1, MUX-2, MUX-3, MUX-6 and MUX-8) and one paid multiplex (MUX-4), dedicated for TV reception on mobile devices, as well as on several local multiplexes. The DTT offer includes free-of-charge access to 34 channels, with multiplex coverage exceeding 99% of Poland's population. It is expected that ultimately six multiplexes may function on the Polish market.

Online market. The Polish online market consists of a mix of various entities, starting from large international corporations, through large Polish media groups and smaller publishers, to small websites owned by companies and private individuals.

The online market is not regulated, any company or a physical person can create an own website and the only requirement is that a website address which is currently not in use must be registered in a proper domain. NASK (Research and Academic Computer Network) is the body which serves in Poland as a register for the ‘pl’ Internet domain.

Polsat-Interia Group is among the leading online media groups defined as Internet publishers producing editorial content.

No.	Media Group		Number of real users	Coverage	Page views	Average time per user	Average time per visit
1		Polsat-Interia Group	20 765 646	63.55%	1 783 929 326	1h 31m 49s	5m 10s
2		RAS Polska Group	20 645 442	63.18%	2 379 831 001	2h 18m 34s	4m 32s
3		Wirtualna Polska Group	20 621 466	63.11%	3 040 473 951	2h 48m 9s	4m 57s
4		Agora Group	16 401 366	50.19%	689 603 562	41m 32s	2m 57s
5		Polska Press Grupa	15 476 184	47.36%	624 238 961	11m 56s	1m 33s
6		ZPR Media Grupa	13 894 092	42.52%	268 837 072	1h 0m 46s	12m 32s
7		TVN WBD Grupa	12 931 164	39.57%	226 845 616	1h 50m 56s	16m 13s
8		Grupa DGP Infor	11 948 796	36.57%	90 240 339	9m 31s	1m 58s
9		Burda Media Polska Grupa	10 759 068	32.93%	82 803 118	14m 50s	3m 2s
10		Iberion Grupa	10 222 362	31.28%	106 130 574	8m 38s	1m 4s

Source: Mediapanel, December 2024

Polish advertising market. According to the estimates of GroupM media agency, in 2024 Poland was the second largest advertising market in Central-Eastern Europe (after Turkey) with total net advertising expenditure exceeding PLN 4.3 billion (after discounts) growing by over 10% compared to 2022.

In 2024, TV was the second largest advertising medium in Poland with approx. 34% share in total advertising expenditure. According to GroupM forecasts, this share is expected to remain at similar level in upcoming years.

The Polish TV ad market is characterized by a continuously high level of TV consumption. In 2024, the average daily TV viewing time among the surveyed population remained at a very high level, estimated at 245 minutes. This is an increase of six minutes compared to 2023. Considering such a high average TV viewing time, it is justified to assume that the TV market will continue to be an attractive communications platform for advertisers.

2.2.6.     Green energy market in Poland

Energy market trends in Poland and Europe. The Polish energy sector is currently undergoing an energy transition aimed at minimizing the use of coal in the country's electricity generation mix and replacing it with efficient low- and zero-carbon sources, including renewables, and achieving energy independence while maintaining the full security of the national electricity system (KSE). The years 2020-2023 in the Polish economy, as well as in the global economy, were marked by significant volatility and turbulence, caused first by the Covid-19 pandemic and later by the outbreak of war in Ukraine and the increase in global political tensions. This led to an energy crisis in Europe and very large fluctuations in electricity and gas prices, which in 2022 were several times higher than in the previous year and had a negative impact on the macroeconomic situation. The quest for energy self-sufficiency and diversification of energy sources in the face of geopolitical and macroeconomic challenges has opened up the potential for rapid growth in renewable energy.

An important driving force behind the changes in both the Polish and EU energy sectors is the growing awareness of the need to counteract climate change by transitioning to a zero-carbon economy, including a shift from so-called dirty, conventional energy sources to low-carbon and clean energy, such as renewable energy or gas. One factor supporting this trend is the European Union's climate policy. The Union is implementing this policy by, among others, promoting the development of renewable energy sources, which provide an alternative to fossil fuels and help reduce greenhouse gas emissions. There is increasing pressure to accelerate the transition to renewable energy sources. In 2023, the European Commission increased the target for the share of renewables in the EU's energy mix for 2030 from 32% to 42.5%, with a view to reaching 45%.

Electricity generation by source. According to Polskie Sieci Elektroenergetyczne (PSE), Poland's total energy production in 2024 was 167.0 TWh (+2.1% YoY), with consumption at 169.0 TWh (+0.9% YoY).

Source: Own analysis based on PSE data

Coal and lignite remain the main source of domestic electricity generation. The overall share of coal-fired power plants in domestic production has decreased from 77% in 2022 and 68% in 2023 to 63% in 2024 due to increasing legal restrictions in climate protection, as well as rising costs associated with the strong influence of unions in the mining industry and the declining availability of the mined raw material. In Poland, the trend of substituting coal energy with green energy from renewable energy sources (RES) is slowly progressing. The share of green energy production in Poland's energy mix increased to 25% in 2024, up from 21% in the previous year. The share of wind power plants was 15% and had the largest share of national production among RES technologies, with a 13.1% increase YoY in the volume of energy produced. Photovoltaic power plants and other renewables produced 10% of the country's electricity in 2024, an increase of 31.2% YoY in volume. Energy production from gas-fired power plants increased by 22.8% YoY, with this source's share of total domestic electricity production increased to 10% in 2024.

Entity structure of the RES market. According to the Institute of Renewable Energy (IEO), the total installed capacity of RES at the end of 2023 was nearly 29 GW, of which 17.1 GW was installed in PV farms and 9.4 GW in wind farms. The remaining capacity included biomass, biogas, and hydroelectric plants. At the same time, according to the Institute's data, at the end of March 2024 there were 4,870 professional PV installations and 1,400 wind installations in Poland. According to the IEO report, the largest players in the PV market in Poland are Respect Energy, PAK-PCE (formerly part of the ZE PAK Group), which was acquired by the Polsat Plus Group in mid-2023, Solis Bond Company, Better Energy, and Energa. In the case of onshore wind farms, however, state-owned companies play a key role in terms of installed capacity. The IEO identifies PGE (797 MW of installed capacity), Tauron (over 400 MW of installed capacity), and Energa (244 MW of installed capacity) as the owners of wind farms with the largest total capacity. In addition, Orlen will have more than 500 MW of installed capacity in onshore wind farms in 2023. Private companies are also present on the market, most notably Polenergia and RWE Renewables, which at the end of March 2023 had 435 MW and 450 MW of installed capacity in onshore wind farms, respectively.

Price formation mechanism. As a rule, the most important benchmark for energy prices in the OTC market in Poland is the exchange quotation conducted by TGE (Towarowa Giełda Energii S.A.) - the Polish Power Exchange. Energy on the TGE is sold on the spot market, i.e. the Day-Ahead and Intraday market (RDNiB), as well as on the Organized Trading Platform (OTF) in futures contracts. Energy prices in Poland are determined by market mechanisms. The segment of the energy market that performs essential functions in ensuring the safety and reliability of the national power system is the balancing market operated by Polskie Sieci Elektroenergetyczne S.A. This market provides signals on the cost of electricity production. The most important mechanism influencing energy prices on this market is the so-called "merit order", i.e. a mechanism aimed at ensuring that offers from sources with the lowest variable production costs are used first to meet electricity demand. Prices from this market are then reflected by market participants in the TGE by submitting bids corresponding to the price level in the balancing market.  In practice, this means that renewable energy sources, such as wind and photovoltaic farms, benefit from this mechanism as the sources with the lowest variable costs. Depending on the current demand for electricity, sources with increasingly higher variable costs are used in order. The price of energy is determined by the unit that "closes" the current "stack" covering the demand. In practice, in Polish conditions, this means that in the current energy mix, the price is determined primarily by coal or gas-fired power plants, which are the pillars of NPS security. According to the rules of the European energy market, the price is also influenced by cross-border exchanges, which are limited by the available transmission capacity.

In addition, the current price formation is also influenced by the annual and daily seasonality of production, due to the weather conditions that shape the supply of electricity from RES. In the case of photovoltaics, energy production occurs during the day and primarily during the sunny months, i.e. from early March to mid-October. For wind farms, the highest production is observed in the first and fourth quarters, when more windy days are recorded. The high production of RES sources due to seasonality and/or favorable meteorological conditions can lead to a supply of electricity that exceeds the demand of the grid at any given time, leading to a temporary drop in energy prices and even to temporary negative prices.

The graph below presents the evolution of electricity prices TGE Base in 2023-2024.

Source: own analysis based on TGE data (1) Band with annual delivery

 

Prospects for the development of the renewable energy market in Poland. Renewable energy has a very high development potential in Poland. Despite the rapid development of renewable energy sources in recent years and the increase in the share of RES in Poland's energy mix, it remains at a low level compared to other EU countries, taking into account the specific climatic, weather, terrain, etc. conditions in individual EU countries, which allowed for the intensive development of individual sources, such as hydropower in Scandinavian countries or photovoltaics in Southern Europe. According to Ember's "European Electricity Review 2024" report, in 2023 two thirds of the EU's electricity were generated from renewable sources, with wind and photovoltaic sources accounting for 27%. At the same time, Poland is one of the largest emitters of greenhouse gases in the EU. Given the climate targets Poland has committed to for 2030, the rate of increase in the share of renewables in the national energy mix will need to accelerate significantly in the coming years. Ember estimates that the share of RES in Poland's electricity generation will exceed 47% in 2030.

The second important trend supporting the development of RES will be a further increase in electricity demand due to the increasing electrification of various sectors of the Polish economy. According to the assumptions of the Polish Energy Policy until 2040 (PEP2040), the electricity demand will increase by 40.4% between 2020 and 2040. Renewable energy sources will have to keep pace with the growth in demand, otherwise the reduction in fossil fuel consumption will not be sufficient to meet the EU's climate targets.

Hydrogen market in Poland. The hydrogen market is developing very rapidly in the European Union as well as in Poland. The strategic document defining the main goals for the development of the hydrogen economy in Poland and the directions of activities necessary to achieve them is the Polish Hydrogen Strategy (PSW) until 2030 with an outlook to 2040. The main indicators define, among others, the amount of installed capacity of hydrogen production facilities, the number of hydrogen buses and hydrogen refuelling stations in use. According to the strategy, at least 40 GW of electrolysers should be installed in Poland by 2030, and annual production of hydrogen from renewable sources should be at least 10 million tonnes. Hydrogen can be used as an energy storage medium. It offers the possibility of using surplus energy to produce green hydrogen, which can then be used for both transport and industry.

Poland is the third largest hydrogen producer in Europe. However, it is mainly grey hydrogen, which is associated with CO2 emissions. Therefore, the strategy is to develop methods to produce, store and distribute green hydrogen. Polsat Plus Group's strategic plans for the production and distribution of green hydrogen are fully in line with the Polish Hydrogen Strategy.

According to an analysis by the International Energy Agency, the demand for low-carbon hydrogen in 2050 will be four times the total demand in the base year (2022). According to the forecast, the main consumers will be transport and industry. At present, the use of hydrogen in individual transport in Poland is less important than plans to develop organized transport.  In connection with calls for proposals for the National Fund for Environmental Protection and Water Management's (NFOŚiGW) "Green Public Transport" program, funds have been allocated to Polish cities for the purchase of more than a hundred hydrogen buses.

2.3.        Competitive advantages

We are the leading integrated media and telecommunications group in the region

Our major competitive advantage is that we have gathered and manage autonomously all key assets within our Group. Thanks to this we can efficiently operate a diversified business comprising pay TV in DTH and online (IPTV, OTT), mobile and fixed-line telephony, mobile and fixed-line broadband Internet, wholesale business as well as TV broadcasting and production and on-line services of content, news and video sharing.

We are a leading player in the markets in which we operate. Since 2006, we are the leader of the Polish pay TV market both in terms of customers and the number of active services and market share. Our subsidiary, Polkomtel, which focuses on the provision of mobile telecommunication services under the ‘Plus’ brand, is one of the leading telecommunication operators in terms of generated revenues and the scale of the base of mobile telephony and the mobile broadband Internet access services. In turn, our subsidiary Netia is a leading provider in fixed-line services, including broadband Internet offered mainly in fibre optic technologies. At the same time we are the leading TV group in Poland in terms of advertising revenues and audience share and, starting from 2020, following the acquisition of Interia.pl Group we became one of the major Internet publishers in Poland.

Additionally, our advantage is that we have an extensive nationwide distribution network through which we sell most of the services offered by our Group. We simultaneously offer our services in alternative telemarketing channel as well as online in our own online stores. Furthermore, both Polkomtel and Netia have their own separate B2B sales and service channels and, additionally, Polkomtel has an extensive prepaid distribution network.

We have strong brand recognition and enjoy good reputation among our customers

Our core brands – ‘Plus,’ ‘Polsat,’ ‘Polsat Box’ and ‘Netia’ – are well recognized by Polish consumers and we believe they are associated with high quality and value-for-money services addressed to the entire family.

We believe that our position as the largest pay TV operator in Poland and good relations with programming licenses providers give us a competitive advantage in obtaining high quality content on attractive market terms. Therefore, we can offer attractive programming packages at competitive prices which translates favorably into viewers’ opinions on us. At the same time, through investing in the latest technologies which allow to offer high quality telecommunication services, we constantly increase attractiveness of our services which contributes to high satisfaction levels among our customers. We also enjoy the viewers' trust in the objectivity of the information we provide, and the programs of Telewizja Polsat have been recognized for many years as one of the most reliable and unbiased sources of information among the main TV stations in Poland.

We own the largest advertising office in Poland

Polsat Media, our advertising sales office, is currently the largest broker on the television market with 94 TV channels in its portfolio, including a large nationwide TV station and a wide package of thematic channels belonging to Polsat Plus Group and other Polish and foreign broadcasters. Polsat Media is currently the largest advertising office not only in terms of the number of channels served, but also in terms of audience share (38% in a target group aged 16-59 years) and its share in the TV advertising market (47% egGRP in 2024). Thanks to the rich portfolio of supported channels and the ability to reach many specialized audiences with the message, we can precisely locate the customer's commercial information and reach the desired audiences, optimizing the cost of reaching them. We can communicate with advertising recipients not only through traditional spots, but also through non-standard methods, such as product placement or special cross-media advertising campaigns. The scale of our operations makes it easier for us and our customers to negotiate and coordinate marketing activities.

Polsat Media is responsible for all advertising services and sales of advertising space in website services of Interia.pl Group.

We have a significant customer base to which we can up-sell a broad portfolio of services

Polsat Plus Group has a significant base of individual, business and corporate customers, as well as prepaid users. This base includes approximately 6 million unique individual customers, bound by contracts for definite or indefinite periods of time, which generate a regular monthly revenues stream. We provide retail services to nearly every second household in Poland, which makes us one of the largest Polish service providers for residential customers.

Our strategy assumes up-selling to this customer base of an extensive portfolio of telecommunication, television and other services and products by our companies independently or in partnership with other entities, to increase revenue per customer. We believe that up-selling services to our own base will enable us to increase revenue in a cost-effective way, while simultaneously offering to our customers attractive price terms, which should translate into an improvement of customer satisfaction and loyalty.

We offer a unique combination of integrated services

We provide multiplay services combining mainly pay TV, Internet access and telecommunication services. In addition, we offer our customers the option to purchase other services essential for the home and business at attractive prices. The Strategy 2023+ that we adopted in December 2021 assumes the further expansion of our portfolio with new services related to the production and sale, at affordable prices, of clean energy from zero and low-emission sources. The ability to provide a comprehensive range of multi-play services represents our significant competitive advantage on the pay TV market in Poland. At the same time we are a telecommunication operator who offers bundled services comprising a rich pay TV offer provided using our own assets and infrastructure, which ensures greater price elasticity and more operational effectiveness on this highly competitive market.

The provision of services in an integrated model enables us to offer attractive price terms to our customers, while simultaneously simplifying the process of customer service, which translates into the improvement of customer satisfaction and loyalty, thus decreasing the churn rate. We believe that, similarly to highly developed European countries, preferences of Poles will gradually move into integrated services direction, which will strengthen our competitive advantage.

Multi-platform distribution of online video content and proprietary technology for video online content distribution

Our Polsat Box Go online streaming service offers access to unique content through a wide range of end-user devices, including computers/notebooks, tablets, smartphones, TV sets with Internet connections and set-top boxes, in line with our principle: “For everyone. Everywhere”. Our objective is to provide access to an extensive range of audio-visual content through any type of device for playing online multimedia files. We strive to ensure that each type of platform is supported by all major equipment manufacturers and operating systems.

Polsat Box Go strengthens our position as an aggregator and distributor of content as well as ensures an important competitive advantage. We continue to develop our services using many years of experience in sales of pay TV, which helps us achieve synergies in terms of costs and revenues.

We have also developed unique technological competences in encoding and streaming audio-visual content, as well as optimizing distribution of this type of signal. Unlike our competitors, we apply proprietary solutions to our online video platforms, which enables us to provide services that are optimally adjusted to the limited Internet infrastructure in Poland and the capacities of external systems with which our applications are integrated. In this way, we may offer services of higher quality than the widely used solutions, for instance, our system of HD video stream encoding helps reduce the broadband required to deliver the signal by half as compared with solutions implemented by other operators on the Polish market. Hence, the optimized technology has a direct effect on our projects, their coverage potential and the number of concurrent viewers.

We own the biggest portfolio of TV channels in Poland, offering attractive programming content for each family member

We offer the largest and most diversified portfolio of channels on the Polish market, which gives us a leading position in terms of audience share among television groups in Poland and advertising market share. Polsat Plus Group portfolio consists of 43 own channels. Moreover, there is a group of 5 cooperating channels which are related with the Group either by equity links or joint broadcasting projects. The portfolio of our thematic channels includes general entertainment, music, sports, news, lifestyle, movie and children’s channels.

We have contracts with major film studios, which provide us with access to a wide selection of the most attractive films and series.

We believe that our rich portfolio of Polish language TV channels and our assets, which enable us to produce diversified and attractive Polish language video content dedicated to Polish viewers, constitute our key competitive differentiators and will allow us to successfully build our revenue on many fields of exploitation. Thereby, Polsat Plus Group is in a position to successfully compete not only with companies which offer media or communication services in Poland, but also with the competitive pressure emerging from global content producers operating in the OTT model.

Synergies in content distribution

Within the media segment, we benefit from two-way synergies in the creation and use of content from traditional TV to the Internet and vice versa from the Internet to traditional TV. The TV content that we produce and premiere on our TV channels is also made available on Polsat Box Go. Making these productions available on our VOD service is another way of providing access to this content so that viewers can find it at a time and place that is most convenient for them. It is also a way to reach potential new viewers and attract new subscribers by broadening the programming base of the Polsat Box Go service, thus increasing its attractiveness. In addition, it is another field for monetizing already produced content by displaying advertising alongside it. In addition to the classic model described above, we are increasingly dealing with the reverse model, where content produced for the VOD service is reused on traditional television after some time.

Another example of synergy is a common newsroom for the Polsat News TV channel, the Polsatnews.pl website and the Interia portal, thanks to which all our major news media can use the same information and materials, providing all viewers and users with the same, highest level of information. In addition, thanks to the use of links redirecting to other sites and services, there is no need to rewrite all the news for each site separately, which saves the editors' time and is a kind of self-promotion, making users aware that they can also find interesting content on other Group sites.

We successfully monetize a rich portfolio of sports rights

An important element that differentiates us on the market is a rich and unique broadcasting offer of the largest and most interesting sports events worldwide. Our offer is exceptionally attractive for fans of football and volleyball. We offer football fans broadcasts of the Europa League and the UEFA Conference League matches, qualifiers to the UEFA European Championships and the FIFA World Championships as well as the football Nations League. As for volleyball, we offer the biggest and most prestigious volleyball tournaments – the men’s and women’s World Volleyball Championships, games of the volleyball Nations League, the men’s and women’s Europe Volleyball Championships, the club volleyball competitions of Polish Plus Liga and Tauron Liga and also the volleyball matches of CEV Champions League and other European cups involving Polish volleyball teams. We also have a strong position in tennis: we broadcast the prestigious Grand Slam tournament at Wimbledon, all the men's ATP tournaments and the national team competition in the United Cup. We also offer boxing and mixed martial arts galas (UFC, FEN, Babilon), competition between the world's best female and male athletes in the Diamond League and World Athletics Series, the thrilling MotoGP motor racing competition and many other disciplines.

In addition to the Polsat Sport and Polsat Sport Premium channels, which offer the above-mentioned events, we have Eleven Sports channels in our Group, which offer the strongest football leagues - La Liga, Serie A, the German Bundesliga and the French Ligue 1. The Eleven Sports channels will also show the elite Formula 1. Unique sports content represents an important element that builds the value of our pay TV offering.

We believe that attractive content, including exclusive content that is not available in the offer of other pay TV operators, is a significant competitive advantage over other pay TV operators in Poland.

Concurrently, we seek to monetize TV channels from our portfolio, also by offering them in a wholesale offer to other entities which provide pay TV services on the Polish market. This translates positively into the level of wholesale revenues we generate in the media segment.

We have a high quality telecommunication infrastructure and broad portfolio of frequency bands

We provide telecommunication services including voice, data transmission and wholesale services, as well as a broad array of added services based on the integrated 2G/3G/4G/5G mobile network. These services are provided based on frequencies and core network owned by us, while our partner in the maintenance and expansion of the mobile access network is Towerlink Poland, a specialized company from Cellnex Group.

The network used by our customers supports the following technologies: GSM/GPRS/EDGE (2G), UMTS/HSPA/HSPA+/HSPA Dual Carrier (3G), LTE/LTE Advanced (4G) and 5G. We own spectrum reservations in an extensive portfolio of telecommunication frequencies, including 420 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2600 MHz FDD and 2600 MHz TDD and 3400-3500 MHz bands. Our rich frequency resources not only guarantee flexibility in bandwidth management, but also open up many possibilities for network reconfiguration in the future. In particular, in 2011, as the first operator in Poland, we introduced services based on LTE and LTE Advanced technologies and in May 2020 we offered our customers Poland’s first commercial 5G network. Currently, practically the entire population of Poland is within the coverage of our 2G/3G/4G mobile services while the coverage of our 5G network already reaches over 26 million of Poles.

Thanks to the extensive footprint of the mobile network that we use, we are able to reach with our telecommunication services customers who live in less populated suburban and rural areas of Poland, while incurring substantially lower costs than cable TV or fixed-line operators. This enables us to build a strong position in smaller cities and less urbanized areas of Poland and provide telecommunication services – in a cost-effective way – to the existing customers of Cyfrowy Polsat, who are located mainly in the aforementioned areas. Due to the high cost of network roll-out, starting of operations and regulatory barriers related to obtaining access to frequencies, we will continue to profit from our strong market position.

New entrants must overcome significant regulatory and operational barriers and acquire access to radio spectrum or incur very significant investment outlays to compete effectively in the markets in which we operate

We believe that we benefit from significant market entry barriers that will aid us in maintaining our leading positions in the competitive Polish pay TV, telecommunication and TV broadcasting markets. Unlike potential entrants to the Polish pay TV market, we benefit from economies of scale and a loyal customer base, and we can spread the relatively high cost of the necessary technologies over our large customer base and leverage the stronger bargaining power that comes with a leading market position.

On the other hand, entry to the telecommunication market requires obtaining direct access to telecommunication frequencies and very expensive and time-consuming investments into telecommunication network or obtaining paid access to radio frequencies via one of the four mobile operators. However, at present the majority of radio spectrum allocated to mobile technologies is nearly fully distributed among the current market players and a scenario assuming the emergence of a new infrastructure operator seems unlikely. Operators who provide mobile services based only on paid access to the existing mobile networks so far have failed to achieve a scale of business in Poland which could create a significant competitive threat to us. As for fixed-line telecommunications services, in particular broadband Internet access, entry barriers include time- and capital-consuming outlays which new players would need to incur to develop their network infrastructure.

We have strong, stable and diversified cash flows

In 2024 we generated revenue through three business segments: the B2C and B2B services segment, the media segment: TV and online, green energy segment and the real estate segment. In the B2C and B2B services segment our large retail customer base, stable monthly subscription revenue and low churn rates provide us with significant predictability of future revenue and strong recurring cash flows, which have historically proven to be resilient, even during periods of challenging economic conditions, such as the COVID-19 pandemic.

In the case of our cost base, we focus on improving the efficiency while maintaining high quality by carrying out initiatives aimed at the development of in-house services and systems. Examples include our own set-top-boxes manufacturing plant or the gradual centralization of back-office processes within the Group.

We have experienced managing staff

Our management team consists of executives who were members of the management boards or served in other managerial positions within the media, TV and telecommunications industries and have many years of experience in these industries. In addition, our business segments are managed by teams of experienced senior managers who provide expertise and a deep understanding of the markets in which we operate. What distinguishes us is a low factor of rotation among our key managing staff, which positively reflects on the stability of our business and operating results. Our senior managers have a significant track record of increasing our customer base and market share and introducing new products in competitive environments while managing costs and increasing free cash flow.

 

3.               Significant investments, agreements and events in the third quarter of 2024

3.1.        Corporate events

Early Redemption of the Series B and C Bonds

On January 17, 2024, the Company decided to carry out the early redemption of all outstanding:

(i)  223,798 Series B bearer bonds with the total nominal value of PLN 223.8 million issued by the Company on April 26, 2019 with the redemption date specified in the terms and conditions of the issuance of the series B bonds of April 24, 2026, with the ISIN PLCFRPT00047, listed in the Alternative Trading System operated by the Warsaw Stock Exchange (Giełda Papierów Wartościowych w Warszawie S.A., the “WSE”) within the Catalyst market under the abbreviated title CPS0426; and

(ii) 88,053 Series C bearer bonds with the total nominal value of PLN 88.1 million issued by the Company on February 14, 2020 with the redemption date specified in the terms and conditions of the issuance of the series C bonds of February 12, 2027, with the ISIN PLCFRPT00054, listed in the Alternative Trading System operated by the WSE within the Catalyst market under the abbreviated title CPS0227.

The Early Redemption was effected on February 5, 2024 through the payment of (i) for each Series B Bond, a cash amount equal to the nominal value, i.e. PLN 1,000, plus accrued interest of PLN 20.46, and (ii) for each Series C Bond, a cash amount equal to the nominal value, i.e. PLN 1,000, plus accrued interest of PLN 39.41 and the Early Redemption premium of PLN 5.00.

In connection with the early redemption, all Series B Bonds and Series C Bonds were retired.

Disposal of shares in Muzo.fm Sp. z o.o.

Telewizja Polsat sold 100% of shares in Muzo.fm Sp. z o.o. on March 27, 2024. The total sale price was PLN 13.3 million.

Distribution of profit for 2023

On June 20, 2024, the Annual General Meeting of Cyfrowy Polsat resolved to allocate the Company's net profit for the fiscal year 2023 in the amount of PLN 639.5 million in full to the reserve capital. The resolution of the Annual General Meeting was in accordance with the recommendation of the Company's Management Board of May 22, 2024, which was positively reviewed by the Supervisory Board on the same date.

The Company's Management Board decided not to recommend the dividend payout from the 2023 profit due to the capital-intensive strategic investments carried out by the Company as part of its Strategy 2023+, aimed at continuing the development of the Company's capital group over the long term in line with the overarching strategic goal of sustainably growing the Company's value for its shareholders. In particular, the funds retained in the Company will be employed for the timely implementation of currently ongoing green energy projects, which, among others, include the construction of wind farms. As a result of the implementation of the aforementioned projects, the Company's capital group will reach an installed capacity in renewable energy sources in 2026, which will enable the production of up to 2 TWh of clean energy per year. According to the Company's estimates, the execution of strategic assumptions will translate into incremental recurring EBITDA at the consolidated level of ca. PLN 500-600 million per year.

At the same time, in deciding not to pay a dividend, the Management Board took into account the Company's net debt ratio, which remains at an elevated level due to, among others, the financing of strategic investments, as well as the unfavourable macroeconomic environment, in particular high inflationary pressure and persistently high interest rates translating into high debt servicing costs for the Company.

Amendment of the Company's Statutes

On June 20, 2024, the Annual General Meeting of Cyfrowy Polsat resolved on amending the Statutes of the Company. The amendment to the Statutes were registered by the District Court for the Capital City of Warsaw on July 18, 2024. The full text of the Company's new Statutes is available on Cyfrowy Polsat's website at https://grupapolsatplus.pl/en/corporate-governance/corporate-documents.

Changes in the Supervisory Board

On June 20, 2024, the Annual General Meeting of the Company appointed Ms. Justyna Magdalena Kulka to the Supervisory Board of the Company and entrusted her with the position of Vice Chairperson of the Supervisory Board.

On July 1, 2024, Mr. Piotr Żak resigned from his membership in the Supervisory Board and from the position of Vice-Chairman of the Supervisory Board of the Company, effective as of the end of 2 July 2024. The resignation followed the appointment of Mr. Piotr Żak to the position of President of the Management Board of Telewizja Polsat Sp. z o.o., a subsidiary of the Company, as of 3 July 2024.

On October 8, 2024, the Extraordinary General Meeting of the Company resolved to reduce the number of members of the Supervisory Board of the present term of office to 6 persons and resolved to dismiss Mr. Jarosław Grzesiak and Mr. Tobias Solorz from the Supervisory Board.

3.2.        Business related events

Sale of intangible assets

On January 25, 2024, Polkomtel entered into a sale agreement regarding the sale of intangible assets, consisting of a portion of its Internet Protocol version 4 communications protocol address package, to an unrelated party for a total consideration of USD 56.1 million. The transaction took place as part of and as a result of an ongoing asset review process, and the intangible assets divested were non-strategic assets.

The agreed schedule provided for the completion of the above transaction and payment in three tranches. The three payments of PLN 198.7 million in total, net of transaction costs, were recognised under 'Other operating income' in the consolidated income statement for 2024.

Won tenders for the delivery of NesoBus hydrogen buses

On March 18, 2024, the city of Chelm signed a contract with our subsidiary PAK-PCE Polski Autobus Wodorowy Sp. z o.o. for the supply of 26 hydrogen buses for the city, in the result of a tender. The delivery of zero-emission, environmentally friendly NesoBus hydrogen buses to Chelm will take place in three tranches and will be completed by October 30, 2025. The contract value is PLN 97.0 million.

In October 2024, a Group company - PAK-PCE Polski Autobus Wodorowy, won two tenders for the delivery of zero-emission, eco-friendly hydrogen buses: 5 for Konin and 8 for Górnośląsko-Zagłębiowska Metropolia (GZM Metropolis). The order for Konin, valued at PLN 18.0 million PLN, was delivered at the turn of 2024 and 2025. The order for the GZM Metropolis, valued at PLN 31.8 million PLN, is planned for the fourth quarter of 2025.

After the balance sheet date, Pak-PCE Autobus Wodorowy won two tenders for the supply of more Nesbuses: 11 buses for Rybnik (contract value of PLN 41.1 million with completion dates in the first and second quarters of 2026) and 10 buses for Krakow (contract value of approximately PLN 36.1 million). 

Modifications of offers for customers

In March 2024, we introduced an innovative All In Streaming bundle to our Plus-branded mobile offerings, providing combined access to the offerings of three popular streaming platforms: Disney+, HBO MAX and Polsat Box Go Plus (via a Polsat Box Go account linked to a Plus phone number). The new package gives users the freedom to choose the content offered by these platforms and Plus is the only operator on the Polish market to offer simultaneous access to several streaming platforms in a single package.

Acquisition of renewable energy projects

On June 27, 2024, PAK-Polska Czysta Energia Sp. z o.o., a member of the Group, and ZE PAK S.A. informed that they had made a joint investment by acquiring shares in project companies of Goalscreen Holdings Limited: Energia Przykona sp. z o.o. and Neo Energia Przykona X sp. z o.o. These companies are implementing a project for a cluster of wind power plants in the Opole province with a total connected generation capacity of approximately 500 MW.

The Group acquired 1% of the shares, with the possibility of increasing its stake in the project, while 99% of the shares were acquired by ZE PAK. The total payments in connection with the acquisition of the shares will amount to no more than EUR 1.2 million for PAK-PCE and no more than EUR 110 million for ZE PAK, respectively, and will be paid in instalments as the project progresses with the final amount depending on the final parameters of the project.

Polsat Plus Group and ZE PAK will aim to have the project in ready-to-build status by December 31, 2030. For that purpose, project development agreements will be entered into under which activities will be carried out, in particular, to obtain full title to the land on which the wind farm is to be built, as well as permits enabling its construction to commence. Payments under project development agreements will depend on the completion of certain project phases, the total amount of which will depend on the final parameters of the wind farm, in particular on the power generated, and is estimated to be a maximum of EUR 160 million. For subsequent phases, the project companies will enter into both further project development agreements and agreements for the construction of renewable energy wind farm units.

On November 4, 2024, the Group company PAK-Polska Czysta Energia Sp. z o.o. acquired 100% of the shares in the share capital of Global Continental Sp. z o.o. for the amount of PLN 4.1 million. Global Continental is developing a photovoltaic project with an estimated target installed capacity of 8.4 MW, located in Gromadka in the Lower Silesian Voivodeship. The estimated energy production capacity is 8.9 GWh per year.

Expanding coverage of mobile and fixed-line Internet services

We are progressively expanding the reach of our internet access services in both mobile and fixed-line technology. In 2024, we expanded the 5G Plus network coverage to over 26 million residents of Poland, nearly 70% of Poland's population, of which more than 17 million can enjoy fibre-fast 5G Ultra mobile Internet. As a result of the expansion of the network to nearly 4,000 transmitters, Plus' 5G network is available in more than 1,320 towns and cities across the country.

In 2024, we expanded the availability of Plus’ fibre optic Internet with the fixed-line infrastructure of Vectra Group and Polski Światłowód Otwarty based on wholesale access by 3.6 million address points. In effect, as of the date of publication of this Report, more nearly 11 million households are within the reach of Plus' fixed-line Internet access service, of which more than 8.5 million households have access to a connection with speeds of up to 1 Gbps.

Acquisition of sports rights

On July 1, 2024, TV Polsat informed that it had acquired exclusive rights to broadcast and stream the new format of the UEFA Europa League and UEFA Conference League for the next three seasons, that is from the season 2024/2025 to 2026/2027.

On July 5, 2024, the Group’s company, Eleven Sports, informed that it had acquired exclusive rights to broadcast Bundesliga and Bundesliga 2 football matches in Poland from the 2025/26 to 2028/29 season. In addition, the station acquired a non-exclusive license for the 2024/25 spring round, in which it will be able to broadcast the five most important Bundesliga matches and selected clashes of Bundesliga 2.

In October 2024, Eleven Sports acquired exclusive rights to show all Formula 1 Grand Prix races in Poland from 2025 to 2028. Under the signed agreement, Eleven Sports has the right to broadcast practice sessions, the qualifiers, F1 Sprint and the Grand Prix during all 24 race weekends.

Grant agreement with The European Climate, Infrastructure and Environment Executive Agency (CINEA)

In August 2024, the Group's companies PAK-PCE Biopaliwa i Wodór Sp. z o.o. and PAK-PCE Stacje H2 Sp. z o.o. signed a grant agreement with The European Climate, Infrastructure and Environment Executive Agency (CINEA) for a hydrogen project. It includes the construction of 5 publicly accessible hydrogen refuelling stations located along the roads of the TEN-T network (Trans-European Transport Network) and green hydrogen production facilities with a total capacity of 5 MW. The subsidy amounts to EUR 14.9 million and was awarded under the CEF Transport - Alternative Fuels Infrastructure Facility program.

Renewal of the frequency reservations

By decision of November 28, 2024, the President of UKE extended the reservation decision in the 2600 MHz band for Polkomtel for another 15 years. Polkomtel made a payment for the aforementioned frequency reservations in the amount of PLN 283.2 million. 

Due to the upcoming expiry of the frequency reservation in the 900 MHz band (in February 2026), Polkomtel submitted an application to the President of the UKE in November 2024 for a frequency reservation in the 900 MHz band for the next period. It is estimated that the issuance of a decision by the President of the UKE regarding the above-mentioned frequency reservation in the 900 MHz band for the next period will take place in the second quarter of 2025.

3.3.        Events after the balance sheet date

Disposal of shares in Asseco Poland S.A.

On January 31, 2025, the Company disposed of 8,300,029 shares of Asseco Poland S.A., representing 9.99% of the share capital of Asseco Poland and carrying the right to exercise 9.99% of votes at the General Shareholders’ Meeting of Asseco Poland for the price of PLN 85.00 per share.

On February 5, 2025, the Company disposed in stock market transactions of 105,298 shares of Asseco Poland S.A., representing 0.13% of the share capital of Asseco Poland and carrying the right to exercise 0.13% of votes at the General Shareholders’ Meeting of Asseco Poland. Following this transaction Cyfrowy Polsat holds null shares in Asseco Poland S.A.

Partial early repayment of loans

On February 21, 2025 the Company and Polkomtel executed partial early repayment of the term loan, granted under the Senior Facilities Agreement dated 28 April 2023 (the “SFA”) in the amount of PLN 681.4 million, increased by accrued interest. As a result of the above early repayment, the total principal amount of the Group's debt from the SFA is PLN 6,263.1 million, with a repayment schedule until 2028.

The funds for the partial early repayment of the term loan have been obtained, among others, in the process of the sale of Asseco Poland S.A. shares by the Company.

Auction for frequency reservations in the 700 MHz and 800 MHz bands

On March 25, 2025, the President of the Office of Electronic Communications (UKE) announced the results of an auction for frequency reservations in the 700 MHz and 800 MHz bands. The auction involved six paired blocks, each 5 MHz wide in the 700 MHz band, and one paired block 5 MHz wide in the 800 MHz band with the starting price for each block set at PLN 365.0 million. Polkomtel auctioned the D Block (718-723 MHz and 773-778 MHz) for PLN 363.1 million. According to the auction documentation, the commercial offering of services using the acquired frequencies must commence within 4 months from the date of reservation receipt, which all auction participants should receive in May this year. All frequency blocks have been allocated for use until May 31, 2040.

The auction documentation includes investment requirements with regard to the network development encompassing coverage and quality obligations, which can be fulfilled using all available frequency resources, including those won in the current selection procedure. The investment commitments stipulate that by the end of 2026, operators must ensure mobile network coverage for 98% of households (excluding the areas indicated in appendix 1 of the draft reservation decisions) with a transfer speed of 50 Mb/s. By the end of 2028, coverage is to increase to 99% of households, with a speed of 95 Mb/s and latency of 10 ms. By the end of 2030, the speed is to increase to 120 Mb/s with 99% coverage and latency of 10 ms. At the same time, the investment commitments stipulate that by the end of 2026, operators will have to provide mobile network coverage for at least 90% of the territory of the country (excluding the areas indicated in appendix 1 to the draft reservation decisions) with at least 50 Mbps transfer and by the end of 2028 with at least 95 Mbps transfer and 10 ms latency.

 

4.               Operating and financial review

4.1.        Operating review

The operating indicators (KPIs) presented below include the operating results of Polsat Plus Group. Due to the strategy pursued by the Group, which involves, among others, bundling and discounting services provided by various entities within the Group, the Company's individual operating ratios are part of broader consolidated data and as such are not published by the Company on a standalone basis.

4.1.1.     B2C and B2B services segment

	3 months ended December 31		change / %
	2024	2023	nominal	% / p.p.
Contract services for B2C customers
Total number of B2C RGUs (EOP) [thous.], incl.:	13,209	13,083	126	1.0%
Pay TV	4,683	4,843	(160)	(3.3%)
Mobile telephony	6,437	6,246	191	3.1%
Internet	2,089	1,994	95	4.8%
Number of B2C customers (EOP) [thous.]	5,737	5,795	(58)	(1.0%)
ARPU per B2C customer [PLN]	77.4	73.6	3.8	5.2%
ARPU per B2C customer (12M YTD) [PLN]	76.1	72.6	3.5	4.8%
Churn	7.0%	7.6%	-	(0.6 p.p.)
RGU saturation per B2C customer	2.30	2.26	0.04 p.p.	1.8%
Prepaid services
Total number of RGUs (EOP) [thous.], incl.:	2,468	2,646	(178)	(6.7%)
Pay TV(1)	86	98	(12)	(12.2%)
Mobile telephony(2)	2,358	2,522	(164)	(6.5%)
Mobile Internet(2)	24	26	(2)	(7.7%)
ARPU per prepaid RGU [PLN]	17.3	17.4	(0.1)	(0.6%)
ARPU per prepaid RGU (12M YTD) [PLN]	17.6	17.6	-	-
Contract services for B2B customers
Total number of B2B customers (EOP) [thous.]	68.2	68.8	(0.6)	(0.9%)
ARPU per B2B customer [PLN]	1,530	1,463	67.0	4.6%
ARPU per B2B customer (12M YTD)  [PLN]	1,504	1,454	50.0	3.4%

(1)	RGU excluding the low margin package Polsat Box Go Start
(2)	The number of reported RGUs of prepaid services of mobile telephony and internet access refers to the number of SIM cards which received or answered calls, sent or received SMS/MMS or used data transmission services within the last 90 days.

Contract services for B2C customers

The total number of B2C customers to whom we provided contract services as at the end of 2024 was 5,737 thousand (-1.0% YoY). The slowdown in the decline of the customer base is worth noting. The erosion of the base was influenced by the declining popularity of the satellite technology as well as the continued process of merging contracts under one common contract for the household within our base. In line with our strategic assumptions, we avoid conducting an aggressive sales policy on individual products and focus on increasing customer loyalty, in particular through offering a wide portfolio of bundled services, as well as on increasing ARPU per contract customer.

At the end of 2024, we recorded an improvement in the 12-month churn rate among B2C customers by 0.6 p.p., to 7.0%. The continued low churn rate is primarily the effect of a high level of loyalty of our customers of bundled services, resulting from the successful implementation of our multiplay strategy, as well as our actions aimed at fostering high customer satisfaction.

In line with the assumptions of our long-term strategy, we aim to maximize revenue per contract B2C customer through up-selling and cross-selling, i.e., selling additional products and services to our customer base within the framework of our bundled services offer, and offering enhanced television and telecommunications packages (the more-for-more strategy). As a result, in the fourth quarter of 2024, average revenue per B2C customer increased to PLN 77.4 (+5.2% YoY) while in 2024 it reached the level of PLN 76.1 (+4.8%).

The number of contract services for B2C customers provided by us at the end of 2024 amounted to 13,209 thousand RGUs, i.e., 126 thousand (+1.0%) more compared to the previous year. This growth was driven by high sales of mobile telephony services (+191 thousand, +3.1% YoY) and Internet access services (+95 thousand, +4.8% YoY) in 2024, in particular, Internet access in fixed technologies. At the same time, the downward trend in the pay TV services base continues, with a decrease by 160 thousand (-3.3%) YoY to the level of 4,683 thousand RGUs at the end of 2024. The key driver behind the decline in the pay TV customer base remains a lower number of provided satellite TV services which was partially offset by an increasing number of TV services offered in online technologies (IPTV/OTT).

The saturation of our B2C customer base with integrated services, expressed as the ratio of contract services per customer, increased by 1.8% YoY in of 2024 and amounted to 2.3. We believe that further saturation of our customer base with integrated services will positively influence the rate of growth of the number of contract RGUs provided by us in the future and will support keeping the churn rate at a low level.

Our bundled services offer is based on a mechanism of offering attractive discounts on every additional product or service purchased from the Group’s portfolio and has a positive effect on the churn rate, RGU saturation per customer ratio and ARPU per contract B2C customer. At the end of 2024, the number of customers using our bundled services amounted to 2,516 thousand, increasing by 60 thousand (2.4%) YoY. This translates into a 43.8% saturation of our contract customer base with multiplay services. This group of customers had 7,699 thousand RGUs at the end of f 2024, up by 261 thousand (+3.5% YoY). Bearing in mind our strategic goal - the successive build-up of revenue per contract customer through cross-selling of additional products and services - our bundled services offer is perfectly in line with our strategy. Therefore, despite having reached a high level of our multiplay base, we will continue to further popularize this program among our customers.

Prepaid services

The number of prepaid services provided by us decreased by 178 thousand (-6.7% YoY) to 2,468 thousand as of December 31, 2024.

The main reason behind the decline in the prepaid service base in the analysed period was a decrease by 164 thousand (-6.5% YoY) in the number of prepaid mobile telephony RGUs, which amounted to 2,358 thousand at the end of 2024. This decrease was due to the high level of competitiveness in this market segment, reflected, among others, in very large data packs offered in prepaid mobile tariffs. In addition, the number of prepaid mobile broadband Internet access services remains in a downward trend (-2 thousand RGUs, -7.7% YoY). This is primarily attributable to the growing popularity of data transmission in mobile tariffs (smartphones) due to the size of data packages offered. The number of prepaid pay TV services decreased by 12 thousand (-12.2% YoY) as a result, among others, of lower sales of Polsat Box Go Sport packages due to the fact that popular sporting events took place in the comparative period.

In the fourth quarter of 2024, ARPU per prepaid RGU amounted to PLN 17.3 (-0.6% YoY) while for the full year 2024 it remained stable YoY at the level of PLN 17.6.

Contract services for B2B customers

The total number of B2B customers as at the end of 2024 was 68.2 thousand (-0.9% YoY). The scale of our B2B customer base remains relatively stable in the long term, proving the high efficiency of our efforts directed at fostering high satisfaction of our business customers. At the same time, we maintain a high level of ARPU from our B2B customers, which increased to PLN 1,530 (+4.6% YoY) per month in the fourth quarter of 2024 and PLN 1.504 (+3.4% YoY) per month in 2024.

The B2B area continues to be under strong competitive pressure, which translates into pricing levels for traditional telecommunication services. Building the value of our B2B base in founded in a natural way on additional services provided to our business customers. We strive to constantly expand our offering for business customers by new services which generate incremental revenue.

4.1.2.     Media segment: television and online

When analysing and evaluating our media segment we consider predominantly audience share by TV channel and TV advertising and sponsoring market share as well as the average monthly number of users and average monthly number of page views in case of online activities. The following tables set forth these key performance indicators for the relevant periods.

	3 months ended December 31		Change p.p. / %	12 months ended December 31		Change p.p. / %
	2024	2023		2024	2023
TV channels
Audience share (1) (2), including:	22.71%	22.00%	0.71 p.p.	22.00%	22.00%	-
POLSAT (main channel)	7.54%	7.50%	0.04 p.p.	7.11%	7.61%	(0.50 p.p.)
Thematic channels	15.17%	14.50%	0.67 p.p.	14.89%	14.39%	0.50 p.p.
TV advertising and sponsoring market share	28.0%	28.3%	(0.3 p.p.)	28.0%	28.4%	(0.4 p.p.)
Online – Internet portals
Average number of users [millions]	20.8	20.8	-	20.4	20.9	(2.4%)
Average number of page views [millions]	1.813	1.982	(8.5%)	1.838	1.941	(5.3%)

 

Audience shares

Audience share	3 months ended December 31		Change p.p.	12 months ended December 31		Change p.p.
	2024	2023		2024	2023
Audience share(1)(2), including:	22.71%	22.00%	0.71	22.00%	22.00%	-
POLSAT (main channel)	7.54%	7.50%	0.04	7.11%	7.61%	(0.50)
Thematic channels	15.17%	14.50%	0.67	14.89%	14.39%	0.50
TV4	3.27%	2.86%	0.41	3.04%	2.91%	0.13
TV6	1.76%	1.21%	0.55	1.68%	1.18%	0.50
Polsat News	1.08%	1.60%	(0.52)	1.19%	1.36%	(0.17)
Super Polsat	1.09%	0.98%	0.11	1.02%	1.00%	0.02
Polsat 2	0.90%	1.19%	(0.29)	0.91%	1.27%	(0.36)
Fokus TV	0.88%	0.84%	0.04	0.88%	0.86%	0.02
Wydarzenia24	0.90%	0.76%	0.14	0.83%	0.67%	0.16
Polsat Film	0.62%	0.60%	0.02	0.57%	0.64%	(0.07)
Nowa TV	0.42%	0.39%	0.03	0.48%	0.38%	0.10
Polsat Play	0.63%	0.60%	0.03	0.53%	0.66%	(0.13)
Polsat Seriale	0.43%	0.43%	-	0.43%	0.46%	(0.03)
Polo TV	0.53%	0.50%	0.03	0.52%	0.46%	0.06
Polsat Sport 1 (formerly Polsat Sport) (3)	0.40%	0.39%	0.01	0.47%	0.52%	(0.05)
Polsat Cafe	0.44%	0.37%	0.07	0.41%	0.39%	0.02
Eska TV	0.36%	0.34%	0.02	0.38%	0.36%	0.02
4FUN.TV (4)	0.25%	0.21%	0.04	0.25%	0.23%	0.02
4FUN KIDS (4)	0.07%	0.13%	(0.06)	0.11%	0.14%	(0.03)
Polsat News Polityka (5)	0.07%	n/d	n/d	0.12%	n/d	n/d
Eleven Sports 1	0.18%	0.14%	0.04	0.17%	0.16%	0.01
Polsat Doku	0.15%	0.11%	0.04	0.14%	0.14%	-
Polsat Sport 2 (formerly Polsat Sport Extra) (3)	0.11%	0.12%	(0.01)	0.13%	0.13%	-
Disco Polo Music	0.07%	0.17%	(0.10)	0.09%	0.17%	(0.08)
Polsat News 2	0.07%	0.07%	-	0.07%	0.07%	-
Polsat Games	0.08%	0.06%	0.02	0.08%	0.05%	0.03
Polsat Rodzina	0.07%	0.06%	0.01	0.07%	0.06%	0.01
Polsat Music HD	0.05%	0.06%	(0.01)	0.05%	0.06%	(0.01)
Eska TV Extra	0.07%	0.06%	0.01	0.05%	0.06%	(0.01)
Polsat Sport 3 (formerly Polsat Sport News) (3)	0.05%	0.06%	(0.01)	0.06%	0.05%	0.01
Eleven Sports 2	0.03%	0.03%	-	0.04%	0.04%	-
4FUN DANCE (4)	0.05%	0.07%	(0.02)	0.05%	0.07%	(0.02)
Vox Music TV	0.04%	0.04%	-	0.03%	0.05%	(0.02)
Polsat Sport Fight	0.03%	0.03%	-	0.03%	0.03%	-
Eska Rock TV	0.02%	0.02%	-	0.02%	0.02%	-
Polsat 1(6)	n/a	n/a	n/a	n/a	n/a	n/a
Polsat Sport Premium 1(6)	n/a	n/a	n/a	n/a	n/a	n/a
Polsat Sport Premium 2(6)	n/a	n/a	n/a	n/a	n/a	n/a
Eleven Sports 3(6)	n/a	n/a	n/a	n/a	n/a	n/a
Eleven Sports 4(6)	n/a	n/a	n/a	n/a	n/a	n/a
TV Okazje(6)	n/a	n/a	n/a	n/a	n/a	n/a
Polsat Film 2(6)	n/a	n/a	n/a	n/a	n/a	n/a
Polsat X(6)	n/a	n/a	n/a	n/a	n/a	n/a
Polsat Reality(6)	n/a	n/a	n/a	n/a	n/a	n/a

(1)	Nielsen Media, All day ages 16-59 audience share, including Live+2 (viewership results include 2 additional days of time-shifted viewing) + out of home viewing – OOH).
(2)	When calculating the total audience share of Polsat Plus Group and audience share of thematic channels, we take into account the moment of including the channel in our portfolio.
(3)	As of April 26, 2024, the names of the Polsat sports channels changed: Polsat Sport became Polsat Sport 1, Polsat Sport Extra became Polsat Sport 2, and Polsat Sport News became Polsat Sport 3.
(4)	As of July 21, 2023, Polsat Plus Group is the majority shareholder of the companies that own the 4FUN.TV, 4FUN KIDS and 4FUN DANCE channels.
(5)	The channel has been broadcasting since January 10, 2024.
(6)	Channel not included in the telemetric panel.

 

Channels cooperating with Polsat Plus Group (non-consolidated)
Audience share	3 months ended December 31		Change p.p.	12 months ended December 31		Change p.p.
	2024	2024		2024	2023
Polsat Comedy Central Extra	0.18%	0.35%	(0.17)	0.23%	0.34%	(0.11)
Polsat Viasat History	0.17%	0.25%	(0.08)	0.19%	0.25%	(0.06)
CI Polsat	0.17%	0.17%	-	0.19%	0.17%	0.02
Polsat Viasat Explore	0.14%	0.16%	(0.02)	0.14%	0.17%	(0.03)
Polsat Viasat Nature	0.11%	0.07%	0.04	0.09%	0.07%	0.02

The audience share in the commercial group for Polsat Plus Group amounted to 22.7% in the fourth quarter of 2024 (+0.7 p.p. YoY) and 22.0% in 2024, which was the same as in 2023.

The trend of increasing market fragmentation continues in the Polish market, which, by dispersing audiences, adversely impacts audience shares of the four main TV channels (Polsat, TVN, TVP1 and TVP2). Rapidly growing popularity of other forms of consumption of video content, e.g., displayed on a TV set or on small screens also determines the viewership of traditional linear TV. Despite the fact that the intensity of these phenomena slowed down slightly in the periods under review, it continues to shape the audience of, among others, our main Polsat channel, which remained unchanged YoY in the fourth quarter of 2024 and amounted to 7.5% and fell by 0.5 p.p. YoY to 7.6% in 2024. In the same periods, our thematic channels recorded an increase by 0.7 p.p. YoY to 15.2% and an increase by 0.5 p.p. YoY to 14.9%, respectively. During the periods under review, we maintained our audience share at a stable level despite the pressure of the one-time event of the European Men's Football Championship EURO 2024, which was broadcast by the public broadcaster's channels between June 14 and July 14, 2024. These broadcasts achieved record audience shares, reaching up to 70% (in the A16-59 group) for matches featuring the Polish national team. The year's viewing figures were also affected by the flooding in western Poland. During the most dramatic period of the flood wave's movement, the week between September 14 and 20, 2024, the average total share of all news channels was almost 20%, and on September 16, 2024, it reached a daily peak of over 24%. Such a significant shift in audience had a substantial impact on the viewing figures of the rest of the stations.

As mentioned above, the audience levels of the Group's channels is under the influence of the growing audience of non-linear video content (including OTT services) and unmonitored TV channels displayed on TV sets, referred to by Nielsen Media as the "others" category. In January 2022, Nielsen broadened the definition of content eligible for this node, and as a result, we are observing sustained growth of "others" audience shares. It is worth noting that a significant portion of the "others" category does not compete with traditional TV channels for TV advertising revenue. Thus, the changes introduced by Nielsen Media may permanently reduce the audience shares of traditional TV channels, with far less impact on their position in the TV advertising and sponsorship market. In March 2024, Nielsen Media changed its methodology for measuring out-of-home (OOH) audiences, adjusting the size of the out-of-home audience phenomenon to a more realistic value. As a result, OOH viewership figures increased by 4.7 p.p. in the fourth quarter of 2024 and 3.6 p.p. in twelve months of 2024 compared to the corresponding periods of 2023. For Polsat Plus Group, this represents an increase in the advertising resources that can be offered to advertisers.

In July 2023, we expanded the portfolio of our stations by three channels from the 4FUN family: 4FUN.TV, 4FAN DANCE and 4FUN KIDS, which further enhances the attractiveness of our programming offer with the ability to reach younger audiences, contributing to an increase in viewership of our thematic channels.

In April 2024, we introduced changes in the names of Polsat sports channels. The main and primary brand is Polsat Sport, which is one of the strongest media brands in Poland. Polsat Plus Group and TV Polsat have a wide range of media rights to many events from a variety of sports, which they broadcast on their various channels. As of April 26, Polsat Sport became Polsat Sport 1, Polsat Sport Extra became Polsat Sport 2 and Polsat Sport News became Polsat Sport 3.

We are constantly striving to strengthen our  offering, including but not limited to the introduction of attractive sports content. In July 2024, we acquired the exclusive rights to broadcast and stream the new UEFA Europa League and UEFA Conference League format for the three seasons. In parallel, we acquired exclusive rights to broadcast Bundesliga and Bundesliga 2 matches in Poland from the 2025/26 season until the end of 2028/29 and a non-exclusive license for the 2024/25 spring round. In September 2024, our subsidiary Eleven Sports Network acquired broadcasting rights to French Ligue 1 McDonald's matches in Poland for the upcoming years. The agreement covers the current 2024/25 season, as well as the 2025/26, 2026/27, 2027/28, and 2028/29 seasons. In October 2024, we acquired exclusive rights to broadcast all Formula 1 Grand Prix races in Poland in 2025 - 2028. At the same time, we didn't renew the UEFA Champions League broadcasting rights for further seasons after they expired in mid-2024.

TV advertising and sponsoring market share

According to estimates of Publicis Group, expenditures on TV advertising and sponsoring in 2024 amounted to approximately PLN 4,960 million (+5.9% YoY). Based on these data, we estimate that our TV advertising market share was 28.0% in the analysed period, which represents a decrease by 0.4 p.p. from the 28.4% share recorded in 2023. Publicis Group estimated that in the fourth quarter of 2024 expenditures on TV advertising and sponsoring amounted to approximately PLN 1,468 million (+2.8% YoY) and our TV advertising market share amounted to 28.0% which represents a decrease by 0.3 p.p. from the 28.3% share recorded in the fourth quarter of 2023.

Average monthly number of Internet users and views

In the fourth quarter of 2024, the average monthly number of users (the ‘real users’ indicator from the Mediapanel survey) of Polsat-Interia Group websites and apps amounted to 20.8 million, which represents the same level YoY and in 2024 it amounted to 20.4 million, which represents a decrease by 0.5 million YoY (-2.4%) compared to 2023.

The table below presents a list of websites, whose number of average users per month exceeded 0.5 million in the fourth quarter of 2024. The Interia.pl portal is presented as a whole, without a breakdown into thematic services.

(1)	Mediapanel survey, Real Users indicator.
(2)	In the data for the Group as a whole, the results of sites acquired by the Group during the reporting period are included only from the time of acquisition.
(3)	The service was launched in June 2023. Data for the period of the service's existence.
(4)	The service was launched in April 2024. Data for the period of the service's existence.
(5)	The service has been part of Polsat Plus Group since July 2023. The comparative data presented also relates to the period when the service was not yet owned by the Group.
(4)	The service was launched in October 2024. Data for the period of the service's existence.

The average monthly number of page and app views of Polsat-Interia Group websites reached 1.81 billion in the fourth quarter of 2024 (-8.5% YoY) and 1.84 billion in the full 2024 (-5.3% YoY).

The table below presents the list of websites, whose number of views exceeded 0.5 million in the fourth quarter of 2024. The Interia.pl portal is presented as a whole, without a breakdown into thematic services.

(1)	Data from Mediapanel survey, Views indicator –views of websites/apps.
(2)	In the data for the Group as a whole, the results of sites acquired by the Group during the reporting period are included only from the time of acquisition.
(3)	The service was launched in June 2023. Data for the period of the service's existence.
(4)	The service was launched in April 2024. Data for the period of the service's existence.
(5)	The service has been part of Polsat Plus Group since July 2023. The comparative data presented also relates to the period when the service was not yet owned by the Group.
(6)	The service was launched in October 2024. Data for the period of the service's existence.

4.1.3.     Green energy segment

Implementation of renewable energy projects

Wind farms. At the end of 2024, the Group had 150.1 MW of installed capacity in wind farms. During 2024, the Człuchów and Przyrów farms were commissioned, with a total capacity of 123 MW. The Group's first wind farms (Miłosław and Kazimierz Biskupi) were commissioned in the fourth quarter of 2023.

The following onshore wind farm projects are being constructed under Strategy 2023+:

•       Drzeżewo with installed capacity of 138.6 MW and potential annual production of ca. 410 GWh, production start-up planned for the fourth quarter of 2025;

•       Dobra with installed capacity of 7.8 MW and potential annual production of ca. 24 GWh, production start-up planned for the first quarter of 2026.

Photovoltaic farms. At the end of 2024, the Group had 82.4 MW of installed capacity in photovoltaic farms. As part of the acquisition of control over PAK-PCE, the 70 MW Brudzew plant was integrated into the Group. A further 12.4 MW was added in the third quarter of 2023 (Cambria).

Energy production from renewable sources

The results of PAK-PCE Group are consolidated as of July 3, 2023. For the sake of comparability, the following table presents operating data for the full period of twelve months of 2023, whereas the companies belonging to PAK-PCE Group were consolidated only for the third and the fourth quarter of 2023.

	3 months ended December 31		change			12 months ended December 31		change
	2024	2023		nominal	% / p.p.	2024	2023	nominal	% / p.p.
Total electricity generation (GWh), of which:	294.9	179.3		115.6	64.5%	1,016.4	665.0	351.4	52.8%
Biomass	169.3	150.1		19.2	12.8%	616.3	565.0	51.3	9.1%
Photovoltaics	9.4	7.8		1.6	20.5%	86.4	72.3	14.1	19.5%
Wind farms	116.2	21.4		94.8	n/a	313.7	27.7	286.0	n/a

In the fourth quarter of 2024, the Group produced 294.9 GWh of electricity from all its renewable energy sources, which represented an increase of by 115.6 GWh (+64.5%) YoY. The main driver of growth was the additional volume of electricity produced from wind farms of 94.8 GWh, which was related to the launch of production by Człuchów (72.6 MW) and Przyrów (50.4 MW) wind farms.

Total volume of electricity produced in 2024 amounted to 1,016.4 GWh and was 351.4 GWh (+52.8%) higher YoY. As a result of the successive commissioning of further wind farms, in accordance with the Strategy 2023+, in 2024 the Group generated a total of 313.7 GWh of electricity from wind farms. The volume of energy generated from the sun amounted to 86.4 GWh in 2024 and was by 14.1 GWh (+19.5%) higher YoY, as a result of, among others, the increased by 12.4 MW capacity at the Brudzew-Cambria photovoltaic farm in the third quarter of 2023.

Green hydrogen projects

Under Strategy 2023+, we are also building a complete value chain of an economy based on green hydrogen.

Green hydrogen generation. In the fourth quarter of 2024, we launched commercial production of green hydrogen at the Konin electrolysis plant using a 2.5 MW PEM electrolyser with a capacity of 1,000 kg of hydrogen per day. In 2025, we intend to expand the production capacity of the Konin hydrogen plant by a 0.5 MW alkaline electrolyser, designed and constructed by our subsidiary Exion Hydrogen Polskie Elektrolizery.

Distribution. In the fourth quarter of 2024, we opened NESO-branded hydrogen refuelling stations in Gdynia and Lublin, while in the first quarter of 2025 we completed the construction of a refuelling station in Wrocław, bringing the total number of NESO hydrogen refuelling stations up to six. With the support of CINEA funding, we plan to construct five more stations along the TEN-T (Trans-European Transport Network) roads. The time horizon of this investment is 2025-2026.

Sales of hydrogen buses. In July and August 2024, 10 hydrogen buses were delivered to Gdańsk on the basis of a 10-year contract for the lease of buses with full service and supply of hydrogen fuel. In addition, in December 2024 and January 2025, we delivered a total of 5 hydrogen buses purchased by the municipal transport company in Konin.

In March 2024, we won a tender for the delivery of 26 buses to Chelm. The order will be executed in three tranches by the end of October of 2025. In the third quarter of 2024, we also won a tender for the delivery of 8 hydrogen buses to the GZM Metropolis (Górnośląsko-Zagłębiowska Metropolia) in the fourth quarter of 2025.

After the balance sheet date, we won two more tenders. In March 2025, MPK (municipal transport company) in Kraków selected our bid to supply 10 hydrogen-powered buses to Kraków, and in April 2025 we signed a contract to supply 11 buses to Rybnik, with completion dates in the first and second quarters of 2026.

4.2.        Review of financial situation

The following review of results for the three- and twelve-month periods ended December 31, 2024 was prepared based on the standalone financial statements of Cyfrowy Polsat and consolidated financial statements for the twelve-month period ended December 31, 2024, prepared in accordance with International Financial Reporting Standards as approved for use by the European Union and based on internal analyses.

It should be noted that the consolidated financial data for the twelve-month periods ended December 31, 2024 and December 31, 2023 are not fully comparable due to the acquisitions and changes to the Group’s structure, which are described in detail in item 1.4. of this Report – Changes in the organizational structure of Polsat Plus Group and their effects, and item 1.5. of the Report of the Management Board on activities of Cyfrowy Polsat S.A. Capital Group for 2023. In particular, as of July 3, 2023, the Group consolidates the results of PAK-PCE and its subsidiaries using the full method.

An explanation of the accounting policies used and key positions from the consolidated income statement and consolidated balance sheet are included in the consolidated financial statements for the financial year 2024 (Note 6). An explanation of the accounting policies used and key positions from the standalone income statement and standalone balance sheet are included in the standalone financial statements for the financial year 2024 (Note 5).

In 2024, the Company modified the presentation of the item “Gain on investment activities” and “Net finance costs” by separating these items into “Finance income” and “Finance costs”. The figures for the comparative period have been restated accordingly. Finance income includes interest income on funds invested, dividends income, gains on financial instruments at fair value through profit or loss, net foreign exchange gains/losses and results on completed forward exchange contracts and call options. Finance costs comprise interest expense on borrowings (including bank loans and bonds) and leasing liabilities, foreign exchange gains/losses on bonds, realization and valuation costs of hedging instruments and instruments not under hedge accounting related to finance activities, bank and other charges on borrowings as well as guarantee fees resulting from the indebtedness. Borrowing costs are recognized in profit or loss using the effective interest rate’s method. Financial costs also include impairment losses on financial assets.

4.2.1.     Consolidated income statement analysis

Results for the fourth quarter of 2024

[mPLN]	3 months ended December 31			change
	2024	2023		[mPLN]	[% / p.p.]
Revenue	3,827.1	3,681.5		145.6	4.0%
Operating costs	(3,439.4)	(3,486.7)		47.3	(1.4%)
Gain on disposal of a subsidiary and an associate	-	(0.4)		0.4	n/a
Other operating income/(cost), net	(39.7)	(22.2)		(17.5)	78.8%
Profit from operating activities	348.0	172.2		175.8	102.1%
Finance income	122.2	368.8	(1)	(246.6)	(66.9%)
Finance costs	(246.4)	(414.6)	(1)	168.2	(40.6%)
Gross profit for the period	223.8	126.4		97.4	77.1%
Income tax	(56.1)	3.9		(60.0)	n/a
Net profit for the period	167.7	130.3		37.4	28.7%
EBITDA	739.9	676.7		63.2	9.3%
EBITDA margin	19.3%	18.4%		-	0.9 p.p.
Gain on disposal of a subsidiary and an associate	-	(0.4)		0.4	(100.0%)
Impairment on inventories of photovoltaic modules	(41.0)	-		(41.0)	n/a
EBITDA adjusted(2)	780.9	677.1		103.8	15.3%
EBITDA adjusted(2) margin	20.4%	18.4%		-	2.0 p.p.

(1)	In 2024, there was a change in the presentation of finance income and finance costs, resulting in a restatement of the comparative figures. This change did not affect the previously reported net profit amounts.
(2)	EBITDA adjusted by a gain/(loss) on disposal of a subsidiary and an associate, and by an impairment charge on inventories of photovoltaic modules..

Revenue

Consolidated total revenue increased by PLN 145.6 million (+4.0% YoY) in the fourth quarter of 2024, primarily as a result of the recognition of revenue from the sale of apartments in the completed investment in Port Praski as well as higher energy revenue and retail revenue.

[mPLN]	3 months ended December 31			change
	2024	2023		[mPLN]	[%]
Retail revenue	1,809.6	1,763.7		45.9	2.6%
Wholesale revenue	898.7	929.3		(30.6)	(3.3%)
Sale of equipment	478.6	506.7		(28.1)	(5.5%)
Energy revenue	340.0	285.6		54.4	19.0%
Other revenue	300.2	196.2		104.0	53.0%
Revenue	3,827.1	3,681.5		145.6	4.0%

Retail revenue increased by PLN 45.9 million (+2.6%) YoY in the fourth quarter of 2024 and amounted to PLN 1,809.6 million, driven mainly by effective up-selling of products and services to our customer base and an increase in ARPU per B2C contract customer by +5.2% YoY and per B2B customer by 4.6% YoY.

Wholesale revenue decreased by PLN 30.6 million (-3.3%) YoY, mainly due to the recognition of lower interconnection revenue, resulting from the final regulatory reduction of MTR rates in January 2024, and lower revenue from cable and satellite operators.

Revenue from the sale of equipment decreased by PLN 28.1 million (-5.5%) YoY following lower volumes of equipment sold.

Revenue from sale of energy increased by PLN 54.4 million (+19.0%) YoY. Revenue from the sale of generated electricity amounted to PLN 139.6 million at the end of the fourth quarter of 2024 and were higher by 60.6 million YoY. This growth was driven by higher volumes of energy produced following the expansion of installed capacity in wind farms. Revenue from energy resale remained at a similar level YoY and amounted to PLN 172.7 million (PLN -6.8 million, -3.8% YoY).

Other revenue amounted to PLN 300.2 million, increasing by PLN 104.0 million (+53.0%) YoY. The main reason behind this growth was the recognition of revenue from the sale of apartments following the transfer of ownership to customers of part of the apartments built as part of the residential investment on Sierakowskiego Street in Port Praski, Warsaw. The above mentioned increase was partially offset by lower revenue from the sale of buses, associated with a large delivery of hydrogen-powered buses to the city of Rybnik in the comparative period.

Operating costs

Consolidated operating costs decreased by PLN 47.3 million (-1.4%) YoY in the fourth quarter of 2024, to the level of PLN 3,439.4 million, mainly as a result of a decrease in depreciation, amortization, impairment and liquidation.

[mPLN]	3 months ended December 31			change
	2024	2023		[mPLN]	[%]
Technical costs and cost of settlements with telecommunication operators	872.3	862.1		10.2	1.2%
Depreciation, amortization, impairment and liquidation	373.2	494.2		(121.0)	(24.5%)
Cost of equipment sold	404.8	415.2		(10.4)	(2.5%)
Content costs	590.3	565.6		24.7	4.4%
Cost of energy sold, includes	263.4	268.2		(4.8)	(1.8%)
Depreciation1)	17.6	9.3		8.3	89.2%
Distribution, marketing, customer relation management and retention costs	290.5	277.4		13.1	4.7%
Salaries and employee-related costs	352.9	335.6		17.3	5.2%
Cost of debt collection services and bad debt allowance and receivables written off	21.4	26.2		(4.8)	(18.3%)
Other costs, includes	270.6	242.2		28.4	11.7%
Depreciation1)	1.1	1.0		0.1	10.0%
Operating costs	3,439.4	3,486.7		(47.3)	(1.4%)
1) Depreciation costs included under the cost of energy and bus production.

Technical costs and cost of settlements with telecommunication operators increased by PLN 10.2 million (+1.2%) YoY. Higher costs of mobile telecommunications network development and network maintenance were compensated to a significant extent by lower costs of interconnect settlements following the final regulatory reduction of MTR rates in 2024.

Depreciation, amortization, impairment and liquidation costs decreased by PLN 121.0 million (-24.5%) YoY, which resulted mainly from the completion of the amortization of Polkomtel‘s retail customer relationships.

The cost of equipment sold decreased by PLN 10.4 million (-2.5%) YoY, which reflected lower sales volumes of equipment in the reported quarter.

Content costs increased by PLN 24.7 million (+4.4%) YoY. This growth was mainly due to higher costs of internal production, including higher write-offs on the value of programming assets.

Cost of energy sold amounted to PLN 263.4 million in the fourth quarter of 2024 and was lower by PLN 4.8 million (-1.8%) YoY.

Distribution, marketing, customer relation management and retention costs increased by PLN 13.1 million (+4.7%) YoY, due to, among others, the recognition of higher logistic and distribution costs and higher customer care costs, which were associated, among others, with an increase in the minimum wage.

Salaries and employee-related costs increased by PLN 17.3 million (+5.2%) YoY, mainly due to inflationary pressure on wages with average headcount in the Group higher by 44 FTEs (+0.5%) YoY.

Average employment	3 months ended December 31			Change
	2024	2023		[FTEs]	[%]
Permanent workers not engaged in production(1)	8,246	8,202		44	0.5%

(1)	Excluding workers who did not perform work in the reporting period due to long-term absences.

Cost of debt collection services and bad debt allowance and receivables written off decreased by PLN 4.8 million (-18.3%) YoY due to, among others, better collection rates and lower sales in the instalment plan model than in the comparative period.

Other costs increased by PLN 28.4 million (+11.7%) YoY, primarily as a net result of the recognition of higher cost of the sale of apartments in the residential investment on Sierakowskiego Street in Port Praski, Warsaw, higher costs of advisory services and lower costs of hydrogen-powered buses sold due to the lower number of units delivered during the analysed period.

Other operating cost, net amounted to PLN 39.7 million in the fourth quarter of 2024 and resulted primarily from the recognition of an impairment charge on inventories of photovoltaic modules held by Esoleo in the amount of PLN 41.0 million.

Reported EBITDA amounted to PLN 739.9 million, increasing by PLN 63.2 million (+9.3%) YoY.

Adjusted EBITDA excluding asset disposal and impairment charges on photovoltaics modules increased to PLN 780.9 million (PLN +103.8 million, +15.3% YoY) in the fourth quarter of 2024, resulting in adjusted EBITDA margin of 20.4%. The reason for the increase in adjusted EBITDA was higher retail revenue, margin recognized on sales of apartments and increasing contribution from the green energy segment following further development of RES projects.

Finance income amounted to PLN 122.2 million in the fourth quarter of 2024 and decreased to PLN 246,6 million (-66.9%) YoY. This decrease was mainly due to a high base in the fourth quarter of 2023, when the positive impact of the settlement of the purchase price allocation of PAK-PCE Group and higher foreign exchange rate gains on the valuation of the EUR tranche of the term loan were recognized, and was partially offset by the positive market valuation of the 10.13% stake held in Asseco Poland S.A. in the period under review.

Finance costs decreased by PLN 168.2 million (-40.6%) YoY and amounted to PLN 246.4 million. This change was primarily due to the recognition of costs related to the purchase price allocation of PAK-PCE Group in the corresponding period. Furthermore, lower finance costs in the fourth quarter of 2024 were impacted by lower interest on loans following the reduction of interest rates in the fourth quarter of 2023 and a positive impact from the execution and valuation of hedging instruments in the analysed period.

Net profit for the fourth quarter of 2024 amounted to PLN 167.7 million, recording an increase by PLN 37.4 million YoY.

Results for 2024

[mPLN]	12 months ended December 31			change
	2024	2023		[mPLN]	[% / p.p.]
Revenue	14,265.9	13,626.3		639.6	4.7%
Operating costs	(12,629.3)	(12,488.8)		(140.5)	1.1%
Gain on disposal of a subsidiary and an associate	10.0	219.7		(209.7)	(95.4%)
Other operating income/(cost), net	119.6	(45.6)		165.2	n/a
Profit from operating activities	1,766.2	1,311.6		454.6	34.7%
Finance income	426.2	452.7	(1)	(26.5)	(5.9%)
Finance costs	(1,112.2)	(1,372.2)	(1)	260.0	(18.9%)
Share of the profit/(loss) of associates accounted for using the equity method	(0.7)	29.7		(30.4)	(102.4%)
Gross profit for the period	1,079.5	421.8		657.7	155.9%
Income tax	(302.2)	(110.2)		(192.0)	174.2%
Net profit for the period	777.3	311.6		465.7	149.5%
EBITDA	3,437.6	3,231.2		206.4	6.4%
EBITDA margin	24.1%	23.7%		-	0.4 p.p.
Gain on disposal of a subsidiary and an associate	10.0	219.7		(209.7)	(95.4%)
Gain on the sale of intangible assets	198.7	-		198.7	n/a
Impairment on inventories of photovoltaic modules	(71.0)	-		(71.0)	n/a
EBITDA adjusted(2)	3,299.9	3,011.5		288.4	9.6%
EBITDA adjusted(2) margin	23.1%	22.1%		-	1.0 p.p.

(1)	In 2024, there was a change in the presentation of finance income and finance costs, resulting in a restatement of the comparative figures. This change did not affect the previously reported net profit amounts.
(2)	EBITDA adjusted by a gain on disposal of a subsidiary and an associate, a gain on the sale of intangible assets (IPv4 address package) and an impairment on inventories of photovoltaic modules..

Revenue

Consolidated total revenue increased by PLN 639.6 million (+4.7% YoY) in 2024 to PLN 14,265.9 million, primarily as a result of the consolidation of revenue generated in the green energy segment. Excluding the impact of the consolidation of PAK-PCE Group's results, consolidated total revenue amounted to PLN 12,944.9 million (-0.4% YoY).

[mPLN]	12 months ended December 31			change
	2024	2023		[mPLN]	[%]
Retail revenue	7,181.8	6,987.1		194.7	2.8%
Wholesale revenue	3,260.4	3,379.9		(119.5)	(3.5%)
Sale of equipment	1,794.5	1,921.7		(127.2)	(6.6%)
Energy revenue	1,230.0	557.6		672.4	120.6%
Other revenue	799.2	780.0		19.2	2.5%
Revenue	14,265.9	13,626.3		639.6	4.7%

Retail revenue increased by PLN 194.7 million (+2.8%) YoY in 2024 and amounted to PLN 7,181.8 million, which resulted mainly from the successful upselling of products and services and the increase in ARPU per contract B2C customer by 4.8% YoY and per B2B customer by 3.4% YoY.

Wholesale revenue decreased by PLN 119.5 million (-3.5%) YoY, mainly due to the recognition of lower interconnection revenue, resulting from the final regulatory reduction of MTR rates in January 2024, and lower revenue from cable and satellite operators. This decrease was partially offset by higher advertising and sponsorship revenue and higher revenue from domestic and international roaming.

Revenue from the sale of equipment decreased by PLN 127.2 million (-6.6%) YoY mainly due to lower volumes of equipment sales.

Revenue from the sale of energy amounted to PLN 1,230.0 million in 2024, recording an increase by PLN 672.4 million (+120.6%) YoY. This increase was due to the recognition of energy sales revenue for the full year in 2024, while in the comparative period it was recognized only for the second half of the year following the consolidation of PAK-PCE Group's results as of July 3, 2023. A part of revenue from sales of energy, in 2024 the Group recognized revenue from the sale of generated electricity in the amount of PLN 510.6 million and revenue from energy resale in the amount of PLN 638.5 million at the consolidated level.

Other revenue increased by PLN 19.2 million (+2.5%) YoY. This growth resulted from the recognition of revenue from the sale of apartments in the residential investment on Sierakowskiego Street in Port Praski, Warsaw, and higher revenue from the sale of gas in the green energy segment, which was significantly offset by lower revenue from operations in the photovoltaic installations market, related in turn to the execution of the Cambria photovoltaic farm in 2023.

Excluding the impact of the consolidation of PAK-PCE Group, other revenue remained stable (+0.1%) YoY and amounted to PLN 707.9 million.

Operating costs

Consolidated operating costs increased by PLN 140.5 million (+1.1%) YoY to the level of PLN 12,629.3 million in 2024, mainly as a result of the recognition of the cost of energy sold in connection with the consolidation of the results of PAK-PCE Group starting from July 3, 2023. This increase was partially offset by a decrease in depreciation, amortization, impairment and liquidation costs, lower content costs and cost of equipment sold.

Excluding the impact of the consolidation of PAK-PCE Group, consolidated operating costs amounted to PLN 11,496.6 million (-3.0% YoY).

[mPLN]	12 months ended December 31			change
	2024	2023		[mPLN]	[%]
Technical costs and cost of settlements with telecommunication operators	3,364.7	3,332.7		32.0	1.0%
Depreciation, amortization, impairment and liquidation	1,613.1	1,900.4		(287.3)	(15.1%)
Cost of equipment sold	1,431.9	1,539.9		(108.0)	(7.0%)
Content costs	2,073.8	2,126.1		(52.3)	(2.5%)
Cost of energy sold, includes	961.5	523.3		438.2	83.7%
Depreciation1)	53.9	17.8		36.1	202.8%
Distribution, marketing, customer relation management and retention costs	1,079.1	1,026.9		52.2	5.1%
Salaries and employee-related costs	1,243.4	1,158.2		85.2	7.4%
Cost of debt collection services and bad debt allowance and receivables written off	90.6	121.0		(30.4)	(25.1%)
Other costs, includes	771.2	760.3		10.9	1.4%
Depreciation1)	4.4	1.4		3.0	214.3%
Operating costs	12,629.3	12,488.8		140.5	1.1%
1) Depreciation costs included under the cost of energy and bus production.

Technical costs and cost of settlements with telecommunication operators increased by PLN 32.0 million (+1.0%) YoY. This increase was caused mainly by the development of mobile telecommunications network and higher costs of network maintenance, which remained under inflationary pressure and was partially offset by lower interconnect settlements due to the final regulatory reduction of MTR rates in 2024.

Depreciation, amortization, impairment and liquidation costs decreased by PLN 287.3 million (-15.1%) YoY, which resulted mainly from the completion of the amortization of Polkomtel’s retail customer relationships.

The cost of equipment sold decreased by PLN 108.0 million (-7.0%) YoY, which reflected lower sales volumes of equipment in 2024 and corresponds with lower revenue from the sale of equipment.

Content costs decreased by PLN 52.3 million (-2.5%) YoY, mainly due to lower costs of sports licences following the non-renewal of the broadcasting rights to the UEFA Champions League and Ekstraklasa football competitions and the lack of costs related to the men’s and women’s European Volleyball Championships which took place in the comparative period. This decrease was partly offset by an increase in the cost of internal production of programming for the main channel and thematic channels.

Cost of energy sold amounted to PLN 961.5 million in 2024 and was higher by PLN 432.8 million (+87.3%) YoY. This increase was due to the recognition of cost of energy sold for the full year 2024, while in the comparative period it was recognized only for the second half of 2023 following the consolidation of PAK-PCE Group's results as of July 3, 2023. Depreciation and amortization related to energy production is included in this cost item, in the amount of PLN 53.9 million.

Distribution, marketing, customer relation management and retention costs increased by PLN 52.2 million (+5.1%) YoY, mainly as a result of the recognition of higher costs of call centre, customer care, and distribution and logistics, associated, among others, with an increase in the minimum wage and inflationary pressure.

Salaries and employee-related costs increased by PLN 85.2 million (+7.4%) YoY, mainly due to the increased headcount following the consolidation of PAK-PCE Group from July 3, 2023 and persisting inflationary pressure. The impact of the consolidation of PAK-PCE Group on this cost item was PLN 14.3 million in 2024.

Average employment	12 months ended December 31			Change
	2024	2023		[FTEs]	[%]
Permanent workers not engaged in production(1)	8,219	8,020		199	2.5%

(1)	Excluding workers who did not perform work in the reporting period due to long-term absences.

Cost of debt collection services and bad debt allowance and receivables written off decreased by PLN 30.4 million (-25.1%) YoY. The decrease was primarily due to a one-time revaluation of the total package of receivables according to a higher ratio than in 2023. In addition, the lower level of bad debt was influenced by better collection rates of receivables and lower sales in the instalment model than in 2023.

Other costs increased by PLN 10.9 million (+1.4%) YoY. This change was the net effect of higher costs of apartments sold in the residential investment on Sierakowskiego Street in Port Praski, Warsaw and lower costs of operations in the photovoltaic installations market, which was related to the execution of the Cambria photovoltaic farm in 2023.

Gain on the disposal of a subsidiary and an associate amounted to PLN 10.0 million and resulted from the disposal of shares held by the Group in Muzo.fm Sp. z o.o. in the first quarter of 2024. In 2023, the Group recognised a gain of PLN 219.7 million on the disposal of a 12.82% stake in Asseco Poland S.A.

Other operating income, net amounted to PLN 119.6 million in 2024 as compared to other operating cost, net of PLN 45.6 million in the comparative period. In 2024, this item included the recognition of a gain on the disposal of part of the IPv4 address package in the total amount of PLN 198.7 million (net of transaction costs), partially compensated by the recognition of an impairment charge on inventories of photovoltaic modules held by Esoleo in the amount of PLN 71.0 million.

Reported EBITDA increased by PLN 206.4 million (+6.4%) YoY to PLN 3,437.6 million in 2024.

EBITDA adjusted for the gain on the disposal of a subsidiary and an associate, asset disposal and impairment charges on inventories of photovoltaic modules amounted to PLN 3,299.9 million (PLN +288.4 million, +9.6% YoY) in 2024, resulting in adjusted EBITDA margin of 23.1% (22.1% in 2023). The main reason for the increase in adjusted EBITDA was the contribution from the green energy segment in the amount of PLN 281.9 million, higher retail revenue and the recognition of the margin on apartment sales in Port Praski.

Finance income amounted to PLN 426.2 million in 2024, decreasing by PLN 26.5 million (-5.9%) YoY. This decrease was mainly due to the high base in 2023, when the positive impact of the settlement of the purchase price allocation of PAK-PCE Group and higher foreign exchange rate gains on the valuation of the EUR tranche of the term loan were recognized, and was partially offset by the positive market valuation of the 10.13% stake held in Asseco Poland S.A. in the period under review.

Finance costs decreased in 2024 by PLN 260.0 million (-18.9%) YoY and amounted to PLN 1,112.2 million. This decrease was due to, among others, lower interest on loans following the reduction of interest rates in 2023 and a positive impact from the execution and valuation of hedging instruments. Moreover, lower finance costs in 2024 were due to the recognition of costs related to the purchase price allocation of PAK-PCE Group and costs related to one-time  loans repayment.

As a result of the above described changes, net profit for 2024 amounted to PLN 777.3 million and was higher by PLN 465.7 million YoY.

4.2.2.     Operating segments

The Group operates in the following four segments:

•        B2C and B2B services segment which relates to the provision of services, including digital television transmission signal, mobile services, the Internet access services, the mobile TV services, the online TV services, set-top boxes production and assembly of photovoltaic installations,

•        media segment, which consists mainly of production, acquisition and broadcasting of information and entertainment programs as well as TV series and feature films broadcasted on television, radio and Internet channels in Poland,

•        green energy segment, which consists mainly of production and sale of electricity from renewable sources, construction of a complete hydrogen-based value chain and investments in renewable energy sources projects such as photovoltaic and wind farms (starting from July 3, 2023), and

•        real estate segment, which consists mainly of implementation of construction projects as well as sale, rental and management of own or leased real estate.

The Group conducts its operating activities primarily in Poland.

The activities of the Group are grouped into segments with distinguishable scope of operations where services are rendered and merchandise delivered in a specific economic environment. Activities of defined segments are characterized by different risk levels and different investment returns from those of the Group’s other segments. The operating segments also represent reportable segments of the Group. The operations carried out within each segment are described in detail in item 2 of this report.

Management evaluates the operating segments’ results based on EBITDA. The EBITDA reflects the Group’s ability to generate cash in a stable environment. The Group defines EBITDA as profit from operating activities increased by depreciation, amortization, impairment and liquidation (including depreciation included in the energy and buses production costs). EBITDA is not an EU IFRS measure and thus its calculations may differ among different entities.

The table below presents a summary of the Group’s revenues, expenses, acquisition of property, plant and equipment, reception equipment and other intangible assets as well as assets by operating segment for the twelve-month period ended December 31, 2024.

12 months ended December 31, 2024 [mPLN]	B2C and B2B services segment	Media segment	Real estate segment	Green energy segment	Consolidation adjustments	Total
Revenues from sales to third parties	10,628.9	2,197.0	220.6	1,219.4	-	14,265.9
Inter-segment revenues	(52.2)	294.6	37.6	228.9	(508.9)	-
Revenues	10,576.7	2,491.6	258.2	1,448.3	(508.9)	14,265.9
EBITDA adjusted (unaudited)	2,560.0	486.4	99.2	282.0	-	3,427.6
Gain on disposal of a subsidiary and an associate	-	10.0	-	-	-	10.0
EBITDA (unaudited)	2,560.0	496.4	99.2	282.0	-	3,437.6
Depreciation, amortization, impairment and liquidation	1,409.7	153.8	17.9	31.7	-	1,613.1
Depreciation included in energy and bus production costs	-	-	-	58.3	-	58.3
Profit/(loss) from operating activities	1,150.3	342.6	81.3	192.0	-	1,766.2
Acquisition of property, plant and equipment and other intangible assets	755.9	78.0	24.7	925.6	-	1,784.2
Acquisition of reception equipment	141.1	-	-	-	-	141.1
Balance as at December 31, 2024
Assets, including:	26,329.0	4,133.7	1,437.7	5,803.3	(235.7)	37,468.0
Investments in joint venture and associates	-	-	-	-	-	-

All material revenues are generated in Poland.

It should be noted that the financial data for the twelve-month periods ended December 31, 2024 and December 31, 2023 allocated to the B2C and B2B services segment, the media segment, the real estate segment and green energy are not fully comparable due to changes in the Group’s structure which were described in item 1.2. of this Report – Changes in the organizational structure of Polsat Plus Group and their effects – and item 1.2. of the report of the Management Board on the activities of Cyfrowy Polsat S.A. Capital Group in 2023.

The table below presents a summary of the Group’s revenues, expenses, acquisition of property, plant and equipment, reception equipment and other intangible assets as well as assets by operating segment for the twelve-month period ended December 31, 2023.

12-month period ended December 31, 2023) [mPLN]	B2C and B2B services segment	Media segment	Real estate segment	Green energy segment	Consolidation adjustments	Total
Revenues from sales to third parties	10,646.6	2,206.2	133.6	639.9	-	13,626.3
Inter-segment revenues	65.6	263.8	48.6	131.7	(509.7)	-
Revenues	10,712.2	2,470.0	182.2	771.6	(509.7)	13,626.3
EBITDA adjusted (unaudited)	2,493.1	472.0	27.0	24.5	(5.1)	3,011.5
Gain on disposal of a subsidiary and an associate	219.7	-	-	-	-	219.7
EBITDA (unaudited)	2,712.8	472.0	27.0	24.5	(5.1)	3,231.2
Depreciation, amortization, impairment and liquidation	1,713.2	155.3	22.5	9.4	-	1,900.4
Depreciation included in energy and bus production costs	-	-	-	19.2	-	19.2
Profit from operating activities	999.6	316.7	4.5	(4.1)	(5.1)	1,311.6
Acquisition of property, plant and equipment and other intangible assets	792.7	74.0	24.6	710.6	-	1,601.9
Acquisition of reception equipment	145.8	-	-	-	-	145.8
Balance as at December 31, 2023
Assets, including:	26,461.4	6,520.11)	1,471.2	4,603.0	(1,879.0)	37,176.7
Investments in joint venture and associates	-	-	10.1	-	-	10.1

1)	Includes non-current assets located outside of Poland in the amount of PLN 5.7 million.

4.2.3.     Consolidated balance sheet analysis

As at December 31, 2024, our balance sheet amounted to PLN 37,468.0 million and increased by PLN 291.3 million (+0.8%) compared to the balance as at December 31, 2023.

Assets

[mPLN]	December 31 2024	December 31 2023	Change
			[mPLN]	[%]
Property, plant and equipment	7,423.3	6,494.3	929.0	14.3%
Goodwill	10,975.3	10,980.2	(4.9)	(0.0%)
Customer relationships	120.1	300.2	(180.1)	(60.0%)
Brands	1,906.3	1,979.7	(73.4)	(3.7%)
Other intangible assets	4,993.0	4,835.8	157.2	3.3%
Right-of-use assets	724.8	644.6	80.2	12.4%
Non-current programming assets	335.7	304.8	30.9	10.1%
Investment property	700.3	700.0	0.3	0.0%
Non-current deferred distribution fees	92.2	85.0	7.2	8.5%
Non-current receivables	903.8	968.1	(64.3)	(6.6%)
Non-current loans granted	2.2	10.9	(8.7)	(79.8%)
Other non-current assets, includes:	83.6	702.8	(619.2)	(88.1%)
shares in associates and joint ventures accounted for using the equity method	-	10.1	(10.1)	(100.0%)
shares in third parties valued in fair value through profit or loss	5.5	615.9	(610.4)	(99.1%)
derivative instruments	40.2	35.2	5.0	14.2%
Deferred tax assets	180.5	142.8	37.7	26.4%
Total non-current assets	28,441.1	28,149.2	291.9	1.0%
Current programming assets	641.0	678.2	(37.2)	(5.5%)
Contract assets	342.0	349.0	(7.0)	(2.0%)
Inventories	1,028.0	1,215.6	(187.6)	(15.4%)
Trade and other receivables	3,052.7	2,947.1	105.6	3.6%
Current loans granted	22.8	116.2	(93.4)	(80.4%)
Income tax receivables	34.3	20.0	14.3	71.5%
Current deferred distribution fees	245.4	227.4	18.0	7.9%
Other current assets, includes:	970.3	139.7	830.6	594.6%
shares in other investments held for trading	808.6	-	808.6	n/d
derivative instruments	40.4	21.6	18.8	87.0%
Cash and cash equivalents	2,653.0	3,306.0	(653.0)	(19.8%)
Restricted cash	34.1	19.7	14.4	73.1%
Total current assets	9,023.6	9,018.9	4.7	0.1%
Assets held for sale, includes	3.3	8.6	(5.3)	(61.6%)
Cash and cash equivalents	-	1.2	(1.2)	(100.0%)
Total assets	37,468.0	37,176.7	291.3	0.8%

As of December 31, 2024, the value of non-current assets amounted to PLN 28,441.1 million (75.9% of total assets) and increased by PLN 291.9 million (+1.0%) compared to the balance at the end of 2023. The main reasons for the increase was higher value of property, plant and equipment by PLN 929.0 million (+14.3%), associated in particular with a higher value of non-current assets under construction due to the successive implementation of renewable energy projects. Other intangible assets increased by PLN 157.2 million (+3.3%), as a result of the renewal of the frequency reservation in the 2.6 GHz band. The increase of non-current assets was partially offset by a lower value of other non-current assets by PLN 619.2 million (-88.1%) as a result of the reclassification of the 10.13% stake held in Asseco Poland S.A. to current assets as assets held for sale. The value of customer relationships decreased by PLN 180.1 million (-60.0%) due to the competed amortization of relations with Polkomtel’s retail customers.

The value of current assets amounted to PLN 9,023.6 million (24.1% of total assets), and remained relatively stable compared to the balance as at December 31, 2023. The increase in other current assets was offset by a decrease in cash and cash equivalents and lower inventories. The main reason behind the increase of other current assets by PLN 830.6 million was the reclassification of the 10.13% stake held in Asseco Poland S.A. to this item, as assets held for sale. Key reasons for a decrease in cash and cash equivalents by PLN 653.0 million were: (i) the commencement of scheduled repayments of principal instalments under the SFA in the amount of PLN 155.3 million per quarter in the third and fourth quarters of 2024, (ii) the payment for the renewal of the 2,600 MHz TDD frequency reservation , (iii) expenditures on the development of renewable energy projects and (iv) allocation of PLN 311.9 million to redeem the Series B and C Bonds in the first quarter of 2024. In addition, as of the end of December 2024, inventories decreased by PLN 187.6 million (-15.4%) due to, among others, an impairment charge on the value of photovoltaics modules in the amount of PLN 71.0 million.

Equity and liabilities

[mPLN]	December 31 2024	December 31 2023	Change
			[mPLN]	[%]
Share capital	25.6	25.6	-	-
Share premium	7,174.0	7,174.0	-	-
Other reserves	2,790.8	2,752.8	38.0	1.4%
Retained earnings	8,987.4	8,334.1	653.3	7.8%
Treasury shares	(2,854.7)	(2,854.7)	-	-
Equity attributable to equity holders of the Parent Company	16,123.1	15,431.8	691.3	4.5%
Non-controlling interests	946.2	873.4	72.8	8.3%
Total equity	17,069.3	16,305.2	764.1	4.7%
Loans and borrowings	9,142.7	9,534.3	(391.6)	(4.1%)
Issued bonds	3,670.8	3,955.4	(284.6)	(7.2%)
Lease liabilities	502.8	444.6	58.2	13.1%
Deferred tax liabilities	1,087.5	1,035.0	52.5	5.1%
Other non-current liabilities and provisions	301.6	385.6	(84.0)	(21.8%)
includes derivative instruments	10.8	24.0	(13.2)	(55.0%)
Total non-current liabilities	14,705.4	15,354.9	(649.5)	(4.2%)
Loans and borrowings	1,315.1	1,069.7	245.4	22.9%
Issued bonds	366.9	393.7	(26.8)	(6.8%)
Lease liabilities	181.9	166.2	15.7	9.4%
Contract liabilities	678.0	682.2	(4.2)	(0.6%)
Trade and other payables	3,090.9	3,172.6	(81.7)	(2.6%)
includes derivative instruments	8.2	20.2	(12.0)	(59.4%)
Income tax liability	60.5	31.4	29.1	92.7%
Total current liabilities	5,693.3	5,515.8	177.5	3.2%
Liabilities held for sale	-	0.8	(0.8)	(100.0%)
Total liabilities	20,398.7	20,871.5	(472.8)	(2.3%)
Total equity and liabilities	37,468.0	37,176.7	291.3	0.8%

Equity increased by PLN 764.1 million (+4.7%), to PLN 17,069.3 million as at December 31, 2024, mainly as a result of the recognition of net profit generated in 2024, in the amount of PLN 771.9 million.

As at December 31, 2024, total liabilities decreased by PLN 472.8 million (-2.3%) compared to the end of December 2023 and amounted to PLN 20,398.7 million, of which current liabilities amounted to PLN 5,693.3 million and non-current liabilities amounted to PLN 14,705.4 million, constituting 27.9% and 72.1% of total liabilities, respectively.

The decrease in the value of non-current liabilities by PLN 649.5 million (-4.2%) was primarily due to a lower value of loans and borrowings by PLN 391.6 million (-4.1%), as a result of their partial reclassification to current liabilities due to the commencement of scheduled repayments of principal instalments of the SFA starting from the third quarter of 2024. Moreover, the lower level of non-current liabilities from issued bonds (PLN -284.6 million, -7.2%) resulted from the early redemption of the Series B and C bonds in the first quarter of 2024.

Compared to the end of December 2023, the value of current liabilities increased to PLN 5,693.3 million (PLN +177.5 million, +3.2%). This increase was mainly due to a higher value of current liabilities from loans and borrowings, which increased by PLN 245.4 million (+22.9%).

4.2.4.     Consolidated cash flow analysis

The table below presents selected data from the consolidated cash flow statement for the twelve-month periods ended December 31, 2024 and December 31, 2023.

[mPLN]	12 months ended December 31			Change
	2024	2023		[mPLN]	[% / p.p.]
Net cash from operating activities	3,427.2	2,392.4		1,034.8	43.3%
Net cash used in investing activities, incl.	(2,174.0)	(2,215.7)		41.7	(1.9%)
Capital expenditures	(1,784.2)	(1,601.9)		(182.3)	11.4%
Net cash from/(used in) financing activities	(1,882.5)	2,336.2		(4,218.7)	n/a
Net increase/(decrease) in cash and cash equivalents	(629.3)	2,512.9		(3,142.2)	n/a
Cash and cash equivalents at the beginning of the period	3,325.7	817.8		2,507.9	306.7%
Cash and cash equivalents at the end of the period	2,687.1	3,325.7		(638.6)	(19.2%)

Net cash from operating activities

Net cash received from operating activities amounted to PLN 3,427.2 million in 2024 and increased by PLN 1,034.8 million (+43.3%) YoY. This increase was due to, among others, higher EBITDA generated in 2024, lower net working capital employed and a lower tax burden in 2024.

Net cash used in investing activities

Net cash used in investing activities amounted to PLN 2,174.0 million in 2024 and was lower by PLN 41.7 million (-1.9%) YoY. Capital expenditures amounted to PLN 1,784.2 million in 2024 and were higher by PLN 182.3 million (+11.4%) YoY. In the TMT area, comprising the B2C and B2B services segment and the media (TV and online) segment, capex amounted to PLN 833.9 million (PLN -32.8 million, -3.8% YoY) with a low capex-to-revenue ratio of 6.4%. At the same time, investment spending for the implementation of projects related to the development of renewable energy sources and the hydrogen chain amounted to PLN 925.6 million. In the real estate segment, capital expenditures remained stable YoY and amounted to PLN 24.7 million in 2024.

In 2024 the most substantial capital expenditures included:

•        implementation of wind farm projects;

•        expenditures related to hydrogen projects, in particular the construction of hydrogen refuelling stations and the production of hydrogen-powered buses;

•        expenditures related to the project of the comprehensive modernization and exchange of the IT environment of the Group;

•        expenditures related to infrastructure development and maintenance, including: expansion of the core network, fibre optic cables and radio links to increase capacity for data transmission;

•        expenditures related to the development of our content services, including, among others, Internet projects, set-top boxes and the development of functionalities of applications and streaming platforms;

•        administrative expenditures, including in particular the development and maintenance of real estate.

In 2024, the Group made payments for the reservation of telecommunications frequencies in the total amount of PLN 549.7 million (the reservation of a frequency block in the 3.6 GHz band and the renewal of the reservation in the 2.6 GHz band), which is less by PLN 796.2 million compared to 2023. Moreover, in 2024 we recorded net proceeds from the repayment of loans granted to entities from outside the Group in the amount of PLN 84.7 million. In addition, in the corresponding period the Group recognized an inflow from the sale of a 12.82% stake in Asseco Poland S.A. in the total amount of PLN 851.4 million, which impacted YoY dynamics.

Net cash used in finance activities 

Net cash used in financing activities amounted to PLN 1,882.5 million in 2024 compared to PLN 2,336.2 million of net cash received from financing activities in the comparative period. In 2024, the level of net cash used in financing activities was principally impacted by interest payments in the amount of PLN 1,200.4 million and the early redemption of the Series B and C Bonds in the total amount of PLN 311.9 million. Furthermore, starting from the third quarter of 2024, the Group commenced the scheduled repayment of principal instalments under the SFA. In 2023, the Group issued Series D and E Bonds in the total amount of PLN 3.89 billion and prematurely redeemed the remaining part of Series B and C Bonds in the total amount of PLN 1.53 billion. In addition, in the corresponding period, the Group refinanced its bank debt by entering into the Senior Facilities Agreement with a consortium of banks granting a term loan in PLN up to PLN 7.3 billion, a term loan in EUR up to EUR 506 million and a revolving credit facility up to PLN 1.0 billion.

4.2.5.     Standalone income statement analysis for 2024

[mPLN]	for the 12-month period ended December 31			change
	2024	2023		[mPLN]	[% / p.p.]
Revenue	2,242.1	2,245.3		(3.2)	(0.1%)
Retail revenue	2,030.9	2,048.8		(17.9)	(0.9%)
Wholesale revenue	84.2	76.0		8.2	10.8%
Sale of equipment	34.1	29.7		4.4	14.8%
Other revenue	92.9	90.8		2.1	2.3%
Operating costs	(2,089.8)	(2,064.1)		(25.7)	1.2%
Content costs	(839.3)	(856.7)		17.4		(2.0%)
Technical costs and cost of settlements with telecommunication operators	(418.1)	(440.8)		22.7		(5.1%)
Distribution, marketing, customer relation management and retention costs	(315.8)	(299.2)		(16.6)		5.5%
Depreciation, amortization, impairment and liquidation	(202.1)	(177.1)		(25.0)		14.1%
Salaries and employee-related costs	(170.8)	(163.1)		(7.7)		4.7%
Cost of equipment sold	(25.5)	(22.3)		(3.2)		14.3%
Cost of debt collection services and bad debt allowance and receivables written off	(9.4)	(6.7)		(2.7)		40.3%
Other costs	(108.8)	(98.2)		(10.6)		10.8%
Other operating income/(cost), net	9.8	(9.6)		19.4	(202.1%)
Profit from operating activities	162.1	171.6		(9.5)	(5.5%)
Finance income	1,074.3	1,163.3	(1)	(89.0)	(7.7%)
Finance costs	(785.1)	(677.1)	(1)	(108.0)	16.0%
Gross profit for the period	451.3	657.8		(206.5)	(31.4%)
Income tax	(45.5)	(18.2)		(27.3)	150.0%
Net profit for the period	405.8	639.6		(233.8)	(36.6%)
EBITDA	364.2	348.7		15.5	4.4%
EBITDA margin	16.2%	15.5%		-	0.7 p,p,

(1)	In 2024, there was a change in the presentation of finance income and finance costs, resulting in a restatement of the comparative figures. This change did not affect the previously reported net profit amounts.

Our standalone total revenue remained relatively stable in 2024 and amounted to PLN 2,242.1 million (PLN -3.2 million, -0.1% YoY). This was the net effect of a decrease in retail revenue by PLN 17.9 million (-0.9%) YoY, offset by an increase in wholesale revenue by PLN 8.2 million (+10.8%) YoY, due mainly to the sale of licenses and sublicenses, and higher revenue from the sale of equipment by PLN 4.4 million (+14.8%) YoY.

Cyfrowy Polsat’s operating costs increased by PLN 25.7 million (+1.2%) YoY in 2024. In the period under review, depreciation, amortization, impairment and liquidation was higher by PLN 25.0 million (+14.1%) YoY and distribution, marketing, customer relation management and retention costs grew by PLN 16.6 million (+5.5%) YoY due mainly to higher distribution and logistics costs, as well as higher customer care and retention costs related to regulatory pressure on salaries, especially in the call centre area. Salaries and employee-related costs were higher by PLN 7.7 million (+4.7%) YoY, due mainly to the inflationary and regulatory pressure on salaries. The increase in operating costs was offset to a large extent by lower costs of interconnection settlements, which decreased by PLN 22.7 million (-5.1%) YoY as a result of lower settlements with Polkomtel for data transmission services, and lower content costs (PLN -17.4 million, -2.0% YoY), which resulted, among others, from lower cost of programming licenses, including those  related to the UEFA Champions League.

In 2024, the Company recognized other operating income, net of PLN 9.8 million as compared to other operating cost, net of PLN 9.6 million in 2023.

As a result of the above-described changes, the Company's EBITDA increased by PLN 15.5 million (+4.4%) YoY to PLN 364.2 million in 2024, with an EBITDA margin of 16.2% (+0.7 p.p. YoY).

Finance income amounted to PLN 1,074.3 million in 2024, recording a decrease by PLN 89.0 million (-7.7%) YoY. This was mainly the net effect of the recognition in 2023 of a gain on the sale of shares in Asseco Poland S.A. and higher revenue from dividends, while in 2024 the Company recognized higher interest income on loans granted and a positive impact from the revaluation of the remaining holding of shares in Asseco Poland S.A. to fair value.

Finance costs increased by PLN 108.0 million (+16.0%) YoY and amounted to PLN 785.1 million in 2024, due to, among others, the recognition of higher expected credit losses from granted loans and a higher level of interest on loans and borrowings and issued bonds.

Net profit for 2024 amounted to PLN 405.8 million. This is 36.6% lower than a year ago, primarily due to lower profit from operating activities, higher finance costs, lower finance income and a higher effective tax rate.

4.2.6.     Standalone balance sheet analysis

As at December 31, 2024, our balance sheet amounted to PLN 19,798.3 million and was higher by PLN 65.4 million (+0.3%) compared to the balance as at December 31, 2023.

Assets

[mPLN]	December 31 2024	December 31 2023	Change
			[mPLN]	[%]
Reception equipment	376.4	362.6	13.8	3.8%
Other property, plant and equipment	121.6	130.2	(8.6)	(6.6%)
Goodwill	197.0	197.0	-	-
Other intangible assets	132.3	127.7	4.6	3.6%
Right-of-use assets	18.4	21.5	(3.1)	(14.4%)
Investment property	107.8	94.3	13.5	14.3%
Shares in subsidiaries, associates and other, incl.	12,117.4	12,774.4	(657.0)	(5.1%)
shares in associates	0.1	0.1	-	-
Non-current deferred distribution fees	11.9	19.5	(7.6)	(39.0%)
Non-current loans granted	2,170.8	3,584.2	(1,413.4)	(39.4%)
Other non-current assets, incl.:	128.9	33.4	95.5	285.9%
derivative instruments	126.4	30.1	96.3	319.9%
Total non-current assets	15,382.5	17,344.8	(1,962.3)	(11.3%)
Contract assets	73.0	72.0	1.0	1.4%
Inventories	82.6	122.7	(40.1)	(32.7%)
Trade and other receivables	73.2	189.5	(116.3)	(61.4%)
Current loans granted	1,915.5	24.3	1,891.2	7,782.7%
Income tax receivables	-	7.2	(7.2)	(100.0%)
Current deferred distribution fees	48.1	48.0	0.1	0.2%
Other current assets, incl.:	871.3	40.8	830.5	2,035.5%
assets held for trading	808.6	-	808.6	n/a
derivative instruments	48.1	15.9	32.2	202.5%
Cash and cash equivalents	1,352.1	1,883.6	(531.5)	(28.2%)
Total current assets	4,415.8	2,388.1	2,027.7	84.9%
Total assets	19.798.3	19,732.9	65.4	0.3%

 

In 2024, the value of non-current assets decreased by PLN 1,962.3 million (-11.3%) and accounted for 77.7% of total assets as of December 31, 2024, compared to 87.9% at the end of 2023. The decrease in the value of non-current assets was driven in particular by a decrease of value of non-current loans granted by PLN 1,413.4 million (-39.4%) resulting from, among others, the reclassification of part of the financing for strategic green projects to current loans granted due their maturity. In parallel, the value of shares in subsidiaries, associates and others decreased by PLN 657.0 million (-5.1%) due to the reclassification of the 10.13% stake in Asseco Poland S.A. to current assets, as shares held for sale.

The value of current assets increased by PLN 2,027.7 million (+84.9%) in 2024, and as at the end of 2024 accounted for 22.3% of the total assets of the Company, compared to 12.1% at the end of 2023. The increase in current loans granted by PLN 1,954.2 million was the main driver behind this change, resulting mainly from the reclassification of loans granted to related companies for the development of renewable energy projects from non-current assets due to their maturity. Additionally, the Company recognized an increase in the balance of other current assets by PLN 830.5 million, mainly due to the reclassification of the 10.13% stake in Asseco Poland S.A. to this category, as shares held for sale. The above mentioned factors were partially offset by a decrease in cash and cash equivalents by PLN 531.5 million due to, among others, the redemption of the Series B and C Bonds in the amount of PLN 311.9 million in the first quarter of 2024.

Equity and liabilities

[mPLN]	December 31 2024	December 31 2023	Change
			[mPLN]	[%]
Share capital	25.6	25.6	-	-
Share premium	7,174.0	7,174.0	-	-
Other reserves	2,909.4	2,909.6	(0.2)	-
Retained earnings	5,261.2	4,855.4	405.8	8.4%
Treasury shares	(2,854.7)	(2,854.7)	-	-
Total equity	12,515.5	12,109.9	405.6	3.3%
Loans and borrowings	1,961.5	2,022.0	(60.5)	(3.0%)
Issued bonds	3,690.9	3,975.5	(284.6)	(7.2%)
Lease liabilities	16.9	19.8	(2.9)	(14.6%)
Deferred tax liabilities	67.4	40.3	27.1	67.2%
Other non-current liabilities and provisions	185.4	58.7	126.7	215.8%
includes derivative instruments	182.9	56.5	126.4	223.7%
Total non-current liabilities	5,922.1	6,116.3	(194.2)	(3.2%)
Loans and borrowings	192.8	185.7	7.1	3.8%
Issued bonds	368.0	394.7	(26.7)	(6.8%)
Lease liabilities	3.4	3.1	0.3	9.7%
Contract liabilities	238.5	230.7	7.8	3.4%
Trade and other payables	544.2	688.8	(144.6)	(21.0%)
includes derivative instruments	47.5	15.5	32.0	206.5%
Income tax liability	10.1	-	10.1	n/a
Deposits for equipment	3.7	3.7	-	-
Total current liabilities	1,360.7	1,506.7	(146.0)	(9.7%)
Total liabilities	7,282.8	7,623.0	(340.2)	(4.5%)
Total equity and liabilities	19,798.3	19,732.9	65.4	0.3%

During 2024, equity increased by PLN 405.6 million (+3.3%), to PLN 12,515.5 million as at December 31, 2024, mainly as a result of net profit generated in 2024 in the amount of PLN 405.8 million.

Total liabilities decreased by PLN 340.2 million (-4.5%) and amounted to 7,282.8 million as at December 31, 2024, of which current liabilities amounted to PLN 1,360.7 million and non-current liabilities amounted to PLN 5,922.1 million, constituting 18.7% and 81.3% of total liabilities, respectively. Compared to the end of December 2023, the value of current liabilities decreased by PLN 194.2 million (-3.2%), which was mainly the net effect of lower liabilities from issued bonds following the redemption of Series B and C Bonds in 2024 and a higher value of other non-current liabilities and provisions, in particular derivative instruments. Non-current liabilities decreased by PLN 146.0 million (-9.7%), mostly due to a decrease in trade and other payables.

4.2.7.     Standalone cash flow analysis

[mPLN]	for the twelve-month period ended December 31			Change
	2024	2023		[mPLN]	[% / p.p.]
Net cash from operating activities	366.3	241.4		124.9	51.8%
Net cash from/(used in) investing activities, incl.	6.1	(1,282.0)		1,288.1	(100.5%)
Capital expenditures	(59.5)	(61.6)		2.1	(3.4%)
Net cash received from /(used in) financing activities	(895.3)	2,803.5		(3,698.8)	n/a
Net increase/(decrease) in cash and cash equivalents	(522.9)	1,762.9		(2,285.8)	n/a
Cash and cash equivalents at the beginning of the period	1,883.6	120.7		1,762.9	1,460.6%
Cash and cash equivalents at the end of the period	1,352.1	1,883.6		(531.5)	(28.2%)

Net cash received from operating activities amounted to PLN 366.3 million in 2024 and was higher by PLN 124.9 million (+51.8%) YoY. This change was primarily driven by higher EBITDA for the reported period and a lower value of income tax paid.

Net cash received from investing activities amounted to PLN 6.1 million in 2024, compared to PLN 1,282.0 million used in 2023. This change was primarily the result of a lower net value of loans granted in 2024, mainly for the development of green energy projects, and a higher value of interests received on loans granted. In the corresponding period, the Company recorded an inflow of PLN 850.5 million from the sale of shares in connection with, among others, the disposal of shares of Asseco Poland S.A.

Capital expenditures on the purchase of property, plant and equipment, and intangible assets amounted to PLN 59.5 million in 2024 and remained relatively stable compared to PLN 61.6 million in 2023. The majority of capital expenditures in the period under review were incurred for the development and modernization of IT infrastructure.

Net cash used in financing activities amounted to PLN 895.3 million in 2024 compared to PLN 2,803.5 million of cash received from financing activities in 2023. This was primarily the net effect of the recognition of cash inflow from the issuance of successive series of bonds (D, E and F) and the refinancing of debt under the SFA dated September 15, 2015 in the comparative period, as well as the early redemption of Series B and C bonds and higher interest paid on loans and bonds in 2024.

4.3.        External financing

We maintain cash to fund the day-to-day requirements of our business. Our objective is to ensure cost-efficient access to various financing sources, including bank loans, bonds and other borrowings.

We believe that cash balances and cash generated from our current operations, as well as funds available under our revolving credit facilities should be sufficient to satisfy the future needs related to our operating activities, development of our services, service of our debt as well as for the execution of investment plans in the field of the Company’s current activity.

4.3.1.     Indebtedness

The table below presents a summary of the financial debt of the Group as at December 31, 2024.

[mPLN]	Balance value as at December 31, 2024
Loans and borrowings liabilities, including:	10,457.8
loans and borrowings liabilities excluding project financing	9,036.6
project financing liabilities	1,421.2
Bond liabilities	4,037.7
Leasing and other liabilities	684,7
Gross debt	15,180.2
Cash and cash equivalents(1)	2,653,0
Net debt	12,527.3
EBITDA LTM(2)	3,285.8
Total net debt / EBITDA LTM	3.81x
Net debt / EBITDA LTM, excluding project financing(3)	3.59x
Weighted average interest cost of loans and bonds(4)	8.3%

(1)     Includes cash and cash equivalents held for sale.

(2)     Consolidated EBITDA LTM adjusted for non-controlling interests.

(3)     EBITDA LTM and net debt of companies using project financing are excluded from the calculation of the ratio.

(4)     Prospective average weighted interest cost of the Group's debt (including the Revolving Credit Facility) in accordance with WIBOR/EURIBOR ratios as of the balance sheet date, excluding hedging instruments, project financing and leases.

Repurchase and redemption of Series B and C Bonds

On February 5, 2024 the Company repurchased for redemption 223,798 unsecured Series B bearer bonds with the aggregate nominal value of PLN 223.8 million and 88,053 unsecured Series C bearer bonds with the aggregate nominal value of PLN 88.1 million. In connection with the early redemption, all Series B Bonds and Series C Bonds were retired.

After the redemption of Series B and Series C Bonds, bonds listed in the Alternative Trading System operated by the WSE on the Catalyst market include 3,490,000 Series D and Series E bonds while Series F bonds are not listed.

Partial early repayment of loans

On February 14, 2025, Company and Polkomtel executed partial early repayment of the term loan, granted under the Senior Facilities Agreement in the amount of PLN 681.4 million, increased by accrued interest, of which Polkomtel repaid PLN 608.7 million and the Company PLN 72.7 million. As a result of the above early repayment, the total principal amount of the Group’s debt from the Facilities Agreement amounts to PLN 6,263.1 million and EUR 506 million, with a repayment schedule until 2028.

Debt structure and maturity

The graphs below present the maturity profile and the structure of the Group’s debt by type and currency, expressed in nominal terms, excluding liabilities arising from project financing, the revolving credit facility and leases, as of December 31, 2024.

(1)	Excluding project financing liabilities, the revolving credit facility and leases.
(2)	EUR tranche under the SFA (EUR 506 million) converted into PLN at the exchange rate on the balance sheet date.

As a result of the partial early repayment of the SFA after the balance sheet date, on February 21, 2025, the repayment schedule and structure of the Group's debt changed. The charts below show the maturity dates and the type and currency structure of debt expressed in nominal terms excluding liabilities arising from project finance, revolving credit facility and leases as at February 24, 2025.

(1)	Excluding project financing liabilities, the revolving credit facility and leases.
(2)	EUR tranche under the SFA (EUR 506 million) converted into PLN at the exchange rate on the balance sheet date.

4.3.2.     Significant financing agreements

Senior Facilities Agreement of April 28, 2023

On April 28, 2023, the Company and Polkomtel, as the borrowers, and Telewizja Polsat Sp. z o.o., Netia S.A., Polsat Media Sp. z o.o., Muzo.fm Sp. z o.o. and Polsat Media Biuro Reklamy Sp. z o.o., as the guarantors, concluded the unsubordinated Senior Facilities Agreement, sustainability linked financing, with a consortium of Polish and foreign financial institutions led by Powszechna Kasa Oszczędności Bank Polski S.A., Santander Bank Polska S.A., Bank Polska Kasa Opieki S.A., BNP Paribas Bank Polska S.A., ING Bank Śląski S.A., (Global Banking Coordinators) and Santander Bank Polska S.A. (ESG Senior Coordinator), ING Bank Śląski S.A. and BNP Paribas Bank Polska S.A. (ESG Junior Coordinators) and including SMBC Bank EU AG, Bank of China Limited, Luxembourg Branch, Société Générale Spółka Akcyjna Oddział w Polsce, Bank Gospodarstwa Krajowego, Bank Millennium S.A., PZU Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych BIS 1, mBank S.A., Credit Agricole Bank Polska S.A., Erste Group Bank AG, Credit Agricole Corporate and Investment Bank, Bank Ochrony Środowiska S.A., Alior Bank S.A., Powszechny Zakład Ubezpieczeń S.A., Powszechny Zakład Ubezpieczeń na Życie S.A., Industrial and Commercial Bank of China (Europe) S.A. (Spółka Akcyjna) Oddział w Polsce, Haitong Bank S.A. Spółka Akcyjna Oddział w Polsce as well as Santander Bank Polska S.A. acting as an Agent and Bank Polska Kasa Opieki S.A. acting as a Security Agent (the “Senior Facilities Agreement”, “SFA”).

The SFA governs the granting of a PLN term facility loan to the Company and Polkomtel up to a maximum amount of PLN 7,255.0 million, a EUR term facility loan up to a maximum amount of EUR 506.0 million (the “Term Facilities”) and a revolving facility loan up to a maximum amount of the equivalent of PLN 1,000.0 million (the “Revolving Facility”). The PLN and EUR portion of the Term Loan is PLN 679.5 million and EUR 356.0 million, respectively, for Cyfrowy Polsat and PLN 6,575.5 million and EUR 150.0 million, respectively, for Polkomtel.

The Term Facilities and the Revolving Facility have been or are being utilized by the Company in particular:

•               to repay in full the indebtedness under the senior facilities agreement of September 21, 2015, as amended;

•               to make funds available to companies implementing investment projects defined in the Senior Facilities Agreement. and

•               to finance general corporate needs of the Company’s capital group.

The Term Facilities and the Revolving Facility bear interest at a variable rate equal to WIBOR/EURIBOR for the relevant interest periods plus margin. The margin of the Term Facilities and the Revolving Facility depends on the level of the consolidated total debt ratio (net debt to consolidated EBITDA) calculated jointly for certain entities from the Company’s capital group in such a way that the lower the ratio, the lower the applicable margin, with the maximum margin level applicable when the debt ratio exceeds 4.50:1, and the minimum margin level when that ratio is equal to or less than 1.80:1. The margin of the Term Facilities and the Revolving Facility also depends on the achievement by the Company’s capital group of certain targets concerning green energy production and zero-carbon electricity consumption by certain entities from the Company’s capital group.

The term of the Term Facilities and the Revolving Facility is 5 years from the date of execution of the Senior Facilities Agreement and the final repayment date of each of these facilities is April 28, 2028. The PLN term facility will be repaid in quarterly instalments of varying amounts. The EUR term facility will be repaid in one instalment on the final repayment date.

In addition, pursuant to the terms of the Senior Facilities Agreement, the Company and other entities from its Group will have an option to take out additional facilities. The terms and conditions of such additional facilities will be determined each time in a separate additional facility accession deed and they will have to meet certain requirements that will depend on the debt ratio.

Pursuant to the Facilities Agreement, certain members of the Company’s capital group are to grant guarantees under the English law to each of the financing parties under the Senior Facilities Agreement and other finance documents executed in relation thereto (in the amount of the facility increased by all fees and receivables contemplated in the Senior Facilities Agreement or other finance documents executed in relation thereto). The guarantees secure:

(i) the timely discharge of the obligations under the Senior Facilities Agreement and other finance documents executed in relation thereto;

(ii) a payment of amounts due under the Senior Facilities Agreement and other finance documents executed in relation thereto and

(iii) an indemnification of the financing parties referred to above against any liabilities, costs and losses that such financing parties may incur in relation to the unenforceability, ineffectiveness or unlawfulness of any obligation secured by the guarantee described above.

The period of the guarantees has not been specified. The guarantors will be remunerated at arm’s length for granting the guarantees.

The Facilities Agreement provides for the establishment of collateral by the Company and other entities from Polsat Plus Group securing the repayment of loans granted thereunder. In the event that the debt ratio is equal to or less than 3.30:1, the Company may request to release collateral established in connection with the Senior Facilities Agreement. The released collateral will have to be re-established, if the debt ratio is higher than 3.30:1. In addition, in the event that certain entities from the Group incur any secured debt, a corresponding pari passu collateral will be provided to the Security Agent (acting, inter alia, for the benefit of the lenders under the Senior Facilities Agreement).

In order to secure the repayment of claims under the Senior Facilities Agreement, the Company and the security agent, entered into and signed agreements and other documents providing for the establishment of the following collateral:

(i) registered pledges over collections of movables and property rights of variable composition, included in the enterprise of the Company,

(ii) financial and registered pledges over all shares in Polkomtel sp. z o.o., Telewizja Polsat sp. z o.o., Polsat Media sp. z o.o. held by the Company, as well as over all shares in Netia S.A. held by the Company, for which the applicable law is Polish law, together with powers of attorney to exercise corporate rights attached to the shares in the aforementioned companies,

(iii) financial and registered pledges over the receivables related to the bank accounts of the Company, for which the applicable law is the Polish law,

(iv) powers of attorney to the bank accounts of the Company for which the applicable law is the Polish law,

(v) registered pledges over the rights to the trademarks of the Company, for which the applicable law is Polish law,

(vi) assignment of receivables for security under hedging agreements payable to the Company, for which the applicable law is English law,

(vii) assignment of rights for security under insurance agreements for real properties and assets made by the Company,

(viii) statements of the Company on submission to enforcement under a notarial deed, for which the applicable law is Polish law,

(ix) a joint contractual mortgage, governed by Polish law, over the following real properties owned by or in perpetual usufruct of the Company: (a) land property located in Warsaw, Targówek district, in the area of ul. Łubinowa, land and mortgage register No. WA3M/00104992/7, (b) land property located in Warsaw, Targówek district, in the area of ul. Łubinowa, land and mortgage register No. WA3M/00102149/9, (c) land property located in Warsaw, Targówek district, in the area of ul. Łubinowa, land and mortgage register No. WA3M/00103400/4, (d) land property located in Warsaw, Targówek district, in the area of ul. Zabraniecka, land and mortgage register No. WA3M/00131411/9, (e) land property located in Warsaw, Praga Północ district, in the area of ul. Zabraniecka, land and mortgage register No. WA3M/00100110/3, (f) land property located in Warsaw, Praga Północ district, in the area of ul. Zabraniecka, land and mortgage register No. WA3M/00100109/3, (g) land property located in Warsaw, Praga Północ district, land and mortgage register No. WA3M/00102615/7, (h) land property located in Warsaw, Praga Północ district, in the area of ul. Zabraniecka, land and mortgage register No. WA3M/00132063/1, (i) land property located in Warsaw, Targówek district, in the area of ul. Zabraniecka, land and mortgage register No. WA3M/00101039/8, (j) land property located in Warsaw, Targówek district, in the area of ul. Zabraniecka, land and mortgage register No. WA3M/00136943/2, (k) land held in perpetual usufruct and a building constituting a separate property located in Warsaw, Targówek district, in the area of ul. Utrata, land and mortgage register No. WA3M/00186120/2.

In order to secure the repayment of claims under the Senior Facilities Agreement, the Polsat Plus Group subsidiaries of the Company and the security agent entered into and signed agreements and other documents providing for the establishment of the following collateral:

(i) registered pledges over collections of movables and property rights of variable composition, included in the enterprises of Polkomtel sp. z o.o., Telewizja Polsat sp. z o.o., Netia S.A. and Polsat Media sp. z o.o.,

(ii) financial and registered pledges over all shares in Polsat Media sp. z o.o. held by Telewizja Polsat sp. z o.o., for which the applicable law is Polish law, together with powers of attorney to exercise corporate rights attached to the shares in the aforementioned company,

(iii) financial and registered pledges over the receivables related to the bank accounts of Polkomtel sp. z o.o., Telewizja Polsat sp. z o.o., Netia S.A. and Polsat Media sp. z o.o., for which the applicable law is the Polish law;

(iv) powers of attorney to the bank accounts of Polkomtel sp. z o.o., Telewizja Polsat sp. z o.o., Netia S.A. and Polsat Media sp. z o.o., for which the applicable law is the Polish law,

(v) registered pledges over the rights to the trademarks of Polkomtel sp. z o.o., Telewizji Polsat sp. z o.o., Netia S.A., Polsat Media sp. z o.o., for which the applicable law is Polish law,

(vi) assignment of receivables for security under hedging agreements payable to Polkomtel sp. z o.o., for which the applicable law is English law,

(vii) assignment of rights for security under insurance agreements for real properties and assets made by Polkomtel sp. z o.o., Telewizja Polsat sp. z o.o., Netia S.A. and Polsat Media sp. z o.o.,

(viii) statements of Polkomtel sp. z o.o., Telewizja Polsat sp. z o.o., Netia S.A. and Polsat Media sp. z o.o. on submission to enforcement under a notarial deed, for which the applicable law is Polish law,

(ix) a joint contractual mortgage, governed by Polish law, over land property located in Warsaw, Ursynów district, in the area of ul. Baletowa and Puławska, land and mortgage register No. WA5M/00478842/7, owned by Polkomtel,

(x) a joint contractual mortgage, governed by Polish law, over the following properties owned or co-owned by Netia S.A.: (a) land property located in Jawczyce, Ożarów Mazowiecki commune, land and mortgage register WA1P/00133706/7, (b) land property located in Kraków, Podgórze district, in the area of ul. Luciany Frassati-Gawrońskiej, land and mortgage register KR1P/00359665/5, (c) land property located in Warsaw, Ursynów district, in the area of ul. Poleczki, land and mortgage register WA2M/00142936/8, (d) land property located in Warsaw, Ursynów district, in the area of ul. Poleczki, land and mortgage register WA5M/00468204/0, (e) land property located in Warsaw, Ursynów district, in the area of ul. Tango, land and mortgage register WA2M/00138733/4.

Series D, E and F Bonds

On January 11, 2023, Cyfrowy Polsat issued 2,670,000 unsecured, sustainability-linked Series D bearer bonds with a nominal value of PLN 1,000.0 each and a total nominal value of PLN 2,670.0 million, maturing on January 11, 2030. On September 28, 2023, Cyfrowy Polsat issued 820,000 unsecured, sustainability-linked Series E bearer bonds with a nominal value of PLN 1,000.0 each and a total nominal value of PLN 820.0 million, which were assimilated with the  Series D Bonds. On December 21, 2023, Cyfrowy Polsat issued 400,000 unsecured, sustainability-linked Series F bearer bonds with a nominal value of PLN 1,000.0 each and a total nominal value of PLN 400.0 million. Series D, E and F were issued with the equal maturity date of January 11, 2030.

The purpose of the issuance of the Series D, E and F Bonds was not specified. Part of the proceeds from the both issues was used to refinance the debt under the Series B Bonds and the Series C Bonds. The Series D and E Bonds were issued by way of a public offering addressed to professional clients. All Series F Bonds were allotted to one investor, i.e., PFR Fundusz Inwestycyjny Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych in a private offer, exclusively addressed only to one person. Detailed terms and conditions of the issuances, redemption and payment of interest are specified in the Series D, E and F Bonds Terms.

The interest rate on the Series D, E and F Bonds is variable and depends on both financial indicators and a sustainability-linked KPI, i.e., the share of electric energy produced from zero-emissions sources in the total electric energy usage for own needs of the four main operating companies of Polsat Plus Group (Cyfrowy Polsat, Telewizja Polsat, Polkomtel and Netia). The sustainability-linked KPI will be tested for the year 2026.

The interest rate on the Series D, E and F Bonds is based on the WIBOR rate for six-month deposits denominated in PLN, increased by a margin whose value depends on the value of the Leverage Ratio (defined in the Series D, E and F Bonds Terms as the ratio of the net financial indebtedness to EBITDA) and on the value of the sustainability-linked KPI:

(i)  the margin amounts to 335 bps if the Leverage Ratio in the given period is less than or equal to 3.5:1,

(ii)  the margin amounts to 385 bps if the Leverage Ratio in the given period is greater than 3.5:1 but less than or equal to 4.5:1,

(iii)  the margin amounts to 435 bps if the Leverage Ratio in the given period is greater than 4.5:1.

(iv) if the value of the sustainability-linked KPI for 2026 is below 30% or the Company fails to provide a settlement of the value of the sustainability-linked KPI as part of the first Compliance Certificate made available after the end of 2026, the interest rate will be permanently increased by 25 bps.

The coupon on Series D, E and F bonds is paid biannually on January 11 and July 11.

In accordance with the provisions of the Series D, E and F Bonds Terms, the Company may exercise at any time an early redemption of all or part of the Series D, E and F Bonds, however, the early redemption may not apply to Bonds that constitute less than 10% of the total nominal value of the Series D, E and F Bonds, or all unredeemed Series D, E and F Bonds in the event that their aggregate nominal value is less than the amount indicated above. An early redemption may be exercised based on the Series D, E and F Bonds’ nominal value together with the accrued interest and a possible premium for the early redemption.

If the early redemption, performed as a result of exercising the issuer’s right to early redemption by the Company, occurs:

(i)  before one year from the issuance date, the premium shall be equal to 3% of the nominal value of the Series D, E and F Bonds subject to the early redemption,

(ii)  before two years from the issuance date but after one year from the issuance date, the premium shall be equal to 1.5% of the nominal value of the Series D, E and F Bonds subject to the early redemption,

(iii)  before three years from the issuance date but after two years from the issuance date, the premium shall be equal to 0.75% of the nominal value of the Series D, E and F Bonds subject to the early redemption,

(iv)  before four years from the issuance date but after three years from the issuance date, the premium shall be equal to 0.5% of the nominal value of the Series D, E and F Bonds subject to the early redemption,

(v)  if the early redemption occurs after four years from the issuance date, the Series D, E and F Bonds shall be redeemed according to their nominal value,

(vi)  in each case the premium shall be increased by 0.25% p.a. for the period between the early redemption date and the redemption date in the event that the SPT is not satisfied or the SPT settlement is not submitted as part of the first Compliance Certificate after the end of 2026, if the early redemption date falls after the date on which the Compliance Certificate for 2026 was delivered or was to be delivered.

Additionally, pursuant to the Series D and E Bonds Terms, the Company and its subsidiaries are obliged to maintain required levels of certain financial ratios and are subject to restrictions, with respect to (but not limited to):

(i)  acquisition or taking up of shares in other companies,

(ii)  extending guarantees or granting sureties, accession to debt or release from liability,

(iii)  granting loans,

(iv)  disposing of assets,

(v)  payment of dividends or advance dividends, payment of the price for own shares, or returns of additional payment to shareholders,

(vi)  incurring of financial indebtedness, and

(vii)  entering into potential composition agreements with creditors which are regulated by the Restructuring Act or another regulation which could replace this law.

In the event of a breach of restrictions specified in the Series D, E and F Bonds Terms, bondholders are entitled to demand an early redemption of Series D, E and F Bonds held by those bondholders with the consent of the Meeting of Bondholders.

In the event of change of control, as defined in the Series D, E and F Bonds Terms, cessation of business activity or insolvency of the Company, i.a. by declaring bankruptcy or liquidation of the Company, culpable delay in payment of benefits under the Series D, E and F Bonds, withdrawal of all the Company's shares from trading on the regulated market operated by the WSE, or failure to convene the Bondholders' Meeting, bondholders are entitled to demand an early redemption of Series D, E and F Bonds held by those bondholders.

The Series D Bonds have been traded since January 20, 2023 and Series E Bonds since September 28, 2023 under the abbreviated name “CPS0130” in the continuous trading system called the Alternative Trading System, operated by the Warsaw Stock Exchange within the Catalyst market. The Series F Bonds are not listed on any market.

The Series D, E and F Bonds are issued under Polish law and any potential disputes related to the Series D, E and F Bonds shall be resolved in proceedings at the Polish common court having jurisdiction over the registered office of the Company.

Financing of green energy production projects

PAK-PCE Group companies have entered into investment loan agreements to finance the implementation of renewable energy investment projects in 2021-2024.

PAK-PCE Biopaliwa i Wodór Sp. z o.o. On July 1, 2022, an amendment to the loan agreement dated January 29, 2021 was concluded between ZE PAK S. A., PAK-PCE Biopaliwa i Wodór Sp. z o.o. (PAK-PCE BiW) and Bank Polska Kasa Opieki S.A., on the basis of which a loan in the total amount of up to PLN 160.0 million was transferred to PAK-PCE BiW to finance an investment project aimed at adapting the existing coal-fired unit at the Konin power plant for burning biomass. The loan is repayable in equal quarterly installments commencing June 30, 2022, with the final repayment date of December 31, 2030. The loan bears interest at a variable rate equal to the sum of the WIBOR rate for the relevant interest period and the margin. The loan carrying value as of December 31, 2024 was PLN 109.1 million.

In order to secure the repayment of the loan granted, the following have been established and signed: (i) a mortgage on the indicated properties of PAK-PCE BiW, (ii) a financial and registered pledge on the bank accounts maintained by PAK-PCE BiW at Bank Pekao S.A. and a power of attorney for each of the above-mentioned bank accounts, (iii) a transfer for security from the insurance policies of PAK-PCE BiW's assets and an assignment of receivables from the heat supply contracts. bank accounts, (iii) assignment by way of security from insurance policies of PAK-PCE BiW's assets and assignment of receivables from contracts for heat supply to the city of Konin, and (iv) PAK-PCE BiW's statement of submission to execution pursuant to Article 777 § 1 item 5 of the Code of Civil Procedure Act.

On June 23, 2022, PAK-PCE BiW entered into a credit limit agreement with Bank Polska Kasa Opieki S.A. up to a maximum amount of PLN 25.0 million to finance the company's general corporate purposes. The credit limit agreement expires on November 30, 2025. The loan bears interest at a variable rate, which is the sum of the WIBOR rate for the relevant interest period and a margin. As of December 31, 2024, the company had not used the limit.

PAK-PCE Kazimierz Biskupi Sp. z o.o. On September 20, 2022, PAK-PCE Kazimierz Biskupi Sp. z o.o. (formerly Farma Wiatrowa Kazimierz Biskupi Sp. z o.o.) (PAK-PCE Kazimierz Biskupi) entered into an agreement with Bank Gospodarstwa Krajowego for an investment loan for the construction of a wind farm. The loan agreement provides for a term loan of up to PLN 135.0 million and a VAT loan of up to PLN 30.0 million. The interest rate on the loans is variable and is the sum of the WIBOR rate for the relevant interest periods and the margin. The term loan is repayable in quarterly instalments starting from June 20, 2024 and the final repayment date for the term loan is December 20, 2038. The carrying value of the investment loan as of December 31, 2024 was PLN 119.7 million.

In order to secure the repayment of the loan, the following have been signed: (i) a financial and registered pledge (subject to registration) on all shares in the share capital of PAK-PCE Kazimierz Biskupi, together with a power of attorney to exercise corporate rights from such shares, (ii) financial and registered pledges (subject to registration) on receivables under PAK-PCE Kazimierz Biskupi's bank account agreements, (iii) a registered pledge (subject to registration) on a collection of property and property rights belonging to PAK-PCE Kazimierz Biskupi, (iv) an assignment for collateral in favor of the bank of rights and receivables under, among others, an electricity sale agreement, a construction works agreement and loan agreements, (v) a subordination of receivables agreement, pursuant to which PAK-PCE's receivables from PAK-PCE Kazimierz Biskupi were subordinated to the bank's receivables under the loan agreement, (vi) a power of attorney to dispose of PAK-PCE Kazimierz Biskupi's bank accounts, and (vii) statements of PAK-PCE Kazimierz Biskupi and PAK-PCE on submission to execution under Article 777 of the Code of Civil Procedure.

PAK-PCE Miłosław Sp. z o.o. On April 20, 2023, PAK-PCE Miłosław Sp. z o.o. (formerly Park Wiatrowy Pałczyn 1 Sp. z o.o.) (PAK-PCE Miłosław) entered into an investment loan agreement with Bank Polska Kasa Opieki S.A. for the construction of the Miłosław wind farm. The loan agreement provides for a term loan of up to PLN 95.5 million and a VAT loan of up to PLN 5.0 million. On March 15, 2024, the unused loan amount of PLN 18.8 million was cancelled. The loans bear interest at a variable rate equal to the sum of the WIBOR rate for the relevant interest periods and the margin. The term loan is repayable in equal quarterly instalments starting from June 20, 2024 and the final repayment date for the term loan is December 20, 2038. The carrying value of the investment loan  as of December 31, 2024 was PLN 75.6 million.

In order to secure the repayment of the loan, the following have been signed: (i) a financial and registered pledge on PAK-PCE Miłosław's shares, (ii) a financial and registered pledge on PAK-PCE Miłosław's bank accounts and a power of attorney over each of the aforementioned bank accounts, (iii) a registered pledge on the company's assets, (iv) an assignment of contracts constituting material documentation for the project, (v) an assignment of insurance policies, and (vi) PAK-PCE Miłosław's statements of submission to execution pursuant to Article 777 § 1 items 5 and 6 of the Code of Civil Procedure Act.

PAK-PCE Fotowoltaika Sp. z o.o. On March 12, 2021, PAK-PCE Fotowoltaika Sp. z o.o. entered into a loan agreement with a consortium of banks consisting of PKO BP S.A., Bank Pekao S.A. and mBank S.A., under which the Company was granted an investment loan up to PLN 175.0 million to finance the construction of a photovoltaic farm, of which PLN 138.0 million was a term loan and PLN 37.0 million was a loan for VAT financing. The VAT loan was repaid on June 30, 2022. Pursuant to an amendment agreement dated March 31, 2023, the term loan limit was increased to a maximum of PLN 182.0 million. The loan bears interest at a variable rate equal to the sum of the WIBOR rate for the relevant interest periods and the margin. The term loan is repayable in quarterly installments according to a payment schedule commencing on March 31, 2022 and the final repayment date is December 31, 2035. The carrying value of the loan as of December 31, 2024 was PLN 140.8 million.

In order to secure the repayment of the loan, the following have been signed: (i) mortgage on real estate, (ii) financial and registered pledge on bank accounts, (iii) financial and registered pledge on shares in PAK-PCE Fotowoltaika, (iv) registered pledge on movable assets, (v) assignment of receivables from the main contracts of the project, including the insurance policy, (vi) statement of submission to execution under Art. 777 of the Civil Procedure Code, (vii) surety of ZE PAK up to PLN 10.0 million, (vii) power of attorney to the bank accounts of PAK-PCE Fotowoltaika Sp. z o.o.

In addition, PAK-PCE Fotowoltaika Sp. z o.o. signed 3 loan agreements with ZE PAK S.A. (on March 8, 2021, March 9, 2021 and March 29, 2022) for a total maximum amount of up to PLN 9.5 million. The funds from the loans received were used for the construction of the photovoltaic farm and served to finance the company's current operations. The loans bear interest at a variable rate, which is the sum of the WIBOR rate for the relevant interest periods and the margin. The loans mature on December 31, 2035. The total debt on the loans as of December 31, 2024 amounted to PLN 12.1 million.

PAK-PCE Polski Autobus Wodorowy Sp. z o.o. On December 22, 2022, PAK-PCE Polski Autobus Wodorowy Sp. z o.o. (PAK-PCE PAW) entered into an agreement with the National Fund for Environmental Protection and Water Management for financing in the form of a loan for the construction of a production facility for innovative hydrogen buses in Świdnik. The loan was granted for a maximum amount of up to PLN 50.0 million and bears interest at a variable WIBOR 3M rate, with a limitation of its minimum level. The loan is repayable in equal quarterly instalments in accordance with the payment schedule commencing on December 20, 2025 and the final repayment date of the loan is December 20, 2037. As of December 31, 2024, the loan’s carrying value amounted to PLN 40.0 million.

In order to secure the repayment of the loan, the following have been signed: (i) a blank promissory note with a promissory note declaration, (ii) a promissory note surety of ZE PAK S.A. with a promissory note declaration, (iii) a mortgage on the real estate where the project is being implemented, (iv) a statement of submission to execution on the subject of the mortgage, and (v) a pledge on a set of property and rights - after the investment is implemented.

On May 10, 2024, PAK-PCE Polski Autobus Wodorowy signed 10 loan agreements with PKO Leasing, each in the amount of approximately PLN 2.9 million. Their purpose is to refinance the costs of production of NesoBus hydrogen buses. The loan bears a variable interest rate - WIBOR plus a margin. All 10 loans were disbursed on September 16, 2024. All loans will be repaid in monthly instalments according to a payment schedule starting October 30, 2024, with the final repayment date no later than September 30, 2034. As of December 31, 2024, the carrying value of all 10 loans amounted to PLN 28.4 million.

The loans are secured by: (i) a blank promissory note issued by PAK-PCE Polski Autobus Wodorowy with a promissory note declaration, (ii) a guarantee by ZE PAK S.A., (iii) an assignment of movable assets, i.e. buses, under a security agreement, (iv) an assignment of rights under an insurance policy, and (v) ZE PAK S.A.'s submission to the rigors of execution under Article 777.

PAK Volt S.A. PAK Volt S.A. signed 2 loan agreements with ZE PAK S.A. to finance the company's ongoing operations: December 15, 2020 for a maximum amount of PLN 13.0 million and November 24, 2022 for an amount of up to PLN 120.0 million. The loans bore interest at a variable rate, being the sum of the WIBOR rate for the respective interest periods and the margin. The December 15, 2020 loan repaid with interest on October 2, 2023. The November 24, 2022 loan matures on December 31, 2025 and was not drawn down as of December 31, 2024.

PAK-PCE Przyrów Sp. z o.o. On October 16, 2023, PAK-PCE Przyrów Sp. z o.o. (formerly Farma Wiatrowa Przyrów Sp. z o.o.) (PAK-PCE Przyrów), entered into a loan agreement with EFG Bank (Luxembourg) S.A., which provides for the granting of financing in the form of a term loan of up to PLN 360.0 million, bearing interest at a variable rate equal to the sum of the WIBOR rate for the relevant interest periods and the margin. The funds raised are used to implement the "Przyrów" wind power project with an estimated target installed capacity of 50.4 MW. The loan amount is secured by an external entity related to the main shareholder. The final repayment date of the loan was set for October 16, 2028. On December 20, 2024, a partial repayment of the loan of PLN 220.0 million was made. As of December 31, 2024, the loan carrying value amounted to PLN 77.4 million.

On December 19, 2024, PAK-PCE Przyrów entered into a loan agreement with IB Towarzystwo Funduszy Inwestycyjnych S.A. which provides for the granting of financing in the form of a loan of up to PLN 220.0 million, bearing interest at a variable rate equal to the sum of the WIBOR rate for the relevant interest periods and the margin. The funds raised are used to implement the "Przyrów" wind power project with an estimated target installed capacity of 50.4 MW. The final repayment date of the loan was set for October 16, 2028. On December 19, 2024, the loan was disbursed in the amount of PLN 220.0 million. As of December 31, 2024, the loan carrying value amounted to PLN 220.5 million.

PAK-PCE Człuchów Sp. z o.o. On November 9, 2023, PAK-PCE Człuchów Sp. z o.o. (formerly Great Wind sp. z o.o.) (PAK-PCE Człuchów), executed a credit facilities agreement with a consortium of banks comprised of: BGK, mBank S.A., Santander Bank Polska S.A. and PKO BP S.A., pursuant to which, PAK-PCE Człuchów obtained a PLN-denominated term facility up to PLN 656.0 million, a revolving facility up to PLN 44.0 million and a revolving VAT facility up to PLN 100.0 million. The credit facilities will be used to finance the development of a wind farm in Człuchów. The facilities bear variable interest rates based on WIBOR for the respective interest periods plus margin. The term facility will be repaid in quarterly instalments according to a payment schedule starting March 20, 2025, with the final repayment due on December 20, 2039. The revolving facility will be repaid by December 31, 2029. The VAT revolving facility will be repaid by June 30, 2025. As of December 31, 2024, the carrying value of the term loan and VAT (combined) was PLN 605.7 million. The revolving credit facility had not been used as of December 31, 2024.

In order to secure the repayment of the loan, the following have been signed and/or established:  (i)  registered pledge over a collection of movables and property rights of a variable composition, being part of PAK-PCE Człuchów’s enterprise; (ii) financial pledges and a registered pledge over all PAK-PCE Człuchów’s shares held by PAK-PCE, with a power of attorney to exercise corporate rights attached to PAK-PCE Człuchów shares; (iii) financial pledges and registered pledges over receivables under PAK-PCE Człuchów’s bank account agreements; (iv) power of attorney to manage PAK-PCE Człuchów’s bank accounts; (v) contribution guarantee to be provided by PAK-PCE; (vi) cost overrun guarantee to be provided by ZE PAK S.A. Furthermore, agreements on subordination and security assignment of certain PAK-PCE’s claims against PAK-PCE Człuchów to secure the financing parties’ claims under the facilities agreement and related documents; security assignment of PAK-PCE Człuchów's claims under certain project documents and warranties/guarantees; direct agreements with counterparties to the agreement for the sale of electricity generated from the renewable energy source and contracts concerning financial settlements (contract for difference) were signed; and statements of submission to enforcement by PAK-PCE Człuchów and PAK-PCE were made.

Ratings

The table below presents a summary of ratings assigned to Polsat Plus Group as at the date of publication of this Report.

Rating agency	Rating / outlook	Previous rating / outlook	Rating / outlook date	Last review date
S&P Global Ratings	BB / stable	BB / stable	21.12.2022	23.01.2025
Fitch Ratings	BB / stable	BB / stable	28.05.2024	28.05.2024

Fitch Ratings. On May 28, 2024, Fitch Ratings (“Fitch”) affirmed the Company’s long-term issuer default rating (IDR) at ‘BB’ with a stable perspective. In its press release Fitch stated that the rating remains anchored on the Company’s telecoms and media (TMT) operations, which account for a vast proportion of its EBITDA. In Fitch’s opinion, the Company’s fully integrated telecom and media profile is a distinguishing factor within its peer group of other single-market telecom operators in Europe. At the same time, the rating takes into account the diversification of the Company’s operations towards renewable energy and real estate which, in Fitch’s view, may result in the deterioration of the leverage profile to above the current rating thresholds in 2024. Fitch’s base case forecasts envisage scope to reduce leverage over the next two years as EBITDA generation from energy investment improves while inflationary pressures cede. However, acceleration of investments in real estate could reduce the pace of deleveraging and result in negative rating pressure. In parallel, Fitch assessed that the Company has adequate access to capital.

S&P Global Rating. On January 23, 2025, following the annual review, the rating agency S&P Global Ratings has maintained the credit rating of Polsat Plus Group at the BB level with a stable outlook. In the published report, S&P forecasts stable operating performance for the Group over the next two years and predicts that the leverage (net debt to EBITDA), adjusted according to S&P's methodology, will be around 4x.

S&P expects the Group’s revenue to grow at a rate of 3% to 4% annually in 2025-2026 with a lower EBITDA margin, due to expected higher costs, mainly associated with the development of the 5G network, content, and salaries. Concurrently, in its report S&P highlights the development of the green energy segment in alignment with strategic assumptions, as well as the contribution of the new operating segment to the Group's results. S&P forecasts that the Group will generate positive free cash flows (FOCF), partly due to lower than previously anticipated total capital expenditures. As a result, S&P-adjusted leverage is expected to remain at about 4x EBITDA in 2025-2026, which is in the midpoint of the rating leverage range. Additionally, S&P assessed that the Group's liquidity is adequate and headroom under financial covenants is sufficient.

The agency foresees the possibility of raising the Group's rating, if the S&P-adjusted net leverage decreases below 3.5x and the free operating cash flow (FOCF) to debt ratio sustainably increases to above 5%. On the other hand, the triggers for lowering the Group’s rating would be an increase in the S&P-adjusted net debt to EBITDA above 4.5x or sustainable negative values of the Group's FOCF to debt ratio while this ratio in the TMT business remains sustainably below 5%.

 

5.               Factors and trends that may impact our results in subsequent periods

5.1.        Factors related to social-economic and competitive environment

Impact of the military conflict on the territory of Ukraine on the Company’s current operations and expected results

In the opinion of the Management Board, despite the lack of direct exposure of Polsat Plus Group to the Ukrainian, Russian or Belarusian markets, the war started by the Russian Federation may have a long-lasting effect on the operational and financial results of the Group. In particular, the war may have an adverse effect on a number of macroeconomic indicators. High inflation, high interest rates, slowdown in economic growth and disruptions in the supply of raw materials and fossil fuels may be reflected in increasing costs of our current operating activities and significantly higher debt service costs of Polsat Plus Group.

The full impact of the war caused by the Russian Federation on the operational and financial activities of both the Company and Polsat Plus Group cannot be predicted as of the date of this Report and depends on many factors beyond the Group’s control.

Apart from macroeconomic and geopolitical factors, which affect virtually every branch of the Polish economy to a varying degree, the Company assesses its operating prospects as stable.

Macroeconomic outlook in Poland

Macroeconomic trends in the Polish economy as well as global market conditions affect our operations and operating results, and are expected to continue affecting them in the future, in particular with respect to the demand for advertisements, the level of expenditures on services that we provide as well as demand for end-user devices.

According to the European Commission's November 2024 forecast, Polish GDP growth is expected to accelerate in 2025. The economy, according to the Commission, will be fuelled by EU-funded public investment under the National Recovery Plan (KPO) and investment for reconstruction after last year's floods. In addition, growth is expected to be supported by rising private consumption.

As a result of the above factors, the European Commission forecasts strong economic growth in Poland compared to other countries, at 3.6% in 2025 and 3.1% in 2026. This represents an upward revision of the earlier forecast of May 2024. At the same time, the Commission revised its inflation forecasts for Poland upwards, to 4.7% in 2025 and 3.0% in 2026, due to the planned unfreezing of energy prices in 2025. Such a scenario would imply a later return to the inflation target.

In addition, the forecast assumes a stable, low unemployment rate of 2.8% in 2025 and 2026. Combined with, among others, an increase in the minimum wage to PLN 4,666 gross per month from January 1, 2025, this will, according to the Commission, further support rising household consumption.

Situation on the pay TV market in Poland

Our revenue depends on the number of our customers and their loyalty, the pricing of our services and the penetration rate of pay TV in Poland, which we consider to be a saturated market. The high level of competition and the dynamically evolving market environment (including consolidation processes on the cable TV market as well as the continued convergence of mobile and fixed-line services) impact offerings addressed to our new customers. In addition, due to high competition, we continuously invest in customer retention programs and building the loyalty of our customers.

We believe that at present our programming packages constitute an attractive value-for-money offer on the Polish pay TV market. Moreover, we invest in production and purchase of new, attractive and unique content. This gives us a chance to attract a significant portion of migrating customers to our platform. What is more, we offer pay TV services as part of our integrated offer, which has a positive impact of the level of loyalty of our customer base and contributes to maintaining a low churn rate.

Dynamic growth of non-linear distribution of content, delivered by video on demand and OTT (over-the-top) services is a global trend. In Poland, this market has been growing rapidly in recent years and its attractiveness is proved by the launch of services by global players, such as Netflix, Amazon Prime, HBO Max, Disney+ or SkyShowtime. In addition, one of the consequences of the COVID-19 pandemic restrictions has been a deepening and consolidating of pre-existing trends of consuming content at any time and on any device. In view of the above, we systematically develop our VOD and online television services and applications.

At the same time, there has been a trend in Poland to increase prices for pay TV services, which is a natural consequence of the distinctly rising costs of purchasing and producing in-house content. Retail price increases apply to basically all technologies - from traditional satellite platforms and cable offerings, through IPTV offerings, to VOD and OTT platforms. In the future, this trend may translate favourably into ARPU growth while, at the same time, it may cause a part of customers to be inclined to limit their parallel use of more forms of access to paid content.

Development of the advertising market in Poland

A significant part of our wholesale revenue comes from the sale of advertising airtime and sponsoring slots on our TV channels. Demand for advertising airtime is highly correlated with the macroeconomic situation. We expect that the development of the TV advertising market in the coming quarters and years will be influenced by the growth rate of the national GDP, which, according to the estimates of the European Commission, will reach 3.6% and 3.1% in 2025 and 2026, respectively.

In our opinion, television will remain an effective advertising medium given the relatively low level of advertising expenditures in Poland as a percentage of GDP and per capita in comparison to other European markets. We believe there is still growth potential for TV advertising in Poland in the long term. In 2023-2024, the average time spent watching TV among the surveyed population remained high, estimated at 239 to 245 minutes per day. It is worth noting that despite the growing importance of new media and the declining trend in the length of time spent watching traditional television, it is forecasted that television will still remain an attractive and popular pastime thanks to, among others, new technical opportunities and given that television remains a widely available and affordable source of entertainment for the whole family.

As of March 2024, the method of measuring out of home TV viewership has changed. Starting from September 2021, the TV audience used for advertising settlements takes into account viewing performed away from home – out of home viewership (OOH). Nielsen Media's measurement, based on a household panel, has been enriched with out-of-home viewing data collected by Gemius, which is then added to Nielsen Media's data. An audit conducted by the French auditor CESP (Centre d'Etude des Supports de Publicité) showed, among other things, that the measured out-of-home audience level was defined as a lower estimate of the phenomenon. In order to make the out-of-home viewership figures more realistic, two modifications were made to the methodology. The first modification was to change the definition of the place of residence. It was changed from a dynamic approach, where Gemius determines, on the basis of GPS coordinates (measurement carried out using smartphones equipped with a special meter), the place where the respondent watches TV most often (defined as home), to a static definition, i.e. the place declared by the respondent as home and confirmed by Gemius in a verification process. The second modification was to reduce the distance from the place of residence, defining TV viewing as out-of-home viewing, from 100 meters to 40 meters. The result of the changes is a more realistic measurement of viewing away from home, as well as greater consistency with Nielsen Media's core measurement of viewing at home. For TV Polsat Group, this means an increase in the advertising resources that can be offered to advertisers by approximately 4% in the period March - December 2024, while keeping other station parameters unchanged.

Prospects of the online advertising market are positive. According to the IAB AdEx report for nine months of 2024, online advertising expenditures in Poland increased at a rate of 16.4% YoY and reached the value of PLN 648 billion. The two main segments of the online advertising market in which we are present, i.e., display and video, were responsible for 44% of total expenditures on the online advertising market and their total value increased by 20% YoY. We believe that following the acquisition of Interia.pl Group, through which we gained a leading position on the online advertising market we are one of the beneficiaries of the development of these promising segments of the advertising market in the following periods.

Growing importance of convergent services

Convergence of services is one of the strongest trends both on the Polish media and telecommunications market and worldwide. Operators develop their bundled offerings in response to changing preferences of customers, who seek media and telecommunications services provided at competitive prices by a single operator under a single contract, a single invoice and a single fee. Given the high saturation of the pay TV and mobile telephony markets, bundled services play a very important role in maintaining the existing customer base.

In the wake of the increasing importance of convergence and bearing in mind the significant level of fragmentation of the broadband access market, it can be expected that the future shape of the Polish telecommunications and media market will be substantially impacted by consolidation trends which have been visible for a long time on more developed foreign markets, where mobile and fixed-line operators merge with content providers.

Increases in pricing of mobile telecommunications services

An important trend visible since 2019 in the Polish mobile telephony market is the gradual introduction by all major telecommunication operators of modifications to their retail services pricelists which in particular consist in increasing monthly fees in exchange for higher data transmission packages (the more-for-more pricing strategy), cancelling selected low-end tariff plans or increasing rates for connections made above package limits. These changes are driven by increased demand for data transmission, low level of prices of telecommunication services in Poland, inflationary pressure on costs of telecommunication activities and a shift in strategies of certain operators towards building customer value and fostering revenue and profitability connected, among others, with the investments in 5G network construction.

The strong inflationary pressure that is being experienced in the Polish market in years 2022-2024 was reflected in the observed adjustments of price lists introduced by telecom operators, including, among others, the implementation of inflation clauses into customer contracts, increasing subscription fees after the basic 24-month contract period, withdrawing the cheapest tariffs from the offer or raising subscription thresholds in line with the more-for-more strategy.

We expect that the above mentioned changes, in connection with increasing demand for transfer in mobile devices and persisting popularity of remote working and learning, shall translate favourably into the growth of the Polish telecommunication market in the medium and long-term.

Development of the market for new technologies and devices and the consequent increase in access to and consumption of audiovisual content

With the expansion of the new technology market, the number of mobile devices owned by consumers is growing rapidly: smartphones, laptops and tablets, or smart TVs. This is leading to a fast increase in access to, and viewing of, video content. Consumers expect providers to enable them to watch content on any screen they own, anywhere, anytime. We see this group as a potential customer segment not only for TV services, but also for opportunities to monetize our audiovisual content. At the same time, this trend will lead to increased demand from our customers for data services on mobile devices, which in turn will lead to a growing revenue stream from the sale of these services to our customers.

The successive launch of 5G networks has also allowed operators for providing a far superior mobile experience. 5G technology will make it possible to achieve speeds that will ultimately exceed 1 Gbps with minimal latency, while at the same time offering significantly higher capacity in newly built networks, which means that a greater number of terminals will be able to comfortably enjoy transmissions at the same time. However, intensive use of 5G technology will require larger data bundles, which can be offered at higher tariffs.

We expect that the above-mentioned developments, combined with the growing demand for transfers between mobile devices and the continued popularity of remote working and learning, will have a positive impact on the value of the Polish mobile market in the medium to long term.

Development of 5G technology in Poland

The 5G technology is currently at a relatively early stage of development in Europe whereas, in our opinion, it will gradually gain popularity. According to the estimates presented in the Ericsson Mobility Report of November 2024, the scale of penetration with this technology among users of mobile devices in the Central and Eastern Europe region will reach approximately 58% in 2030. Simultaneously, by 2030 data transmission in 5G technology is expected to account for 80% of the total data transmission in networks built in all technologies. Rapidly increasing usage of data in smartphones is to be the main driver for data transmission growth in mobile networks, with forecasted growth rate of 14% CAGR in 2024-2030 in Central and Eastern Europe and expected target level of 42 GB per month (compared to 20 GB in 2024). We want to actively benefit from this increasing demand by leveraging on our investment in 5G technology.

In Poland, the bands designated for 5G development are 3.4-3.8 GHz (the so-called C-Band), 694-790 MHz and 26 GHz, with operators able to use any of their frequency bands for 5G network development. At the end of 2023, the President of the UKE conducted a procedure that resulted in the allocation of the C-band. In March 2025, the 700/800 MHz frequency auction was completed. The 26 GHz band remains in prospect for distribution, whereas the conditions and timing of the distribution of this band are not known yet.

The auction documents for both the C-Band and 700/800 MHz auctions provide for the imposition of quantitative, coverage and qualitative network roll-out obligations on the auction winners. The 700/800 MHz auction completed on March 2025, 2025 maintains the same obligations as in the earlier 5G auction in the 3.6 GHz band, with an additional condition to provide capacity (using any frequency band) of 120 Mbps to 99% of households nationwide (excluding the areas indicated in appendix 1 to the draft reservation decisions) by the end of 2030. As a result, the four MNOs will gradually roll out their 5G networks over the next few years.

Growing demand for data transmission on smartphones

The growing popularity of smartphones is reflected in increasing demand for data transmission in the small screen equipment segment. According to estimates presented in the Ericsson Mobility Report of November 2024, the scale of data transmission in the Central and Eastern Europe region, to which Poland is classified, will increase from 20 GB per month in 2024 to 42 GB per month in 2030, driven also by the increasing popularity of 5G technology.

We expect that the growing popularity, availability and technological advancement of smartphones combined with improving quality parameters of mobile data transmission and the constantly expanded offer of applications and content for customers shall continue to be the driving factor behind growing demand for data transmission services.

Situation in the electricity market

The majority of our revenue from the sale of energy produced by wind and photovoltaic farms is secured by long-term PPAs, while the sale of biomass energy and electricity trading in the market are highly dependent on the level of spot and forward market energy prices and their volatility. The year 2022 was characterized by record-high energy prices and their very high volatility, as a result of the global energy crisis, fueled by the COVID-19 pandemic, followed by Russia's invasion of Ukraine and destabilization of the gas market in Europe. In 2023, electricity prices in Poland fell.  The downward trend was halted in mid-2024, the second half of last year was characterised by a stabilisation of energy prices with a slight upward trend in the fourth quarter.

Volatility in market energy prices. Market energy prices affect the financial performance of the Group's various generation units in different ways. Market prices will largely determine the level of revenue from the production and sale of electricity generated by the two biomass units. PAK-PCE Biopaliwa i Wodór Sp. z o.o., which produces energy from biomass, contracts most of its production at futures market prices, supplemented by spot market sales (day-ahead market (RDN) and balancing market).

In order to reduce its exposure to energy price fluctuations, some of PAK-PCE Group's solar and wind generation companies have entered into Power Purchase Agreements (PPAs). This type of contract is intended to provide funds for the repayment of obligations to banks financing investments in renewable energy sources, which is particularly important from the point of view of managing the risk of fluctuations in electricity prices in a market environment characterized by significant price volatility.

Energy price regulation. In connection with the continuation of sate support mechanisms directed at end consumers of energy, the conduct of business activities in the field of energy trading (both in terms of electricity and gas fuels) is subject to restrictions on the prices applied to eligible entities. According to the current provisions of the Act of October 27, 2022, on extraordinary measures aimed at limiting the prices of electricity and supporting certain consumers in the years 2023-2025, maximum prices have been maintained for the most vulnerable consumers of energy, heat and gas, including households, public utility buildings, and local government units.

The Group expects that the regulations freezing energy prices for selected consumer groups in their current form will not have a significant impact on financial results in the green energy segment in 2025. This is mainly due to the profile of the customer base and the type of products offered by PAK Volt, a company engaged in energy trading within the Group.

Green certificate prices. One of our biomass sources participates in the "green certificates" support system for energy certificates of origin, i.e. PMOZE_A (a symbol on the TGE, Polish power exchange). The revenue we receive from the sale of green certificates is derived from their quantity and market price. The price of green certificates is subject to market laws, but it is also influenced significantly by regulations introduced by the legislator, in particular the so-called green certificate redemption factor. This is a factor that affects the increase or decrease in demand for certificates from entities obligated to redeem them. As a rule, an increase in this coefficient causes an increase in the price of certificates, while a decrease in the coefficient causes a decrease in the price of certificates.

Biomass prices. The biomass units owned by the Group, with a total capacity of 105 MW, produce electricity and heat using biomass as a feedstock. The Polish biomass market is highly fragmented. Certified biomass is purchased from many suppliers. Purchases are made through a competitive bidding process. It should be noted that the current biomass market does not allow for long-term price security for a large volume of supplies. Biomass supply contracts are usually signed for one year, however, the company Biopaliwa i Wodór Sp. z o.o., which operates biomass plants, is trying to gradually extend delivery terms with a guaranteed price for periods longer than one year. The price of purchased biomass has a significant impact on the profitability of energy production from this feedstock.

Seasonality and meteorological conditions affect the level of production from RES sources

Meteorological conditions, particularly wind strength and ensolation levels, are an important factor influencing the level of energy production from wind and photovoltaic installations in a given period, and thus also the level of revenue generation. The peak period of energy generation from photovoltaic farms is in the spring and summer, while wind farms record the highest level of production in the first and fourth quarters. The production volume of renewable energy sources also affects the level of spot market electricity prices. During periods of strong wind or high ensolation, with the simultaneous relatively low energy consumption, there can be a temporary drop in market energy prices (even to negative values). On the other hand, unfavourable wind or solar conditions combined with a relatively high energy demand (e.g. due to low temperatures) lead to temporary increases in market energy prices.

The risk of meteorological conditions is therefore strongly correlated with the spot market price risk, as the imbalance of the renewable energy generation companies will be settled on the balancing market, in spite of contracting. This means the purchase of missing energy or the sale of surplus energy at unknown prices, which will be determined by the meteorological conditions prevailing during the period.

In addition, during periods of very high RES energy production due to weather conditions, power system operators may use the mechanism of non-market curtailment of RES energy production in order to balance electricity supply with the demand for it, which is necessary to ensure the safety of grid operation. In this case, RES producers receive financial compensation based on the balancing market prices and not on the prices resulting from the PPAs of the RES sources.

5.2.        Factors related to the operations of the Group

Proceedings concerning TiVi Foundation, the Company’s shareholder

To the Company's best knowledge, proceedings are pending before the court in Liechtenstein to determine who is entitled to the rights set forth in the Articles of Association of TiVi Foundation. TiVi Foundation is an indirect shareholder of the Company, holding a block of 60.47% of the Company's shares entitling to 69.13% of votes at the Company's general meeting.

In the opinion of the Company's Management Board, the aforementioned proceedings have no impact on the operational and financial activities of the Company and Polsat Plus Group. Cyfrowy Polsat and its Group are operating stably, according to plan and in a normal operational mode. The Group's financial position is stable, and it consistently executes its strategy while meeting its obligations to financial institutions and bondholders on time.

On October 17, 2024, the Company received a notification letter from a shareholder of the Company – Reddev Investments Limited, informing that Reddev had been served with temporary injunctions obtained ex parte by advocates acting for Piotr Żak, Aleksandra Żak and Tobias Solorz. Concurrently, the notification states that the temporary injunctions have no force or effect in Poland and do not affect or in any way alter the ownership or management of the Company and they do not in any way affect the day-to-day operational activities of the Company or its subsidiaries.

The Company will report, to the best of its knowledge, by way of relevant reports, any further material developments in the case.

Implementation of renewable energy investment projects

The successive construction and commissioning of projects currently under construction by PAK-PCE Group companies will have a significant impact on our consolidated financial results. Due to the magnitude of the Drzeżewo and Dobra wind farms and hydrogen project, we expect a significantly higher level of capital expenditures in the coming periods related to the expansion of renewable energy production capacity and the implementation of hydrogen projects, which in turn will be reflected in the Group's net debt/EBITDA ratio. In parallel, we expect the wind and photovoltaic farms already built and in operation, together with the RES projects currently underway, to increasingly contribute to the Group's revenue and EBITDA once commissioned.

Developing an offer based on bundled services

Our bundled services offers, addressed both to our individual and business customers, enable our customers to combine products in a flexible way and benefit from attractive discounts. Furthermore, we offer a broad range of complementary services to every basic service. We combine our traditional pay TV services provided in the satellite and Internet (OTT, IPTV) technologies with VOD, PPV, Multiroom and online video services. We propose optional value added services (VAS) to our Internet access and mobile telephony services.

Thanks to the acquisition of Netia we have strengthened of our market position in integrated services. We have expanded our portfolio with a wide range of fixed-line products and services, in particular with fixed-line broadband Internet offered, among others, in fibre optic technologies. These services are provided via Netia’s own access network with approximately 3.4 million homes passed. Thanks to cooperation with wholesale partners, such as Orange Polska, Światłowód Inwestycje, Nexera, Fiberhost, Tauron, Vectra and Polski Światłowód Otwarty, Plus’ fibre optic services already reach ca. 11 million address points.

Effective use of the potential in the area of provision of integrated services and value added services to our customers, both through up-selling of single products and value added services, as well as through the sale of bundled offers and cross-selling, may significantly increase the number of services used by each individual customer, thus increasing average revenue per customer (ARPU) and concurrently maintaining the churn ratio on a low level.

Rollout of Plus’ 5G network

In 2024, our customers transferred over 2.4 EB of data as compared to over 2.2 EB transferred in 2023, which represents a 9% growth YoY. Following the development of mobile technologies and responding to the dynamically growing data transmission consumption while maintaining the highest quality of our services, we continue to develop our telecommunications network.

The Group is successively expanding its 5G network, launched in May 2020, operating on dedicated frequencies in the 2600 MHz TDD band. With ca.4,000 transmitters, Plus' 5G network already covers more than 26 million people living in over 1,320 towns and cities. In June 2023, we launched the 5G Ultra network, which is currently available to over 17 million people in Poland and offers transfer speeds similar to fibre - 1Gbps.

The TDD technology implemented at the current stage of development of our 5G network enables data transmission using one common fragment of spectrum for alternating downlink/uplink transmission. This approach offers balance between data transmission speed (up to 600 Mbps) and coverage (i.e. wide availability), while maintaining the highest quality of both parameters. With the 5G Ultra project, a 2100 MHz band in TDD technology was added to the 2600 MHz band in FDD technology, thus launching the first 5G band aggregation in Poland and achieving up to 800 Mbps transfer to the subscriber in 5G and more than 1 Gbps aggregate (5G and 4G).

In the auction of frequencies in the 3.6 GHz (C-Band) band, which ended in late 2023, operators were imposed with quantitative and coverage-quality obligations regarding network development. The quantitative commitments consist in the launch of at least 3,800 base stations by the operators who obtained the spectrum within 48 months from the date of delivery of the decision. The required coverage of the country's territory also defines quality parameters of services to be provided in terms of minimum throughput and maximum latency. Winners of the auction were required to provide throughput (using any frequency band) of 95 Mbps to 99% of households nationwide within 60 months, in 90% of the country's territory within 60 months, along 95% of national roads within 84 months, along 95% of provincial roads within 84 months, along 95% of designated railroads within 84 months, and to 24-hour border crossings within 24 months from the date of delivery of the reservation decision.

Furthermore, in March 2025, the frequency auction in the 700 MHz and 800 MHz bands, which are coverage bands dedicated to 5G in Poland, was concluded. According to the auction documentation, the operators who obtained reservations under this procedure are also subject to quantitative and coverage-quality obligations regarding network development. This auction maintains the same obligations as the previous 5G auction in the 3.6 GHz band, with an additional condition to provide capacity (using any frequency band) of 120 Mbps to 99% of households nationwide (excluding the areas indicated in appendix 1 to the draft reservation decisions) by the end of 2030.

Based on the previously held frequency resources and the reservations acquired by Polkomtel in the 3.6 GHz and 700 MHz band auctions, we will continue to develop our 5G network in terms of both quality and coverage in the coming periods in order to meet the imposed quantitative and coverage-quality obligations. The development of the Group’s mobile network access layer is carried out in cooperation with Towerlink Poland, a company belonging to the Cellnex group, based on a Service Level Agreement. The expansion of our 5G network will result in an increase in costs incurred by the Group payable to Towerlink Poland, recognized in the "Technical costs" item. At the same time, we believe that higher quality parameters of the mobile services provided by the Group will support the future revenue stream from our customers.

Development of the Group’s streaming platforms

Our Internet services and applications Polsat Box Go and Netia Go strengthen our position as an aggregator and distributor of content. We continue to develop our services using our experience in sales of pay TV, which helps us achieve synergies in terms of costs and revenues. The distinguishing element of our platforms is the unique, local content produced by TV Polsat.

Mobile video traffic is the fastest growing segment of global mobile data traffic. Bearing this in mind, we believe that online television will make an increasingly significant element of our business in the future. Therefore, we pay attention to providing users of our video services with a wide variety of attractive content. In particular, the coronavirus epidemic and the accompanying lockdowns contributed to higher interest of customers in online television offer. We think that such a trend will continue in the future and that we will benefit from it thanks to investments in the development of this segment of our operations.

Development of thematic channels

Main general entertainment channels (FTA) are experiencing a gradual decline in audience shares as a result of the high penetration level of the Polish market by pay TV which provides viewers with an increasingly greater selection of thematic channels, as well as an offer of channels available via digital terrestrial television (DTT). In turn, the advertising market share of thematic stations and channels broadcast via terrestrial television multiplexes is consistently growing.

In order to maintain total audience shares and advertising market shares, we focus on developing our thematic channels portfolio and increasing the attractiveness of content offered to our viewers. From that point of view, the initiation of cooperation and acquisitions in the field of thematic TV channels, made by the Group from 2017 to 2024, are perfectly in line with the Group’s long-term strategy to maintain a strong market presence, measured by viewership results, on an increasingly fragmented market. The channels Eska TV, Eska TV Extra, Eska Rock TV, Polo TV and Vox Music TV, acquired in December 2017, significantly strengthened the music programming of Telewizja Polsat. Moreover, in June 2018 we included Superstacja (currently Wydarzenia24), a news channel, and in May 2019 TV Okazje, a telesales channel, into our thematic channels portfolio. In turn, in September 2020 we increased our capital engagement in Nowa TV and Fokus TV channels, becoming their sole owner and, at the same time, strengthening our position among channels available via digital terrestrial television. Our most recent acquisitions include the purchase of three channels from the 4FUN family: 4FUN.TV, 4FUN DANCE and 4FUN KIDS, which target younger audiences. All of these channels have established market positions and solid viewership. On January 10, 2024, we launched a new news and current affairs channel, Polsat News Polityka, which offers viewers, among others, interviews with politicians, live broadcasts of press conferences or coverage of the Sejm (Lower House of Parliament) and Senate debates. At the same time, the Wydarzenia24 channel was moved to the national MUX1 multiplex and broadcasts under a new license.

We pay a lot of attention to creating a strong sports offering for our viewers. An important step in strengthening our position in this field consisted in entering into strategic cooperation with Eleven Sports in Poland in May 2018. By taking control over its Polish subsidiary, Eleven Sports Network, we included premium sports content of the highest quality in our retail and wholesale offering. This represented yet another strategic investment aimed at consistently creating the best programming offering for our viewers.

Investment in increasing the attractiveness of offered content and monetization of sports rights

We offer the biggest and most versatile portfolio of TV channels on the Polish market, which places us in the leading position in terms of viewership among private television groups in Poland and translates into our share in the advertising market. Our direct production covers mainly news programs, documentaries, shows and series based on international formats as well as own concepts. Moreover, we have contracts with major film studios which provide access to a wide selection of the most attractive films and series. In June 2022, we entered into cooperation with Disney+ and we are the  service provider in Poland to include access to Disney+ platform in our service packages from the moment it entered the Polish market.

An important element that differentiates us on the market is a rich and unique broadcasting offer of the largest and most interesting sports events worldwide. Polsat Plus Group offers its viewers and subscribers matches from the prestigious club football competition – the UEFA Europa League and the UEFA Europa Conference League - for all distribution channels, including TV, Internet and mobile devices. These matches are broadcast on Polsat Sport Premium channels. We currently hold the license for the UEFA Europa League and the UEFA Europa Conference League up to and including the 2026/2027 season. In addition, we hold exclusive rights to broadcast Bundesliga football games until the end of the 2028/2029 season. Under the current agreement with the International Volleyball Federation FIVB, we will broadcast the most important events of world and national team volleyball until 2032. The package of acquired rights includes the Volleyball Nations League, the qualifying tournaments for the Volleyball Nations League - Challenger Cup and the men's and women's World Championships. We also have the rights to the next three editions of the European Volleyball Championships, and to the most important volleyball league competition, the CEV Champions League, up to and including the 2028/2029 season. We also hold the rights acquired from the Professional Volleyball League to broadcast Plus League and Tauron League matches up to and including the 2027/2028 season. Among other sports, we concluded agreements to broadcast ATP tennis tournaments, including the ATP Masters 1000 and ATP Finals, as well as future editions of Wimbledon, and the ORLEN Super League and the ORLEN Super League Women's Handball matches until 2030, extended the license agreement with the Polish Basketball League to broadcast the Energa Basket League until the end of the 2029/2030 season, acquired the exclusive rights to broadcast the Ice Hockey World Championships until 2029 and in the next year we will also continue to show the Diamond League's athletic myths. Through our subsidiary Eleven Sports Network we have access to attractive sports rights which nclude, among others, the prestigious Formula 1® races, as well as the Spanish LALIGA EA SPORTS, the French Ligue 1 McDonald's, the German Bundesliga and DFB-Pokal, Liga Portugal, the Belgian Jupiler Pro League and speedway matches of the Polish PGE Ekstraliga.

In parallel, we also seek to monetize TV channels from our portfolio by offering them in a wholesale offer to other entities which provide pay TV services on the Polish market. This translates positively into the level of wholesale revenue that we generate in the media segment.

Implementation of investment projects in the real estate segment

Within the operations in the real estate segment, we are pursuing, among others, development projects in Port Praski, located in the strict centre of Warsaw. In the fourth quarter of 2024, construction of a residential project located on Sierakowskiego St. was completed, with more than 71% of the 174 units sold as of the date of publication of this Report. In November 2024, the transfer of ownership of sold units was initiated. In accordance with applicable accounting principles, recognition of revenue and expenses from the sale of apartments is made when the units are delivered to customers. Accordingly, we recorded a significant positive impact from apartment sales on the Group's consolidated results in the fourth quarter of 2024 and expect this impact to continue in 2025, albeit to a lesser extent, as the purchased apartments are gradually released to customers.

5.3.        Financial factors

Interest rate fluctuations

Market interest rate fluctuations do not impact our revenue directly, but they affect our cash flows from operating activities through the amount of interest on current bank accounts and overnight deposits, and also cash flows from financing activities through the Company’s and Polkomtel's costs of servicing debt. In particular, our liabilities under the SFA of April 28, 2023 and the issued bonds are calculated based on variable WIBOR/EURIBOR interest rates increased by a relevant margin.

We systematically analyse the Company’s interest rate risk, including refinancing and risk hedging scenarios. Based on these scenarios, we estimate the impact of specific interest rate fluctuations on our financial result. In order to reduce exposure to interest rate risk related to interest payments based on a floating rate, we actively apply hedging strategies based on derivative instruments, swaps (IRS and CIRS) in particular. As at December 31, 2024, transactions hedging the WIBOR interest rate changes, opened and entered into by the Group companies for future periods and maturing in different periods in the years 2024-2027, hedged around 31% of the Group's exposure in relation to the indebtedness under the PLN tranche of the SFA and the bonds issued while EURIBOR interest rate hedging transactions, maturing in 2026 and 2027, hedged about 20% of the exposure with respect to the Group's debt arising from the EUR tranche of the SFA.

Interest rate fluctuations will have a material effect (both positive and negative) on our results of operations, financial condition and prospects.

Exchange rates fluctuations

The Polish zloty (PLN) is our functional and reporting currency. The Group’s revenue is primarily denominated in PLN, whereas a portion of expenses and capital expenditures is denominated in foreign currencies.

Foreign exchange rate fluctuations affect the level of our operating costs, finance income and costs. In particular, our exposure to foreign exchange rate fluctuations stems from our foreign currency payments made in different areas of our operations. These include, among others, payments for license fees, transponder capacity, conditional access system fees, purchase of content and equipment, including phones and receiver sets, international roaming and interconnect agreements or purchase of wind turbines or photovoltaic modules.

The Group is exposed to foreign exchange risk in connection with the euro-denominated tranche of the SFA. Changes in the euro exchange rate against the zloty will result in an increase or decrease, respectively, in the zloty-denominated cash required to service interest payments on the euro-denominated tranche of the SFA, which will have a corresponding impact on the level of reported financial expenses.

Strong fluctuations in foreign exchange rates may also affect the amount of foreign exchange differences resulting from the recognition in the income statement of assets and liabilities denominated in foreign currencies, in particular the euro-denominated tranche of the SFA.

We have no control over how exchange rates change in the future, and consequently foreign exchange rate fluctuations will continue to affect (positively or negatively) our operations and financial results. Considering our open exposure to currency exchange risk, the Group has in place a market risk management policy and uses, inter alia, natural hedging and hedging transactions, in particular with regard to the currency risk arising from interest payments on the loan granted to the Group in EUR.

Valuation of financial Power Purchase Agreements

In recent years, the rise in market energy prices has enabled the development of renewable energy investments outside the support system, based on long-term power purchase agreements (PPAs). PPAs allow to purchase electricity directly from renewable energy producers (physical PPA) or to hedge the price of electricity against future energy prices on the Polish Power Exchange (financial PPA). A financial PPA is a financial derivative where the underlying price of electricity is settled through a contract for difference in which the parties agree on a strike price for electricity and a market reference price for the duration of the contract. Like other derivative instruments entered into by Group companies, financial PPAs are subject to periodic valuation at present value.

Due to the increasing volume of RES electricity generation by the Group's companies and the increasing use of financial PPAs by both electricity producers and consumers, the valuation of these contracts can have a significant impact on our results, in particular on gains on investment activities. The main factors influencing the valuation are the long duration of the financial PPAs (more than 10 years), changes in current and forecasted market electricity prices and fluctuations in market interest rates.

The financial PPAs are concluded both between Group companies and with third parties, so that the valuation can have different effects on the standalone results of the individual companies and on the consolidated results of the Group.

5.4.        Factors related to the regulatory environment

Cap interconnect rates for termination of calls in other networks

The provisions of the European Code of Electronic Communication assume regulation of MTRs and FTRs. In line with the provisions of this directive, in 2020 the European Commission issued a delegated regulation specifying the highest levels of MTRs and FTRs that can be applied by operators in the European Union. The delegated regulation adopted by the European Commission provides for a transition period with a time schedule for reducing the rates in order to reach their assumed level in January 2024 for MTRs and January 2022 for FTRs, respectively. The time schedule for reducing the rates came into force on July 1, 2021 and is presented in the table below.

[EUR or PLN per minute]	Cap rates for termination of calls in other operators’ networks in the EU from:
	July 1, 2021 to December 31, 2021	January 1, 2022	January 1, 2023	January 1, 2024
Mobile termination rate (MTR)	EUR 0.007	EUR 0.0055	EUR 0.004	EUR 0.002
Fixed termination rate (FTR)	PLN 0.005	EUR 0.0007	EUR 0.0007	EUR 0.0007

The gradual reduction of the MTR and FTR rates implemented by the EU will impact the results of Polsat Plus Group until the end of 2024. In particular, the above mentioned regulation translates into a decrease of wholesale revenue from interconnection settlements, both mobile and fixed-line, and a decrease of interconnection costs which are recognized in our technical costs. Due to the fact that the levels of outgoing and incoming traffic in interconnection settlements are similar we expect the impact of the regulation on Polsat Plus Group’s EBITDA result to remain relatively neutral.

Extension of the Rome Like at Home (RLAH) regulation

In April 2022, the regulation of the European Parliament and of the Council was published which prolonged the currently binding Roam Like At Home principle (regarding roaming costs while travelling on the territory of the European Union) until 2032.

The regulation also introduced further reductions of the maximum wholesale rates for interconnection settlements for voice call and text messages (in July 2022 and January 2025) and for Internet usage (in July 2022 and then every January in the years 2023-2027). The new price caps are, respectively:

•        0.022 EUR and 0.019 EUR per minute of an outbound voice calls.

•        0.004 EUR and 0.003 EUR per text message.

•        2 EUR, 1.8 EUR, 1.55 EUR, 1.3 EUR, 1.1. EUR and 1 EUR per 1 GB of data transmission.

The regulation also introduces obligations for operators with regard to providing connections to emergency numbers and premium rates services as well as quality of services in regulated roaming.

Changes in regulations governing the activities of telecommunications operators in Poland

Work is currently underway in Poland to implement new or amend existing regulations governing the activities of telecommunications companies. The proposed regulations may be important for the conduct of telecommunications activities in Poland, as they involve new obligations and requirements for telecommunications operators.

On July 12, 2024, the Act - Electronic Communications Law and the Act - Introductory Provisions to the Act - Electronic Communications Law were enacted, as an implementation into the Polish legal order of, among others, Directive 2018/1972 of the European Parliament and of the Council (EU) of December 11, 2018 establishing the European Electronic Communications Code. The Electronic Communications Law entered into force on November 10, 2024 and replaced the Telecommunications Law, which has been in effect for 20 years. In many aspects, the Electronic Communications Law duplicates and continues the solutions already known from the Telecommunications Law, while introducing a number of new regulatory requirements and obligations that are costly to implement, the performance of which may negatively affect the Group's financial results. For example, the financial results may be affected by new requirements and restrictions related to the prohibition on concluding electronic communication service agreements during an unannounced visit of the entrepreneur to the consumer's residence, the provision of optional debit services, or the obligation to return, at the consumer's request, any remaining recharge funds on the account, in the event of account expiration and in the event of a change of voice communication service provider.

 

6.               Risk factors

6.1.        Risk factors related to our business and the sector in which we operate

The results of our operations in the telecommunications sector depend on the ability to effectively encourage the existing customers to use a wider range of our services, to win customers from competitive telecommunication operators, as well as the ability to reduce churn

It is expected that further growth of our operations on the mature Polish telecommunication market will chiefly depend on the ability to effectively encourage existing customers to use a wider range of services offered by us, to win customers from competitive mobile and fixed-line operators, as well as the ability to reduce the churn rate. We cannot give any assurance that the measures we undertake will encourage our existing customers to use a wider range of our services or attract customers from competitive operators, or that the measures we undertake to increase customer loyalty will reduce the rate of churn or allow us to maintain a satisfactory churn rate. If we are unable to effectively manage the churn rate, we may be forced to reduce our costs to maintain satisfactory profit margins, or to take alternative steps, which could in turn result in higher costs of customer acquisition and retention.

In addition, the telecommunication industry is characterized by frequent developments in product offerings, as well as by advances in network and end-user device technology. If we are unable to keep up with technological development and provide customers with an attractive, modern portfolio of products and services, we may not be able to retain customers or the customers’ retention cost may increase.

Additionally, competing telecommunication operators may improve their attractiveness for the customers, e.g. by offering their products or services at lower prices, which could make it more difficult for us to retain the current customer base, and the cost of retaining and acquiring new customers could increase.

All such events could have a material adverse effect on the results of our operations, financial condition and prospects.

The performance of our pay TV and broadcasting and television production operations depends on our customers' satisfaction, the acceptance of our programming content by viewers, as well as our ability to generate profit from our own productions or from acquired broadcasting right

We operate on markets where commercial success primarily depends on customer satisfaction and acceptance of programming content which are often difficult to predict. We strive to acquire and retain pay TV customers by providing them with access to a broad range of channels, including sports, music, entertainment, news, children's, educational and film channels, all main terrestrial television channels available in Poland, as well as HD and free-to-air TV and radio channels. Whether customers are satisfied with our programming is vital for our ability to acquire and retain pay TV customers, as well as to generate and increase customer revenue from subscriptions.

Our ability to generate advertising revenue in the media segment depends almost entirely on viewers' demand for our programs. Audience shares achieved by programs we broadcast directly affect both the attractiveness of our television channels to existing and potential advertisers and rates we are able to charge for advertising time. In the media segment, we also generate revenue from license revenues from the distribution of our paid channels to cable networks and satellite platforms operating in Poland and, to a lesser extent, abroad. Prices which we are able to receive from potential buyers of our own productions are linked to attractiveness of content.

Demand for TV programs and programming preferences change frequently, irrespective of the media on which they are carried. We might not be able to attract customers or retain customers of our pay TV services and advertisers, if we are not able to effectively predict the demand for programs or changes in audience tastes, or if our competitors prove better at such predictions. This may bring about an increase in customer churn, while in the media segment it may result in decreasing audiences for our programs and subsequent difficulties in acquiring advertisers.

To some extent, the profitability of our operations depends on our ability to produce or obtain broadcasting rights to the most attractive programs in a cost-effective manner. While costs of in-house production of television content are usually higher than the costs of purchasing third-party programs, we believe that a larger number of Polish programs broadcast on our channels will impact positively viewership results and consequently increase demand from advertisers. However, there can be no assurance that financial outlays we have made or will make in the future on Polish programming production will be fully recovered or that we will be able to generate revenue high enough to offset those costs.

Consequently, if customers do not accept our programming offer or we are unable to produce programs or acquire broadcasting rights in a profitable manner, it may have a material adverse effect on the results of our operations, financial condition and prospects. We may be unable to attract or retain customers and advertisers if we fail to conclude or extend the license agreements under which we distribute key programs

Our performance depends on our ability to acquire attractive television programs. Our pay TV customers' access to television channels depends on our purchase of licenses from TV broadcasters. In the media segment, we independently produce certain TV programs, while other TV programs and content are broadcast under license agreements. Our license agreements are usually concluded for definite periods, usually two to three years for films and TV series, and three to ten years for sports programs. Under certain circumstances, a licensor may terminate a license agreement before it expires without our consent. This is particularly likely if we fail to fulfil our obligations, including the obligation to pay license fees. In order to acquire and retain customers and advertisers, it is necessary to maintain an attractive selection of TV programs. There can be no assurance that our license agreements will be extended on equally favorable terms or that they will be extended at all, nor can we exclude the possibility that a licensor will terminate the license agreement before its agreed expiry date. In addition, we have no influence on delays in the execution of our rights under certain concluded license agreements, which may occur due to extraordinary events of a similar nature to the COVID-19 pandemic or the war in Ukraine.

Our inability to obtain, maintain, or extend important program licenses, as well as delays in the execution of our license rights may make it difficult for us to provide and offer new attractive channels and programs, which may result in losing our ability to acquire and retain customers and advertisers. This in turn may have a material adverse effect on the results of our operations, financial condition and prospects.

In the real estate segment, we are exposed to risks associated with a decrease in demand for the properties we offer, undiscovered defects and the impact of external factors, climate change or warranty claims

Our financial results in the real estate segment directly depend on the level of sales and rental prices of real estate in Poland, which is influenced, among other things, by changes in demand for the premises offered. Market volatility and deterioration of the macroeconomic situation, outflow of foreign investors from the markets of Central and Eastern Europe, limited availability of sources of financing for customers, especially mortgage loans, an increase in the supply of premises in a specific area and a change in purchasers' expectations regarding the standard, location or furnishing of premises may result in a reduction of the demand for the properties we offer.

The development projects we carry out may suffer damage due to undiscovered faults or due to the impact of external factors (e.g. floods, landslides or earthquakes). In particular, our key investment in the real estate segment - Port Praski - is located in the centre of Warsaw in the immediate vicinity of the Vistula River, which may expose it in particular to the risk of flooding. The occurrence of such events may entail the need to carry out the associated maintenance and repair work without the possibility of transferring the costs thereof to third parties. However, it should be noted that in recent years the City of Warsaw has built a flood protection embankment and Port Praski has built a lock, which allows the use of the port and is part of the flood protection for the entire Praga Północ district. These measures significantly reduce the risk of flooding.

Climate change, which has been observed with increasing intensity in recent years, such as global temperature increase, weather anomalies or increase in greenhouse gas concentrations, can have a negative impact on our development activities at every stage, from design to construction and maintenance of buildings, exposing us to additional costs associated with the need to adapt properties to dynamic climate change.

In addition, the construction, lease and sale of the property may involve claims for defective construction work repair or otherwise. We are liable to purchasers of premises under the warranty for physical and legal defects of the buildings and the land on which the buildings are built, as well as for defects in the individual premises. Possible claims of this type may have an adverse effect on the perception of the Group's business, properties and projects by target customers, tenants or investors.

The occurrence of damage due to undiscovered defects and external factors, climate change or warranty claims may have an adverse effect on the Group's reputation which, together with a decline in demand for the properties we offer, could have an adverse effect on the results of our operations, financial condition and prospects.

Our ability to increase sales of our services depends on the effectiveness of our sales network

We operate an organized and specialized Poland-wide sales network, which distributes the products and services we offer. Because of strong competition with other pay TV providers and telecommunications services providers, as well as increase in wages observed on the domestic labour market we might have to raise fees paid to our distributors, which may result in higher operating costs and probably lead to lower profit from operating activities.

Furthermore, if we decide that our distribution network requires extensive reorganization or reconstruction, we may face the need to incur substantial financial outlays. Moreover, our sales network may be subject to operational downtime in the event of extraordinary events, which could result in a reduction of our revenues. For example, in 2020, following the COVID outbreak, restrictions were imposed as a result of which part of our sales network remained temporarily closed or experienced a significantly lower volume of visits by existing and potential customers, which negatively impacted our sales during this period. The occurrence of future extraordinary events with similar effects may translate into a decline in sales of services and equipment, as well as the churn rate, and may require us to incur additional costs to reorganise our sales channels to adapt them to permanently changing customer preferences.

Any failure to maintain, expand or modify our sales and distribution network, as well as the reduced efficiency of its operation as a result of extraordinary events, may make it much harder to acquire and retain customers of our services, which may have a material adverse effect on the results of our operations, financial condition and prospects.

In our business, we depend on third-party providers for certain services, infrastructure or equipment. If these are delivered late or if they are not delivered at all our services may be delayed or even suspended

Our ability to grow our customer base depends on our ability to provide high-quality, reliable services and products. In offering products and services, we rely on a number of third-party providers of network, services, equipment and content over whom we have no control.

We collaborate with a number of third parties in providing our pay TV, broadband Internet access and mobile telephony and landline services and the ability to deliver services to our customers depends on the correct operation of the infrastructure and equipment belonging to the entities with which we collaborate.

The access layer of the mobile network infrastructure used by our customers belongs to Towerlink Poland, a company of Cellnex Group, as of July 2021. Potential disputes between this entity and the Group companies, Towerlink Poland's failure to fulfil its contracts (in particular, the detailed provisions of the Service Level Agreement), delays in concluding new orders or failure to fulfil orders concluded with Towerlink Poland in a timely manner, as well as a number of other events and factors, could result in our inability to provide high quality services to our customers, which could have a negative impact on the acquisition and retention of customers for telecommunications services, higher customer churn rates and, ultimately, the level of revenue generated from the sale of telecommunications services. Moreover, Towerlink Poland’s failure to comply with the arrangements contained in our signed Service Level Agreement could lead us to exercise the option contained in the Buyback Agreement, which provides an entitlement (but not an obligation) for Polkomtel to repurchase shares in Towerlink Poland (formerly Polkomtel Infrastruktura) for a price reflecting the fair value of the shares to be repurchased, taking into account the discount agreed between the parties. We have no assurance that the repurchase process would not negatively impact the continuity of our service provision or the satisfaction of our customers with the services we provide. We also cannot ensure that we, if required to exercise the repurchase option, would have adequate financial resources or would be able to arrange additional financing of sufficient scale and on acceptable terms, and thus we have no certainty that the exercise of the repurchase option would be effectively possible.

Our customers’ pay TV antennas are adapted to receiving signals delivered through Eutelsat S.A.’s transponders located on the Hotbird 13G satellite. In order to switch the satellite operator in the event of our failure to extend a contract, or in the event of contract termination by Eutelsat S.A., or for other reasons, we would be forced to find an alternative provider of satellite transmission capacities and potentially reposition our customers' satellite antennas, which would be a cost- and time-consuming process considering the size of our customer base.

To broadcast our terrestrial channels, we use the services provided by Emitel S.A. In parallel, with regard to pay digital TV services we rely on other third-party contractors, Nagravision and Irdeto, which provide us with conditional access systems to secure audiovisual content against unauthorized access. We regularly take steps to detect unauthorized access due to the significant risks it poses to our business and, consequently, to our revenues. In accordance with our agreement with Nagravision, when unauthorized access to our services is detected, Nagravision will replace the conditional access system with the cards provided to our customers and, if necessary, adapt the decoders to support the new system, if there is no other option. Our broadcasting services also rely on a number of third-party contractors, and we outsource a number of non-core activities (including certain IT functions) not related to our broadcasting business. These, and other services, are often central to many of our operating activities.

The provision of our services may be disrupted or interrupted if any of our contractors (or their subcontractors) is unable to, or refuses to, perform their contracted services or provide access to infrastructure or equipment in a timely manner, on acceptable terms or at all. These and other disruptions or interruptions may have a material adverse effect on our business, financial condition, results of operations or prospects.

A possibility of provision of telecommunications services depends to a large degree on our ability to interconnect with telecommunications networks and services of other telecommunications operators, including those of our direct competitors. In particular, part of our services are provided based on regulated access to Orange Polska’s infrastructure or wholesale access to networks of other wireline operators. We also rely on third-party operators for the provision of international roaming services to our customers. While we have interconnection, infrastructure access and roaming agreements in place with these operators, we do not have direct control over the quality of their networks and the interconnections and roaming services they provide, due to the fact that we do not have direct control over availability or quality of networks of these operators or interconnect and roaming services, there can be no assurance that availability and quality of services provided by such other operators will be in accordance with contract. Any difficulties or delays in interconnecting with other networks and services, the failure of any operator to provide reliable interconnections, regulated access or roaming services on a consistent basis or early termination of any of material interconnection, regulated access or roaming agreements could result in an inability or limited ability to provide services to our customers or in a deterioration of quality of the services, which in turn can lead to loss of customers or decreased usage of our services, and consequently have a material adverse effect on our performance, financial condition and growth prospects.

We are in the gradual process of implementing a new, integrated IT environment supporting sales and customer care as well as a convergent billing system for our products and services. The purpose of the implementation is to redefine and standardize the sales processes and the offers across Polsat Plus Group as well as to provide a single, consistent and effective tool which will enable management of sales and customer relations in all possible spheres. The project is implemented in cooperation with Asseco Poland S.A. which provides IT systems and, as the main integrator of the system is responsible for effecting the implementation.

Ongoing cooperation with some of the external suppliers is important for the ability to conduct uninterrupted operational activities. Should any of the major suppliers of telecommunication equipment be considered a high-risk supplier and excluded from the supply chain, the competitiveness of the market may be reduced and the price of telecommunication equipment may increase. In addition, imposing an obligation on telecommunication operators to replace hardware or software supplied by a supplier deemed to be a high-risk supplier may entail additional high costs for the replacement of such network equipment and, as a result, adversely affect the pace of construction and modernisation of the telecommunication network of the operator concerned. We cannot exclude the possibility that this fact could have a negative impact on the cost and pace of construction and modernisation of the telecommunication network used by our customers.

We also rely on agreements with external suppliers of handsets, modems and routers, external suppliers of components necessary for the production of end devices in our factory in Mielec and external providers of IT services. We do not have any control over our key suppliers and have limited influence on the manner in which these key suppliers perform their obligations under concluded contracts. There can be no assurance that these providers will not terminate their contracts with us, extend them upon expiry, extend them on the same or more favorable terms, or that we will be able to acquire the necessary equipment and services in the future from these or other suppliers, in required amounts and at the right time, or at all. Furthermore, in the event of a permanent or temporary reduction in the supply of components by external suppliers, there may be disruptions in the supply chain for imported equipment offered to our customers. Accordingly, due to dependence on third-party suppliers, we are exposed to the risk of delayed provision of necessary services or equipment or lack of such provision.

If such third-party providers do not perform their contractual obligations towards us or do not adjust to changes in requirements of the Group’s companies, or are unable or refuse to provide services or deliver infrastructure or equipment, on which the possibility of timely and economically justified provision of certain services and products to our customers depends, our customers may experience service interruptions, which could adversely affect the perceived quality of our services and products, therefore, adversely impact the brand and reputation of the Group’s companies, thus affecting the results of our operations, financial condition and prospects.

We may be unable to keep pace with new technologies used on markets, on which we operate

The technologies used in broadcasting and delivering pay TV, mobile and fixed-line telephony and broadband Internet access develop extremely quickly, which is why there can be no assurance that we will be able to introduce new and/or enhanced technologies, services and products in a fast and efficient enough way.

Compression, signal encoding and customer management systems vital to the correct functioning of our satellite center, software of set-top boxes manufactured by us, as well as other software and technologies used by us and our suppliers, must be constantly updated and replaced to match the latest technological developments. Our inability to replace obsolete technological solutions may result in disruption of our pay TV services, which may in turn cause an outflow of customers to competitors who have brought their technologies up to date.

Technological progress requires us to modify our content distribution and TV programming methods to keep pace with the changing market. New technologies – including new video formats, IPTV, Internet streaming and downloading services, video on demand (VOD), the DVB-T2/HEVC standard, set-top boxes with recording capability, as well as other devices and technologies – introduce new media and entertainment options and change the way customers receive content. This allows them to enjoy television outdoors or at any chosen time, without commercials and to a personalised custom schedule. Such technologies are growing in popularity and are becoming easier to use, yet the resulting fragmentation of TV viewers may cause a general decline in TV advertising revenues.

It is expected that certain communications technologies that are currently under development, including 5G, as well as fibre optics technology allowing for faster data transmission at lower unit costs, to become increasingly important in the markets in which we operate. Technological developments may also shorten product life cycles and facilitate convergence of various segments in the telecommunications industry. We cannot currently predict how emerging and future technological changes will affect our operations, nor can we predict whether new technologies required to support our planned services will be available when expected, if at all.

Furthermore, fixed-line broadband services are associated with a need for investments in modernization of access networks. Some market players are currently conducting large investments programs which allow to significantly increase throughput provided to end-users and increase the reach of an access network. In addition, there are programmes to support the construction of broadband fibre networks using European Union funds, as as, among others, The National Plan for Rebuilding and Increasing Resilience (KPO) and the European Funds for Digital Development (FERC) for 2021-2027.

We are not able to guarantee that the demand for our fixed-line broadband services will be sufficient to reach our revenue targets. Neither can we guarantee that the growing coverage of the less developed areas of Poland with optic fibre technologies giving the end users broader access to video content, will not adversely affect the demand for our pay TV satellite access services or wireless Internet.

Given the fast pace of technological change and customers’ growing expectations, and considering the risk that our competitors may offer telecommunications products and services that are based on new technologies which are more advanced, less costly or otherwise more attractive to customers than those provided by us, we may be required to rapidly deploy new technologies, products or services. The rapid evolution of technology in the markets in which we operate and the complexity of our information technology systems, as well as a number of other factors, including economic ones, may affect our ability to timely launch new technologies, products or services. We cannot guarantee that we will correctly predict the development of new technologies, products or/and the demand for products and, therefore, that we will at an appropriate moment engage appropriate amounts of capital and resources to develop the necessary technologies, products or services that will satisfy existing customers and attract new customers. If we fail to implement new technologies, products or services or implement such new technologies, products or services too late, it may render our technologies, products or services less profitable or less attractive than those offered by its competitors. In addition, new or enhanced technologies, services or products we introduce may fail to achieve sufficient market acceptance or experience technical difficulties. We may also be unable to recover the investments it has made or may make to deploy these technologies, services and products and therefore no assurance can be given that we will be able to do so in a cost-efficient manner, which would also reduce our profitability. Moreover, we may not be able to obtain funding, in sufficient amounts on reasonable terms, in order to finance capital expenditures necessary to keep pace with technological developments and with the competitors.

Failure on our part to adapt our products and services to the changing lifestyles and preferences of our customers, or to make sufficient use of new technologies in our activities, may have a material adverse effect on the results of our operations, financial condition and prospects.

We are exposed to the risk of fraudulent activities by customers

Given the nature of the telecommunications market stemming from the manner of making interconnect settlements related to the exchange of domestic and international telecommunications traffic, incurring wholesale costs related to traffic generated by our customers when using telecommunications networks of foreign operators (roaming) and fees for sold premium services, some of our customers use telecommunications services in a way that differs from the standard method of their use by the end user, e.g. by terminating mass traffic in the network of another operator while bypassing wholesale interconnect settlements. We prevent such behavior by analyzing any abnormal traffic patterns on individual SIM cards. If such traffic patterns are identified, the card can be immediately deactivated, in accordance with the service provision regulations. However, there can be no assurance that we will be sufficiently effective in preventing this type of fraud. If we do not identify a fraud or identifies a fraud with a delay, we may be exposed to additional costs or lose some revenue due to us, which can have a negative effect on the results of our operations, financial condition and prospects.

We might be unable to maintain the good name of the major brands in our portfolio

The good name of the major brands in our portfolio, including “Polsat Box”, “Plus”, “Polsat”, “Polsat Box Go”, “Netia”, and “Interia.pl” is a significant component of Group's value. Maintaining their good name is fundamental for acquiring new and retaining existing customers and advertisers. Our reputation may also suffer if we are unable to provide existing products and services or implement new products and services due to technical faults, a lack of necessary equipment, or other circumstances. Also, the quality of our products and services depends on the quality of third-party infrastructure and services, over which we have little control. If our partners fail to observe relevant performance standards or supply faulty products or services, the quality of our products and services, as well as our good name may suffer. There can be no assurance that these or other risks, which would compromise the good name of our most important brands, will not materialize in the future. Any damage to our good name may have a material adverse effect on the results of our operations, financial condition and prospects.

Goodwill and brand values may be impaired

Following the acquisitions made in the past, in particular of Telewizja Polsat, Polkomtel, Netia, Interia.pl, Port Praski and PAK-PCE we carry considerable amounts of goodwill and intangible assets, representing brand value, on our balance sheet. We test the goodwill and brand value allocated to our business segments for impairment on an annual basis, by measuring the recoverable amounts of cash-generating units, based on value in use. Any adverse changes to the key assumptions we apply in impairment testing may have a material adverse effect on the results of our operations, financial condition and prospects.

We may lose our management staff and key employees

Our performance, as well as the successful implementation of our strategy, depend on the experience of our management staff and the commitment of our key employees. Whether we are successful in the future will depend partly on our ability to retain the Management Board members and senior managers who have made considerable contributions to the development of our Group, as well as to acquire and retain qualified employees who will ensure effective operation of our business segments. In the media and telecommunication sectors, both in Poland and worldwide, there is strong competition for highly qualified employees. Therefore, no assurance can be given that in the future we will be able to acquire or retain Management Board members, senior managers or qualified employees. Loss of our key managers or our inability to acquire, properly train, motivate and retain key employees may have a material adverse effect on the results of our operations, financial condition and prospects.

Disruptions to set-top box production may adversely affect our reputation and increase customer churn

To reduce acquisition costs of pay TV reception equipment and to be able to offer our customers the option to lease set-top boxes at lower prices, we are currently producing most of the set-top boxes we offer and deliver to our customers at our manufacturing plant in Mielec. Should any batch of the set-top boxes we have manufactured prove defective and need to be withdrawn from the market, we are under the obligation to replace the set-top boxes we have made available to our customers. Any disruption of services provided to our customers may trigger our obligation to refund subscription fees due to the inability to use the pay TV services that should be delivered using the defective set-top boxes, and to pay the stipulated damages. Furthermore, the withdrawal of reception equipment due to a confirmed epidemic defect could be harmful to our reputation.

Any problems with production of set-top boxes would force us to acquire larger numbers of set-top boxes from third-party suppliers. There can be no assurance that we will be able to purchase a sufficient number of set-top boxes from third-party suppliers when required. Furthermore, the cost of acquiring from third-party suppliers of the vast majority of set-top box models we offer could be much higher than the cost of manufacturing them at our own plant. If we were unable to obtain set-top boxes from third-party suppliers on satisfactory pricing terms, we might have to raise the prices for our customers to cover our increased expenses. Moreover, if the deliveries of set-top boxes we managed to procure were insufficient to meet the demand, our reputation among our current and potential customers would suffer. As our production of set-top boxes is based on components purchased from third-party contractors, there is a risk that we lose access to such components, for instance due to problems with the availability of these components, discontinuation of their production or changes in technologies or products. Losing access to certain components would force us to redesign our set-top boxes, which could affect continuity of their production and supplies to our customers.

Any difficulties in the production of most of our set-top boxes at our own production plant could lead to a loss of our current customers or adversely affect our ability to acquire new customers for our pay TV services. Any disruption to our set-top box production and subsequent necessity to procure more set-top boxes from third-party suppliers could adversely affect our reputation, which could have a material adverse effect on the results of our operations, financial condition and prospects.

Network infrastructure, including information and telecommunications technology systems, may be vulnerable to circumstances beyond the Group’s control that may disrupt service provision

The mobile telecommunications business depends on providing customers with reliable service. The services we provide may encounter disruptions from many sources, including power outages, acts of terrorism and vandalism and human error, as well as fire, flood, or other natural disasters.

In addition, we could experience interruptions of our services due to, among other things, software bugs, hacking attacks, or unauthorized access. Any interruptions in our ability to provide services could seriously harm our reputation and reduce customer confidence, which could materially impair our ability to attract and retain customers in both the retail and wholesale segments. Such interruptions could also result in an obligation to pay contractual penalties or cause our customers to terminate their agreements or the imposition of regulatory penalties due to violations of the terms of frequency allocation. They might also result in a need to incur significant expenditure to restore the functionality of the telecommunication network and guarantee reliable services to customers.

In order to provide pay TV services to our customers, we rely primarily on our satellite center, as well as satellite transponders, customer management system, reporting systems, sales support system, and customer relationship management system. Any failure of the individual components of our satellite center, including failure of satellite transponders or any intermediate link, may result in serious disruption or even suspension of our activities for a certain period. In the media segment, the IT systems are used primarily for management of advertising scheduling, program broadcasting, and maintaining relations with advertisers. Failure of any of our IT systems may prevent us from carrying out our operations successfully, while restoring them to full working condition may require significant financial outlays.

Such events may have a material adverse effect on the results of our operations, financial condition and prospects.

We could become a party to labor disputes or experience growth of employment costs

In spite of correct relations with our employees, we may not rule out the risk of occurrence of work disruptions, disputes with employees, strikes or significant growth of labor costs in one or many of our companies. Each of the above events could prevent our ability to satisfy customer needs or lead to growth of labor costs which would reduce our profitability. In addition, any employee-related problems affecting external companies providing services or technologies to us could also have adverse impact on us if they hinder our ability to obtain the required services or technologies on time or the ability to offer the expected quality. All disruptions of this type may have a material adverse effect on the results of our operations, financial condition and prospects.

The administrative and court proceedings in which we are involved may result in unfavorable rulings

We were, and currently are, party to a number of past or pending administrative and court proceedings in connection with our business. Therefore, there is a risk of new proceedings being instituted against us in the future, outcomes of which may prove unfavourable (including those instituted in connection with claims made by organizations for collective administration of copyrights). Under Polish copyright law, from September 20, 2024 we are required to pay fees for collective administration of copyrights to organizations that collect royalties on behalf of authors of copyright-protected works we broadcast or distribute as part of our operations. Such fees are charged in accordance with license agreements signed with these organizations. Although relevant agreements are in place with several organizations for collective administration of copyrights, there is a risk that claims will be brought against us by other such entities. Regarding the mandatory mediation by collective management organizations for copyright and related rights introduced in 2024, we are currently in discussions with their representatives. At present, both the collective management organizations and other pay-TV operators and providers of on-demand audiovisual media services are adapting to the new legal situation. We are in turn a party to administrative and court proceedings, including the ones which have been initiated by regulators, competition and consumer protection office, tax authorities as well as disputes and court proceedings involving third party entities.

Any unsuccessful court, arbitration and administrative ongoing and future proceedings may have an adverse effect on the results of our operations, financial condition and prospects.

Should any claims related to the infringement of third-party intellectual property rights be brought against us, we may be forced to incur substantial expenses to defend against those claims, to acquire a license for a third-party technology, or to redefine our business methods to eliminate the infringement

Our business success depends largely on third-party intellectual property rights, particularly rights in advanced technologies, software, and programming content. No assurance can be given that we have not, or that we will not in the future, infringe any third-party intellectual property rights although we exercise due diligence to avoid such situations. Any such infringement may result in claims for damages being brought against us by third parties. We may also be placed under an obligation to obtain a license or acquire new products which would enable us to conduct our business in a non-infringing way, or we may have to expend time, human and financial resources to defend against claims of infringement. Expenditure on defending against intellectual property infringement claims or obtaining necessary licenses, and the need to employ time and human resources, including the management staff, to handle issues related to absence or infringement of intellectual property rights, may have a material adverse effect on the results of our operations, financial condition and prospects.

Our own intellectual property rights and other means of protection may not adequately protect our business, and insufficient protection of our programming content, proprietary technologies and know-how may cause profit erosion and customer churn

A large proportion of our products make use of proprietary or licensed content, delivered to the customers and the viewers through our broadcast channels, interactive TV services, and pay TV. We establish and protect our property rights on distributed content relying on trademarks, copyrights, and other intellectual property rights, but no assurance can be given that these rights will not be challenged, revoked or disregarded.

Even if our intellectual property rights remain in full effect, no assurance can be given that our protection and anti-piracy measures will successfully prevent unauthorized access to our services and theft of our programming content. Furthermore, our proprietary content and the content we use under licenses may be accessed, copied or otherwise used by unauthorized persons. The risk of piracy is particularly harmful to our media segmentand the distribution of paid content. Media piracy is a problem well known in many geographies, including Poland. Technological advancements and digital conversion of multimedia content are powerful incentives for pirating, as they enable the production and distribution of high-quality unauthorized copies, recorded on various carriers, of pay-per-view programs delivered via set-top boxes, license-free or free-to-air transmissions on television or the Internet. This is further exacerbated by the difficult enforcement of the laws governing copyright and trade-mark infringements on the Internet, which compromises the protection of our intellectual property rights in that medium. Unauthorized use of our intellectual property may adversely affect our operations, harming our reputation and undermining our trading partners' confidence in our ability to properly protect our proprietary and licensed content, which in turn may have a material adverse effect on the results of our operations, financial condition and prospects.

Our broadcasting licenses may be revoked or may not be renewed

Our business operations in the media segment require that we obtain licenses issued by the National Broadcasting Council (KRRiT). These licenses may be revoked or may not be renewed.

To keep our TV broadcasting licenses, we must comply with the applicable laws and the terms and conditions of the licenses. Failure to comply with the applicable laws or breach of the terms and conditions of a broadcasting license, especially with respect to the period within which we must commence broadcasting of a channel, could lead to the license being revoked or a fine being imposed on us. Our broadcasting licenses may also be revoked if we are found to be conducting activities in violation of the applicable laws or the terms and conditions of our broadcasting licenses, or we fail to remedy such violation within the applicable grace period. In addition to license revocation, there is also a risk that licenses granted by KRRiT will not be renewed.

If any of our broadcasting licenses are not extended, are revoked or extended on unfavorable conditions, the Group may be forced to suspend the provision of some services temporarily or permanently, may be unable to offer services based on a particular technology or may have to incur substantial expenditure, all of which may have a material adverse effect on the results of our operations, financial condition and prospects.

Our current frequency allocations may be revoked or may not be renewed on acceptable terms or at all

We base our business activities in mobile telecommunication services, on acquired radio frequency reservations. All frequency allocations (including those for the media segment) have been issued to us for a definite term. There can be no assurance that our frequency allocations will be extended prior to their expiry. In particular, pursuant to the Electronic Communications Law, the President of UKE may refuse to extend or revoke frequency allocations if he decides that the terms of use of the allocated frequencies has been repeatedly breached, used ineffectively, or if particular circumstances occur which jeopardize the state defense abilities, state security or public order, or if revocation of the frequency allocations follows from the necessity to ensure equal and effective competition or substantially better use of frequencies, especially if the extension of the allocation would lead to excessive frequency concentration at the given capital group.

To maintain our frequency allocations, we must comply with the terms of the allocation, as well as relevant laws and regulations. Any breach of those terms, laws or regulations, including in particular failure to pay frequency allocation fees, may cause the allocation to be revoked and penalties to be imposed on the given allocation owner. In particular, given that the regulations and laws governing the Polish telecommunications industry are very complex and often change, there can be no assurance that we will not breach any laws or regulations related to frequency allocation or any terms of such allocation.

If any of our frequency allocations is not extended, is revoked or extended on unfavorable conditions, we may be forced to suspend the provision of some services temporarily or permanently, may be unable to offer services based on a particular technology or may have to incur substantial expenditure in order to be able to provide services to customers based on frequencies from other bandwidths, all of which may have a material adverse effect on the results of our operations, financial condition and prospects.

In particular, we currently hold frequency allocations in the 900 MHz, 1800 MHz, 2100 MHz, 2600 MHz and 3400-3500 MHz bandwidths. These allocations are fundamental for the roll-out of our mobile telecommunications network. Our competitors have taken a number of steps (initiated administrative and judicial/administrative proceedings), some of which are still pending, involving frequencies in the 1800 MHz band.

No assurance can be given that if we lost certain frequency allocations on the basis of which we provide telecommunication services, we would be able to gain access to sufficient alternative frequency band resources on satisfactory terms or at all, and failure to obtain access to such resources could have a negative impact on the implementation of business strategies and consequently a material adverse effect on the results of our operations, financial condition and prospects.

The spectrum of radio frequencies available to the mobile phone industry is limited and therefore we may not be able to obtain new frequency allocations

The ability to maintain existing and implement new or improved mobile technologies and our ability to successfully compete on the telecommunications services market partly depends on our ability to obtain further radio frequency resources. The size of the spectrum of radio frequencies available for allocation in Poland is limited, and the process of obtaining allocations is long and very competitive.

The Group’s inability, or limited ability, to obtain access to frequency bands important for further development of our operations (on favorable terms or at all), including maintaining the existing or implementing new or improved mobile technologies, or obtaining such access by competitors, including new participants of the national mobile telecommunication market, if any, can have a material adverse effect the results of our operations, financial condition and prospects.

We may not be able to reap the expected benefits of the past or future Group’s acquisitions and strategic alliances

Whether the Group will be able to reap all expected benefits from past or future acquisitions or strategic alliances may depend on various factors, including our ability to implement our strategy of integrating business processes leading to noticeable income and cost synergies on acquisitions or strategic alliances. Through acquisitions or strategic alliances, the scale of our business continues to grow and we make efforts on a day to day basis to integrate the business processes of the target companies within the Group structure, as well as other actions aimed at consummating the benefits of strategic alliances. If we are unable to attain all or some of our goals, the benefits from past or future acquisitions or strategic alliances, including the estimated income or cost synergies, may deviate from the plans or may fail to be obtained in full or at all, or obtaining them may take longer than anticipated.

It cannot be ruled out that the process of integration of business processes after past or future acquisitions, or the implementation of past or future strategic alliances may result in losing key employees, disruptions to our day-to-day business in some business areas and incoherencies in standards, procedures or policies, which might adversely affect our ability to maintain the existing relations with third parties and employees or our ability to obtain the expected benefits from past or future acquisitions or strategic alliances. In particular, in order to achieve all expected benefits from our past or future acquisitions or strategic alliances, we need to identify and optimize some areas of our business and assets across the whole organization. Our inability to achieve all or any expected benefits from our past or future acquisitions or strategic alliances, as well as any delays in the integration processes related to past or future strategic alliances may have an adverse effect on us. Furthermore, the integration may require additional, unanticipated costs and the benefits of acquisitions or strategic alliances may never the consummated.

All these factors may have a material adverse effect on the results of our operations, financial condition and prospects.

Key risks associated with production and distribution of hydrogen

The hydrogen sector, both in Poland and globally, is relatively underdeveloped due to the innovative nature of the technology, which means that economies of scale may take several years to materialize. The small number of suppliers in the hydrogen sector results in limited opportunities for order diversification. In order to mitigate this risk, it is necessary to systematically conduct detailed and comprehensive technology analyses before placing orders. Due to the high demand for hydrogen technology components, such as equipment for stationary hydrogen refuelling stations, mobile hydrogen refuelling stations or hydrogen trailers, it is also necessary to place orders well in advance.

The Group is currently incurring significant capital expenditures related to the implementation of technology and infrastructure for the production of green hydrogen in the process of electrolysis. In principle, the price of green hydrogen depends on the market cost of electricity, but we believe that the production of green hydrogen based on electricity from our own renewable energy sources, will allow us to largely mitigate the risk of exposure to fluctuations in market energy prices.

Regulatory risks in the hydrogen sector are mainly focused on regulatory changes. The Polish Hydrogen Strategy until 2030 sets the main goals for the development of the hydrogen economy, but specific regulations and financial incentives are needed. Without a stable regulatory environment and support both from Polish and EU legislation, the development of this market may be hampered. Regulatory changes may affect, among others, the regulations related to the construction and operation of hydrogen production facilities and hydrogen refuelling stations, which could have a significant impact on the timing and cost of project implementation. To reduce the impact of this risk, current regulations are monitored and planned changes at the national and European level are analyzed. The most important factor influencing the dynamics of the green hydrogen market is regulation in the area of decarbonization of the economy - the degree of its restrictiveness has and will have a direct impact on the degree of demand for green hydrogen from industries that use large amounts of fossil fuels (coal, oil and gas) today.

6.2.        Risk factors associated with the Group’s financial profile

The servicing of our debt is very cash-intensive, and our debt servicing liabilities may impair our ability to finance the Group's business operations

Our Group uses large financial leverage. Our debt liabilities from loans and bonds increased significantly following the past acquisitions, in particular the acquisition of Telewizja Polsat, Polkomtel, Netia and PAK-PCE and completion of the related financial transactions. In addition, our Strategy 2023+ includes the development of new businesses, such as investments in renewable energy sources, which are also financed by debt.

Our ability to service and repay debt depends on future results of our operations and our ability to generate sufficient cash flows to pay these and other liabilities, which in turn depends, to a significant extent, on the general economic situation, financing terms, monetary and fiscal policy of the Polish government, market competition, acts of law and secondary legislation, and a number of other factors which are often outside of our control. If our future operating cash flows and other capital resources prove insufficient to repay our liabilities as they fall due or cover our liquidity requirements, we may lose our property, plant and equipment which serve as security for the repayment of our debts, or we may be forced to restrict or postpone certain business and investment projects. dispose of assets. incur more debt or raise new capital. or restructure or refinance our debts, in part or in full, at or prior to their maturity. The terms and conditions of our debts limit our ability to take the above measures. Therefore, we cannot guarantee that they will be taken on commercially reasonable terms, or at all, if need arises.

Also, the refinancing of our debt on unfavorable market terms would require us to pay higher interest margins or observe more stringent covenants, which could further restrict our business activity. If our debt financing increased, the related risks would also increase. Moreover, any significant adverse change in financial market liquidity, resulting in tighter lending terms and debt or equity financing constraints, may restrict our access to financing sources and increase our borrowing costs, which could significantly affect our ability to achieve and manage liquidity, raise additional capital, or restructure or refinance our existing debt.

The SFA of April 28, 2023, Series D, E and F Bonds Terms provide for a number of restrictions and obligations (including maintaining specified financial ratios and the achievement of sustainable development goals), limiting the Group's ability to incur new debt for financing future operations or to pursue business opportunities and activities that may be in our interest.

If our debts are not repaid in accordance with the terms of the SFA or the Series D, E and F Bond Terms, or fail to comply with any other material obligations contained in the documents referred to above, such breach may result in a breach of other agreements or debt instruments, which include cross-default or cross-acceleration clauses. The debt under the aforementioned titles may become immediately payable, and we may not have sufficient funds to repay all our liabilities. Our inability to generate sufficient cash flows to service our debt, or to restructure or refinance it on commercially reasonable terms (or at all), may have a material adverse effect on our business, financial condition, results of operations or prospects.

We may need to incur a significant amount of new debt in the future. In particular, the terms and conditions of the SFA, Series E Bonds Terms and Series F Bonds Terms impose certain limitations on, but do not prohibit us from, incurring new debt or other liabilities. In particular, a high level of debt may (i) limit our ability to repay our liabilities under the SFA, Series D, E and F Bonds or other liabilities. (ii) require us to apply a considerable portion of operating cash flows towards debt repayment, restricting the availability of cash used to finance our investment activities, working capital, and other corporate needs and business opportunities. (iii) reduce our competitiveness relative to other market players with lower debt levels. (iv) affect our flexibility in business planning or responding to the overall unfavorable economic conditions or to specific adverse developments in our sector. and (v) impair our ability to borrow new funds, increase our borrowing costs and/or affect our equity financing capacity. In consequence, any additional debt would further reduce our ability to secure external financing for our operations, which may have a material adverse effect on the results of our operations, financial condition and prospects.

We might be unable to refinance our existing debt, secure favorable refinancing terms, or raise capital to finance new projects

We are exposed to risks related to debt financing, including the risk that the debt will not be repaid, extended, or refinanced at maturity, or that the terms of such extension or refinancing will be less favorable. In the future, we may need to increase our share capital if our operating cash flows are insufficient to ensure financial liquidity or fund new projects. Depending on our capital requirements, market conditions, and other factors, we may be forced to seek additional sources of financing, such as debt instruments or a share offering. If we are unable to refinance our debts on reasonable terms, or at all, we may be forced to sell certain assets on unfavorable terms, or to restrict or suspend certain activities, which could have a material adverse effect on our financial condition and performance. Our inability to secure external financing could force us to delay or abandon new projects, which could have a material adverse effect on the results of our operations, financial condition and prospects.

We might be unable to repay our debts In the event of a change of control of the Company as defined in the SFA and the Series D, E and F Bond Terms

In the event of a change of control of the Company within the meaning of the SFA and the Series D,E, and F Bond Terms we are under the obligation to repay liabilities arising from the above financing documents. Moreover, if a change of control takes place, our ability to repay our debt will be limited by the level of available funds at the time. There can be no assurance that those funds will be sufficient to repay outstanding debts. In view of the above, we believe that in the case of change of control over the Company, we would require additional external financing in order to repay the debt.

Limitations arising from our contract obligations could make it impossible for us to repay the credit facilities or secure external financing if events constituting a change of control actually occur. Any breach of those limitations may lead to a default under other contracts and acceleration of other debts, which could have a material adverse effect on the results of our operations, financial condition and prospects.

6.3.        Risk factors associated with the market environment and economic situation

We are exposed to the effects of the regional or global economic slowdown

We derive almost all our revenues from telecommunication services customers, pay TV customers and TV advertisers in Poland. Our revenue depends on the amount of cash our existing and potential customers can spend on entertainment, communication services and telecommunications equipment. If the economic conditions in Poland deteriorate or there is prolonged inflationary pressure of a supply-side nature, consumers may be willing to spend less on entertainment, communication services and telecommunications equipment, which may have an adverse effect on the number of our customers or on our customers' spending on our services and products. In addition, continued inflationary pressures may result in an increase in the cost of our day-to-day operations, thereby reducing the profit margins we achieve. Lower consumer spending caused by economic recession or increase in inflation may also lead existing and potential customers to choose cheaper versions of our service packages or to discontinue using the services and the equipment we offer. The foregoing factors may have a material adverse effect on results of our operations, financial condition, and growth prospects.

Lower advertising spending in Poland may have a material adverse effect on our revenue and the growth prospects of our business in the media segment. Slower GDP growth in Poland usually negatively impacts advertising spending. Moreover, as many of our advertisers are global companies, the global economic downturn, even if it has no direct effect on Poland or its effect on the Polish economy is not as significant as in other countries, as well as economic slowdown in Poland, may force customers to cut their advertising budgets in Poland, which will have a negative impact on the demand for advertising services in Poland. A decrease in our advertising revenue may force us to adjust the level of our costs to lower revenues. As adjustments of the cost base to market conditions are not generally sufficient to fully offset the effect of lower revenue, the consequences of such risk factors may include a reduced profitability, lower quality of our programs, or limited number of programs broadcast by us, both our own productions and content purchased from third parties. Any constraints on the quality or quantity of our programming may result in the loss of audience share both to our competitors and to alternative forms of entertainment, which in turn may affect the attractiveness of our offering to potential advertisers and sponsors.

The results of our operations in the real estate segment are also to some extent dependent on the current economic situation in Poland. In the event of an economic downturn, consumers may postpone decisions to buy or lease real estate, or may not be able to obtain the financing necessary to purchase or lease real estate. As a result, we may see a reduction in the ability to sell real estate and a decrease in the rents earned from rental properties. This, in effect may reduce our revenues derived from the real estate segment's operations or lead to the need to revaluate our real estate assets.

Moreover, the worsening of the macroeconomic conditions across the world, as well as possible uncertainty regarding the future economic situation, may have, among others a negative impact on the Group’s ability to acquire sufficient financing on the global capital markets or the cost of obtaining and servicing such financing.

In view of the above, the worsening of macroeconomic conditions in Poland or across the world may, as a result, have a considerably adverse impact on the financial situation, results of our operations and growth prospects of the Group.

We are exposed to the effects of extraordinary events such as a pandemic, epidemic or war

Our operations may be reduced as a result of extraordinary events, such as the announcement of a state of epidemic or pandemic or the start of an armed conflict in our region. Temporary restrictions have been put in place in the past to combat the COVID-19 pandemic, such as restrictions on movement, organization of events and meetings, entertainment activities, operation of shopping malls or quarantine obligations. The future introduction of restrictions of a similar nature in connection with the occurrence of extraordinary events may lead to a significant reduction in the the functioning of the economy and, as a result, entail negative effects like an economic slowdown or recession, which could negatively affect our operating activities and financial results.

The military conflict in Ukraine could have a significant and long-lasting impact on the global, European and Polish macroeconomic environment. In particular, as a result of a sudden reduction in the availability of raw materials, oil, steel, gas or biomass and fossil fuels, a sudden economic slowdown and deepened inflationary pressures occured. These phenomena translate adversely into demand for our services, the cost of conducting current operations, as well as the possibility of carrying out certain investments. At the same time, continuing inflationary pressure may cause the monetary authorities to further tighten monetary policy, which may affect the cost of servicing our debt or the ability to raise additional financing. We are not able to predict development of events in Ukraine or their long-term impact on the global and regional economy and, consequently, on our operations and financial results.

In view of the above, the occurrence of extraordinary events such as a pandemic, epidemic or war and the introduction of related restrictions on the functioning of society and the economy may have a significant adverse impact on our financial position, results of operations and development prospects.

The Polish telecommunications industry is highly competitive

We face strong competition in all of its core business areas, especially from telecommunication operators, in particular: Orange Polska, T-Mobile Polska and Play. There can be no assurance that our current customers will not find the offerings of those operators more attractive.

A shift in the business model of mobile telecommunications network operators in Poland, whereby competing providers of telecommunications services would form joint ventures or strategic alliances, or launch of new types of services, products and technologies may additionally intensify competition on the telecommunications services market. The situation on the telecommunications market in Poland may also change significantly as a result of potential acquisitions or intensify if new mobile telecommunications operators enter the market or if broadband Internet access services are offered by entities other than mobile telecommunications operators.

We face growing competition from entities offering non-traditional voice and data transmission services which rely on the VoIP technology, such as instant messaging (e.g. WhatsApp, Messenger), or video conferencing platforms (eg., Zoom, Teams), through which customers who use only mobile data transmission or fixed Internet access can be provided with voice and video services, usually at prices lower than traditional voice and data transmission services. To this end, such entities use, among other things, the possibility to provide services via existing infrastructure, belonging to telecommunication operators, so as to avoid having to implement capital-intensive business model themselves. Continued growing popularity of these services may lead to a decrease in ARPU per customer and the customer base of telecommunications operators, including the Group’s one. It can be expected that in the future the Group will also have to compete with providers of services supported by communication technologies which currently are at an early stage of development or which will be developed in the future. The Group's existing competitors as well as new players on the Polish market may introduce different new services or telecommunications services based on better technologies than those currently used by the Group before such services are introduced by the Group, or may offer such services at more competitive prices. Mobile virtual network operators (MVNO) also compete with traditional mobile telecommunications network operators.

The Group’s ability to effectively develop its operations on the Polish telecommunications services market may be also adversely affected by the imposition of new regulatory requirements or new fees or payments on entities operating in Poland, further legal changes, or the regulator's policy designed to increase the competitiveness of the telecommunications services market.

Moreover, the high rate of mobile voice penetration and the highly consolidated nature of the Polish mobile telephony market may result in increased pricing pressure and our ability to compete effectively will depend on our ability to introduce new technologies, convergent services and attractive bundled products at competitive prices. It cannot be ruled out that we will be forced to reduce prices for certain products and services in response to the pricing policies of our major competitors, which may have an adverse effect on our future revenue and profitability.

Group’s reduced competitiveness and increased pricing pressures could have a material adverse effect on the financial situation, results of our operations and growth prospects of the Group in the future.

Our operating results in media segment depend on the importance of television and Internet as advertising media

In 2024, ca. 67% of the revenue generated by our media segment came from sale of advertising time and sponsored time slots on our TV channels and Internet media. The Polish advertising market sees television competing with other advertising media, such as the Internet, newspapers, magazines, radio, and outdoor advertising. In view of the continuing growth in the importance of online advertising in Poland, we are consistently developing our online advertising channels, however, the vast majority of our advertising revenues come from TV operations. There can be no guarantee that TV commercials will maintain their position on the Polish advertising market, or that changes in the regulatory regime will not favor other advertising media or other broadcasters. The growing competitive pressure among advertising media, higher spending on thematic channels, and the development of new forms of advertising may have an adverse effect on TV advertising revenue generated by our media segment, and thus on our operations, financial condition, performance, and cash flows.

Our potential advertising revenue depends on several factors, including the demand for and prices of advertising time. No assurance can be given that we will be able to respond successfully to the changing preferences of our viewers, which means that our audience share may decrease, which may adversely affect demand for our advertising time and our advertising revenue. eThe diminishing appeal of TV as a whole, and our own channels in particular, attributable both to higher interest in other forms of entertainment and to the declining importance of television as an advertising medium, may have an adverse effect on the results of our operations, financial condition and prospects.

Due to the strong competition in the television market, we cannot guarantee that in the future customers using our services and advertisers will use our offer and not the services offered by our competitors

The Polish television market is characterised by strong competition and we are therefore unable to guarantee that in the future we will achieve satisfactory revenues from pay TV subscriptions and television advertising in comparison to our competitors. Our current and potential competitors may have greater financial and marketing resources that will enable them to more effectively attract customers and advertisers for their services.

Our main competitor in the satellite TV market is the Canal+ platform. We also compete with broadcasters using other transmission technologies, such as terrestrial television, cable television and internet television. We also expect increasing competition from joint ventures and strategic alliances entered into by satellite TV providers, cable TV providers and telecommunications operators. We are also competing with local and foreign competitors entering the Polish market in the form of OTT services and applications based on providing all types of content, especially video.

Our main competitors in the TV advertising market are other broadcasters such as TVN (Warner Bros. Discovery Group),  a commercial broadcaster, and TVP - a broadcaster financed to a significant extent from public funds, which by definition fulfils the mission of public television. In relation to the fulfilment of the public television mission, TVP has restrictions on interrupting individual programmes and films with advertisements. Any changes to TVP's restrictions on the transmission of advertising may intensify competition from TVP and reduce our advertising revenues. In addition, we will be forced to compete with existing TV broadcasters and potential new entrants for the the granting of licenses for terrestrial and satellite television broadcasting in Poland. The loss of customers and advertisers to our competitors could have a material adverse effect on results of our operations, financial condition and prospects.

We face competition from entities offering alternative forms of entertainment and leisure

Technological progress, as well as a number of various other factors expose our operations to growing competition for the time and form of customers' leisure and entertainment activities. In particular, we compete with entities offering such alternative forms of leisure and entertainment as streaming, cinema, radio, home video, printed media, as well as other non-media forms of leisure, including live events. New technologies, such as video on demand (VoD), Internet streaming and downloading, have broadened and may continue to broaden the selection of entertainment options available to existing and potential users of our services. The media market is witnessing a trend of changing preferences in the way content is consumed, with a gradual shift away from linear television, especially among younger generations. In particular, increasing activity of foreign players operating in the OTT model, e.g. Netflix, Amazon Prime, Max, Disney+ or SkyShowtime. These platforms are increasingly investing in Polish-language content and local productions, enhancing the appeal of their offerings to Polish audiences. The growing variety of leisure and entertainment options offered by our current and future competitors may bring about a decrease in demand for our products and services, and weaken the effect of television as an advertising medium. This may have a material adverse effect on the financial situation, results of our operations and growth prospects of the Group in the future.

In the green energy segment we face the risk of growing competition in the area of energy generation from renewable sources

The renewable energy market attracts interest from investors who may compete with the Group due to its potential and potential returns. The intensification of this competition as well as increased investment in the sector by established companies and start-ups, could result in demand for photovoltaic and wind farm projects exceeding supply, which would have a negative impact on the selling prices of the projects.

It should be noted that the vast majority of energy market players have the development of RES-based capacity in their strategic plans. A general trend towards zero-carbon technologies, but also a lower barrier to entry compared to other technologies (e.g. conventional or nuclear), is a motivating factor for such activities. Therefore, it is expected that competition in this market segment will increase. PAK-PCE operates in the field of RES and is in the process of developing more photovoltaic and wind farms. It cannot be excluded that investments in the construction of photovoltaic and wind farms, as well as the acquisition of existing projects, will be of interest to foreign companies with experience in this field gained in other European and world markets.

Increased activity of other companies in the renewable energy market may make it more difficult for PAK-PCE to access attractive sites and increase the cost of acquiring them. It should also be mentioned that as the installed capacity of individual weather-dependent technologies (such as photovoltaics and wind turbines) in the system increases, the supply of energy produced during periods of high wind or sunshine increases, which, in the absence of demand-side flexibility, has a negative impact on spot market prices. High energy supply during periods of high wind and sunshine and low energy supply during periods of low wind and sunshine increase balancing costs. The above factors could have a material adverse effect on the Group's business, financial condition and results of operations.

6.4.        Factors relating to market risks

When conducting its business operations, the Group is exposed to a number of financial risk factors, including:

•       credit risk,

•       liquidity risk,

•       market risk, including currency risk and interest rate risk.

The Group’s risk management policies are designed to reduce the impact of adverse conditions on the Group’s results.

The Management Board is responsible for oversight and management of each of the risk factors that the Group is subjected to in its activities. Therefore, the Management Board has established an overall risk management framework as well as specific risk management policies with respect to market, credit and liquidity risks.

Detailed information about the Group’s and Company’s exposure to each of the above risk factors, the objectives and processes for measuring and managing risk were presented in Note 41 to the Company’s consolidated financial statements for the financial year ended December 31, 2024 and in in Note 37 to the Company’s standalone financial statements for the financial year ended December 31, 2024.

Market risk management

We employ an active approach to managing a market risk exposure. The objectives of market risk management are to: (i) limit fluctuations in profit/loss before tax. (ii) increase the probability of meeting budget assumptions. (iii) maintain a healthy financial condition. and (iv) support the process of undertaking strategic decisions relating to investing activity, with attention to sources of capital for this activity.

All the market risk management objectives should be considered as a whole, while their realization is dependent primarily upon the internal situation and market conditions.

We apply an integrated approach to market risk management. This means a comprehensive approach to the whole spectrum of identified market risks, rather than to each of them individually. The primary technique for market risk management is the use of hedging strategies involving derivatives. Apart from this, we also use natural hedging to the extent available.

All of the potential hedging strategies and the selection of those preferred reflect the following factors: the nature of identified market risk exposures, the suitability of instruments to be applied and the cost of hedging, current and forecasted market conditions. In order to mitigate market risk, derivatives are primarily used. We transact only those derivatives for which we have the ability to assess their value internally, using standard pricing models appropriate for a particular type of derivative, and also these which can be traded without significant loss of value with a counterparty other than the one with whom the transaction was initially entered into. In evaluating the market value of a given instrument, we rely on information obtained from particular market leading banks, brokers and information services.

We are permitted to use the following types of instruments: swaps (IRS/CIRS), forwards and futures and options.

Currency risk

One of the main risks to which we are exposed is the currency risk resulting from fluctuations in exchange rate of the Polish zloty against other currencies. Revenues we generate are denominated primarily in the Polish zloty, while a portion of operating costs and capital expenditures are incurred in foreign currencies. The Company’s currency risk is associated mainly to royalties to TV and radio broadcasters (USD and EUR), transponder capacity usage agreements (EUR), fees for conditional access system (EUR and USD) and purchases of reception equipment and accessories for reception equipment (USD and EUR). After the purchase of Telewizja Polsat and the significant expansion of its offer by sport content which require the acquisition of certain licenses, the currency risk exposure is also associated to purchases of foreign programming licenses. After the purchase of Polkomtel the currency risk exposure is also associated to agreements with suppliers of stock, mainly mobile phones, and suppliers of telecommunication network equipment (EUR and USD), roaming and interconnect agreements and rental of office space (various currencies). Following the takeover of the PAK-PCE Group, foreign exchange risk also arises from contractual obligations in connection with the development of photovoltaic and wind farms or hydrogen projects, including the supply of components, goods or installation services.

In respect of license fees and transponder capacity usage agreements, the Group partly reduces its currency risk exposure by means of an economic hedge as it denominates receivables from signal broadcast and marketing services in foreign currencies.

We do not hold for trading any material assets denominated in foreign currencies.

The SFA dated April 28, 2023, which we entered into with a syndicate of banks, provides, among others, for the granting of a EUR-denominated loan tranche to the Company, and therefore there is exposure to foreign currency risk under the financing agreements in place.

We have no means to influence the foreign exchange rates fluctuations and any adverse change of foreign exchange rates to PLN may translated to a significant increase of our costs expressed in PLN, and that may have a material, adverse effect on our performance, financial condition and prospects.

Interest rate risk

Changes in market interest rates have no direct effect our revenues, however they do have an effect on net cash from operating activities due to interest earned on overnight bank deposits and current accounts, and on net cash from financing activities due to interest charged on bank loans and bonds.

We regularly analyse a level of interest rate risk exposure, including refinancing and risk minimising scenarios. Based on these analyses, we estimate the effects of changes in interest rates on its profit and loss.

In order to reduce interest rate risk exposure resulting from interest payments on the floating rate senior facility, the Company and the Group stipulated interest rate swaps and currency interest rate swaps for which hedge accounting was adopted. In order to reduce interest rate risk exposure resulting from Polkomtel Group’s floating rate senior facilities, the Group also uses interest rate swaps and currency interest rate swaps, and for these the hedge accounting was not adopted.

Interest rates fluctuations may affect our ability to repay current liabilities and have a material adverse effect on our performance, financial condition and prospects.

6.5.        Risk factors associated with the legal and regulatory environment

The complexity, lack of clarity, and frequent amendments of Polish tax laws may lead to disputes with tax authorities

Tax laws in Poland are complex, unclear and subject to frequent and unpredictable changes. Frequent amendments in the tax laws and contradicting legal interpretations among the tax authorities result in uncertainties and lack of consistency in the tax ordinance, which in fact lead to difficulties in the judgement of the tax consequences in the foreseeable future. In consequence, the application of tax law in practice is accompanied by controversies and interpretation disputes which usually need to be resolved by administrative courts, and even their judicial practice is notoriously inconsistent. The Polish tax laws also includes the so-called General Anti-Avoidance Rule (“GAAR”), intended to prevent artificial legal arrangements designed mainly to obtain tax benefits, and a number of detailed regulations intended to combat tax evasion which are often formulated using non-defined or inaccurate notions or criteria.

Given the frequency of changes in the Polish tax laws and the fact that such changes can be retroactively applied in practice, as well as the existence of inconsistencies and lack of uniform interpretation, and considering the relatively long limitation periods applying to tax liabilities, the risk of misapplication of tax laws in Poland may be greater than in the legal systems of more developed markets. Accordingly, there is a risk that we may fail to bring certain areas of our activity in compliance with the frequently amended tax laws and the ever-changing practice of their application.

Therefore, no assurance can be given that there will be no disputes with tax authorities or that the tax authorities will not see the tax consequences of the Group’s business transactions differently than the Group, and, consequently, that tax authorities will not question the correctness of the Group companies' tax settlements on non-statute-barred tax liabilities (including conformity with the taxpayer's obligations), and will not determine the existence of tax arrears of such Group companies. Any unfavorable decisions, interpretations (including changes to any interpretations obtained by the Group companies) or rulings by tax authorities may have a material adverse effect on the results of our operations, financial condition and prospects.

Tax authorities may question the accuracy of intra-Group and related-party settlements under applicable transfer pricing regulations

In the course of their business, the Group companies enter into transactions with their related parties within the meaning of the Corporate Income Tax Act. Related-party transactions, which guarantee that the Group's business is run efficiently, include inter-company rendering of services and sale of goods. When entering into and performing related-party transactions, the Group companies take steps to ensure that terms and conditions of such transactions are consistent with the applicable transfer pricing regulations. At the same time, it cannot be ruled out that Group companies may be subject to inspections, audits or tax proceedings by the competent tax authorities with respect to the foregoing. The nature and diversity of transactions with related-parties, the complexity and ambiguity of the regulations governing methods of verifying the prices applied, dynamic changes in market conditions affecting the calculation of prices applied in such transactions, as well as the difficulty in identifying comparable transactions, the risk that the methodology used to determine arm's-length terms for the purpose of such transactions is questioned by tax authorities cannot be excluded, and therefore tax authorities may question the accuracy of the model of settlements implemented by the Group companies with respect to transactions with related parties under applicable transfer pricing regulations, which may have material adverse effect on the results of our operations, financial condition and prospects.

Assessment of tax effects of the Group’s restructuring activities by tax authorities may differ from assessment of such activities by the Group

The current composition of the Group is a result of consolidation, restructuring and other transactions involving assets of considerable value, implemented over the recent years by and between the Group’s companies. Those activities had an effect on the tax settlements not only of the companies directly involved in such consolidation, restructuring and other transactions involving assets of considerable value, but also of their respective members or shareholders.

Despite monitoring the risk in individual business areas, with respect to completed and planned restructuring activities, no assurance can be given that the tax authorities will not have a different assessment of tax effects of individual restructuring events and transactions, both completed and planned, in particular with respect to the possibility, manner, and timing of the recognition of income and tax-deductible expenses by entities participating in such events and transactions, or that financial terms of such activities will not be questioned, which may have a material adverse effect on the results of our operations, financial condition and prospects.

The tax regime applicable to our operations and the sectors in which we operate create numerous uncertainties

The tax regime applicable to transactions and events typical for our operations and the sectors in which we operate are a source of numerous interpretation uncertainties. Among others, there is uncertainty as to the interpretation of income tax laws with respect to the possibility, manner, and timing of recognition of income and tax-deductible expenses on individual transactions and events and the requirements for their documentation, or the rules of calculation, withholding and remittance of the withholding tax. Also, VAT legislation is characterized by vague and complex regulations, particularly where it concerns goods and services subject to the tax, the tax rate, tax base or time at which the tax liability or right to deduct input tax arises with respect to transactions subject to VAT. Further, Polish tax legislation does not provide unequivocal rules regarding imposition of other taxes, including property tax (in particular with respect to the determination of tax base and taxable property) and custom duties.

Given that Polish tax laws are frequently amended, inconsistent, and lack uniform interpretation, and considering the relatively long limitation periods on tax liabilities, there is a risk that our selected operations may not be harmonized with the changing legal (including tax) regulations and their changing application.

Despite monitoring the risk in individual business areas, there can be no guarantee that disputes with tax authorities regarding assessment of tax effects of individual events and transactions typical for our operations and the sector in which we operate will not occur, and consequently that the tax authorities will not question the correctness of tax settlements on non-statute-barred tax liabilities of Polsat Plus Group entities (including conformity with the taxpayer's obligations), and will not determine the existence of tax arrears of these entities. There is also a risk that tax authorities may question financial terms of individual events and transactions. This may have a material adverse effect on the results of our operations, financial condition and prospects.

The Group’s companies are subject to legal regulations (including tax legislation) in force in different jurisdictions

Given the international structure of the Group, its companies are governed by legal regulations (including tax legislation) in force in different jurisdictions. Therefore, in view of such dissimilar legal frameworks, there is a risk that the Group will interpret local legal regulations (including tax legislation) in a way which is divergent from their construction by the tax authorities of the countries where the Group conducted, conducts and will conduct business. The diversity of legal regulations by which individual companies are bound may give rise to internal problems within the Group, including problems with respect to the law governing legal relations between the Group's entities. Another aspect of the relationship between the Group companies which may raise doubts is the application and interpretation of double-tax treaties concluded between countries in which the companies conducted, conduct or will conduct business. An additional risk factor are the regulations introduced in 2021 for hybrid structures (ATAD 2 Directive). The lack of clarity on the interpretation of the regulations and the breadth and multidimensionality of the operations carried out by the Polsat Plus Group may result in a different tax interpretation of the arrangements and events reported by the individual Group’s companies to the relevant tax jurisdictions.

At the same time, in many cases the legal regulations (including tax legislation) in countries where the Group conducted, conducts and will conduct its business are frequently ambiguous and there is no single or uniform interpretation or practice followed by local tax authorities. Additionally, the tax legislation (including the provisions of applicable double-tax treaties) in the countries where the Group companies conducted, conducts and will conduct business, may be subject to change. The practice adopted by the local tax authorities in respect of particular tax regulations may change as well, even retroactively.

Therefore, no assurance can be given that there will be no disputes with tax authorities in countries where the Group conducted, conducts and will conduct its business, and consequently that the tax authorities will not question the correctness of the Group companies' tax settlements on non-statute-barred tax liabilities, and will not determine the existence of tax arrears of such Group companies, which may have an adverse effect on the results of our operations, financial condition and prospects.

Pending or future tax inspections, tax and customs inspections, tax proceedings and other reviews of the Group companies to which Group companies are parties conducted by Polish tax authorities or local tax authorities abroad may result in additional tax liabilities in the countries where the Group conducted, conducts and will conduct its business (in particular in Poland)

The Group companies are and may again be in the future subject to tax inspections, tax audits, tax proceedings or verifications conducted by Polish tax authorities. At the same time, there are or may be activities related to the verification of the correct implementation of the tax obligations of the Group's companies by local tax authorities in the jurisdictions where the Group conducted, conducts or will conduct its business. Such activities, to which Group companies are or will be parties conducted by Polish tax authorities or local tax authorities in the jurisdictions where the Group conducted, conducts or will conduct its business (in particular in Poland) may result in the tax authorities challenging the correctness of the Group companies’ settlements of outstanding tax liabilities (including, in the jurisdictions where this is applicable, the proper performance of the Group’s obligations as a tax remitter) and in assessing tax arrears for these companies.

In particular, as at the date of this Report, the Company is party to tax proceedings before Polish tax authorities, in which the authorities challenged the Company’s right to apply the exempt from the obligation to collect the withholding CIT on certain license payments.

Due to the foregoing, it should be assumed all future tax inspections and other reviews conducted against Group companies or tax proceedings to which Group companies are parties conducted by Polish tax authorities or local tax authorities in the jurisdictions where the Group conducted, conducts or will conduct its business, may result in additional tax liabilities in the jurisdictions where the Group conducted, conducts or will conduct its business (in particular in Poland). The costs related to such tax inspections, reviews or tax proceedings as well as any additional payments on account of taxes, may have a significant, adverse effect on revenues, performance, business, condition or development prospects of the Group, and thereby have a significant, adverse effect on our business performance, financial condition and prospects.

We are exposed to changes of Polish law which may adversely affect labor costs

The regulations relevant to the determination of the level of remunerations and labor costs have been recently undergoing profound changes which will affect the level of our costs of employment as well as our ability to employ employees in the future. In particular, on September 14, 2023 the Council of Ministers adopted a regulation on the minimum salary in 2024, setting it at PLN 4,242 as of January 1, 2024 and PLN 4,300 as of July 1, 2024.

Additionally, starting from 2019 selected Polish enterprises (including Polsat Plus Group) have been obliged to launch Employee Capital Plans, a form of pension schemes which envisage additional financial contributions from the employer. In addition, starting from January 2022, the Polish tax system has undergone comprehensive changes including, among other things, an increase in the health contribution without the ability to its deduction from the tax base, which can effectively result in the amount of actual net remuneration received by part of our employees.

All changes affecting the remunerations and costs of labor will have an effect on our ability to employ new employers, the level of remuneration costs incurred as well as the level of external services provided by external providers procured outside the Group, which may have a material, adverse effect on our business performance, financial condition and prospects.

There can be no assurance that in the competition and consumer protection authorities will not deem – despite our different assessment – the practices we use as limiting competition or violating the Polish consumer protection laws

Our operations are reviewed by institutions of competition and consumer protection: the President of the Polish Office of Competition and Consumer Protection (UOKiK) and, with respect to any anti-competitive practices which may affect trade among Member States - the European Commission, to ensure that we comply with Polish and European laws prohibiting practices that limit competition or Polish regulations prohibiting infringements of collective interests of consumers, such as for example providing inaccurate information to customers, dishonest market practices or use of abusive contract clauses. As a general rule, our operations are subject to the assessment of the President of the Polish Office of Competition and Consumer Protection (UOKiK). If the regulator finds any of our practices or contract clauses to be in conflict with Polish or European competition and consumer protection laws, we may be subject to fines and our reputation could be harmed. In addition, if such practices or clauses are considered abusive, the President of UOKiK prohibits their application, may impose a fine and define the measures to remedy the subsisting effects of breaching the prohibition and compel us to take actions in order to amend the contracts already concluded with consumers.

In addition to the prohibition of particular practices, the President of UOKiK could impose on us a cash fine of up to 10% of our revenue generated in the financial year immediately preceding the year in which the fine is imposed. Agreements or other legal actions which implement anti-competitive practices are invalid by operation of law in full or in part. Similar regulations, including the European Commission’s right to impose a fine up to 10% of the annual revenue, apply to infringements of the European competition protection regulations. The President of UOKiK may also compel us to pay public compensation to consumers, who were affected by the practices in question or apply other measures. Fines of up to PLN 2 million may also be imposed on our managing persons, if through their actions or omissions, they permitted a breach of the prohibition from entering into agreements limiting competition. Moreover, if we, even unintentionally, fail to provide the President of UOKiK with the required information or provide misleading information, a fine of of up to 3% of the revenue generated in the financial year preceding the year in which the penalty is imposed may be imposed on us.

Any decisions by the President of UOKiK or by appeals bodies confirming our infringement could also result in claims for damages by consumers, contractors and competitors. The potential amount of such claims is difficult to assess but may be significant. If any of our practices or contract terms are deemed to be in conflict with Polish consumer protection laws, the Company may be subject to fines and its reputation could be harmed, which could have a material adverse effect on our business performance, financial condition and prospects.

In addition, expansion of consumer protection legislation or case law in this field, could increase the scope or scale of our potential liability or the scope of consumer rights. Such events may have a material adverse effect on the results of our operations, financial condition and prospects.

We may violate the acts of law and regulations governing our satellite TV distribution business as well as telecommunications, TV broadcasting, advertising and sponsoring activities, which are subject to periodic amendments

We are required to comply with Polish and EU laws, which impose limitations on the conduct of our business. Our operations are extensively regulated by government authorities and market regulators, especially the President of the Office of Electronic Communications (UKE) and the National Broadcasting Council (KRRiT), the bodies responsible for overseeing compliance with the Polish Act on Television and Radio Broadcasting, the Electronic Communications Law, and the terms of our broadcasting licenses. Decisions by the President of UKE, the Chairperson of KRRiT, or other regulators may place certain restrictions on the way in which our business can be run.

The President of UKE supervises our telecommunications operations, as well as TV broadcasting and production. As part of our telecommunications services, we mainly provide mobile voice services, broadband Internet access as well as certain wholesale services to other operators. Telecommunications enterprises operating in Poland are subject to a number of legal and administrative requirements having a direct impact on their business, both in relations with individual and business customers (for instance, by specifying the scope of customers’ rights or the content of standard terms and conditions for the provision of electronic communications services, setting rules for settlements in international roaming services, caps for pricing of international services or restricting the maximum time for which contracts can be concluded with customers) and wholesale customers (for instance, by imposing MTR and FTR caps or defining caps for rates used in roaming traffic settlements). Media segment is in turn overseen by the President of UKE for compliance with the terms of licenses and frequency allocations assigned by the President of UKE for the purposes of TV broadcasting services. In the event of our non-compliance with any provisions of the Electronic Communications Law, companies from the Group may face a fine from the President of UKE of up to 3% of revenue generated in the year preceding the year in which such fine is imposed.

The KRRiT regulations primarily affect our operations in the media segment. As a TV broadcaster operating in Poland, we have to observe a number of legal and administrative requirements related to such matters as broadcasting time, programming content, and advertisements. Furthermore, KRRiT undertakes regular checks to ensure that our operations conform to the terms of our broadcasting licenses, provisions of the Polish Act on Television and Radio Broadcasting, and its own internal guidelines. In the event of our non-compliance with any applicable regulations, we may face a fine from KRRiT of up to 50% of the annual fee for the right to use the frequency designated for terrestrial broadcasting and, if we do not pay the fee for the right to use such frequency, a fine of up to 10% of the revenues generated in the previous fiscal year, taking into account the scope and degree of harmfulness of the violation, our past activities and our financial capabilities.

The regulatory regime for the broadcasting industry is subject to frequent changes, and so there can be no assurance that such future changes will not have an adverse effect on our channel mix, ability to attract advertisers or the way in which our business is run.

In future, our pay TV business may be subject to zoning, environmental or other regulations that will place restrictions on where satellite antennas may be deployed. We may also have to deal with pressures from local communities regarding deployment of our satellite antennas. Any such legal restrictions or conflicts with local communities related to the deployment of our satellite antennas may render our pay TV services less attractive, leading to a fall in customer numbers.

Non-compliance with valid law or with the regulations issued by regulatory bodies may have material adverse effect on the results of our operations, financial condition and prospects.

Operations of companies belonging to Polsat Plus Group are subject to a number of legal regulations and requirements of awarded frequency allocations which could be amended in the future

As a mobile and fixed telecommunications network operator, we are subject to a number of laws and regulations, in particular those regulating maximum rates charged for specific telecommunications services, those related to ensuring effective competition, non-discrimination, transparency in telecommunication services prices, reporting, data protection and national security. Any potential breach of the applicable laws or terms of frequency allocations may in certain cases result in penalties imposed on us, loss of reputation, inability to obtain new frequency allocations or even loss of current frequency allocations. Furthermore, future changes in our Group’s regulatory environment may be disadvantageous to our business, for instance by increasing its costs.

An important and active role in ensuring the observance of telecommunications laws and regulations by entities operating in the telecommunications market in Poland is played by the regulators of the Polish telecommunications market, including in particular the President of the Office of Electronic Communications (UKE). The President of UKE has a number of regulatory and supervisory powers, including those with respect to provision of electronic communications services and managing radio frequency and orbital slot resources. If the President of UKE determines that a relevant market is not sufficiently competitive, the President may designate one or more telecommunications providers as a provider with significant market power (SMP) in such market and impose on such provider(s) certain regulatory obligations, such as an obligation to accept requests from other telecommunications providers for the provision of telecommunications access and the obligation to prepare and submit a draft framework offer for telecommunications access to serve as a basis for cooperation between a provider with SMP and its competitors. Polkomtel has been designated as holding SMP in certain relevant markets at the wholesale level. As a result, Polkomtel is required to meet strict regulatory obligations on the wholesale markets of call termination to a public mobile telecommunications network and of call termination to a public fixed line network. As part of its continued provision of telecommunications services in Poland, Polkomtel is also regularly reviewed by the President of UKE to ensure that it has complied with the terms of the licenses and frequency allocations granted by the President of UKE. If the President of UKE was to declare that Polkomtel breached a provision of the Electronic Communications Law, the company could be forced to pay a fine of up to 3% of the revenue it generated in the year prior to the imposition of the fine and it could be prohibited from providing further telecommunications services in Poland.

The President of UKE may also designate one or more network operators to guarantee the provision of universal services (including voice and broadband access, and customer network access) which may then apply to the President of UKE to be compensated by the other telecommunications operators, on the justified net costs basis.

Group’s operations are also supervised by the President of the Office of Competition and Consumer Protection, the Personal Data Protection Office, and other agencies.

Violation of the laws or terms of frequency allocations applicable to our business may expose us to costs, penalties, sanctions or claims as a result of potential violation of such requirements or laws that, in turn, could have a material adverse effect on the results of our operations, financial condition and prospects.

Operations of companies belonging to Polsat Plus Group are subject to a number of legal regulations related to energy generation from renewable sources

In Poland, the electricity generation segment is heavily influenced by the current legislation governing the industry. The regulations cover, among others, requirements for the implementation of investments, access to the electricity grid, but they can also have a significant impact on the level of market prices.

The basic legal acts applicable to entities generating and trading electricity in Poland are the Energy Act, the Renewable Energy Sources Act, the Environmental Protection Act, which defines the principles of sustainable use of the environment, and the Wind Energy Investment Act. According to the Energy Act, the generation and trading of electricity, subject to the exceptions specified in the Act, require a license issued by the President of the Polish Energy Regulatory Office (URE). Licenses are issued for a fixed term, not less than 10 years and not more than 50 years. In certain situations, the President of the URE may revoke a license, in particular if an energy company grossly violates the conditions set out in the license or other conditions for carrying out licensed activities. In addition, the President of the URE may revoke a license or change its scope, inter alia, in case of a threat to the defence or security of the state or the safety of citizens, in case of a division of an energy company or its merger with other entities, as well as in case of failure to fulfill certain obligations under the Energy Act. A revocation or change in the scope of the license under which the Group's companies operate could have a material adverse effect on the Group's business and financial results.

In connection with the implementation of the acquisition of shares in PAK-PCE, the general provisions of the investment and construction process and the specific provisions of the Wind Power Investment Act will apply to the activities of the Group's entities, particularly to the investment process involving the creation of new photovoltaic and wind power installations. Accordingly, as part of this process, selected Group companies will be required to obtain, among others, decisions on environmental conditions, decisions on development conditions, water permits, construction permits and occupancy permits. In certain situations, the construction of a new photovoltaic and wind power plant may require either the adoption of local zoning plans or an amendment to the local zoning plan to accommodate the planning requirements for this type of investment. In certain situations, a particular Group company may not obtain the required administrative decisions (due to possible protests by the local community or regulatory restrictions) or the administrative process in this matter may be prolonged, which could have a negative impact on the further development of the Group's business and its financial performance. The implementation of investments in renewable energy sources is also associated with the need to enter into a number of agreements to secure legal title to the land on which such an installation is to be made, which means that the financial expectations of many landowners must be met and potential non-market expectations taken into account.

In addition, the war-related volatility of electricity sales prices in the European markets resulted in ad hoc regulatory decisions, imposed at the European Union level and locally, aimed at limiting in the short term the increase in energy sales prices from producers (set separately for each electricity generation technology) and the level of sellers' margins, thereby limiting the increase in costs for sensitive consumers or households, among others. There can be no guarantee that these ad hoc regulations will not continue in the future or that new regulations will be introduced that will limit the possibility of free pricing of electricity sales on the market and thus affect the ability to generate revenues and margins from the production and sale of energy from biomass, photovoltaic installations or wind farms.

The realization of the above situations may adversely affect the Group's operations, which may have a material adverse effect on the Group's financial results.

Risks related to environmental regulations

Producers of electricity from renewable energy sources are required to comply with relevant environmental laws (including those of the European Union), both in Poland and abroad. These laws regulate, among others, emissions of pollutants, wastewater, protection of soil and groundwater, and the health and safety of humans and wildlife. Failure to comply with laws, regulations and other environmental requirements could subject Group companies to significant fines or even shutdown. Some equipment used in photovoltaic and wind farms, such as transformers, contain substances that can cause environmental contamination in the event of a malfunction or accident.

Compliance with applicable laws and regulations involves certain costs, and potential violations of such laws and regulations and the resulting potential imposition of penalties by the relevant governmental authorities may adversely affect the business, financial condition and results of operations of the Company and the Group companies.

Risks related to administrative proceedings in the scope of real estate development and construction law

Our investment activities in the real estate segment involve the need to obtain numerous decisions and administrative permits. Only after this stage is completed we move on to the design phase and then the construction of the designed facilities.

Obtaining the relevant administrative acts is often associated with lengthy administrative proceedings, which creates the risk that we will not be able to complete the particular phases of the investment within the assumed deadlines. In particular, there is often a delay in issuing a construction permit resulting from, among others, a delay in issuing an environmental decision or refusal to issue such a decision by the relevant authorities, which causes additional administrative and court proceedings to be initiated. This has a negative impact on the economics of such an investment. Accumulation of this could have an adverse effect on the results of our operations, financial position or prospects.

No assurance can be given that we will not breach any personal data protection laws or regulations, or that we will not fail to meet requirements imposed by the President of the Personal Data Protection Office and we may incur pecuniary penalties for non-compliance with GDPR

In the course of its business the Group companies gather, keep and use customer data which are protected by personal data protection regulations. Therefore, since May 25, 2018, the companies, as personal data processors, are required to comply with the Regulation of the European Parliament and of the Council (EU) 2016/679 of April 27, 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (“GDPR”).

GDPR has elevated the standards required of personal data administrators and the entities processing personal data on their behalf, and authorized the competent authorities to impose pecuniary penalties of up to EUR 20 million or 4% of total global turnover for the past year on personal data administrator and entities processing personal data on their behalf. It has also authorized the competent authorities to temporarily or indefinitely impose a complete ban on personal data processing.

If the solutions that we implement in order to protect personal data prove ineffective, it may result, for instance, in a disclosure of customer personal data either as a result of a human error, wilful, unlawful misconduct by third parties or failure of IT systems, or it result in inappropriate use of such data in other ways. A breach of the personal data regulations and the Polish Personal Data Protection Office may result in imposing pecuniary penalties on us, as well as a loss of customer confidence and thus have a material adverse effect on our business, financial condition or development prospects.

We also use external providers, cooperate with external partners, agents, suppliers and other external entities, therefore we are unable to entirely rile out the risk of a malfunction of the systems involved in the processing or transmission of restricted information in these entities. A breach of the personal data regulations by us or by those entities may result in imposing pecuniary penalties, as well as in a loss of reputation and loss of customers and in consequence have a material adverse effect on the results of our operations, financial condition and prospects.

 

7.               Other significant information

7.1.        Transactions concluded with related parties on conditions other than market conditions

Transactions with parties related to Polsat Plus Group in 2024 have been concluded exclusively on market conditions and are described in Note 45 of the consolidated financial statements for the year ended December 31, 2024.

7.2.        Achievement of previously published forecasts

Pursuant to Article 35 of the Bonds Act, the achievement of forecasts regarding the development of financial liabilities, including the estimated value of financial liabilities and the estimated structure of financing, understood as the value and percentage share of liabilities from loans and borrowings, bonds and leasing in the total liabilities and equity of the Company's balance sheet and the consolidated balance sheet of the Group has been presented in Note 32 of the standalone financial statements of the Company for the year ended December 31, 2024 and in Note 35 of the consolidated financial statements for the year ended December 31, 2024.

The Company did not publish forecasts for other financial results.

7.3.        Information on sureties and guarantees granted by the Company and its subsidiaries

In connection with the implementation of investment projects in the green energy segment by its subsidiaries, the Company provided guarantees of a significant value for the execution of contracts for the implementation of individual wind farm projects, in particular contracts for the supply and installation of wind turbines concluded with Vestas Poland S.A. As of December 31, 2024, the total value of guarantees and warranties provided to Vestas Poland S.A. for wind farm projects amounted to EUR 175.7 million, with maturity dates in 2024 to 2026.

The Company issued corporate guarantees and warranties in EUR and USD, which guarantee the trade payables of its subsidiary Polkomtel sp. z o.o. to its suppliers. As of December 31, 2024, the total value of granted guarantees, converted into PLN at the exchange rate as of the balance sheet date, amounted to PLN 207.4 million. The guarantees expire in 2025-2026.

The Company issued a corporate guarantee in EUR to the subsidiary of Telewizja Polsat Sp. z o.o. in connection with the execution of an agreement under which UEFA granted TV Polsat the rights to broadcast the UEFA Europa League and UEFA Conference League from 2024 to 2027. As of December 31, 2024, the total value of the granted guarantee, converted into PLN at the exchange rate on the balance sheet date, amounted to PLN 106.8 million.

The financial terms of the guarantees or sureties granted do not deviate from market conditions.

7.4.        Information on loans granted

Neither the Company nor any of its subsidiaries grant loans in material amounts to entities outside the Group. Details of the Group's inter-company loans, together with their value at the balance sheet date, are shown in the table below. The margin on the loans is in line with market conditions.

Borrower	Currency	Loan’s total amount  (in mln in a loan’s currency)	Maturity	Interest	Total balance sheet value as at December 31, 2024 [mPLN]1)	Total balance sheet value as at December 31, 2023 [mPLN]1)
Polkomtel sp. z o.o.	PLN	1,650.0	December 31, 2028	WIBOR +margin	1,583.5	1,586.6
PAK Polska Czysta Energia sp. z o.o.	PLN	2,473.4	various dates in 2025-2027	WIBOR +margin	1,384.0	874.3
	EUR	121.0	various dates in 2025-2026	EURIBOR +margin	517.2	375.1
Esoleo sp. z o.o.	PLN	97.9	December 31, 2025	WIBOR +margin	49.4	100.4
	EUR	44.3	December 31, 2025	EURIBOR +margin	160.4	152.8
Netia S.A.	PLN	348.5	July 31, 2025	WIBOR +margin	344.9	344.9
Pantanomo Ltd.	EUR	24.0	September 30, 2026	EURIBOR +margin	-	96.7
Others	PLN	109.2	various dates in 2024-2031	WIBOR +margin	73.9	53.1
	EUR	26.6	various dates in 2026-2031	EURIBOR +margin	36.0	24.6
Total					4,149.3	3,608.5
1) Converted into PLN at the exchange rate on the balance sheet date, includes accrued interest including VAT.

7.5.        Material proceedings at the court, arbitration body or public authorities

Management believes that the provisions as at December 30, 2024 are sufficient to cover potential future outflows and the adverse outcome of the disputes will not have a significant negative impact on the Company’s nor the Group’s financial situation.

Proceedings before the Office of Competition and Consumer Protection (UOKiK)

On February 24, 2011, the President of UOKiK imposed penalty on Polkomtel  in the amount of PLN 130.7 million for the alleged lack of cooperation during an inspection carried out by UOKiK in Polkomtel. Polkomtel appealed against the decision of the President of UOKiK to the Consumer and Competition Protection Court  (“SOKiK”). According to management, during the inspection the company had fully and at all times cooperated with UOKiK within the scope provided by the law. On June 18, 2014, the decision of the President of UOKiK has been changed by SOKiK, reducing the penalty to PLN 4.0 million (i.e. EUR 1.0 million). On October 20, 2015, SOKiK’s verdict has been revoked and the case has been transferred for re-examination. On April 28, 2017, the decision of the President of UOKiK has been changed by SOKiK, reducing the penalty to PLN 1.3 million. Polkomtel and President of UOKiK appealed against the verdict. On April 3, 2020, both Polkomtel’s and the President’s of UOKiK appeals have been dismissed. The Court of Appeal upheld the SOKiK’s decision. On April 20, 2020, Polkomtel made a payment in the amount of PLN 1.3 million. Polkomtel and the President of UOKiK filed cassation appeals against the Court of Appeal’s verdict. On September 28, 2022, the cassation appeal of the President of the UOKiK was dismissed, the appeal of Polkomtel was accepted in the scope dismissing the plaintiff's appeal, and the appealed judgment of the Court of Appeal in Warsaw dated April 3, 2020 was revoked and referred - in accordance with the Polkomtel’s cassation appeal - to be reconsidered. On March 29, 2023, the Court of Appeal issued a judgment, whereby the Court agreed with the company's position that the fine was imposed in euros and then incorrectly converted into PLN. As a result the Court changed the appealed judgment of the first instance, reducing the penalty to PLN 1.2 million.

On December 30, 2014, the President of UOKiK issued a decision ending investigations related to Polkomtel’s alleged practices which infringed upon the collective interests of consumers by not providing its telecommunication clients (which entered into a written agreement) with terms and conditions of the preferential sales offer as well as not informing about the termination of the preferential sales offer. Pursuant to the decision of the President of UOKiK, Polkomtel was charged with a penalty in the amount of PLN 6.0 million. The company appealed to SOKiK against the decision. On March 5, 2018, SOKiK issued a decision where the penalty has been annulled and dismissed the appeal in remaining scope. Both parties appealed to the Court of Appeal in Warsaw. The Court of Appeal annulled in full the verdict of the first instance court and returned the case back to the first instance court. On April 1,  2021, SOKiK dismissed Polkomtel’s appeal. On January 24, 2022, Polkomtel’s appeal was dismissed. On February 7, 2022, Polkomtel paid the penalty in the amount of PLN 6.0 million. Polkomtel filed a cassation appeal against the judgment of the Court of Appeal. On December 18, 2024, the Supreme Court refused to accept the cassation appeal.

On April 29, 2019, the President of UOKiK issued a decision stating that the operations of Polkomtel were allegedly infringing collective consumer interests by charging for activating the services to consumers, despite not obtaining an explicit approval of the additional payment associated with these services. Pursuant to the decision of the President of UOKiK Polkomtel was charged with a penalty in the amount of PLN 39.5 million. Polkomtel appealed to SOKiK against the decision. On May 26, 2021, SOKiK dismissed Polkomtel’s appeal. Polkomtel appealed against the SOKiK judgment. On November 8, 2022, the Court of Appeal dismissed the appeal. On November 22, 2022, Polkomtel paid a penalty of PLN 39.5 million. Polkomtel filed a cassation complaint. Complaint was accepted for consideration by the Supreme Court. On August 8, 2024, the Supreme Court refused to accept the cassation appeal.

On December 19, 2019, the President of UOKiK issued a decision stating that the operations of the Company were allegedly infringing collective consumer interests by hindering access to ZDF and Das Erste channels during the Euro 2016 championship by removing these channels and by giving incomplete and unreliable information to consumers in response to claims regarding unavailability of the above programs. Pursuant to the decision of the President of UOKiK the Company was charged with a penalty in the amount of PLN 34.9 million. The Company appealed against this decision to SOKiK. On February 14, 2022, First Instance Court dismissed the Company’s appeal in its entirety. The Company submit a cassation appeal to the Court of Appeal in Warsaw. The appeal hearing took place on October 21, 2022. On November 21, 2022, the Court of Appeal in Warsaw repealed the appealed judgment in its entirety and referred the case to the Regional Court in Warsaw for examination and resolution. On July 24, 2023, Company's appeal was again dismissed. On September 6, 2023, the Company filed an appeal against the judgment. At the hearing on June 5, 2024, the Court of Appeal annulled part of the decision of the President of UOKiK, including that related to the fine of PLN 20.1 million. On July 12, 2024, Company complied with the judgment in terms of paying the fine of PLN 14.8 million. The Company filed a cassation appeal.

On January 22, 2020, the President of UOKiK issued a decision stating that the operations of Polkomtel were allegedly infringing collective consumer interests by clauses included in the terms and conditions of telecommunications services regarding prepaid services and expiration of the unused value of the subscribers’ accounts. Pursuant to the decision of the President of UOKiK, Polkomtel was charged with a penalty in the amount of PLN 20.4 million. Polkomtel appealed to SOKiK against the decision. On April 8, 2022, SOKIK dismissed Polkomtel's appeal. On May 31, 2022, Polkomtel submitted an appeal against the SOKiK verdict. On March 28, 2023 the Court of Appeal dismissed the appeal. On April 11, 2023, Polkomtel paid a penalty of PLN 20.4 million. After receiving written justification of the judgment of the Court of Appeal, on June 30, 2023, Polkomtel filed a cassation complaint. On March 7, 2024, Polkomtel received a decision of the Supreme Court refusing to accept the cassation appeal in this case for consideration.

By decision of December 27, 2023, the President of UOKiK recognized the actions of Telewizja Polsat Sp. z o.o. and Teleaudio Dwa Sp. z o.o Sp. k. as a practice violating the collective interests of consumers. The violations allegedly consisted in misleading SMS information sent to customers as to the rules and costs of participation in the New Year's Eve edition of the SMS competition in the content of verbal and graphic messages as part of the broadcast "New Year's Eve Power of Hits 2021 - New Year's Eve of Happiness" and as to the course of the competition and the prizes that could be won at its individual stages. As a consequence, the President of UOKiK imposed fines on both entities in the total amount of PLN 9.9 million. The decision is not final, each company filed an appeal to the Regional Court in Warsaw on January 26, 2024. As of the date of this report, no hearing date has been set.

Other proceedings

In September 2015, Polkomtel received a claim from P4 Sp. z o.o., in which the company demands compensation of PLN 316 million (including interest of PLN 85 million), for the alleged actions relating to the pricing of the mobile services rendered between July 2009 and March 2012. The claim assumes payment of the above amount jointly by Orange Poland S.A., Polkomtel and T-Mobile Poland S.A. On December 27, 2018, Court dismissed the entire claim. P4 Sp. z o.o. appealed against the decision. On December 28, 2020, the Court of Appeal referred the case to the District Court for reconsideration, Polkomtel appealed to the Supreme Court against this decision. On November 13, 2020, the P4 sp. z o.o. claim for payment of PLN 313 million, including interest of PLN 85 million, was delivered by the court. This lawsuit constitutes an "extension” of P4 Sp. z o.o claim dated September 2015 and concerns a further period of the acts alleged against the defendants, i.e. from April 2012 to December 2014.

Management believes that the claim is unfounded, as Polkomtel’s conduct alone or with other tort entities was not wrongful, in particular relating to the pricing of retail mobile services directed to the telecommunications network of P4 Sp. z o.o. In management’s opinion, there is no legal basis for the overall assessment of the alleged actions of each of the operators on the telecommunications market, which is fully a competitive market, and each of the operators has its own business and pricing strategy. The claim of P4 Sp. z o.o. indicates neither nature (premises liability) nor the amount.

On April 28, 2017, the Association of Polish Stage Artists (“ZASP”) filed a lawsuit against Cyfrowy Polsat for payment of PLN 20.3 million. The Company issued an objection in the writ-of-payment proceedings and filed for its dismissal entirely. On January 10, 2018, the Court issued a decision to refer the case to mediation proceedings. Mediation ended without a settlement. The last hearing took place on May 8, 2019. Both parties have submitted an application for re-referral to the mediation proceedings for a period of three months. The court approved application and postponed the hearing without a deadline. Mediation ended without a settlement. On May 6, 2020, the Company received a letter from the Court, containing the mediator's position summarizing the course of mediation, with a request to refer to its content. On May 25, 2020, the Company submitted a response informing the Court about the settlement being impossible to reach by the parties. The hearing took place on October 20, 2021. At the end of March 2022 the Company received a letter extending the previous claim by the period from January 1, 2010 to December 31, 2020, the value of the lawsuit was increased by over PLN 120.0 million. The court set hearing dates for December 15, 2023 and April 17, 2024. The both hearings scheduled for on December 15, 2023 and April 17, 2024 have been cancelled. The court set new hearing dates for November 25, 2024 and December 9, 2024, which were also cancelled.

By lawsuit, delivered to the Company on 16 December 2019, the Association of Performing Artists (SAWP) filed two claims against the Company: information and a claim for payment. The information claim relates to television programs rebroadcasted by the Company in the period from August 20, 2009 to August 20, 2019. In the claim for payment, SAWP claims PLN 153.3 million for the alleged violation of related rights to artistic performances of musical and verbal - musical works through their non-contractual cable rebroadcast. The Company filed for the dismissal entirely. The last hearing took place on January 17, 2024. The hearing was postponed without a date.

The legal dispute in respect to the telecommunication concession

The legal dispute in respect to the telecommunication concession for the 1800 MHz frequency granted in 2007 to Mobyland Sp. z o.o. (currently Polkomtel Sp. z o.o.) and CenterNet S.A. (currently Polkomtel Sp. z o.o.) has ended. Proceedings to invalidate the 1800 MHz frequency allocation tender have been instigated by T-Mobile and Orange. Supreme Administrative Court (NSA), in its ruling dated May 8, 2014, sustained the decision of the Court of First Instance and repealed the decision issued by the President of the Office of Electronic Communications (UKE) on September 23, 2011, which partially invalidated the above mentioned tender. Following the decision of the Supreme Administrative Court, UKE informed that “the decisions regarding re-running the tender will be taken by the Office upon careful analysis of the written justification of NSA’s rulings and the Court’s guidelines regarding further procedure as well as upon analysis of the legal situation”. UKE also stated that the “reservation decisions issued by UKE President remained valid while the operators could continue providing their services while using these frequencies”. On December 23, 2016, President of UKE notified the parties that the tender annulment proceedings relating to the 1800 MHz frequency have been adopted. Pursuant to the decision dated August 4, 2017, President of UKE notified the parties that the tender dated 2007 has been annulled. On October 13, 2017, Aero 2 Sp. z o.o. (a successor of CenterNet S.A. and Mobyland Sp. z o.o., currently Polkomtel Sp. z o.o.) filed a motion to reconsider the decision of the President of UKE dated August 4, 2017 concerning the annulment of the tender procedure. On January 31, 2018 the President of UKE upheld its decision dated August 4, 2017. On March 7, 2018, Aero2 (currently Polkomtel Sp. z o.o.) filed a complaint with the Provincial Administrative Court in Warsaw, on October 4, 2018, the complaint was dismissed. On December 27, 2018, Aero2 (currently Polkomtel Sp. z o.o.) filed a cassation appeal against judgment, which was dismissed by the Supreme Administrative Court on November 25, 2022.

The decision issued by UKE President does not affect reservation decisions issued following the administrative tender. Moreover, on December 5, 2022, the company obtained the decision from the President of UKE to grant a frequency reservation in the 1800 MHz range for the next period.

In the proceedings instigated by T-Mobile Polska S.A., the President of UKE resumed the proceedings which were terminated on April 23, 2009 by the issuance of a final decision by the President of UKE which sustained the decision of the President of UKE dated November 30, 2007 concerning the frequency reservation in the 1710-1730 MHz and 1805-1825 MHz range. Under these proceedings, in the decision dated November 28, 2017 the President of UKE refused, after resuming the proceedings, to annul the reservation decision of the President of UKE dated April 23, 2009. This decision was upheld by the decision of the President of UKE dated June 4, 2018. In connection with complaints filed against this decision, in the ruling of March 11, 2019, the Voivodship Administrative Court in Warsaw annulled the decision of the President of UKE dated June 4, 2018. On October 10, 2023, the Supreme Administrative Court overturned the contested judgment and referred the case to the Court of First Instance for reconsideration. On April 3, 2024, the Voivodship Administrative Court in Warsaw dismissed the complaint of T-Mobile Polska S.A. T-Mobile Polska S.A. appealed against this judgement in a cassation appeal, which is pending.

On October 4, 2018, T-Mobile Polska S.A. filed a complaint with the Voivodship Administrative Court in Warsaw against the announcement dated September 5, 2018, issued by the President of UKE in respect to the activities necessary to remove the breach constituting the reason for invalidating two frequency reservations (each including 48 duplex radio channels with a duplex spacing of 95 MHz each, ranges 1710-1730 MHz and 1805-1825 MHz). On November 20, 2018, Voivodship Administrative Court in Warsaw rejected the complaint of T-Mobile Polska S.A. On July 4, 2019, the Supreme Administrative Court annulled the decision of the Voivodship Administrative Court in Warsaw dated November 20, 2018, as a result of a cassation appeal filed by T-Mobile Polska S.A. On August 18, 2020, the announcement of the President of UKE, dated September 5, 2018, was considered ineffective by the Voivodship Administrative Court in Warsaw. NSA annulled that judgment on December 9, 2021. The case was remanded for re-examination to Voivodship Administrative Court in Warsaw. On October 25, 2022, the Voivodship Administrative Court in Warsaw dismissed the complaint of T-Mobile Polska S.A. On October 13, 2023, the Supreme Administrative Court dismissed the cassation appeal of T-Mobile Polska S.A., as a result of which the proceedings were legally terminated.

The initiation by the European Commission of the procedure based on Art. 108 sec. 2 of the European Union Treaty

In the beginning of October 2020, Cyfrowy Polsat S.A. and Sferia S.A., a company owned by the Cyfrowy Polsat Group in 51% since February 29, 2016, received from the Ministry of Digital Affairs a copy of the European Commission’s decision dated September 21, 2020 regarding the initiation of the formal investigation procedure against the Republic of Poland concerning the alleged illegal state aid provided to Sferia. The alleged illegal state aid relates to granting in 2013 to Sferia the right to use a frequency block of 800 MHz range in place of the frequency 850 MHz range previously held by Sferia. According to the decision, the European Commission intends to investigate, whether the state aid was granted, and if so, whether it can be considered compatible with the internal market. On February 4, 2022, the European Commission began consultations on this matter and Cyfrowy Polsat and Sferia submitted their comments. Both companies believe that no illegal state aid was granted.

Proceedings brought by Tobias Solorz

On November 7, 2024, the shareholder Tobias Solorz filed a lawsuit against the Company to establish the non-existence or, alternatively, to declare the invalidity or, alternatively, to revoke the resolutions adopted by the Extraordinary General Meeting of Cyfrowy Polsat S.A. on October 8, 2024, on the subject of: (i) changing the number of members of the Company's Supervisory Board (Resolution No. 7); (ii) dismissing Mr. Tobias Solorz from the Company's Supervisory Board (Resolution No. 9). The text of the aforementioned resolutions was published by the Company in its current report No. 19/2024 dated October 8, 2024. The Company has filed a response to the complaint on January 10, 2025, in which it request that the complaint be dismissed in its entirety. On January 29, 2025, Tobias Solorz applied to the court for leave to file a reply to the statement of defence. The court has not yet ruled on Tobias Solorz's application or set a date for the first hearing.

In addition to the matters described above, there are also other proceedings, for which provisions have been made according to the best estimates of the Management Board as to potential future outflows of the economic benefits required for their settlement. Information regarding the amount of provisions was not separately disclosed, as in the opinion of the Group's Management, such disclosure could prejudice the outcome of the pending cases.

7.6.        Changes to the principle rules of management of our Company and the Capital Group

There were no changes to the principle rules of management of our Company and the Capital Group in the year 2024.

7.7.        Information on seasonality

Our wholesale revenue includes, inter alia, advertising and sponsoring revenue which tends to be lower during the first and the third quarter of each calendar year due to the winter and summer holidays and no seasonal programming and higher during the second and fourth quarter of each calendar year due to the introduction of new TV schedulings. In the year ended December 31, 2023, Telewizja Polsat Group generated approximately 22.1% of its advertising revenue in the first quarter, 26.0% in the second quarter, 21.4% in the third quarter and 30.5% in the fourth quarter.

As regards retail revenue, mobile revenue is subject to slight fluctuations during the year. This revenue stream tends to decrease in the first quarter of each year due to a lower number of calendar and business days.

Revenue from the sale of energy produced from wind power is subject to seasonal fluctuations during the year in such a way that the highest production usually occurs in the fourth and first quarters, which is related to the higher number of windy days. Revenue from the sale of energy produced from photovoltaics is subject to seasonal fluctuations during the year in such a way that the highest production usually occurs in the second and third quarters, which is related to the higher number of sunny days. For a detailed description of the impact of seasonality and meteorological conditions on the level of production from renewable energy sources, please refer to item 5 - Factors and trends that may impact our results in subsequent periods.

Other revenue generated by the Group is not directly subject to substantial seasonal fluctuations.

7.8.        Sales markets and dependence on the supplier and customer markets

All our services are offered in Poland. The share of any of our suppliers or customers does not exceed 10% of our operating revenue.

7.9.        Research and development - new services and implementations

In 2024, we continued our efforts in the field of implementation of state-of-the-art technologies and latest technical solutions which offer superior quality and enhanced functionality of services to our customers and enable us to expand our offer by adding new services and products.

Prototype of the Polish 0.5 MW alkaline electrolyser. Group-owned Exion Hydrogen Polskie Elektrolizery has designed and manufactured Poland's first 0.5 MW alkaline electrolyser in 2024. The electrolyser is currently in the testing phase. The alkaline electrolyser is very safe, robust and reliable. The system consists of two innovative cell stacks, which together provide a nominal hydrogen flow rate of 100 Nm3/h at 30 bar pressure. This enables the production of ca. 200 kilograms of hydrogen per day. The design of the alkaline electrolysers allows them to be combined in a modular system, so that production capacity can be increased in line with hydrogen demand. The company's next goal is to produce a 2.5 MW electrolyser using PEM technology. An electrolyser of this capacity will be able to produce approximately 1,000 kilograms of hydrogen per day.

Next Gen Cloud Project. Group-owned Oktawave is working on a project aimed at developing a technology of cryptographic protection for data processing in the cloud. The Next Gen Cloud project, undertaken by the company, is co-financed by the European Union under the IPCEI CIS initiative, which aims to strengthen Europe's digital sovereignty and improve the competitiveness of European cloud service providers. The technologies being developed by Oktawave as part of the Next Gen Cloud project are designed for universal application, ensuring the security of processing both in public global cloud environments and private clouds located in local data centres. The solution will be intended for companies using cloud computing that need to ensure data sovereignty (e.g. DORA, NIS2) or want to protect data processing, especially in the area of commercializing ML models for industries such as finance, cybersecurity or e-commerce. The project focuses on researching the potential use of cryptographic techniques as a foundation for building runtime environments and data storage areas within GPU processors. In 2024, Oktawave completed key preparatory stages, including a detailed analysis of technologies, a review of project assumptions, and the construction of laboratory environments. Requirements for development and testing environments were defined, and plans for implementing middleware, which will ensure efficient data handling, were developed.

7.10.   Insurance agreements

We maintain insurance coverage for our Company and its operations, substantially against all risks and with sums insured at levels typical of pay TV providers and telecommunication operators operating in Poland.

The Group maintains automobile insurance, property insurance against fire and other casualty events with a loss of profits extension, business and property liability insurance (including product liability), professional liability insurance for broadcasting and telecommunications and directors and officers liability insurance for the Group companies, all of which are purchased at arm's length.

We believe that our insurance coverage is in line with our needs and the risks to which pay TV providers and telecommunication operators in Poland are exposed.

7.11.   Business Contingency Plan

As a Group, we have more than ten years of experience in Business Continuity Management, when the first Business Contingency Plan was developed for Polkomtel in 2010. The fact that the Business Continuity Management System is implemented, maintained and continuously improved and that it complies with the requirements of the PN/EN ISO 22301:2020-04 - Security and Resilience: "Business Continuity Management Systems - Requirements" standard is declared by a document in the form of the Polsat Plus Group Business Continuity Policy, adopted by resolutions of the Management Boards of Polkomtel and Cyfrowy Polsat in October 2024.

The Business Contingency Plan covers with its scope the critical processes and services implemented and provided by Polkomtel and Cyfrowy Polsat. The last update to the plan was approved by the Management Boards of both companies on July 3, 2024. The periodic conduction of the Business Impact Analysis is the key element of the Business Contingency Plan and includes an update of the list of processes and critical services which is also approved by resolution of management boards of both companies. Within the current and periodic (once every two years) update of the Business Contingency Plan we examine threats and vulnerabilities in critical processes and services, and perform risk analysis aimed at identifying main threats and defining recommendations with respect to groups of resources, such as locations, human resources, external and internal service providers, office infrastructure, data stored in both an electronic and paper form, the technical and IT infrastructure.

Within the Business Contingency Plan we maintain a dedicated structure - the Crisis Management Centre – which is targeted to prevent crisis situations in the Group thanks to reacting to incidents which exceed the competences of individual managers running separate organizational units as well as coordinating all emergency and restoration actions of the organization in the crisis mode. The prepared Survival Strategy and alternative operating methods as well as periodic testing of essential elements of the Plan and ongoing training of new staff and crisis team members ensure business continuity of critical processes and services covered by the Business Contingency Plan of Polkomtel and Cyfrowy Polsat. The implementation of the Business Continuity Plan was confirmed as part of the PN-EN ISO/IEC 27001:2022-06 recertification obtained in 2024.

7.12.   Information on remuneration policy of Cyfrowy Polsat S.A.

On June 20, 2024, the Annual General Meeting adopted, based on a draft resolution proposed by the Company’s Management Board and taking into account the opinion of the Supervisory Board’s Remuneration Committee, the Remuneration Policy for the Management Board and Supervisory Board Members of Cyfrowy Polsat S.A. The full wording of the policy is publicly available at the following address:

https://grupapolsatplus.pl/sites/default/files/polityka_wynagrodzen_eng.pdf

The adopted policy aims to ensure sustained growth of the Company’s value, the achievement of which by the Management Board and the Supervisory Board requires, among others, setting up of a relevant structure of remuneration of the members of the Management Board and the Supervisory Board on account of their overall duties. This aim is accomplished by restricting the remuneration of these individuals to a fixed part, allowing them to perform their duties concerning the overall operations of the Company without focusing on the pursuit of selected specific goals only.

The Remuneration Policy for the Management Board and Supervisory Board Members of Cyfrowy Polsat S.A. is based on a general assumption that market volatility, the social and economic situation as well as the need for a flexible response to the emerging risks and business opportunities provide no justification for setting fixed goals. The required flexible response to the changing situation and to the emerging challenges is assured – in the case of Management Board Members – by potential bonuses that can be awarded to them. Such a solution offers flexibility in terms of assuring stable operations of the Company and pursuing its long-term interests.

The remuneration of Management Board Members consists of a fixed part, having the form of a base salary. Management Board Members may have the title to a bonus on the terms defined in the deed establishing their corporate relation or their employment relation. Subject to the terms set by the Supervisory Board in the deed establishing a corporate relation or an employment relation, the Management Board Members may be also covered by additional pension schemes.

In addition, Management Board Members may be entitled to additional benefits of permanent or periodic nature. These include in particular healthcare services for a Management Board Member or for the members of his/her family, right to use the elements of the Company’s property, and life insurance and D&O insurance.

Moreover, Management Board Members employed under an employment contract are entitled to the same rights as all other employees of the Company by virtue of the Labor Code regulations, as defined by Article 9 of the Labor Code. Remuneration and other benefits also include benefits on account of the Management Board’s activities in the Company’s subsidiaries.

The Supervisory Board, based on the recommendation issued by the Supervisory Board’s Remuneration Committee, is entitled to determine the amount of the base salary, the conditions for acquiring the right to a bonus as well as other components of the remuneration and benefits in the resolution serving as the basis for entering by a Management Board Member into a corporate relation or into an employment relation, and depending on the nature of the duties of a given Management Board Member as well as the conditions of his/her employment.

Supervisory Board Members receive fixed remuneration on account of the function performed on the basis of a corporate relation. The remuneration may differ depending on the function in the Supervisory Board, especially in connection with participation in the work of respective Supervisory Board committees. In justified cases a Supervisory Board Member may receive additional remuneration. The amount of the remuneration of the Supervisory Board members is determined by the General Meeting.

There were no changes to the Remuneration Policy since the date of its adoption. In parallel, the Remuneration Policy stipulates that it will be adopted by the General Meeting not less frequently than once every four years.

The shape of the Remuneration Policy as proposed by the Management Board and adopted by the General Meeting derives from the many years of remuneration practice developed within Polsat Plus Group and, given the Company’s proven track record of achieving long-term value growth for its Shareholders as well as the Group’s stable functioning, is evaluated as an effective tool for remunerating and motivating the Company’s Management Board and Supervisory Board Members.

Reports on the remuneration of the Management Board and the Supervisory Board Members of the Company are publicly available on Polsat Plus Group’s website.

7.13.   Agreements with the entity certified to perform an audit of the financial statements

On July 10, 2023, the Company’s Supervisory Board consented to extend the agreement and choose Ernst & Young Audyt Polska Spółka z ograniczoną odpowiedzialnością Sp. k., with its registered office in Warsaw, for the performance of the audit of standalone financial statements of Cyfrowy Polsat S.A. and the consolidated financial statements of Cyfrowy Polsat Group for the financial years ended December 31, 2023 and December 31, 2024.

On October 15, 2024, the Supervisory Board consented to commission assurance services from Ernst & Young Audyt Polska Spółka z ograniczoną odpowiedzialnością to obtain limited assurance regarding the sustainability reporting for the year ended December 31, 2024.

On February 13, 2025, the Company’s Supervisory Board consented to extend the agreement and choose Ernst & Young Audyt Polska Spółka z ograniczoną odpowiedzialnością Sp. k., with its registered office in Warsaw, for the performance of the audit of standalone financial statements of Cyfrowy Polsat S.A. and the consolidated financial statements of Cyfrowy Polsat Group for the financial years ended December 31, 2025, December 31, 2026 and December 31, 2027.

The following summary presents a list of services provided by the certified auditor and remuneration for the services in the twelve month period ended on December 31, 2024 and December 31, 2023.

[mPLN]	For the year ended December 31
	2024	2023
Review of interim standalone financial statements	0.2	0.2
Audit of standalone financial statements for the year and other services	0.7	0.7
Total	0.9	0.9

 

[mPLN]	For the year ended December 31
	2024	2023
Review of standalone and consolidated interim financial statements	0.3	0.3
Audit of standalone and consolidated financial statements for the year	4.9	4.6
Other certification services and other services	0.7	0.2
Total	5.9	5.1

In the financial year 2024, Ernst & Young Audyt Polska Spółka z ograniczoną odpowiedzialnością Sp. k. provided the following permitted services other than audit services: (i) the review of financial statements, (ii) the execution of agreed procedures with regard to verification of the fulfilment of conditions of concluded credit agreements, based on the analysis of the financial information from the audited consolidated financial statements of Cyfrowy Polsat Group, (iii) the verification of the correctness of the application of Sustainability KPIs in the certificates of compliance reported in accordance with the requirements of the concluded loan agreements, (iv) the execution of limited assurance procedures with regard to certification of sustainability reporting, and (v) the audit of the reports on the remuneration of the Members of the Management Board and the Supervisory Board of the Company, after being granted consent from the Audit Committee.

 

8.   Cyfrowy Polsat on the capital market

8.1.        Shares of Cyfrowy Polsat

Shares of Cyfrowy Polsat are listed on the Warsaw Stock Exchange since May 6, 2008. The share capital of the Company is PLN 25,581,840.64, divided into 639,546,016 shares. The total number of votes at the General Meeting is 818,963,517.

The table below presents the characteristics of the shares issued as of December 31, 2024:

Series	Number of shares	Type of shares	Number of votes at the General Meeting	Face value [PLN]
A	2,500,000	Preferred shares (2 votes per share)	5,000,000	100,000.0
B	2,500,000	Preferred shares (2 votes per share )	5,000,000	100,000.0
C	7,500,000	Preferred shares (2 votes per share )	15,000,000	300,000.0
D	166,917,501	Preferred shares (2 votes per share )	333,835,002	6,676,700.0
D	8,082,499	Ordinary shares, introduced to trading	8,082,499	323,300.0
E	75,000,000	Ordinary shares, introduced to trading	75,000,000	3,000,000.0
F	5,825,000	Ordinary shares, introduced to trading	5,825,000	233,000.0
H	80,027,836	Ordinary shares, introduced to trading	80,027,836	3,201,113.4
I	47,260,690	Ordinary shares, introduced to trading	47,260,690	1,890,427.6
J	243,932,490	Ordinary shares, introduced to trading	243,932,490	9,757,299.6
Total	639,546,016		818,963,517	25,581,840.6
including:	179,417,501	not traded	358,835,002	7,176,700.0
	460,128,515	traded	460,128,515	18,405,140,6

On April 20, 2011, the Company issued 80,027,836 Series H ordinary bearer shares with a nominal value of PLN 0.04 each. On May 30, 2011, the shares were registered with the National Depository for Securities (KDPW) under ISIN code PLCFRPT00013 and admitted to trading on the primary market. The issue of Series H shares served as one of the sources of financing for the acquisition of Telewizja Polsat.

On May 7, 2014, the Company issued 47,260,690 Series I shares and 243,932,490 Series J shares with a nominal value of PLN 0.04 each. On May 14, 2014, these shares were registered with KDPW under ISIN codes PLCFRPT00013 and PLCFRPT00021, respectively. The Series I Shares were admitted to trading on May 12, 2014 and the Series J Shares were admitted to trading on April 20, 2015. The Series I and J Shares were issued to finance the acquisition of Metelem Holding Company Limited, the indirect owner of Polkomtel Sp. z o.o.

As at December 31, 2024, 88,842,485 ordinary shares, representing 13.89% of the capital, were held by Cyfrowy Polsat as a result of the acquisition of treasury shares initiated by Resolution No. 7 of the Extraordinary General Meeting of Shareholders of November 16, 2021. Pursuant to Article 364(2) of the Commercial Companies Code, the Company does not exercise the participation rights from its own shares.

Basic data on traded shares

Date of first quotation		May 6, 2008
Component of indices		WIG, WIG20 (until March 21, 2025), mWIG40 (from March 21, 2025), WIG30, WIGtech
Macrosector		Technology
Market		main
Quotation system		continuous
International Securities Identification Number (ISIN)		PLCFRPT00013 (shares admitted and introduced to trading) PLCFRPT00062 (shares with preferential voting rights)
Cyfrowy Polsat’s identification codes		•         WSE: CPS •         Reuters: CPS.WA •         Bloomberg: CPS PW

As a result of the annual index revision, following the trading session on March 21, 2025, the Company has been transferred from the WIG20 index to the mWIG40 index.

8.2.        Shares quotes

Performance of Cyfrowy Polsat shares in 2024

Performance of Cyfrowy Polsat shares since the debut on the WSE in May 2008 until the end of 2024 compared to selected WSE indexes

(indexed; 100 = closing price on May 6, 2008) (1) change December 30, 2024 vs. May 6, 2008

Cyfrowy Polsat shares on the stock exchange in 2024

				2024	2023
Year-end price		PLN		14.14	12.33
High for the year		PLN		15.39	19.60
Low for the year		PLN		9.76	11.42
Average for the year		PLN		12.27	15.52
Average daily turnover		PLN ‘000		15,940	11,048
Average daily trading volume		shares		1,314,355	761,312
Number of shares (as at year-end)		shares		639,546,016	639,546,016
Listed shares		shares		460,128,515	460,128,515
Market capitalization (as at year-end)		PLN ‘000		9,043,181	7,885,602

Market capitalization of Cyfrowy Polsat since its debut on the WSE

8.3.        Analysts’ recommendations

Brokers covering the Company

Local		International
•        Bank Pekao Biuro Maklerskie •        Biuro Maklerskie mBanku S.A. •        Dom Maklerski BDM S.A. •        Dom Maklerski BOŚ S.A. •        Dom Maklerski PKO BP S.A. •        IPOPEMA Securities S.A. •        Trigon Dom Maklerski S.A.		•        ERSTE Group Research •        Santander Biuro Maklerskie •        Wood&Company
Structure of recommendations as of April 8, 2025			Target price as of April 8, 2025 [PLN] minimal   14.0 maximal   20.0 average   16.2

Close dialogue with the capital market

The goal of our corporate strategy is to create sustainable value of the Company. We support this strategy through regular and open communication with all capital market participants.

In order to ensure current access to information we participate in conferences with investors and we organize numerous individual meetings. Every quarter, after the publication of our financial results, we organize meetings with investors and sell-side analysts with Members of the Company’s Management Board. Both are open events. In 2024, we held meetings with approximately 340 representatives of the capital market, including approx. 13 conferences, both face-to-face and online.

When communicating with the capital market we are guided by the main principle of transparency and equal access to information. Following this principle, we introduced the rule of limited communication before the publication of our financial results. Under this rule the representatives of the Company avoid discussions or meetings with analysts and investors two weeks prior to the publication of the quarterly results. This rule is meant to increase transparency and ensure equal access to information about the Company before the publication of our financial results.

To ensure proper fulfilment of the information obligations imposed by the relevant regulations, including the MAR Regulation, we have implemented, at the Group level, detailed internal rules which define, among others, the principles of analysis and identification of events occurring within our organization, the procedures to be followed upon obtaining any information which is subject to reporting as well as the deadlines for fulfilment of information disclosure requirements. We have also adopted an Individual Reporting Standard which supports the identification and classification of events as inside information. We keep abreast of changes in current legislation and update internal procedures as necessary.

In order to reach a wide audience we use modern tools to communicate with capital market representatives, such as a website dedicated to investors (http://www.grupapolsat.pl/en/investor-relations), a reliable and practical source of information about Polsat Plus Group, electronic newsletters, selected social media, periodic newsletters including both information on current events in Polsat Plus Group and latest market developments, as well as reminders of the most important events in the Company. In addition, we have been using online meeting tools to enable all interested investors and analysts to actively participate in the Company's events.

 

9.   Corporate governance statement

9.1.        Principles of corporate governance which the Company issuer is subject to

As at December 31, 2024, Cyfrowy Polsat S.A. (the “Company”) was subject to corporate governance principles outlined in the “Best Practices of WSE Listed Companies in 2021” (“Best Practices 2021”), constituting an appendix to resolution No. 13/1834/2021 of the Council of WSE of March 29, 2021 (this document is available on the official website of the Warsaw Stock Exchange dedicated to the issues of the corporate governance of listed companies – https://www.gpw.pl/dobre-praktyki2021

Application of principles outlined in the Best Practices 2021

The Management Board of the Company adopted the recommendations and principles specified in the Best Practices 2021. In 2024, the Company did not comply with principles set out in items 1.4., 1.4.1., 2.1., 2.2., 3.2., 3.6., 3.7., 3.9., 3.10., 4.1. and 4.9.1. Furthermore, there was one accidental breach of Rule 4.4 during 2024.

Below, the Company presents explanations regarding non-compliance or partial application of:

•	Principle 1.4. regarding the ensuring of quality communications with stakeholders, as a part of the business strategy, companies publish on their website information concerning the framework of the strategy, measurable goals, including in particular long-term goals, planned activities and their status, defined by measures, both financial and non-financial. The assumptions of the business strategy, along with the description of non-measurable and selected measurable goals, as well as the information on achieved results and the accomplishment of the strategic goals are published by the Company on its website as well as in Polsat Plus Group’s annual reports on the activities of the management board and in Polsat Plus Group’s sustainability reports. In connection with the publication of its strategy in December 2021, the Company's Management Board formulated and published on the Group's corporate website measurable long-term strategic goals, both financial and operational, as well as non-financial, particularly related to the expected reduction of greenhouse gas emissions. In addition, in November 2022, the Company formulated and published additional key performance indicators and quantified long-tem sustainability performance targets relating specifically to environmental issues in Polsat Plus Group's Sustainability-Linked Financing Framework, a document that had undergone an independent expert review. The Company provides disclosures on planned and undertaken activities as well as progress in the achievement of its goals in Polsat Plus Group’s annual reports on the activities of the management board and in Polsat Plus Group’s sustainability reports.
•	Principle 1.4.1. stating that information concerning the ESG strategy should explain, among others, how the decision-making processes of the company and its group members integrate climate change, including the resulting risks. On December 20, 2021, the Company adopted and announced the assumptions of Polsat Plus Group's strategy, including strategic assumptions in the area of ESG. The Management Board identified the unfavourable local energy mix as a key challenge for the Polish society and economy, as it impacts negatively both air quality (social aspect) and the cost of conducting business or living in Poland (economic aspect). Accordingly, as part of its strategy, Polsat Plus Group is focused, among others, on developing new areas of activity, particularly the production and sales of energy from zero- and low-emission sources. In the view of the Company's Management Board, the implementation of Polsat Plus Group Strategy 2023+ has a chance to effectively combine ESG considerations with building a new revenue stream for Polsat Plus Group, with long-term benefits for the Company's stakeholders. In its sustainability reports, the Company publishes detailed information regarding the governance principles and the procedures covering the environmental issues that are valid in the  Company’s capital group, describes in detail the efforts of the entire group in the areas of conservation of natural environment and education of the public in this area as well as outlines climate-related risk analysis, taking into account the analysis of climate scenarios and the resilience of the business model of individual business segments to climate risks.
•	Principle 2.1. stating that companies should have in place a diversity policy applicable to the management board and the supervisory board, approved by the supervisory board and the general meeting, respectively. The diversity policy defines diversity goals and criteria, among others including gender, education, expertise, age, professional experience, and specifies the target dates and the monitoring systems for such goals. With regard to gender diversity of corporate bodies, the participation of the minority group in each body should be at least 30%. The Company has a Policy on Respect for Human Rights, which also includes an Equal Opportunity Policy, a Diversity Protection Policy, an Anti-Discrimination Policy, a Protection Against All Forms of Violence Policy, a Freedom of Association Policy, and a Safe Work Environment Policy. Policy on Respect for Human Rights also operates in the companies belonging to the Company’s capital group. The provisions of the policy apply to all employees, including management board and supervisory board members. The Company would like to note that high degree of diversity is assured in the Management Board and the Supervisory Board in such areas as age, education, competence and professional experience. Moreover, in spite of the lack of a defined goal, the Management Board fulfills the diversity principle related to gender as women make up 50% of the Management Board. The Policy on Respect for Human Rights adopted by the Company and by the member companies of the Company’s capital group prohibits discrimination of any kind related to employment, direct or indirect, especially in respect of gender, age, psychosexual orientation, gender identity, competences, experience, disability, nationality, ethnic origin, color of skin, language, parental status, denomination, worldview as well as place of residence, form of employment, trade union membership, or any other dimension of diversity as defined by valid law. The Policy on Respect for Human Rights and the policies operating under it do not define, however, the minimum goal for diversity in terms of gender, hence the Company does not apply principle 2.1.
•	Principle 2.2. stating that decisions to elect members of the management board or the supervisory board of companies should ensure that the composition of those bodies is diverse by appointing persons ensuring diversity, among others in order to achieve the target minimum participation of the minority group of at least 30% according to the goals of the established diversity policy referred to in principle 2.1. The provisions of the Group’s diversity policy apply to all of the Group’s employees, including Management Board and Supervisory Board Members. The Company’s goal is to assure diversity, including diversity in terms of gender, for higher ranking positions, nevertheless the persons who make decisions while selecting Management Board and Supervisory Board Members are above all guided by the candidates’ competencies, their professional experience and education.
•	Principle 3.2. stating that the companies’ organization includes units responsible for the tasks of individual systems and functions unless it is not reasonable due to the size of the company or the type of its activity. The Company effectively carries out the tasks listed in the principle 3.1, however dedicated organizational units responsible for managing risk and compliance issues have not been established in the Company’s organizational structure until the end of 2024. Nonetheless, relevant internal processes and procedures have been implemented and operate in the Company, assuring efficient management of financial and operational risks as well as monitoring of compliance of the Company’s operations with applicable regulations. High-level managers, managing respective areas covered by specific procedures, are responsible for the efficiency and the proper functioning of these procedures. In spite of the lack of a formal separate compliance function, control of the Company's compliance in various areas with applicable legislation is executed through internal regulations and takes place at the level of individual organizational units which are responsible for a given area of operations in the capital group, including, in particular, within the finance, controlling, legal, administrative divisions. The Management Board verifies on an on-going basis the correctness of functioning of the internal processes in the areas of risk management and compliance of operations with applicable regulations, and takes action whenever necessary. The Supervisory Board, and in particular the Supervisory Board’s Audit Committee, monitors and assesses the effectiveness of functioning of the internal processes of operational and financial risk management, including the process of drafting of financial statements on the basis of the documents and reports presented by the Management Board and by the person responsible for internal audit as well as on the basis of other information obtained in the course of the Supervisory Board’s on-going activities.
•	Principle 3.6. stating that the head of internal audit reports organizationally to the president of the management board and functionally to the chair of the audit committee or the chair of the supervisory board if the supervisory board performs the functions of the audit committee. In accordance with the organizational structure adopted in the Company, the internal auditor reports directly to the Management Board Member responsible for finance – which is in line with IIA (The Institute of Internal Auditors) standards. The internal auditor functionally reports to the Chairman of the Audit Committee. In the opinion of the Company’s Management Board, the internal audit function present in the Company operates in an effective and independent manner.
•	Principle 3.7. stating that principles 3.4 to 3.6 (concerning, the linking of the remuneration of persons responsible for risk and compliance management and of the head of internal audit with the performance of delegated tasks rather than short-term results of the company, the direct reporting of persons responsible for risk and compliance management report to the president or other member of the management board and the direct reporting of the head of internal audit reports organizationally to the president of the management board and functionally to the chair of the audit committee or the chair of the supervisory board if the supervisory board performs the functions of the audit committee, respectively) apply also to members of the company’s group which are material to its activity if they appoint persons to perform such tasks. By analogy to the principles 3.4-3.6, the principle are applied partially by the Company. Principles 3.4. and 3.5. also apply to those members of the Company’s capital group who are essential from the point of view of the group’s operations. Principle 3.6, in turn, does not apply to the group’s essential companies since in the selected entities being members of the Company’s capital group the internal audit function is fulfilled by the same internal audit and control unit as the one which functions in the Company itself. In the face of the above, the person managing the internal audit function in selected companies having significant importance for the Group reports directly to the Management Board Member responsible for financial matters in the Company, which is in line with the IIA (The Institute of Internal Auditors) standards.
•	Principle 3.9. stating that the supervisory board monitors the efficiency of the systems and functions referred to in principle 3.1 among others on the basis of reports provided periodically by the persons responsible for the functions and the company’s management board, and makes annual assessment of the efficiency of such systems and functions according to principle 2.11.3. Where the company has an audit committee, the audit committee monitors the efficiency of the systems and functions referred to in principle 3.1, which however does not release the supervisory board from the annual assessment of the efficiency of such systems and functions. The Supervisory Board of the Company operates according to the Anglo-Saxon model, i.e., in addition to carrying out its duties under the Polish law, members of the Board (excluding independent members and members of the Audit Committee) simultaneously perform the role of Non-executive Directors. The Board has a wide range of competencies and a high degree of authority set in the Company's corporate documents, which in practice means that the Board is very close to the decision-making process and is well positioned to effectively monitor and evaluate the internal control, risk management and compliance systems, as well as the internal audit function. The Supervisory Board, and the Supervisory Board’s Audit Committee in particular, monitors and assesses the effectiveness of functioning of the internal processes of operational and financial risk management, including the process of drafting of financial statements and sustainability reports, on the basis of the documents and reports presented by the Management Board or by the person responsible for internal audit as well as on the basis of other information obtained in the course of the Supervisory Board’s on-going activities. Risk assessment and mapping is conducted at both management and supervisory boards levels. Risks specific to each business area are identified, monitored, mitigated/managed at the level of: (a) the members of the Management Board responsible for the business area concerned based on internal processes and procedures, (b) the relevant committees (e.g. CAPEX), and if necessary (c) the members of the Management Board with the involvement of individual members of the Supervisory Board. In addition, the Supervisory Board as a whole reviews risks on a regular basis, focusing on key challenges.
•	Principle 3.10. stating that companies participating in the WIG20, mWIG40 or sWIG80 index have the internal audit function reviewed at least once every five years by an independent auditor appointed with the participation of the audit committee. The Supervisory Board, the Audit Committee specifically, monitors and assesses the efficiency of internal processes, which includes on-going monitoring of the efficiency of the internal audit function.
•	Principle 4.1. stating that companies should enable their shareholders to participate in a general meeting by means of electronic communication (e-meeting) if justified by the expectations of shareholders notified to the company, provided that the company is in a position to provide the technical infrastructure necessary for such general meeting to proceed. Neither Polish, nor foreign shareholders have so far notified the Company of the interest in or the need for organizing the general meetings in such a form. The Management Board, in turn, considers assuring efficient course of debates of general meetings as well as correctness of adoption of resolutions by general meetings a priority. The adopted practice of holding general meetings is intended to reduce the risk of occurrence of any organizational and technical problems during the meetings, potentially causing disruption of the efficient course of the general meetings, as well as the legal risks, especially the ones which could potentially result in the resolutions adopted by a general meeting being questioned due possible transmission delays, technical faults, both on the Company’s end as well as in the locations of the shareholders who participate remotely in the meetings.
•	Principle 4.9.1. stating that candidates for members of the supervisory board should be nominated with a notice necessary for shareholders present at the general meeting to make an informed decision and in any case no later than three days before the general meeting; the names of candidates and all related documents should be immediately published on the company’s website. The Company encourages its shareholders to propose their candidates at the times indicated in the principle 4.9.1, including by publishing the relevant information in the notices to convene the general meetings. However, due to the fact that the Company’s internal regulations do not provide for any other mode of appointing Supervisory Board Members than stipulated by the generally valid legal regulations, especially in terms of restricting the time during which the candidates for Supervisory Board Members may be proposed, while the to-date practice of proposing of candidates for Supervisory Board Members differed from the requirements of the principle 4.9.1, hence the Company may not assure that the principle will be applied in the future.

In 2024, the Company incidentally violated Principle 4.4. stating that presence of representatives of the media is allowed at general meetings with regard to the Extraordinary General Meeting of the Company convened for 8 October 2024.

The Company provides live webcasts of the General Meetings and makes available on its website recordings of the General Meetings. Given the nature of the Company's Extraordinary General Meeting convened for October 8, 2024, the Company believes that the presence of the media could have been a disruption to the orderly conduct of the meeting. There have been no incidents of non-compliance with the above rule in the previous two years.

9.2.          Internal control systems and risk management applied with respect to the process of preparing financial statements

The Management Board is responsible for internal control system in Polsat Plus Group and its effectiveness in the process of preparing financial statements and interim reports prepared and published in accordance with the requirements of the Ordinance of the Minister of Finance of March 29, 2018 regarding current and periodic information to be submitted by issuers of securities, and the conditions for recognizing equivalence of information required under non-member states regulations as well as the Act of September 29, 1994 on Accounting and other applicable legislation.

We draw on our employees' extensive experience in the identification, documentation, recording and controlling of economic operations, including numerous control procedures supported by modern information technologies used for recording, processing and presentation of operational and financial data.

In order to ensure the accuracy and reliability of the accounts of the parent and subsidiary companies, we apply accounting policies for Polsat Plus Group and various internal procedures relating to transaction control systems and processes resulting from the activities of the Company and the Group.

We keep our accounts in IT systems integrated with the underlying source systems and auxiliary books. We ensure data security through the use of access rights aligned with the needs and requirements of granted to authorized users. Systems operations are assured by the specialists with extended experience in this field. In addition, the system security is ensured by applying the appropriate solutions for physical security of the equipment. We have a complete IT system documentation in all its areas. In accordance with Article 10 of the Accounting Act of September 29, 1994, the accounting information systems documentation is periodically reviewed and updated upon approval by heads of units.

An important element of risk management, in relation to the financial reporting process, is ongoing internal control exercised by the Finance and Controlling Department. The Internal Audit Department conducts an independent verification of functioning of the internal control system and, as such, complements its efficient operation.

The Internal Audit functions on the basis of the Audit Charter adopted by the Management Board and the Audit Committee of the Supervisory Board. Its primary task is to test and evaluate controls for the reliability and consistency of financial data underlying the preparation of financial statements and management information.

The Controlling department functions on the basis of financial controlling system and business controlling system, and exercises control over both the current processes and the implementation of financial and operating plans, and preparation of financial statements and reports.

An important element of quality control and data review is the use of a management reporting system on a standalone and consolidated basis, as well as regular monthly analyses by the Management Board of financial and operational performance, and other key indicators. The monthly results analysis is carried out in relation to both the current financial and operating plan and the prior period results.

The budgetary control system is based on monthly and annual financial and operating plans and long-term business projections. Achieved financial and operating results are monitored regularly in relation to the financial and operating plans. During the year, we perform additional reviews of the financial and operating plans for the year if the need arises. The financial and operating plans are adopted by the Management Board and presented to the Supervisory Board.

One of the basic elements of control in the process of preparation of financial statements of the Company and the Group is the verification carried out by independent auditors. An auditor is chosen from a group of reputable firms, which guarantee a high standard of service and independence. The Supervisory Board of the Company chooses the Company’s auditor. In the subsidiaries, the auditor is chosen by either the supervisory board, the general meeting or the meeting of shareholders. The tasks of the independent auditor include, in particular: a review of semi-annual standalone and consolidated financial statements and audit of annual standalone and consolidated financial statements. The auditor's independence is fundamental to ensure the accuracy of the audit.

The Audit Committee, appointed within the Company's Supervisory Board, supervises the financial reporting process in the Company. The Audit Committee oversees the financial reporting process, in order to ensure sustainability, transparency and integrity of financial information. As at the date of publication of this Report, two out of three Members of the Audit Committee meet the requirements listed in article 129 item 3 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight (as amended).

Moreover, under article 4a of the Accounting Act of September 29, 1994, the duties of the Supervisory Board include ensuring that the financial statements and the report on activities meet the requirements of the law. The Supervisory Board carries out this duty using its competences under applicable law and the Articles of Association of the Company. This is yet another level of control exercised by an independent body to ensure the accuracy and reliability of the information presented in the standalone and consolidated financial statements.

9.3.        Shareholding structure of Cyfrowy Polsat

9.3.1.     Shareholders with qualifying holdings of shares in Cyfrowy Polsat

The table below presents shareholders of Cyfrowy Polsat S.A. holding at least 5% of votes at the General Meeting of the Company as at the date of publication of this Report, i.e. April 10, 2025.

Shareholder	Number of shares	% of shares	Number of votes	% of votes
Zygmunt Solorz, through:	396,802,022	62.04%	576,219,523	70.36%
TiVi Foundation, including through:	386,745,257	60.47%	566,162,758	69.13%
Reddev Investments Limited, including through:	386,745,247	60.47%	566,162,738	69.13%
Cyfrowy Polsat S.A.(1)	88,842,485	13.89%	88,842,485	10.85%
Tobias Solorz(2), including through:	10,056,765	1.57%	10,056,765	1.23%
ToBe Investments Group Limited	4,449,156	0.70%	4,449,156	0.54%
Others	242,743,994	37.96%	242,743,994	29.64%
Total	639,546,016	100%	818,963,517	100%

(1)	Own shares acquired under the buy-back program announced on November 16, 2021. Pursuant to Art. 364 Item 2 of the Commercial Companies Code, the Company does not exercise voting rights attached to own shares.
(2)	Person under the presumption of the existence of an agreement referred to in Art. 87 Section 1 Item 5 of the Act on Public Offering and Conditions Governing the Introduction of Financial Instruments to Organized Trading and Public Companies.

Changes in the structure of qualifying holdings of shares in the Company since the publication of the previous interim report

From the date of publication of the previous interim report, i.e. November 20, 2024 (report for the third quarter of 2024), until the date of publication of this Report, i.e. April 10, 2025, the Company did not receive notifications concerning changes in the structure of ownership of significant blocks of Cyfrowy Polsat shares.

9.3.2.     Securities with special controlling rights

Current shareholders do not have any rights in the General Meeting of the Company other than those resulting from holding the Company’s shares. As at December 31, 2024 the shares of the A through D series are preferred shares as to voting rights in the way that:

•        Series A shares in the amount of 2,500,000 have preferential voting rights entitling their holder to two votes per share;

•        Series B shares in the amount of 2,500,000 have preferential voting rights entitling their holder to two votes per share;

•        Series C shares in the amount of 7,500,000 have preferential voting rights entitling their holder to two votes per share;

•        Series D shares in the amount of 166,917,501 numbered 1-166,917,501 have preferential voting rights entitling their holder to two votes per share.

To the Company's best knowledge, as of the date of this Report, Reddev Investments Limited held 179,417,491 voting preferred shares and TiVi Foundation held 10 voting preferred shares.

8,082,499 D Series shares, numbered 166,917,502 - 175,000,000; 75,000,000 E Series shares; 5,825,000 F Series shares, 80,027,836 H Series shares, 47,260,690 I Series shares and 243,932,490 J Series shares are ordinary bearer shares.

Pursuant to Article 19 of the Company's Articles of Association, the Chairperson of the Supervisory Board shall be appointed and dismissed by TiVi Foundation with its registered office in Vaduz, Liechtenstein as a personal right vested in that shareholder. The remaining members of the Supervisory Board shall be appointed and dismissed by the General Shareholders Meeting.

Pursuant to Article 14 of the Company's Articles of Association, the President of the Management Board is appointed and dismissed by the TiVi Foundation, Vaduz, Liechtenstein, as a personal right of this shareholder. The other members of the Management Board are appointed and dismissed by the Supervisory Board of the Company.

9.3.3.     Shares in the Company held by Members of the Management Board and the Supervisory Board

To the Company’s best knowledge, Members of the Management Board of Cyfrowy Polsat did not hold any shares in the Company, directly or indirectly, as at the date of publication of this Report, i.e. April 10, 2025, nor as at the date of publication of the previous report, i.e., November 20, 2024 (report for the third quarter of 2024).

The table below presents the number of shares in Cyfrowy Polsat which, according to the Company’s best knowledge, were held, directly or indirectly, by Members of the Company’s Supervisory Board as at the date of publication of this Report, i.e. April 10, 2025, along with changes in holdings from the date of publication of the previous report, i.e. November 20, 2024 (report for the third quarter of 2024).

Name and surname / Function	Holding as at November 20, 2024	Acquisitions	Disposals	Holding as at April 10, 2025
Mr. Zygmunt Solorz(1) Chairman of the Supervisory Board	396,802,022	-	-	396,802,022
Mr. Józef Birka(2) Member of the Supervisory Board	79,268	-	-	79,268
Mr. Tomasz Szeląg(3) Member of the Supervisory Board	125,000	-	-	125,000

(1)	Mr. Zygmunt Solorz holds the Company’s shares through the following companies: TiVi Foundation (the parent of Reddev Investments Limited, which in turn is the parent of Cyfrowy Polsat S.A.). Within the block of shares held by Mr. Zygmunt Solorz, 10,056,765 shares held indirectly and directly by Mr. Tobias Solorz were disclosed.
(2)	The disclosed shares were acquired by Ms. Ewa Birka, a person closely related to Mr. Józef Birka, a person discharging managerial responsibilities within the meaning of Article 19 of the Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse.
(3)	Mr. Tomasz Szeląg holds the Company’s shares indirectly, through Pigreto Ltd.

To the Company’s best knowledge the remaining Members of the Supervisory Board did not hold any shares of the Company, directly and indirectly, as at the date of publication of this Report, i.e. April 10, 2025, nor at the date of publication of the previous report, i.e. November 20, 2024 (report for the third quarter of 2024).

Changes in the ownership of the Company's shares by Management Board and Supervisory Board Members since the publication of the previous interim report

From the date of publication of the previous interim report, i.e. November 20, 2024 (report for the third quarter of 2024), until the date of publication of this Report, i.e. April 10, 2025, the Company did not receive notifications concerning changes in the structure of ownership of significant blocks of Cyfrowy Polsat shares.

9.3.4.     Limitations related to shares

As at the date of publication of this Report, i.e. on April 10, 2025, the Company held 88,842,485 ordinary treasury shares constituting 13.89% of the share capital of the Company and entitling to 88,842,485 votes at the General Meeting of the Company, representing 10.85% of the total number of votes at the General Meeting of the Company. The above mentioned shares were purchased under the own shares buyback program announced on November 16, 2021. Pursuant to Art. 364 Section 2 of the Code of Commercial Companies the Company does not exercise voting rights attached to the held treasury shares.

Except for the mentioned above limitations and the limitations regarding securities ownership rights transfer resulting from the general provisions of the law there are no other limitations, in particular contractual limitations, regarding our securities ownership rights transfer. Nevertheless, the Company has learned that on October 11, 2024, the District Court in Limassol (Cyprus) issued a temporary injunction prohibiting Reddev Investments Ltd. from disposing of or encumbering its shares in the Company ("Injunction"). The Company is not the addressee of the Injunction and, to the best of the Company's knowledge, the Injunction has no legal effect in the territory of the Republic of Poland. As of the date of this report, the Company had no information regarding the lifting of the Injunction.

9.3.5.     Information on material agreements, which can result in a change in the proportion of shares held by hitherto shareholders in the future

As at the date of publication of this Report, i.e. April 10, 2025, the Company did not have any information on agreements which can result in a change in the proportion of shares held by current shareholders in the future.

9.4.        Rules of amending the Articles of Association of the Company

An amendment to the Articles of Association of the Company requires a resolution of the General Shareholders’ Meeting and a registry in the Court register. The general provisions of law, the Articles of Association and the Bylaws of the General Shareholders’ Meeting govern the procedure for adopting resolutions regarding amendments to the Articles of Association.

Pursuant to the provisions of the Articles of Association and taking into account the provisions of art. 417 § 4 of the Commercial Companies Code, an amendment to the Articles of Association may take place without a share buyback.

9.5.        General Shareholders’ Meeting

The General Shareholders’ Meeting acts pursuant to the provisions of the Commercial Companies’ Code, the Articles of Association, and the Bylaws of General Shareholders’ Meeting adopted by Resolution 6 of the Extraordinary Shareholders’ Meeting dated December 4, 2007 and amended by Resolution 29 of the Extraordinary Shareholders’ Meeting dated April 23, 2009.

The General Shareholders’ Meeting adopts resolutions regarding, in particular, the following issues:

a) review and approval of the Management Board’s Report and the report of the Supervisory Board as well as the financial statements of the Company for the preceding accounting year and the consolidated financial statements,

b) decisions on the distribution of profits or on the manner of covering the losses,

c) acknowledgement of the fulfilment of duties by the Supervisory Board Members and Management Board Members,

d) establishment of the remuneration of Supervisory Board Members, subject to the provision of Article 18 sec. 3 c) of the Articles of Association, i.e., determining the amount of remuneration of Supervisory Board Members delegated to perform temporarily the tasks of a Management Board Member,

e) amendment of the Articles of Association,

f) modification of the scope of the Company’s operations,

g) increase or decrease of the share capital,

h) merger, division or transformation of the Company,

i) dissolution and liquidation of the Company,

j) issuance of convertible bonds or senior bonds as well as issuance of subscription warrants,

k) sale or lease of the enterprise, its organized part or property components constituting a significant part of the enterprise as well as establishment of limited rights in rem in the aforementioned scope,

l) consenting to any acquisition and disposal of real estate, perpetual usufruct or a share in real estate, as well as consenting to the establishment of a limited right in rem on real estate, perpetual usufruct or a share in real estate with a value in excess of the amount determined in accordance with Article 1, sec. 3.19 of Statutes, i.e., with a value exceeding at one time or on an annual basis PLN 3.0 million net or the equivalent amount in other currencies,

m) any and all issues connected with claims for remedying a loss caused upon the formation of the Company or in the course of its management or supervision.

The General Meeting shall be attended by persons who are shareholders of the Company sixteen days prior to the date of the General Meeting (the day of registration for participation in the General Meeting). The date of registration for participation in the General Meeting is consistent for bearer shares and preferred shares holders. Pledgees and usufructuaries who are entitled to vote, have the right to participate in the General Meeting if establishment of a limited right on their behalf is registered on a securities account on the day of registration for participation in the General Meeting.

A shareholder, being a natural person, is entitled to participation in the General Shareholders’ Meeting and execution of voting rights in person, or through a proxy. A shareholder, being a legal entity, is entitled to participation in the General Shareholders’ Meeting and execution of voting rights through a person authorized to make representations of intent on its behalf, or through a proxy.

The power of attorney to attend the General Meeting and exercise voting rights requires a written or electronic form. The shareholder must notify the Company about electronically granting the power of attorney by providing information specifying the Shareholder and the Shareholder's proxy, including the name and surname or company (the name) and address (seat), and indicating the number of shares and votes, of which the proxy is authorized to exercise to the address: akcjonariusze@cyfrowypolsat.pl.

The General Meeting should be attended by Members of the Management Board and Supervisory Board - in the composition which allows for substantive answers to the questions posed during the General Meeting.

The General Meeting shall be opened by the Chairperson or, in his/her absence, the Deputy Chairperson of the Supervisory Board (if appointed). In their absence, the General Meeting shall be opened by the President of the Management Board or a person nominated by the President. Next, the General Meeting shall appoint the Chairperson of the Meeting from among persons authorised to participate in the General Meeting.

Each participant in the General Meeting is entitled to be elected the Chairman of the General Meeting, and also nominate one person as candidate to the position of Chairman of the General Meeting. Decisions shall not be made until Chairman of the General Meeting is elected.

The Chairman of the General Meeting directs proceedings in accordance with the agreed agenda, provisions of law, the Articles of Association and the Bylaws, and in particular: gives the floor to speakers, orders voting and announces the results thereof. The Chairman ensures efficient proceedings and respecting of the rights and interests of all Shareholders. The Chairman may decide on procedural matters.

After the drawing up and signing of the attendance list the Chairman determines that the Shareholders’ Meeting has been convened in a proper manner and is authorized to adopt resolutions; presents the agenda and orders the selection of the Ballot Committee.

The General Meeting may pass a motion regarding nonfeasance of voting over an item on the agenda, and also on adjourning the order of issues on the agenda. However, removing an item from the agenda, or its adjourning upon the request of shareholders, requires prior consent of all the shareholders present who have forwarded such a motion, supported by a majority of votes of the General Meeting. Motions regarding the aforementioned issues shall be justified in detail.

The Chairman, after opening an item on the agenda, may give the floor in order of application to speakers. In the event of a significant number of applications the Chairman may set a time limit or limit the number of speakers. The floor may be taken regarding items on the agenda and currently under discussion only. The Chairman may give the floor outside of the order of application to the Members of the Management Board or Supervisory Board, and also to the Company experts called by them.

The Meeting may not adopt resolutions regarding items that are not on the agenda unless all the share capital is represented in the General Meeting and none of the present in the Meeting raises any objections as to the adoption of a resolution.

Voting shall proceed in a manner adopted by the General Meeting using a computerized system of casting and counting votes, ensuring that votes are cast in the number corresponding to the number of shares held and - in case of a secret ballot - allowing to eliminate the possibility of detecting the manner of voting by individual shareholders.

Subject to mandatory provisions of law, the General Meeting shall be valid, if attended by shareholders representing jointly more than 50% of the total number of votes in the Company. The resolutions of the General Meeting shall be adopted by an absolute majority of votes cast, unless the provisions of the Commercial Companies’ Code or the provisions of Company’s Articles of Association provide for a greater majority.

The Chairman of the General Meeting closes the General Meeting upon exhausting its agenda.

9.6.        Management Board of the Company

9.6.1.     Rules regarding appointment and dismissal of the management

Pursuant to article 14 of the Articles of Association of the Company the Management Board consist of one or more members, including the President of the Management Board. The President of the Management Board is appointed and dismissed by TiVi Foundation with its registered office in Vaduz, Liechtenstein as a personal right vested in that shareholder. The remaining Management Board Members are appointed and dismissed by the Supervisory Board. The number of Management Board Members in any given term of office is determined by the Supervisory Board. The term of office of the Management Board is joint and lasts three years.

The Management Board of the Company shall consist in their majority of persons holding Polish citizenship. Prior to their appointment, the Company’s Management Board Members are required to submit a written statement that they have familiarized themselves with the Company’s Articles of Association, the Bylaws of the Management Board, the Bylaws of the Supervisory Board, the Company’s Organizational Regulations, Work Regulations and Employee Remuneration Rules, and that they undertake to strictly observe and apply them.

9.6.2.  Composition of the Management Board

The following table sets forth the composition of the Company's Management Board as of December 31, 2024 and the responsibilities of its members. The composition of the Management Board remained unchanged in 2024.

Name and surname	Function	Tenure (in years)	Expiry of term	Responsibilities
Mirosław Błaszczyk	President of the Management Board	6	2025	sales and marketing strategy, HR, administration
Maciej Stec	Vice-President of the Management Board	11	2025	strategy and business development
Jacek Felczykowski	Member of the Management Board	6	2025	technology and network
Aneta Jaskólska	President of the Management Board	15	2025	legal and corporate governance, customer relations, security and safety, including cybersecurity
Agnieszka Odorowicz	President of the Management Board	9	2025	film production
Katarzyna Ostap-Tomann	President of the Management Board	9	2025	finance, investor relations, internal audit and ESG

Biographies of the Company's Management Board Members are available on the Company's website at: https://grupapolsatplus.pl/en/corporate-governance/management-board/members.

9.6.3.     Competences and Bylaws of the Management Board

In accordance with the Company’s Articles of Association, the Management Board conducts the business of the Company and represents it in external relations.

The following are entitled to submit statements on our behalf:

•        in the case of one person Management Board – the President of the Management Board acting together with a commercial proxy, and

•        in the case of a more numerous Management Board – the President of the Management Board, a Management Board Member, and the commercial proxy acting jointly.

The Management Board operates under legal regulations in force, the Company’s Articles of Association, the Bylaws of the Management Board, the Bylaws of the Supervisory Board, the Company’s Organizational Regulations, Work Regulations, and Employee Remuneration Rules as well as under the resolutions of the General Meeting of Shareholders.

The Management Board performs its obligations collectively whereas each of its members manages specific areas of the Company's operations within the division of tasks, in accordance with the descriptions mentioned above.

All issues related to our management, not restricted by the provisions of the law or the Articles of Association to the competence of the Supervisory Board or the General Meeting, are within the scope of competence of the Management Board.

Decisions regarding an issue or buyback of the Company’s shares are within the competence of the General Shareholders’ Meeting. The competences of the Board in respect to the above are limited to the execution of any resolutions adopted by the General Shareholders’ Meeting.

Members of the Management Board may attend the sessions of the Supervisory Board. Furthermore, Members of the Management Board may participate in the sessions of any General Meeting. They provide substantive answers to questions asked during the General Meeting in accordance with the binding laws.

The Management Board conducts the Company’s business on the basis of adopted resolutions.

The resolutions of the Management Board are adopted during Management Board’s meetings. In extraordinary cases, the resolutions of the Management Board may be adopted without holding a meeting either in writing or using means of distance communication. Management Board resolutions adopted at a Management Board meeting are passed by an absolute majority of votes. If the votes are distributed equally, the President of the Management Board has a casting vote. Management Board resolutions may only be adopted, if all Management Board Members have been duly notified of a Management Board meeting and if the meeting is attended by more than half of the Management Board Members.

Management Board resolutions may be adopted in writing or using means of distance communication, if the draft of the resolution has been effectively served to all Management Board Members and the Chairperson of the Supervisory Board, if all Management Board Members take part in the vote, and if an absolute majority of Management Board Members consent to the resolution. Immediately after a resolution is adopted, the President of the Management Board is obliged to deliver it to the Chairperson of the Supervisory Board in the adopted wording together with information on the result of the vote.

Management Board meetings may be attended by the Chairperson of the Supervisory Board and a Supervisory Board Member or Supervisory Board Members appointed by the Chairperson of the Supervisory Board in writing. The President of the Management Board is obliged to notify the Chairperson of the Supervisory Board in writing of the date and agenda of Management Board meetings. The aforementioned notification shall be served at least 72 hours prior to the appointed time of the meeting. In extraordinary cases, said notification may be served within a shorter time-limit upon the written consent of the Chairperson of the Supervisory Board. Management Board meetings may also be attended by the Company’s commercial proxy. The Company’s Management Board notifies the commercial proxy of the date and agenda of the meeting.

The Company’s Management Board is obliged to maintain the continuity of the commercial power of attorney; in particular, if the commercial power of attorney expires for any reason whatsoever, the Company’s Management Board shall be obliged to appoint another commercial proxy immediately. Granting a commercial power of attorney requires the consent of all Management Board Members, subject to the stipulation that it shall only be permitted to grant a commercial power of attorney obliging the commercial proxy to perform transactions jointly with the President of the Management Board and a Management Board Member. A commercial power of attorney may only be granted by the Company’s Management Board to candidates approved by the Supervisory Board. A commercial power of attorney can be revoked by any Management Board Member.

9.6.4.     Remuneration of the Members of the Management Board

Rules for remuneration of Members of the Management Board are regulated by the Remuneration Policy for the Management Board and Supervisory Board Members. Information on the remuneration of Board Members in 2024 is included in the consolidated financial statements (Note 47) and the standalone financial statements (Note 43) for 2024.

9.6.5.     Contracts with Members of the Management Board setting out severance packages payout

The Company has concluded managerial contracts with the following Members of the Management Board: Aneta Jaskólska, Agnieszka Odorowicz and Katarzyna Ostap-Tomann. These contracts do not provide for the payment of severance packages as a result of the resignation of the mentioned above Members of the Management Board or their dismissal from the position without a material cause, or in the case when their resignation or dismissal results from a merger by acquisition of the Company.

9.7.        Supervisory Board of the Company

9.7.1.     Rules regarding appointment and dismissal of the Supervisory Board

In accordance with Art. 19 of the Company’s Articles of Association, the Supervisory Board consists of five to nine members, including the Chairperson of the Supervisory Board. A Supervisory Board Member may be appointed Deputy Chairperson of the Supervisory Board by resolution of the General Shareholders Meeting. The Chairperson of the Supervisory Board is appointed and dismissed by TiVi Foundation with its registered office in Vaduz, Liechtenstein as a personal right vested in that shareholder. The remaining Members of the Supervisory Board are appointed and dismissed by the General Shareholders Meeting.

The Supervisory Board is appointed for a joint five-year term of office. The number of Supervisory Board Members in any given term of office shall be determined by the General Shareholders Meeting.

The Supervisory Board of the Company shall consist in their majority of persons holding Polish citizenship. Prior to their appointment, the Company’s Supervisory Board Members are required to submit a written statement that they have familiarized themselves with the Company’s Articles of Association, the Bylaws of the Management Board, the Bylaws of the Supervisory Board, the Company’s Organizational Regulations, Work Regulations, and Employee Remuneration Rules, and that they undertake to strictly observe and apply them.

The Supervisory Board consists of two Members meeting the criteria of an independent Member of the Supervisory Board as set out in article 129 item 3 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight which fulfils the principle 2.3. of the Best Practices 2021. A Supervisory Board Member is required to submit a statement to the Management and Supervisory Boards of the Company on his or her compliance with the independence criteria.

9.7.2.  Composition of the Supervisory Board

The following table presents the composition of the Company's Supervisory Board as of December 31, 2024.

Name and surname	Function	First appointment	Appointment for current term	Expiry of term
Zygmunt Solorz	Chairman of the Supervisory Board	2008	2021	2026
Justyna Kulka	Vice-Chairman of the Supervisory Board	2024	2024	2026
Józef Birka	Member of the Supervisory Board	2015	2021	2026
Marek Grzybowski	Independent(1) Member of the Supervisory Board Chairman of the Audit Committee	2020	2021	2026
Alojzy Nowak	Independent(1) Member of the Supervisory Board Member of the Audit Committee	2021	2021	2026
Tomasz Szeląg	Member of the Supervisory Board Chairman of the Remuneration Committee Member of the Audit Committee	2016	2021	2026

(1)	conforms with the independence criteria listed article 129 item 3 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight and in principle 2.3. of the Best Practices 2021.

On June 20, 2024 the Annual General Meeting of the Company appointed Ms. Justyna Magdalena Kulka to the Supervisory Board of the Company and entrusted her with the position of Vice Chairperson of the Supervisory Board.

On July 1, 2024 Mr. Piotr Żak resigned from his membership in the Supervisory Board and from the position of Vice-Chairman of the Supervisory Board of the Company, effective as of the end of 2 July 2024.

On October 8, 2024, the Extraordinary General Meeting of the Company resolved to reduce the number of members of the Supervisory Board of the present term of office to 6 persons and resolved to dismiss Mr. Jarosław Grzesiak and Mr. Tobias Solorz from the Supervisory Board.

Biographies of the Company's Supervisory Board Members are available on the Company's website at: https://grupapolsatplus.pl/en/corporate-governance/supervisory-board/members.

9.7.3.     Competences and Bylaws of the Supervisory Board

The Supervisory Board acts pursuant to the Commercial Companies Code and also pursuant to the Articles of Association of the Company and the Bylaws of the Supervisory Board.

Pursuant to the Articles of Association of the Company, the Supervisory Board performs ongoing supervision of the Company’s operations in all its fields. In order to exercise supervision in the scope and under the terms stipulated in the Articles of Association, the Supervisory Board is entitled to review any documents of the Company, request reports and explanations from the Management Board, and review the status of the Company’s assets. The Supervisory Board performs its obligations collectively but may also delegate its members to perform specific supervisory activities independently. The Supervisory Board is entitled to establish committees in circumstances provided for under applicable law. The Supervisory Board is also be entitled to appoint other committees and determine the scope and terms of their operation.

The Chairperson of the Supervisory Board is authorized to perform individually supervisory tasks with regard to the manner of performing obligations by the Management Board stipulated under Article 13 sec. 1.3 of the Articles of Association as well as to the activity of the Management Board with respect to agreements, revenue, costs, and expenses.

The competences of the Supervisory Board include matters restricted by the Commercial Companies Code and provisions of the Company’s Articles of Association, in particular:

a)	reviewing the annual financial statements of the Company and the consolidated financial statements with respect to their consistency with both the books and documents and the facts; reviewing the annual Management Board Report on the Company’s operations and the assessment of the Management Board’s work, reviewing the Management Board’s motions with respect to distributing profits or covering losses, and submitting a written report on the results of the aforementioned reviews to the Annual Shareholders Meeting,
b)	drafting a report on the activities of the Supervisory Board, the assessment of the Company’s standing, the assessment of the manner of performing the information obligations by the Company, the assessment of the rationality of the policy pursued by the Company, including but not limited to the price policy, and the assessment of the internal control system and the system for managing significant risks for the Company, in each case in accordance with the terms of corporate governance adopted by the Company, and presenting them to the Annual Shareholders Meeting,
c)	delegating Supervisory Board Members to perform temporarily the tasks of a Management Board Member who has been revoked, has resigned or is unable to perform his/her duties for other reasons, for a period not longer than three months,
d)	determining the remuneration of Management Board Members,
e)	appointing a statutory auditor to audit the financial statements of the Company,
f)	granting consent to the payment of an advance towards the predicted dividend to the shareholders,
g)	approving the terms, plans and prices of acquisition or sale of goods and services by the Company in the scope stipulated under the Bylaws of the Management Board or a resolution of the Supervisory Board.

Moreover, the competences of the Supervisory Board include:

a)	reviewing and issuing opinions on issues that shall constitute the object of the resolutions of the General Shareholders Meeting,
b)	approving quarterly, annual, and multi-year plans for the Company’s operations drafted by the Management Board and monitoring their performance on an ongoing basis,
c)	determining the amount of remuneration of Supervisory Board Members delegated to perform temporarily the tasks of a Management Board Member,
d)	granting consent to the appointment and dismissal of supervisory board members of a Material Company, excluding supervisory board members of a Material Company who are appointed and dismissed on the basis of personal rights granted to a partner or a shareholder of this Material Company, where Material Company means: Telewizja Polsat sp. z o.o. with its registered office in Warsaw, Polkomtel sp. z o.o. with its registered office in Warsaw, Netia S.A. with its registered office in Warsaw, and every company whose EBITDA for the last 12 months was higher than 5% of the Group's consolidated EBITDA,
e)	granting consent to the Company to perform any Qualified Legal Transaction, which means any legal transaction resulting or potentially resulting in the disposal or obligation of any title towards a single entity with a value exceeding either PLN 3.0 million net or the equivalent of this amount in other currencies, either on a one-time basis or annually,
f)	approving the selection of bidders in the procurement proceedings held by the Company and approving bids submitted by the Company in procurement proceedings,
g)	granting consent for any acquisition and disposal of real estate, perpetual usufruct or share in real estate, as well as for the establishment of a limited property right on real estate, perpetual usufruct or share in real estate, up to the amount specified in Article 1 Section 3.19 of the Statutes, i.e., with a value exceeding PLN 3.0 million net or the equivalent of this amount in other currencies, either on a one-time basis or annually,
h)	granting consent to hiring for the positions of director, deputy director, expert or consultant, irrespective of the basis for such employment, including in particular on the basis of employment relationship and other legal relationships. Modification and termination of the aforementioned employment shall also require the consent of the Supervisory Board.
i)	approving the Work Regulations and Employee Remuneration Rules,
j)	granting consent to the application for, modification or waiver of any license or permit stipulated under Article 6 sec. 2 of the Articles of Association, as well as to transferring or granting access to them to third parties,
k)	granting consent to the conclusion of any agreement on consultancy services by the Management Board,
l)	granting consent to the issue of bonds by the Company other than bonds convertible to shares or senior bonds,
m)	granting consent to any acquisition, sale, assumption or encumbrance of shares and stock in companies as well as any participation titles in entities and organizations other than companies,
n)	approving plans for merging or dividing the Company before they are passed and any plans for the reorganization of the Company.

The detailed terms of activity and operation of the Supervisory Board, including but not limited to the terms of operation of its respective committees, are determined in the Supervisory Board Regulations approved by the General Shareholders Meeting. Any amendment to the Supervisory Board Regulations shall require a resolution of the General Shareholders Meeting.

Supervisory Board meetings are convened by the Chairperson of the Supervisory Board. In the absence of the Chairperson, a Supervisory Board meeting can be convened by the Deputy Chairperson of the Supervisory Board or, in the absence of a Deputy Chairperson, the meeting can be convened by a Supervisory Board Member nominated by the Chairperson. Supervisory Board meetings are convened ex officio upon the motion of the Management Board or at least two Supervisory Board Members. Supervisory Board meetings are chaired by the Chairperson of the Supervisory Board or, in the absence of a Chairperson, by the Deputy Chairperson or, in the absence of a Deputy Chairperson, by a Supervisory Board Member nominated by the Chairperson. Apart from Supervisory Board Members, Supervisory Board meetings may be attended by Management Board Members, the commercial proxy, and invited guests. The person chairing a Supervisory Board meeting is entitled to order persons other than Supervisory Board Members to leave the room where the meeting is held.

Supervisory Board resolutions shall be by two-thirds of cast votes. All Supervisory Board Members must be invited to a Supervisory Board meeting and more than 50% of Supervisory Board Members must attend the meeting for the Supervisory Board resolutions to be binding. Supervisory Board Members shall be entitled to participate in adopting Supervisory Board resolutions by casting their vote in writing through the agency of another Supervisory Board Member. Casting a vote in writing shall not apply to issues added to the agenda at the meeting of the Supervisory Board.

The resolutions of the Company’s Supervisory Board may be adopted without holding a meeting either in writing or using means of distant communication. Resolutions adopted in writing or using means of distant communication as well as electronically, as stipulated in art. 21 section 5 of the Statutes, are passed, if the draft resolution has been effectively served to all Supervisory Board Members, if all Supervisory Board Members take part in the vote, and if at least two-thirds of Supervisory Board Members vote for the resolution. An electronic vote shall be ordered by the Chairperson of the Supervisory Board. In the absence of the Chairperson, an electronic vote shall be ordered by the Deputy Chairperson of the Supervisory Board or, in the absence of a Deputy Chairperson, by a Supervisory Board Member nominated by the Chairperson.

In 2024, the Supervisory Board’s resolutions were adopted at the meetings and in accordance with Article 21 item 4 of the Company’s Articles of Association and Article 5 item 4 of the Bylaws of the Supervisory Board, i.e., in writing, by electronic means or using means of direct remote communication.

9.7.4.  Committees of the Supervisory Board

Pursuant to the Bylaws of the Supervisory Board, the Supervisory Board may appoint permanent committees, in particular an Audit Committee, a Remuneration Committee, or a Strategic Committee, as well as ad hoc committees to investigate certain issues remaining in the competence of the Supervisory Board or acting as advisory and opinion bodies of the Supervisory Board.

The functioning of the Audit Committee is regulated by the Bylaws of the Audit Committee. The provisions of the Bylaws of the Supervisory Board apply to meetings, resolutions, and minutes of remaining committees of the Supervisory Board.

The aforesaid committees may be appointed by the Supervisory Board from among its Members by means of a resolution. The committee appoints, by means of a resolution, the Chairman of the particular committee from among its Members. The mandate of a Member of a particular committee expires upon expiry of the mandate of the Member of the Supervisory Board. The Supervisory Board may, by means of a resolution, resolve to dismiss a Member from the composition of a particular committee before the expiry of the mandate of the Member of the Supervisory Board. Dismissal from membership in a committee is not tantamount to dismissal from the Supervisory Board.

The first meeting of a committee is convened by the Chairman of the Supervisory Board or another Member of the Supervisory Board indicated by him or her. Meetings of the committees are convened as the need arises, ensuring thorough delivery of duties assigned to a particular committee. Minutes of committee's meetings and adopted resolutions are made available to the Members of the Supervisory Board that are not Members of the committee. The Chairman of a given committee chairs its proceedings. The Chairman also performs supervision over the preparation of the agenda, distribution of documents, and preparation of minutes of the meetings of the committee.

Pursuant to article 128 item 1 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight, the Company has an Audit Committee and, in addition, a Remuneration Committee.

As at December 31, 2024, the Audit Committee comprised the following Members of the Supervisory Board while the composition of the Audit Committee remained unchanged in 2024:

Name and surname	Function
Marek Grzybowski	Chairman of the Audit Committee Independent Member of the Supervisory Board
Alojzy Nowak	Independent Member of the Supervisory Board
Tomasz Szeląg	Member of the Supervisory Board

The composition of the Audit Committee meets the requirements listed in article 128 item 1 and article 129 item 3 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight.

In 2024, the Audit Committee held 4 remote meetings, and resolutions were also adopted using means of direct remote communication.

In addition, the Company has a Remuneration Committee, which as of December 31, 2024 included Mr. Tomasz Szeląg, who served as the Chairman of the Remuneration Committee.

Audit Committee

In accordance with the Bylaws of the Audit Committee, the Committee consists of at least three Members, appointed for the term of office of the Supervisory Board. The Chairman of the Committee is appointed by the Company’s Supervisory Board. Most Members of the Committee, including its Chairman, are independent from the Company that is they meet the independence criteria set out in Article 129 item 2 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight.

Among the Members of the Audit Committee, the statutory independence criteria are met by Mr. Marek Grzybowski and Mr. Alojzy Nowak.

The independence of the indicated Members of the Supervisory Board has been verified by the Supervisory Board on the basis of statements submitted by them confirming that they meet the independence criteria set forth in Article 129 item 2 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight and, moreover, based on information gathered by the Company and sourced in the Company concerning the relations of the persons in question with the Company and other companies from Polsat Plus Group, in particular the capital structure and the composition of governing bodies of Polsat Plus Group and legal relations between the persons in question and the Company and the companies from Polsat Plus Group.

Members of the Audit Committee: Mr. Marek Grzybowski, Mr. Alojzy Nowak and Mr. Tomasz Szeląg, possess knowledge and skills in accounting and/or auditing financial statements which were obtained during studies, scientific career and/or extensive professional practice.

Furthermore, Mr. Tomasz Szeląg possesses knowledge and skills with regard to the sectors in which the Group operates, gained during many years of professional career on key managerial positions within Polsat Plus Group, among others, as Member of the Management Board responsible for finance in Cyfrowy Polsat.

Regulations of the Audit Committee apply to the meetings, resolutions and minutes of meetings of the Audit Committee.

Meetings of the Audit Committee are convened by the Chairman of the Audit Committee or a Member of the Audit Committee authorized by the Chairman and are held at least once a quarter, at dates determined by the Chairman of the Audit Committee. Additional meetings of the Audit Committee may be convened by the Chairman of the Audit Committee at the request of a Member of the Audit Committee, Chairman of the Supervisory Board or another Supervisory Board Member, as well as at the request of the Management Board.

The Audit Committee passes resolutions, if at least half of its Members are present at the meeting and all Members were properly invited. Resolutions are passed by an absolute majority of votes and in the case of an equal number of votes, the Chairman of the Audit Committee shall have a casting vote. Members of the Audit Committee may participate in the Committee’s meetings and vote in person, or by means of distant communication.

The work of the Audit Committee is managed by its Chairman who is responsible for preparing an agenda of each meeting or may appoint a Secretary of the Audit Committee whose tasks include in particular the preparation of an agenda of each meeting and organization of the distribution of documents for the Committee’s meetings. A notification of the meeting, including its agenda together with all required materials, must be delivered to the Members of the Audit Committee at least 7 days before the meeting and in extraordinary circumstances a Committee’s meeting may be convened at a shorter notice than the above mentioned deadline.

The Chairman of the Audit Committee may ask a relevant Management Board Member to prepare appropriate materials.

Minutes are taken of every meeting of the Audit Committee and are then signed by all Members who participated in a given meeting.

Members of the Supervisory Board who are not part of the Audit Committee may, at their own initiative, participate in the Committee’s meeting, however without a voting right. The Chairman of the Audit Committee may invite Members of the Supervisory Board, auditors, employees of the Company and other persons as experts.

The tasks of the Audit Committee include in particular monitoring of the financial reporting process, efficiency of internal control systems and risk management systems as well as internal audit and performing financial revision activities, in particular carrying out audits by an audit company.

Pursuant to the Audit Charter, the Internal Audit Director meets directly the Audit Committee. In addition, at the request of the Audit Committee he or she joins its sessions and presents additional/supplementary information.

The Audit Committee evaluates, controls and monitors independence of a certified auditor and audit company, in particular in the case when the audit company provides the Company with services other than auditing of financial documents in the Company. The Audit Committee grants consent to provision of such services by the audit company. The Audit Committee notifies the Company’s Supervisory Board about the results of audit and the role of the Committee in the auditing process as well as explains how this audit contributed to the reliability of financial reporting in the Company.

The tasks of the Audit Committee also include developing a policy of selection of an audit company to carry out the audit as well as developing a policy of provision by the selected audit company, its affiliated entities and members of the audit company’s network of permitted services which are not part of the audit.

Main assumptions underlying the selection of an auditor in Cyfrowy Polsat

•        In accordance with the Company’s Articles of Association, the Company’s Supervisory Board is the body selecting the auditing company (in the Company’s Articles of Association referred to as the chartered accountant) for carrying out the statutory audit, while the General Meeting of the Company is the body approving the Company’s financial statement.

•        The first contract with the auditing company for carrying out the statutory audit of financial statements is concluded by the Company for the period of 2 years, extendable for successive two- or three-year periods, with the reservation that the total period of the statutory audit may not exceed ten years and the key auditor may not conduct the statutory audit for more than five years. Termination of the contract with the auditing company is possible, if justified grounds to do so emerge.

•        The Audit Committee develops the policy for the selection of the auditing company and determines the procedure of selection of the auditor for performing the statutory audit. The auditor selection procedure is determined at the Audit Committee’s discretion. The Audit Committee may instruct the Company's Management Board or employees of the Company selected by it to carry out the selection procedure.

•        If an auditor for statutory audit is selected, the selection procedure must meet the following criteria:

–         the auditor on its own, or as part of a chain of companies operating on the territory of the European Union, has not conducted statutory audits for the Company for a period of at least past 10 consecutive years, or of if such a company did conduct a statutory audit for the Company for a continuous period of 10 consecutive years in the past, then a period of at least 4 years has already elapsed since the last of such audits,

–         the organization of the tender process does not exclude from the selection process companies which have obtained less than 15% of their total remuneration on account of auditing public interest units in the Republic of Poland during the past calendar year, which are found on the list of auditors published on the website of the Audit Oversight Committee (Komisja Nadzoru Audytowego) (a sub-page of www.mf.gov.pl),

–         in the event that the selection of the auditing company is carried out during the year covered by the audit in question, neither the auditor, nor any member of the chain, of which the auditor is a member, has provided, either directly or indirectly to the Company or to its subsidiaries, any prohibited services, as defined by article 136 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight, during the current financial year, as well as any services related to the development and implementation of internal control procedures or risk management procedures associated with the development or control of financial information, or the development and implementation of any technological systems concerning financial information during the preceding year.

Major assumptions of the policy of provision to Cyfrowy Polsat of permitted services which are not audit services by the selected auditor, its related companies or members of the chain of which the auditor is a member

•        The Company shall not conclude, with the auditor, its related companies or the members of the chain of which the auditor is a member, any agreements for the provision of prohibited services, as defined in Article 5, section 1, paragraph 2 of the Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC.

•        Prior to contracting any work, being permitted services and not being an audit, the Audit Committee performs an assessment of the threats and safeguards related impartiality, mentioned in Articles 69-73 of the Act on Statutory Auditors, Audit Firms and Public Oversight. The Audit Committee also oversees compliance of the performed work with the valid law.

•        Permitted services include:

–         services involving due diligence procedures related to the Company’s economic-and-financial standing;

–         issuing comfort letters in connection with prospectuses issued by the audited entity, carried out in accordance with the national standard for related services and consisting of performance of agreed procedures;

–         assurance services related to pro forma financial information, forecasts of results or estimated results which are included in the audited unit’s prospectus;

–         audit of historical financial information to be included in the prospectus which is mentioned in the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements;

–         verification of consolidation packages;

–         confirmation of fulfilment of the terms of facility agreements concluded by the Company based on the financial information coming from the financial statements examined by a given auditor;

–         assurance services in the scope related to reporting on corporate governance, risk management and corporate social responsibility;

–         services involving assessment of the compliance of the disclosures made by financial institutions and investment firms with the requirements related to disclosure of information concerning capital adequacy and variable components of remuneration;

–         assurance concerning financial statements or other financial information intended for the supervisory authority, the supervisory board or any other supervising body of the company, or the owners whose scope exceeds the scope of the statutory audit and which are intended to assist these authorities in the fulfilment of their statutory duties.

The Audit Committee provides the Supervisory Board with a recommendation regarding the selection of audit company.

On July 10, 2023, the Audit Committee recommended to the Supervisory Board to appoint Ernst & Young Audyt Polska Spółka z ograniczoną odpowiedzialnością Sp. k., with its registered office in Warsaw, to audit the financial statements of the Company and the consolidated financial statements of the Company’s capital group for the years 2023 and 2024. The recommendation fulfilled the criteria set in the adopted policy of selection of an audit company and followed the selection procedure organized by the Company which met the binding criteria. The recommendation was accepted by the Supervisory Board.

Additionally, the Audit Committee presents recommendations to the Company’s Management Board aimed at ensuring the reliability of financial reporting in the Company.

9.7.5.     Remuneration of the Members of the Supervisory Board

Rules for remuneration of Members of the Supervisory Board are regulated by the Remuneration Policy for the Management Board and Supervisory Board Members. Information regarding remuneration of Members of the Supervisory Board in 2024 is included in the consolidated financial statements (Note 48) and in the standalone financial statements (Note 44) of the Company for 2024.

9.8.        Diversity policy applicable to administrative, managing and supervising bodies of the Company

As part of the implementation of the Human Rights Policy, Polsat Plus Group has adopted a Diversity Policy. The policy enables the Group to respond in a better way to the employees’ expectations, make full use of their potential and at the same time help the companies who are part of the Group to adjust to the changes occurring on the labour market. We trust that diversity is one of the sources of our competitive advantage, and competing views, opinions, work styles, skills and experience generate new quality and enable companies to achieve better business results.

The basic principles of Polsat Plus Group’s Diversity Policy include protection of diversity and prohibition of any discrimination due to gender, age, sexual orientation, competence, experience, potential degree of disability, nationality, ethnic origin, colour of skin, language, parental status, religion, worldview, or any other dimensions of diversity which are defined by valid law.

The provisions of Polsat Plus Group’s Diversity Policy apply to all employees, including Management Board Members and Supervisory Board Members. While our aim is to promote gender equality among top managerial positions, our policy is above all to appoint persons with appropriate competences, professional experience and education to the Management and Supervisory Boards of the Company. The diagrams below present the gender and age structures of the Members of the Management and Supervisory Boards of Cyfrowy Polsat.

 

 

As at December 31, 2024 three men and three women sat on Cyfrowy Polsat’s Management Board while the Supervisory Board included five men and one woman.

Members of the Management Board and the Supervisory Board have education in fields such as management and marketing, law, economy, finance, or technical education as well as rich and diverse professional experience.

 

10.    Sustainable development statement

10.1.   General information

10.1.1.         ESRS 2 General disclosures

BP-1 – General basis for preparation of the sustainability statement

Cyfrowy Polsat S.A. (“the Company”, “Cyfrowy Polsat”), a company with its registered office in Warsaw, at Łubinowa 4a, is the dominant unit of Cyfrowy Polsat S.A. Capital Group (the “Group”, “Polsat Plus Group”) conducting its business operations on the territory of Poland. Cyfrowy Polsat shares have been traded on the Warsaw Stock Exchange since May 2008.

The Company fulfils the criteria set for the biggest public interest units (listed in the catalogue in Article 3(1e) (1) to (6) of the Polish Accounting Act) and during the preceding years it was covered by the obligation of publication of non-financial data, which has been imposed on selected units and capital groups by virtue of the Polish Accounting Act of 29 September 1994. The Act of 6 December 2024 on the amendment of the Accounting Act, the act on chartered accountants, auditors and public supervision and of some other acts, which was published on 17 December 2024, and which took effect from 1 January 2025, imposed new reporting obligations on Polsat Plus Group. The new reporting obligations are defined by the Corporate Sustainability Reporting Directive - CSRD) (2022/2464) and rely on the European Sustainability Reporting Standards (ESRS) which were implemented by the delegated regulation of the European Parliament and Council EU 2023/2772 of 31 July 2023 (Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU of the European Parliament and of the Council as regards sustainability reporting standards).

This chapter is the sustainable development statement, as defined by the ESRS standards, and it constitutes the fulfilment of the statutory reporting obligations related to sustainable development as defined by the Polish Accounting Act (“the sustainable development reporting”). The document constitutes the consolidated sustainable development report of Polsat Plus Group, which means that the scope of consolidation of this report is identical as the scope of the Group’s consolidated financial statement. Due to the nature and the scope of influence, the data presented therein cover the scope of the data related to Cyfrowy Polsat S.A. and its subsidiaries for the period from 1 January 2024 to 31 December 2024, while indicating the material events which occurred in the period after 31 December 2024 but before the date of the present statement’s publication. At the same time, while analysing the impact, the risks and the opportunities, the Group has adopted a broader view, i.e. the one which encompasses individual value chains, both with regard to the upstream part, as well as the downstream part (being involved in several categories of operations, the Group has companies operating in various sectors, thus several value chains are mentioned here). Wherever justified from functional point of view, in the face of the occurring changes the Group has addressed not only the current nature of the impact it has but also its potential future impact, in the broadest sense possible, i.e. while accounting for the value chain.

In this report we have exercised the right to omit specific information items regarding the intellectual property rights, the know-how, or the results of innovation due to their confidential nature (ESRS 1, section 7.7 Classified and sensitive information, and information on intellectual property, know-how or results of innovation), with regard to the following:

•        S3-5. Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities. (in the context of the procedures and tools associated with prevention of crime – that is intellectual property theft – which is intended to protect these tools and, consequently, the effectiveness of the activities themselves).

BP-2 – Disclosures in relation to specific circumstances

The Group did not adopt any other understanding of the short-, medium- or long-term perspective than the one adopted in the ESRS.

In principle, the quantitative data presented in the report are the actual data coming from internal reporting systems. Potential limitations regarding specific data items are indicated directly in the relevant place in the report (next to a relevant table), which has been done for convenience of the readers. Wherever presentation of the actual data was impossible, the Group provided estimates. This applies in particular to the calculations of the carbon footprint whose size is not actually measured but calculated on the basis of the data regarding the actual consumption of fuel and energy, while using relevant conversion ratios in line with the approach described in “The GHG Protocol Corporate Accounting and Reporting Standard” (Scopes 1 and 2). Due to impossibility of using the actual data, estimates have also been used for calculating the carbon footprint for Scope 3. The information regarding the calculation methodologies applied can be found directly in the disclosure ESRS E1 Climate change, E1-6 – Gross copes 1, 2, 3 and Total GHG emissions. The methodologies used comply with the ones found in the „Technical Guidance for Calculating Scope 3 Emissions. Supplement to the Corporate Value Chain (Scope 3) Accounting & Reporting Standard”.

It is the first sustainable development report developed in line with the ESRS standards. In previous years, the Group published reports on non-financial data based on other regulations and the GRI (Global Reporting Initiative) reporting standards. In the face of the changes, including introduction of the new ESRS reporting requirements and standards, it became impossible to present comparative data for the previous reporting period. Whereas it is the first report which follows the sustainable development reporting rules based on the ESRS standards, thus it is impossible to discuss any potential, identified errors in earlier reports. At the same time, the Group did not identify any errors in the earlier statements presenting the non-financial data.

Bearing in mind the intention to make this report as concise as possible, and hence to maintain transparency wherever such an approach fostered transparency, the Group uses references to other parts of its reports, especially to other items of this Management Board’s report on activities and the consolidated financial statements for 2024, while accounting for the provisions mentioned in ESRS 1, section 9.1 Incorporation by reference. In particular, incorporation by reference has been applied to the following disclosures:

•        GOV-1 The role of the administrative, management and supervisory bodies,

•        GOV-5 Risk management and internal controls over sustainability reporting.

The Polsat Plus Group has taken advantage of the opportunities provided by the gradual implementation of the legislation, i.e. the allowances indicated in ESRS 1 Appendix C in relation to SBM-3(48)(e) and the disclosures relating to the anticipated financial impacts arising from the significant risks and opportunities associated with each environmental impact area, i.e.: E1-9, E2-6, E3-5, E4-6 and E5-6, and disclosures S1-13, S1-14 (to the extent indicated in Appendix C).

GOV-1 – The role of the administrative, management and supervisory bodies

In accordance with the Commercial Companies Code, the governing bodies of Cyfrowy Polsat S.A., which is the dominant unit in Polsat Plus Group, are the General Meeting, the Supervisory Board and the Management Board. The representatives of trade unions are not members of any of these bodies. Detailed information regarding the members and the authority of the respective governing bodies can be found in section 9 of this report – Corporate governance statement.

Within the Group’s management structure, the responsibility for the ESG-related issues has been assigned to a Member of Cyfrowy Polsat S.A. Management Board, who at the same time is responsible for finance, investor relations and internal audit functions. Thus, the responsibility for financial and non-financial reporting is concentrated in one place, while combining the above-mentioned responsibilities with coordination of the internal audit and investor relations functions fosters assurance of reliable management of non-financial data and reporting in this area.

Members of the Management Board and members of the Audit Committee are informed quarterly about the status of activities and reporting in the ESG area.

GOV-2 – Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies

The activities which are material from the point of view of the risks, the opportunities and the results of ESG-related activities in the Group’s respective companies are coordinated on an on-going basis at the operational level by the ESG Manager. The position is also responsible for the exchange of the information which is material from ESG point of view between the respective companies and the dominant unit, as well as for the implementation of ESG-related formal solutions. In addition, the position manages the reporting process, while making sure that the presented information is uniform and reliable. In accordance with the organizational structure, which was in effect on 31 December 2024, the position reported to the Director of the Reporting and Financial Controlling Department, who in turn reports to the Management Board Member responsible for the ESG matters. After 31 December 2024, however before publication of the report, the organizational structure underwent modifications, i.e. the ESG Unit was established. The manager of this unit (formerly the ESG Coordinator) functions within the Investor Relations, ESG and Compliance Department, reporting to the same member of the Management Board. The key information, as well as all major ESG-related decisions, are presented and discussed by the relevant Management Board Member at Management Board meetings. Non-financial information, along with other information found in the reports, is subject to approval by the Management Board. Such information is also subject to the Supervisory Board’s oversight.

GOV-3 – Integration of sustainability-related performance in incentive schemes

In the year 2024 the issues related to sustainable development were not covered by the incentive schemes of the management and supervisory bodies of the Group’s companies. No bonus-associated objectives were formulated which would be directly linked to specific metrics or ESG-related results. At the same time, capital expenditures as well as other projects, which are part of transformation of the Group’s business model, are of strategic importance, and as such they form a starting point for the assessment of the managers by the supervisory body.

GOV-4 – Statement on due diligence

Bearing in mind the fact that the Corporate Sustainability Due Diligence Directive (CSDDD) of the European Parliament and Council, which was published in the EU Official Journal in July 2024, is not yet in force and that its effective date has been postponed, the Group has not taken any actions yet to assure compliance with the new regulation.

Nonetheless, the Group is implementing solutions aimed at assuring the highest level of diligence, both with regard to the value chain (including deliveries), as well as the activities within the Group itself.

Major elements of the due diligence process

Core elements of due diligence	Actions taken as part of the due diligence process
a) Embedding due diligence in governance, strategy and business model	Key actions include: •        guaranteeing the resources (including human and financial resources as well as formal solutions which facilitate monitoring of regulatory changes as well as the cooperation with regulators and industry organizations •        adoption of respective policies, including the Policy of Respect for Human Rights which constitutes a formal reference point in terms of the expectations regarding third party conduct as well as establishes the Compliance Officer for the Respect of Human Rights •        adoption and application of the Partner's ESG Declaration of Responsible Cooperation (for Contractor, Supplier, Bidder, Integrator) along with the anti-corruption and ESG clauses •        implementation of the Internal Reporting of Legal Breaches and Follow-up Procedure References in the report: ESRS 2 GOV-1, ESRS 2 GOV-2, ESRS 2 SBM-1, ESRS 2 SMB-3, SMB-3-E1, E1-2, E3-1, SMB-3-E4, E4-2, E5-1, SMB-3-S1, S1-1, SMB-3-S2, S2-1, SMB-3-S2, S3-1, SMB-3-S4, S4-1, GOV-1-G1, G1-1, G1-2, G1-3
b)  Engaging with affected stakeholders in all key steps of the due diligence	Key actions include: •        cooperation within the framework of industry agreements as well as observance of voluntary self-regulation rules adopted by respective industries •        obtaining information from and providing explanations to the public administration bodies (including UKE, URE, UOKIK, KRRiT) •        dialogue with suppliers in the situations when questions or doubts emerge as regards fulfilment of the expectations formulated in the ESG Declaration •        monitoring the satisfaction level of selected stakeholder groups and surveying their expectations •        monitoring and analysis of complaints. References in the report: SBM-2, SBM2-S1, SBM-2-S2, SBM-2-S3, SBM-2-S4
c)  Identifying and assessing adverse impacts	Key actions include: •        monitoring and analysis of the information regarding potential irregularities reported based on the Internal Reporting of Legal Breaches and Follow-up Procedure, or via other communication channels •        analysing the causes of complaints and customer requests •        in the case of construction work, analysing signals from residents of neighbouring areas or other persons exposed to possible nuisance or suspecting irregularities •        points of contact are created for construction projects (including RES projects) for which Stakeholder Engagement Plans (SEP) are developed and adopted. The information received via such points of contact is processed and responded to on an on-going basis. References in the report: IRO-1, IRO-1-E1, IRO-1-E2, IRO-1-E3, IRO-1-E4, IRO-1-E5, SBM-3-S1, SBM-3-S2, SBM-3-S3, SBM-3-S4,
d) Taking actions to address those adverse impacts	The general principles are: •        analysis of the cases of potential non-compliance or existence of irregularities, and taking of corrective actions •        continuous improvement and modification of procedures considering good market practices. References in the report: E1-3, E3-2, E4-3, E5-3, S1-3, S1-4, S2-3, S2-4, S3-3, S3-4, S3-3, S4-3, S4-4, G1-3
e) Tracking the effectiveness of these efforts and communicating	The general principles are: •        analysing various types of requests (e.g. complaints, internal requests) •        monitoring of regulatory changes to assure compliance. References in the report: E1-4 – E1-6; E3-3 – E3-4, E4-4- E4-5, E5-3 – E5-5, S1-5 – S1-17, S2-5, S3-5, S4-5, G1-4 – G1-6

It is both the legal departments and the functional units involved in specific business activities who are responsible for assuring compliance with the law in individual Group companies. Our activities on the telecommunications market are supervised by the Office of Electronic Communications (UKE), while the activities on the TV market are subject to supervision by UKE and the National Broadcasting Council (KRRiT), whereas the operations on the renewable energy sources (RES) market are supervised by the Energy Regulatory Office (URE). Representatives of our organisation regularly participate in the work of Polish and international industry organisations, implementing and promoting the solutions developed there.

We are the signatories of numerous voluntary industry agreements, including:

•               IAB Polska standards for online advertising formats

•               Broadcasters’ agreements regarding the principles of dissemination of advertisements and sponsor references regarding food or beverages containing components whose presence in excessive amounts in a daily diet is not recommended

•               IAB Polska initiative for fair advertising

•               Code of best practices regarding the principles of protection of minors in respect of on-demand audio-visual media services

•               “Warsaw Declaration”: International Cooperation Key to Combating Piracy

•               5G Strategy for Poland Agreement

•               Declaration of Cooperation for the Safety of Children in the Internet

•               IAB QUALID program of improvement of the quality of online advertising

•               Agreement signed by the providers of media services regarding the method of fulfilment of the obligation of assuring the facilities for the people with disabilities, while providing to them audio-visual services which are offered on-demand, as well as the obligation of assuring the facilities in the TV shows for children

•               Code of Best Practice in the field of safe use of phones

•               Code of Best Practice in mobile advertising.

In 2023 Cyfrowy Polsat S.A. adopted the Policy of Respect for Human Rights. For more information on this Policy, please read section S1-1 - Policies related to own workforce. The position of the Compliance Officer for Human Rights was established as a result of introduction of this Policy. The responsibilities of the Compliance Officer for Human Rights include planning and conducting of the training sessions concerning respect for human rights as well as resolution of any doubts which may be associated with the implementation of the Policy. Identification of cases of human rights violations is supported by the possibility of reporting the suspected irregularities in this area based on the adopted Internal Reporting of Legal Breaches and Follow-up Procedure.

Polsat Plus Group strives to make sure that all the initiatives it embarks upon, all the projects or partnerships are not only compliant with the applicable law but also with the adopted principles of ethics and the defined sustainable development goals which are stipulated, together with the expected outcomes, in the Partner's ESG Declaration of Responsible Cooperation (for Contractor, Supplier, Bidder, Integrator). The Partner’s ESG Declaration of Responsible Cooperation is a set of principles which are intended to shape the relations of Polsat Plus Group with its business environment. They also form the ethical foundations of cooperation and set the standards to which the Group wants to adhere when cooperating with its business partners. The document is available on the Group’s corporate website at the following URL.

Since December 2023, anti-corruption and ESG clauses are successively introduced to the new agreements with suppliers. They obligate the suppliers to respect human rights (the rules related to working conditions, safety, non-discrimination, combatting of forced labour, decent remuneration, freedom of association), observe the principles of protection of natural environment, use of responsible management practices, or prevention of corruption and bribery.

GOV-5 – Risk management and internal controls over sustainability reporting

At the end of 2024 the sustainability reporting was the duty of the same organizational unit as the one which responsible for financial reporting (Reporting and Financial Controlling Department) which helped assure consistency of both types of reporting and fostered efficient information flow in this area. In 2025, before the publication of this report, the organizational structure was expanded and modified by establishing the ESG Unit whose manager (formerly the ESG Coordinator) works within the structure of Investor Relations, ESG and Compliance Department. The move was a response to the growing importance of ESG issues, as well as scope of sustainability-related reporting obligations.

In 2024 the ESG Manager has been responsible for preparing the sustainability statement and overseeing the process of collection and consolidation of the required data. The qualitative and the quantitative data is acquired from the functional units responsible for these items and confirmed with these units, and it comes from their internal reporting systems. At the same time, substantial part of quantitative data is collected and aggregated with the use of IT tools, which reduces the risk related to data incompleteness and calculation errors. The whole process is supported by an external expert (for more information see section 9.2 of the Report on activities – Internal control systems and risk management applied with respect to the process of preparing financial statements).

SBM-1 – Strategy, business model and value chain

Business model of Polsat Plus Group

Polsat Plus Group is a provider of integrated media and telecommunications services in Poland which include pay TV (DTH) services as well as presence in the Internet media (interia.pl). It offers mobile and fixed telephony services, data transmission services as well as broadband Internet access, including mainly LTE, LTE Advanced and 5G technologies, and through fixed networks, including fibre-optics. Additionally, we provide wholesale services to other telecommunications operators. In the media segment we also offer comprehensive multimedia services designed for entire families: pay TV using satellite, terrestrial and Internet access technologies (IPTV, OTT). Our operations in this area include production, purchase and broadcasting of news and entertainment programmes as well as TV series and feature films via TV channels and over the Internet (the revenue of the media segment comes mainly from airing of commercials, sponsoring as well as revenues from cable network operators and digital platforms). 

The Group is also involved in the production and sale of energy coming from renewable energy sources (RES), including in particular solar power, wind and biomass, and invests in RES projects. The Group is the majority shareholder of the company that controls Elektrownia Konin, a power plan generating energy from biomass combustion, as well as numerous photovoltaic and wind farms. Additionally, within this segment of operations, the Group is developing the green hydrogen-based value chain, which includes production, storage, transport, distribution and sale of green hydrogen as well as construction of hydrogen refuelling stations and manufacturing of hydrogen-powered buses. Thanks to the resources at its disposal, the Group also offers the services of photovoltaic systems installation to individual customers and business clients.

In terms of real estate development, the Group’s companies are involved in construction projects as well as sale, rental and management of own and leased properties. Port Praski in Warsaw is the key real estate project in this segment of operations.

(information regarding current operations can be found at: https://grupapolsatplus.pl/en/about-us/our-business)

The business model, the nature of the markets covered as well as the business strategy are described in section 1 – Characteristics of Polsat Plus Group and section 2 – Our business – of this report. The most important social and environmental impact categories for the various business segments are indicated in the following sections: ESRS 2 – General disclosures, SBM-3 and IRO-1, as well as, in a slightly more extensive manner, in the respective chapters which correspond to those individual ESRS topical standards that are material from the point of view of the Group’s activities.

In 2024 the Group carried out operations in the scale that enabled it to generate revenues in individual business segments at the level presented in this report in section 4.2.2 – Operating segments, with year-end employment at 9 059 people (FTEs).

At the same, the Group did not generate any revenue from the activities associated with chemicals production, controversial weapons, cultivation and production of tobacco (items indicated in requirement SBM-1 (40)(d)). Until the launch of own production of green hydrogen, the Group supplied hydrogen purchased from external suppliers. Having adopted a precautionary approach, the Group did not recognise hydrogen as produced with the use of renewable energy sources only. In 2024 the revenue from the sale of hydrogen had no material influence on the Group’s results.

ESG matters in the development strategy

Along with the announcement of the 2023+ Strategy in December 2021, we have also structured our approach to sustainable growth, which includes ESG factors - environmental, social responsibility and corporate governance.

We assume responsibility for prevention of climate change and are active in improving air quality in Poland
E (Environmental)	•	New investments. By producing nearly 2 TWh of green energy from solar, wind and biomass installations per year we will contribute to the reduction of CO2 emissions in Poland by nearly 2 million tonnes per year.
	•	Renewable and zero-emission energy sources. We use energy from low- and zero-emission sources; by 2030 we will increase the share of zero-emission sources in our energy mix to 50% 1.
	•	Reduction of carbon footprint. By 2030 we will reduce the total Scope 1 and Scope 2 GHG emissions by 80%, compared to 2019.
	•	Green hydrogen. By 2030 we will be producing 3000 tonnes of green hydrogen per year.
	•	Low-emission mobility. we successively increase the share of low-emission vehicles, especially electric and hydrogen powered, in the car fleet of Polsat Plus Group.
	•	Circular economy. Decoders, that have been returned after use by our customers, undergo refurbishment process and are returned to the market, while other equipment is recycled.
We are an active member of the local society and – at the same time – we stimulate Poland’s economic and social development by investing in digitization
S (Social)	•	Counteracting digital exclusion. We are dynamically expanding the coverage of modern, high-speed 5G and fibre-optic Internet service.
	•	Polsat Foundation. We are a key partner of the Foundation, which has helped fund the treatment and rehabilitation of 44 945 children over the past 28 years.
	•	Responsible employer. we ensure a friendly and safe working environment, as well as equality and diversity for all our employees.
	•	Protection and safety of children. We are committed to the safety of children and young people using media, including online safety and TV content.
We develop our business in a transparent and sustainable manner, to the benefit of all our stakeholders
G (Governance)		Codes of ethics. We operate in accordance with ethical principles and with respect for human rights, and our internal systems and procedures ensure the highest standard of integrity.
	•	Transparency. we ensure high quality financial and ESG reporting in combination with regular, transparent and direct communication with all our stakeholders.
	•	Cybersecurity. Aware of the challenges in this area, we strive for the best possible security and protection of our customers‘ and employees’ data (ISO 27001 certified).
	•	Experience, trust, and reputation. Our companies’ Management Boards are served by individuals with long tenures in the Group and extensive experience.

(1)	Applies to the Polsat Plus Group's main operating companies: Cyfrowy Polsat S.A., Telewizja Polsat sp. z o.o., Polkomtel sp. z o.o., Netia S.A.

In November 2022, we adopted a framework document which linked the external financing to sustainability goals – the Sustainability-Linked Financing Framework (SLL Framework) compliant with ICMA’s Sustainability-Linked Bond Principles (SLBP) and Sustainability-Linked Loan Principles. Our strategic plan includes ambitious actions to counteract climate change and to improve air quality in Poland. In SLL Framework we have defined 4 KPIs that support the achievement of the UN Sustainable Development Goals (SDG), setting for ourselves ambitious, measurable targets for the coming years. Our SLL Framework was subject to an external expert evaluation which is documented in the publicly available Second-Party Opinion by the company Sustainalytics.

The full content of the SLL Framework and the Second-Party Opinion are available at the following link: Polsat Plus Group Sustainability-Linked Financing Framework.

Below are the key performance indicators and the quantified long-term environmental objectives, that the Group will strive to achieve, including the expert assessment of these goals in terms of their relevance and the assumed ambition levels.

Key Performance Indicator (KPI)	Relevance	Sustainable Performance Target (SPT)	Ambition level
Total Scope 1 and 2 greenhouse gas emission (tCO2)	Very high	Reduction of total Scope 1 and 2 greenhouse gas emission by 75% by 2025 and by 80% by 2030, compared to 2019 levels	Very ambitious
Energy production from renewable sources (GWh)	Relevant	Increase of renewable energy production to 800 GWh by 2025 and to 1,600 GWh by 2030	Ambitious
Green hydrogen production (t)	Relevant	Increase of green hydrogen production to 1,500 tons per year by 2025 and to 3,000 tons per year by 2030	Ambitious
Share of zero-emission sources in the energy mix (%)	High	Increase of the share of zero-emission in the total energy mix to 25% by 2025, to 30% by 2026 and to 50% by 2030	Ambitious

The performance of KPIs in 2024 is reflected in the following table:

¹) Concerns companies: Cyfrowy Polsat S.A., Telewizja Polsat sp. z o.o., Polkomtel sp. z o.o., and Netia S.A.

 

In 2024, we not only managed to achieve both goals of reducing total greenhouse gas emissions in scopes 1 and 2 that we had set for 2025 and 2030 but also exceeded them. It is worth noting that the greenhouse gas emissions for 2024 in both scopes were calculated for the Group's companies according to operational control, which resulted in an increase in the total emissions value of the Group in 2024 compared to previous years. However, the baseline carbon footprint level in scopes 1 and 2 from 2019 was not adjusted (it is lower), which means that the achieved emission reduction result is understated.

In 2024, the Group has exceeded the target set for 2025 for the renewable energy production indicator.

Own green hydrogen production was launched in December 2024.

The KPI of the share of zero-emission sources in Polsat Plus Group’s energy mix is calculated in the following way:

•        the denominator is the volume of electricity purchased by the companies: Cyfrowy Polsat S.A., Telewizja Polsat sp. z o.o., Polkomtel sp. z o.o., and Netia S.A. for their own consumption, i.e.:

–         electricity purchased for own consumption from an entity being an energy generation or an energy supply company, for purposes other than resale of energy in contracts in which any of the above entities solely performs in the role of electricity supply company, but

–         including the volume of energy being recharged to other entities as a complimentary cost component in combination with other complex service deliverables (mainly as part of data centre services or property sub-lease);

•        the numerator is the volume of purchased electricity generated by solar, geothermal, tidal power plants, and wind farms.

In 2024 r. the share of zero-emission sources in the energy mix of the above-mentioned Group companies reached 42.9%, which exceeds significantly the target for 2025.

Value chain

As a consequence of Polsat Plus Group’s operating in four business segments (see item 2 of this Report– Our business) there are four independent value chains. What they have in common, however, is a structured approach to collaboration with third parties, including „The procedure for purchase planning and supplier selection” adopted by key companies of the Polsat Plus Group, or the expectations concerning the principles of cooperation with partners that are stipulated in Partner’s ESG Declaration (see: GOV-4 – Statement on due diligence).

B2C and B2B services segment. The activities include providing services to individual and business customers, primarily in the areas of paid digital television, mobile telephony, and Internet access. The Group also includes the installation of photovoltaic systems in this segment. Services are provided based on the telecommunication infrastructure owned by the Group and third parties. It covers most of the value chain, excluding selected elements of its upper part (e.g., the production of most equipment, including customer devices, and a significant portion of content, as well as telecommunication services provided in international roaming, where the Group uses the services of foreign telecoms, and the ownership of a significant part of the infrastructure used by the Group).

Suppliers. Key direct suppliers are:

•        ICT infrastructure providers (telecommunications and ICT network components)

•        manufacturers of customer premise equipment (CPE) offered by the Group

•        manufacturers of photovoltaic infrastructure components (solar cells, inverters, mounting systems) that are further offered to the customers

•        other telecommunications operators (national and foreign), who often are competitive telecommunications companies, with whom traffic is exchanged, and who are also wholesale service providers and/or are obliged under current regulations to share their network

•        ICT and network service providers

•        companies providing satellite capacity on transponders

•        agents acting as intermediaries in the sale of services and products

•        content producers and licensors

•        call centre service providers

•        electricity suppliers.

At the same time, the adopted business model assumes that the maintenance and development of key mobile telecommunication infrastructure is the responsibility of an external entity – Towerlink Poland sp. z o.o., which provides services to Polkomtel. Part of the fixed infrastructure in use is owned by our subsidiary Netia and remains under the control of the Group. Additionally, the Group accesses fixed-line, mainly fibre-optic networks, of other operators based on wholesale access agreements. In supporting functions, suppliers also include numerous entities that provide advertising, legal, advisory services, as well as property management services and utilities.

Upstream links in the value chain, related for example to the production of electronic equipment, source raw materials (metals, including precious and rare earth metals; plastics) from companies in the mining and petrochemical sectors. The Group has limited influence and knowledge about specific companies that supply materials and services to its suppliers. Decoders are an exception to this, as their production and refurbishment is handled by Interphone Service – a company belonging to the Group. Nevertheless, it also uses electronic intermediates and components from manufacturers who, very much like equipment manufacturers, derive raw materials from the mining and petrochemical sectors at the beginning of the value chain.

Customers. The recipients of the services provided within the B2C and B2B services segment are:

•        individual customers (B2C)

•        businesses (B2B) and administration institutions

•        other telecommunications operators (national and foreign).

The Group does not impose any restrictions regarding, for example, the industry, providing services to businesses of various profiles, ensuring the widest possible access to its services for all individuals and legal entities. It also undertakes a number of actions to counteract the risk of exclusion of socially vulnerable groups, such as people with disabilities or residents of rural areas (see: ESRS S3, ESRS S4).

Other stakeholders: employees, competitors, public administration, regulators (including Office of Electronic Communications – UKE, Office of Competition and Consumer Protection – UOKiK, Personal Data Protection Office – UODO), industry and non-governmental organisations (including mountain and water rescue services: GOPR, TOPR, MOPR, WOPR), content providers (see: SBM-2 for more information).

Media segment: TV & online. The media segment primarily involves the production, purchase, and broadcasting of news and entertainment programmes, as well as TV series and feature films aired on television and online channels in Poland. The revenues of the media segment are mainly derived from advertising, sponsorship, and income from cable network operators and digital platforms.

Suppliers. Key direct suppliers of the media segment are:

•        infrastructure providers and service providers, including ICT and broadcasting infrastructure (e.g. broadcasting services)

•        content producers and licensors

•        television broadcasters making advertising time available for resale by the advertising office

•        utility providers, primarily electricity.

Supporting suppliers also include numerous entities that provide advertising, legal, advisory services, as well as property management services and utilities.

Upstream links in the value chain, related for example to the production of electronic equipment, source raw materials (metals, including precious and rare earth metals; plastics) from companies in the mining and petrochemical sectors. The Group has limited influence and knowledge about specific companies that supply materials and services to its suppliers.

Customers. The recipients of the services provided within the media segment are:

•        individual customers and households (viewers and Internet users)

•        businesses (pay-TV operators, advertisers) and administration institutions.

The Group does not impose any restrictions regarding, for example, the industry, providing services to businesses of various profiles.

Other stakeholders: employees, competitors, public administration, regulators (including National Broadcasting Council – KRRiT, Office of Competition and Consumer Protection – UOKiK), industry and non-governmental organisations (see: SBM-2 for more information).

Green energy segment. The green energy segment primarily involves the production and sale of energy from renewable sources (RES), particularly from the sun, wind, and biomass, as well as investments in RES projects. Within this segment, we are also developing a value chain based on green hydrogen, which includes its production, storage, transport, distribution, and sale, as well as the construction of hydrogen stations and hydrogen-powered buses.

Suppliers. Key direct suppliers of the green energy segment are:

•        manufacturers/suppliers of fixed assets (equipment), i.e. wind turbines or photovoltaic modules, hydrogen vehicles and suppliers of parts and components for the construction of electrolysers, hydrogen refuelling stations and the production of hydrogen buses, etc.

•        suppliers from the automotive segment, providing components and parts necessary for the production of hydrogen buses

•        fuel suppliers: biomass (forestry and agro-industrial), hydrogen

•        entities specialising in construction work (development of wind farm projects).

In supporting functions, suppliers also include numerous entities that provide repair, transportation services, and, analogically to other segments: advertising, legal, advisory, property management services and utilities.

Apart from choosing reliable suppliers and using certified biomass only, the Group has limited influence and knowledge about specific companies that supply materials and services to its suppliers.

Customers. The recipients of the products of the green energy segment are:

•        the Municipal Heat Energy Enterprise in Konin (MPEC Konin) (thermal energy collection)

•        companies and electricity traders (collection of electricity)

•        users of hydrogen cars (for hydrogen refuelling stations)

•        public administration (local) – purchase of hydrogen city buses.

Other stakeholders: employees, competitors, public administration, regulators (including Energy Regulatory Office - URE, Chief Inspectorate for Environmental Protection – GIOŚ), industry and non-governmental organisations (see: SBM-2 for more information).

Real estate segment. The real estate segment primarily involves the development of construction projects, as well as the sale, rental, and management of owned or leased properties. The Group also purchases construction services from other entities, which, as commissioned by the Group as the investor, carry out the necessary works and provide building materials. A key investment in this segment is the Port Praski project located in Warsaw. As part of this investment, the Group sells residential units and rents commercial premises, ensuring the management and administration of the facility during its initial period of use, also using external services.

Suppliers. Key direct suppliers are companies from the construction industry, both service providers (offering various types of construction services, professional services related to design and supervision) and manufacturers/suppliers of building materials. Their suppliers, in turn, are companies whose initial links in the value chain are associated with the mining and metallurgy industries (extraction of limestone for cement production, extraction of coking coal, extraction of metal ores: iron (e.g., for steel production), or copper (for electrical equipment), forestry and wood industry, and petroleum industry (plastics, e.g., PVC joinery). In supporting functions, suppliers also include numerous entities that provide advertising, legal, advisory, property management services and utilities.

Customers. The customers are buyers of flats and tenants of commercial premises in the development projects built by the Group. They are both individuals (B2C) and businesses (B2B).

Other stakeholders: employees, competitors, public administration (m.in. General Inspector of Building Control – GINB), industry organisations, residents of neighbouring areas (see: SBM-2 Interests and views of stakeholders for more information).

SBM-2 – Interests and views of stakeholders

The Polsat Plus Group categorised stakeholders as follows, highlighting the nature, subject matter and form of contacts with each group.

CUSTOMERS

Entities comprising the stakeholder group	Approach and type of stakeholder group engagement	Frequency of engagement	Key issues and concerns raised by the stakeholders
•   Individuals (B2C) and companies (B2B) who use any of the offers provided by the Group’s member companies •   Subscribers of pay TV and telecommunication services •   Viewers •   Polsat Box Go users •   Internet users  •   Advertisers •   Other telecom operators and pay TV service providers •   Companies and intermediaries involved in trade of electricity •   Purchasers of flats and tenants of commercial premises •   Customers using other services offered by the Group	•   Website (questionnaires) •   Customer service points and call centre (dialogue, questionnaires) •   Online self-service •   Opinion and satisfaction surveys •   Social media •   Press releases	•   Ongoing - continuous activities, opinion surveys - as needed and/or possible	•   General customer satisfaction with products and services, likelihood of recommending the brand, relations stability, likelihood of selecting the operator again •   Studied areas: offer, customer service points, telemarketing, call centre, website, online service centres, financial benefits, invoice, quality of services
Main areas of interest: ESRS S4

EMPLOYEES

Entities comprising the stakeholder group	Approach and type of stakeholder group engagement	Frequency of engagement	Key issues and concerns raised by the stakeholders
•   Present employees and their families  •   Potential employees •   Associates •   Trainees	•   Employee satisfaction surveys and interim employee evaluation •   Intranet, Yammer, GPP messenger, newsletter and in-house surveys •   Teambuilding events •   Employee volunteering •   Social media	•   Ongoing and regular communication	•   Stability and attractiveness of employment •   Family-friendly HR policy •   Hybrid working model arrangements •   Friendly workplace •   Development opportunities
Main areas of interest: ESRS S1

CAPITAL MARKET

Entities comprising the stakeholder group	Approach and type of stakeholder group engagement	Frequency of engagement	Key issues and concerns raised by the stakeholders
•   Shareholders •   Institutional and individual investors •   Banks and other financial institutions •   Bondholders •   Brokerage analysts •   Rating agencies	•   Financial and non-financial reports •   Current reports •   Corporate website •   Individual meetings (online and in person) •   Conferences and video conferences •   General Shareholders’ Meetings •   Shareholder analyses •   Perception studies •   SLL Framework •   Environmental & Social Action Plans	•   As required due to the Company's presence on the Warsaw Stock Exchange (WSE): –         Quarterly financial reporting –         On-going communication –         General Shareholders’ Meetings, held at least once a year –         Dialogue and meetings, as needed	•   Economic situation of the Group and its financial policy •   Strategy and development •   Competitive environment •   Business opportunities and risks •   Company value and valuation •   Transparency of operation •   Future investments •   ESG activities
Main areas of interest: financial performance, ESG performance on aspects related to the obligations imposed on financial sector institutions

REGULATORS AND STATE INSTITUTIONS

Entities comprising the stakeholder group	Approach and type of stakeholder group engagement	Frequency of engagement	Key issues and concerns raised by the stakeholders
•   KRRiT (National Broadcasting Council), UKE (Office of Electronic Communications), UOKiK (Office of Competition and Consumer Protection), URE (Energy Regulatory Office) •   UODO (Personal Data Protection Office) •   GIOŚ (Chief Inspectorate for Environmental Protection), Marshal’s Offices •   GUS (Main Statistical Office), KNF (Financial Supervision Authority), KRS (National Court Register) •   Council of Ministers •   the Lower House of the Parliament (Sejm) and the Senate •   European Commission, European Parliament and European Council •   ESMA •   BEREC •   National Media Council •   Council of Digital Affairs	•   Public consultations •   Fulfilment of the reporting obligations •   Direct meetings •   Joint initiatives and activities •   Participation in industry conferences	•   On-going communication resulting from the reporting obligations •   As needed	•   Impact on Polish and European economy  •   Market development  •   Service availability •   Compliance of the operations with the standards and the law •   Fulfilment of reporting obligations required of a public company
Main areas of interest: ESRS S4, ESRS S3, ESRS G1, as well as ESRS E1-E5 (GIOŚ and Marshall’s offices) and ESRS S1

SUPPLIERS

Entities comprising the stakeholder group	Approach and type of stakeholder group engagement	Frequency of engagement	Key issues and concerns raised by the stakeholders
•   Content providers, including TV stations, film studios, content distributors and producers •   Licensors (e.g. providing licenses for the broadcasting rights to sports events) •   TV broadcasters providing access to advertising air-time for resale by the advertising office •   Suppliers of end-user equipment  •   Suppliers of the components used for production of own end-user equipment  •   Suppliers of network elements and other infrastructure  •   Suppliers of power infrastructure components (wind turbines, photovoltaic panels, components of the hydrogen economy chain) •   Fuel suppliers: suppliers of biomass (forest-based and agricultural) and hydrogen •   Companies offering construction and design services as well as manufacturers of building materials •   Suppliers of other goods and services	•   Direct relations  •   Contracts  •   Cooperation within industry organisations  •   Industry conferences and workshops	•   As needed – on-going and regular	•   Conditions of cooperation  •   Transparent terms of tenders and cooperation •   Good, long-term relations •   Cooperation within the framework of industry initiatives
Main areas of interest: ESRS 2 GOV-4 (the part related to the value chain), ESRS G1 (mainly G1-2 and G1-6, but other G1 aspects as well)

SOCIETY AND SOCIAL ORGANISATIONS

Entities comprising the stakeholder group	Approach and type of stakeholder group engagement	Frequency of engagement	Key issues and concerns raised by the stakeholders
•   Associations of journalists •   Foundations and associations (beneficiaries) •   Industry, social and environmental organizations •   Cultural institutions •   Emergency services – mountain rescue units (GOPR, TOPR) •   Emergency services - lifeguard and water rescue units (MOPR, WOPR)	•   Planning and assurance of availability of services •   Exchange of information regarding identified incidents as well as cooperation in the development of optimal solutions •   Partnerships and joint initiatives •   Employee volunteering •   Sponsoring  •   Direct dialog with local communities and environmental organisations •   Scientific reports  •   Debates	•   Depending on the stakeholders’ needs and the Group’s capabilities	•   Access to services and service security •   Privacy and intellectual property protection •   Monitoring of freedom of speech and the freedom of work of journalists •   Openness to dialogue •   Financial support and human involvement  •   Understanding the Group’s core values •   Dispelling possible concerns/doubts regarding technological development
Main areas of interest: ESRS S3, ESRS S4, ESRS G1

COMPETITORS

Entities comprising the stakeholder group	Approach and type of stakeholder group engagement	Frequency of engagement	Key issues and concerns raised by the stakeholders
•        Market players active in the following areas: -        media -        telecommunications -        pay TV -        digital services -        production of electricity from RES -        real estate development	•   Cooperation within the industry organizations •   Industry conferences, debates and workshops •   Joint initiatives (e.g. market reports)	•   On-going communication, depending on the market situation	•   Market development •   Appropriate market regulation
The Group has no detailed knowledge of the data that is collected and analysed by the competitors. It can only assume that our competitors analyse both the financial results as well as the data related to sustainable development.

BUSINESS PARTNERS

Entities comprising the stakeholder group	Approach and type of stakeholder group engagement	Frequency of engagement	Key issues and concerns raised by the stakeholders
•   Distributors  •   Advertising brokers  •   Scientific institutions  •   Industry organisations and chambers of commerce •   Sports associations •   Marketing partners	•   Direct communication channels (e.g. website for distributors)  •   On-going and regular meetings  •   Contracts •   Codes of Best Practice and self-regulation •   Conferences and workshops •   Reports and reporting  •   Holding of positions in the authorities of industry organisations and chambers •   Active involvement in joint projects and activities (e.g. within respective chambers of commerce, consultations and expressing of opinions)	•      Communication depending on the needs of the stakeholders  •   Being pro-active, depending on the market situation	•   Group’s involvement in shaping the market •   Solving of market problems and promoting innovation •   Transparency of activities  •   Observing standards and rules  •   Openness to dialogue
Main areas of interest: ESRS S3, ESRS S4, ESRS G1

NATIONAL AND INDUSTRY MEDIA

Entities comprising the stakeholder group	Approach and type of stakeholder group engagement	Frequency of engagement	Key issues and concerns raised by the stakeholders
•   The press •   Internet •   Radio •   TV •   Influencers	•   Conferences and events •   Press releases •   Individual meetings •   Statements, comments and opinions •   Corporate website •   Social media •   Services offered for testing on a trial basis	•   On-going communication, depending on the market situation and current developments in the Group	•   Group’s economic situation •   New offers •   Innovation •   Development plans •   New programmes & shows •   Sports events •   Product testing •   Social involvement
Main areas of interest: ESRS S3, ESRS S4, ESRS G1, but other ESG aspects as well (social, environmental and governance), and financial results