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Strategy 2020
On January 13, 2011, Netia announced the main assumptions of its operational strategy towards year 2020 together with the long-term financial outlook and a newly adopted distribution policy (“Strategy 2020”).
Mission
We deliver the world on-line
Vision
By 2020 Netia will profitably grow to be Poland's No.1 on-line gateway through:
- Delivering integrated and easy to use solutions
- Providing a superior customer experience, and
- the Drive of passionate employees inspired by our values
Main assumptions of Strategy 2020
1. Netia to become Poland’s No. 1 on-line gateway, delivering integrated and easy-to-use solutions, providing superior customer experience, driven by passionate employees inspired by the values of the Company;
2. Focus on growing Netia’s customer base and their value through delivery of integrated telecom services and media solutions to end users while providing unique superior customer experience at the same time;
3. Next Generation Infrastructure (NGA) will support us in developing and rendering innovative, high quality and easy-to-use services to our customers;
4. Finalizing LLU roll-out combined with NGA upgrade in select parts of our Copper network as well as implementation of commercial TV services will facilitate integrated product offerings comprising 3play+ driving customer value and enhancing customer experience;
5. Netia will continue to penetrate the market with regulatory access in search of new residential clients while strong focus will be maintained on our traditionally very effective business segments;
6. Netia will focus on opportunities in M&A, including Ethernet networks (ETTH) acquisitions, and transformational value-enhancing transactions in particular;
7.Delivering ‘best-in-class’ financial and operating performance among European peers will be Netia’s key focus over the long term through rising market share and increasing profitability.
The detailed presentation on the adopted Strategy 2020 is enclosed in the attachment.
Guidance for 2011
| 2011 Guidance |
|
| Revenues (PLN m) | 1,590.0+ |
| Adjusted EBITDA (PLN m) | 405.0+ |
| Adjusted EBITDA margin (PLN m) | 25% |
Adjusted EBIT (PLN m) | 95.0+ |
Capital investments (excl. M&A) (PLN m) | 230.0 |
| Capital investments to sales (%) | 14% |
| Operating free cash flow (OpFCF) | 170.0+ |
| Number of broadband service clients (incl. Ethernet acquisitions) | 750,000 |
| Unbundled local loop (LLU) nodes | 700 |
The guidance does not take account of any effect from the potential closing of the acquisitions of Telefonia Dialog SA and Crowley Data Poland Sp. z o.o. before the end of 2011. Netia expects to publish its detailed 2012 and updated medium-term guidance in Q1 or Q2 2012, dependent on the closing dates of these acquisitions and integration planning results.
Mid-term guidance (2010-2012)
| Medium term outlook | 2010-2012 |
| Revenue growth (CAGR) overall | 3% - 5% |
| Revenue growth (CAGR) in retail market segments | 5% - 10% |
| EBITDA margin in 2012 | 28% |
The above guidance excludes impact of potential transformational M&A activities, but includes Ethernet acquisitions.
Long-term outlook (beyond 2012)
| Long-term outlook (beyond 2012)1 |
| Blended2 fixed line market share to grow from 11.5% to at least 15% |
| Expected revenue growth above 2% per annum delivers increasing value share |
| EBITDA margins in 26%-28% range throughout |
| Capex to sales ratio to stay below 15% during network upgrade (2011-2013) and falling to 10%-12% thereafter |
| OpFCF margin to sales continously above 10% |
1 The above guidance excludes impact of potential transformational M&A activities, but includes Ethernet acquisitions.
2 Average of the fixed voice and fixed broadband market shares in the Polish fixed telecom market.
Netia announces that it will continue to monitor the possibilities of achieving the forecast results on a quarterly basis. The achievement of the forecast results will be assessed, and any necessary adjustments will be introduced, after the end of a given quarter of the financial year based on an analysis of sales revenues, investment expenditure, number of broadband customers and regulatory conditions on the Polish telecommunications market.
Disclaimer:
The information regarding Netia’s strategy contained above does not constitute a forecast of results within the meaning of the Regulation dated 19 February 2009 on current and periodic information to be disclosed by issuers of securities and on conditions under which such information may be recognized as being equivalent to information required by the regulations of law of a state which is not a member state (Polish Journal of Laws (Dz. U.) of 2009, No. 33, item 259 as amended). None of the information contained above is a recommendation to purchase or sell financial instruments within the meaning of the Regulation of the Minister of Finance on information constituting recommendations regarding financial instruments or their issuers, dated 19 October 2005 (Polish Journal of Laws (Dz. U.) of 2005, No. 206, item 1715). For a more detailed description of the risks involved in investing in Netia’s securities, please see Netia’s annual financial report of February 22, 2011. Subject to the obligations referred to herein, Netia is not required to publicly update or revise any of its forecasts and assumptions of the strategic objectives.
Guidances as of November 3, 2011.