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Orange Polska briefs analysts on the outlook for 2015, Equities News - EquitiesPoland.pl
Coverage of high-potential mid-market firms in Poland


Orange Polska briefs analysts on the outlook for 2015

TAG'S: Orange Polska SA, Telecoms

Following are takeaways from Orange Polska Q4 results conference with analysts. Comments come from CEO Bruno Duthoit, CFO Maciej Nowohonski and deputy CEO Mariusz Gaca.



2015 GUIDANCE ELEMENTS - Revenues: Revenues can fall below 2014 levels, with pressure on the top line driven by the B2B segment. Additionally, the effect of instalment offers launched in Q2 2014 will fade away. - CEO. Profitability: "EBITDA may be under pressure, coming mainly from the revenue side. It cannot be ruled out that profitability percentage-wise will be comparable to 2014, but it would be very challenging." - CFO


DIVIDEND FOR 2015 - "We will reassess our dividend position one year from now, depending on the cash position and its prospects, the level of fiber investments, the ECJ verdict and the cost of acquiring spectrum." - CEO


COST CUTTING - 2014: The firm delivered "sustainable savings without jeopardizing revenue generation capabilities." Close to 60% of savings came from sources other than labor. 2015: Ambitions for cost savings "are set high," but the firm did not want to set any specific goals. "We hope to have OPEX savings in 2015 that will offset revenue decline better than in 2014." Headcount is expected to decline by 1.4k this year. - CFO


NET DEBT/ EBITDA - "It is not excluded that for a certain period of time, for example after the auction, we will be above 1.5x net debt/EBTIDA. Long-term we remain committed to internally imposed level of 1.5x."


REAL ESTATE ASSET DISPOSAL - The figure grew some 60% y/y to PLN 85 mln in 2014 and the firm hopes to beat this figure in 2015 provided demand for assets meets Orange Polska's assumptions. - CFO


FTTH INVESTMENTS - "We would like to preserve flexibility regarding FTTH rollout [and investment spending beyond 2015] depending on the success in client acquisition and monetization of offer." In 2015 the firm expects to add a "rather modest figure" above 10k clients to FTTH services, and more significant additions are expected in 2016. - CEO. Cash CAPEX for fiber network will reach some PLN 250 mln in 2015. - CFO


COMPETITIVE ENVIRONMENT - "Competitive pressure shifted to the business segment, while on the B2C we see signs of stabilization. . . We expect pressure on B2B to weigh on results in the coming quarters as well." - CFO; In B2B mobile we are currently having 40% of the customer base in unlimited offers. In other segments, the vast majority of contracts has already been repriced in 2014 and the firm will now see the full impact of the move. No major contracts are to be repriced in Q1 2015. - dep CEO Mariusz Gaca


MARKET CONSOLIDATION - "We are not working on any consolidation opportunities, but if they appear on the market, Orange Polska could be potentially interested." The firm would have to take into consideration potential regulatory hurdles given its historical position. - CEO


EU FINE - Orange expects the ECJ decision to be taken next year rather than in 2015. - CEO


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