Poland’s leading telcoSeptember 2014
investor.netia.pl 2
Disclaimer
Some of the information included in this material contains forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of
future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward-looking statements as a result of various factors.
For a more detailed description of these risks and factors, please see Netia's most recent financial report and press release. Netia undertakes no obligation to publicly update or
revise any forward-looking statements.
investor.netia.pl 3
Vision and Mission towards 2020
responsibilityFinished solutions
anytime, anywhere
personalized
Delivery of services
power, choice,
connectivity,
communication
digital,
all services,
convergence
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
Netia, us
We deliver the
world on-line
We deliver the
world on-line
• In mid-2014 Netia started works on revised strategic operational and financial objectives aimed at stabilizing financial
performance and increasing exposure to the growth and consolidation opportunities remaining in the Polish telecom market
• The Management Team anticipates proposing a strategic plan to the Supervisory Board during the course of 3Q 2014
investor.netia.pl 4
Investment proposition
• 2013 Revenues at ~ PLN 1.9 bn, Adjusted EBITDA at 29% margin and Adjusted FCF at 17%
• Financial leverage at 0.72x 2014 Adjusted EBITDA guidance1
• Announced distribution policy targeting the pay out to shareholders of PLN 0.42 per
share (7.9% yield)2 from 2014 onwards (PLN 0.42 dividend per share distributed in 2014,
PLN 0.35 per share distributed in form of a share buy-back tender offer in 2013)
Poland’s leading telco
consolidating
the market
• Almost 3m homes passed (~ 21% of Polish households) by own access network with a
further 11m reached by via regulated access through the incumbent
• 8.4k km of fiber backbone and around 16k km of fiber metro rings underpin
all operations
• Synergetic network assets allowing to render services in both B2C and B2B1 Status as of H12014
2 Versus a three-month average share price of PLN 5.33 on August 29, 2014 (inclusive of block transactions)
• Delivering services through 2 commercial divisions for B2B and B2C, supported by a
single technology and back office units
• 2.4m services in Poland, of which 1,415k fixed voice and 826k fixed broadband at the end
of Q2 2014
• 12.2% market share in fixed broadband and 18.2% market share in fixed voice
• 129k TV services, 54k mobile broadband and mobile voice services combined
Strategic focus on
multi-play services
Leveraging own network
scale and regulatory
opportunities
inwestor.netia.pl 5
Netia’s broadband driven transformation
2006 YE 2013 YE
PLNm 862
PLNm 48
PLNm 1876
PLNm 311
Netia as a provider of
Broadband TV
Revenues
Adjusted Operating FCF
Brand Awareness
PLNm 221 PLNm 551Adjusted EBITDA
25.7% 29.4%Adjusted EBITDA margin
Change
+ 118%
+ 149%
+ 3.7 pp
6.5x
RGUs Fixed voice
RGUs Broadband
~398k ~1,451k 3.6x
~60k ~837k 14.0x
Netia as a provider of
fixed telco services
From a business oriented fixed telco subscale altnet operator to become a major, revenue balanced on-line
gateway synergistically leveraging its assets, brand and country wide presence
From a business oriented fixed telco subscale altnet operator to become a major, revenue balanced on-line
gateway synergistically leveraging its assets, brand and country wide presence
93% 68%
inwestor.netia.pl 6
Major initiatives and projects in the past 6 years
1 From 2010 onwards 2 Average annual improvement in EBITDA margin in the period 2009-2010 3 Net Promotors’ Score
Disposals
Acquisitions
Cost reduction
Klientomania
Company
culture
• Minority stake sold for EURm 132 in 2008 (66% profit and annualized IRR of 26%)
• Cash proceeds for Netia’s broadband expansion strategy
• Acquired in 2008 for EURm 34 (EV/EBITDA of 1.5x with synergies, 2.8x standalone)
• + 502k voice WLR RGUs
• + PLNm 455 revenues, + PLNm 41 EBITDA standalone for 2008
• Synergies of PLNm 45 delivered against original PLNm 30 target
• PLNm 140 of gross expense annual savings1, +3.5 p.p. EBITDA yoy2 (project ‚Profit’ executed in 2008-2009)
• More agile organization, downsizing unnecessary resources
• Improvements along entire value chain driving NPS3
• Huge cultural transformation from a rigid, engineer-driven approach to entrepreneurial-minded teamwork
• + 1,046k RGUs
• + PLNm 640 revenues
• + PLNm 156 EBITDA standalone for 2011
• + PLNm 130 FCF annual synergies by 2014 (including PLNm 120 EBITDA synergies)
• Increase in own network footprint, high multi-play and cross-sell potential
• + 139k ETTH RGUs acquired since 2007
• High-end technology, easy upgrade to NGA
• International Voice Termination to Mediatel, CATV to Vectra and real estate property disposals
Play (P4)
Non-core
Tele2
Polska
Dialog
Crowley
ETTH
• A complete Cable TV network covering 446k HPs acquired from UPC Polska in May 2013
• Inclusive of recent CATV acquisitions, Netia has advanced plans to expand its NGA coverage
by over 400k to approximately1.7m homes passed
Cable
networks
investor.netia.pl 7
Revenues, EBITDA and OpFCF development
Subscriber base
Tele2 Polska
acquisition
Dialog & Crowley
acquisitions
Adoption of
broadband-driven strategy
Customer base and market shares
Source: Company
Fixed voice market share (quarterly)
Fixed broadband market share (quarterly)
Note: For discussion purposes only, more detailed information for reference can be found in Netia Group’s quarterly and annual financial statements and press releases
1 Adjusted OpFCF excluding one-off New Netia integration capex
(‘000)
PLN m
CAGR 2007 – 2013: Broadband subs +25%
CAGR 2007 – 2013: Voice subs +23%
CAGR 2007 – 2013: Revenues +14%
CAGR 2007 – 2013: Adj. EBITDA+22% (k)
CAGR Q1 2007 – Q2 2014: Netia +7%
CAGR Q1 2007 – Q2 2014: Total market+2%
(k)
CAGR Q1 2007 – Q2 2014: Netia +4%
CAGR Q1 2007 – Q2 2014: Total market-1%
1
838
1,121
1,506 1,569 1,619
2,121
1,8761,675
171 171304 359 408
591 551 505
-74 -77 57160 164
334 311 290
-500
0
500
1,000
1,500
2,000
2,500
2007 2008 2009 2010 2011 2012 2013 2014F
Revenues Adjusted EBITDA OpFCF
218
414559
690
912 875 849 826
422
1,0661,158 1,219
1,7451,645
1,4891,415
51 79120 12982 91
68 54
0
500
1,000
1,500
2,000
2007 2008 2009 2010 2011 2012 2013 1H 2014
Broadband services Fixed voice services TV services Mobile services
3% 3% 4% 5% 5% 6% 7% 8% 8% 9% 9%10%11%11%11%11%12%12%12%14%14%14%14%13%13%13%13%13%12%12%
28%29%30%
32%34% 35%35%37% 38%38%39%40%41% 42%42%43%
44%44%45% 45% 46%46% 46%47% 47%47%48%48%48% 49%
0%
10%
20%
30%
40%
50%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1Q
07
2Q
07
3Q
07
4Q
07
1Q
08
2Q
08
3Q
08
4Q
08
1Q
09
2Q
09
3Q
09
4Q
09
1Q
10
2Q
10
3Q
10
4Q
10
1Q
11
2Q
11
3Q
11
4Q
11
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
Total market broadband subscribers Netia's market share Penetration of households
4% 4% 4% 4% 4% 5%10% 10%11% 11% 11%12%12% 12% 13%13% 13% 13% 13%
20%20% 20% 20% 20% 19% 19%19%19% 18% 18%
79% 78% 77%76%77% 76% 76% 76% 75% 74% 73%72%71% 69% 68% 66% 65% 65%64%63% 62% 61% 60% 59% 59% 58%57%57% 56% 56%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0
2,000
4,000
6,000
8,000
10,000
12,000
1Q
07
2Q
07
3Q
07
4Q
07
1Q
08
2Q
08
3Q
08
4Q
08
1Q
09
2Q
09
3Q
09
4Q
09
1Q
10
2Q
10
3Q
10
4Q
10
1Q
11
2Q
11
3Q
11
4Q
11
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
Total market fixed voice Netia's market share Penetration of households
investor.netia.pl 8
Financial performance and network assets
Source: Company
Asset backed with modest leverage
Dynamically growing business
Note: For discussion purposes only, more detailed information for reference can be found in Netia Group’s quarterly and annual financial statements and press releases
1 Including 2 weeks of Dialog’s and Crowley’s consolidation in December 2011
2 Including full year of Dialog's and Crowley's consolidation
3 Excluding M&A and integration capex
Netia’s backbone and access network assets country-wide
Netia’s own FO
Netia’s leased FO
1
PLN m 2007A 2008A 2009A 2010A 2011A1 2012A2 2013A
Total assets 2,071 2,283 2,341 2,568 3,553 3,233 3,221
Liabilities 343 355 316 271 1,053 937 925
Shareholders funds 1,728 1,928 2,025 2,297 2,500 2,296 2,295
Net cash / (debt) (37) 193 240 345 (539) (408) (291)
Undrawn loan facilities 208 375 295 - - 81 250
PLN m 2007A 2008A 2009A 2010A 2011A1 2012A2 2013A 2014F
Revenue 838 1,121 1,506 1,569 1,619 2,121 1,876 1,675
Growth (yoy%) -2.8% 33.8% 34.3% 4.2% 3.2% 31.0% -11.6% -10.7%
Adjusted EBITDA 171 171 304 359 408 591 551 505
Margin (%) 20.4% 15.3% 20.2% 22.9% 25.2% 27.9% 29.4% 30.1%
EBITDA 171 171 313 586 611 461 533 nd
Margin (%) 20.4% 15.3% 20.8% 37.3% 37.7% 21.7% 28.4% nd
Adjusted Capex3 244 248 246 200 244 257 240 215
Adjusted OpFCF (73) (77) 58 159 164 334 311 290
Acquisition outlays 37 178 15.7 14.8 978 9 7 nd
Total capex 281 426 262 215 1,222 279 280 nd
Disposal proceeds na 460 46 24 9 2 1 nd
Net Cash / (Debt) at YE (37) 193 240 345 (539) (408) (291) nd
investor.netia.pl 9
Netia is present in both Business and Residential market segments
1 Operating segments reorganized from July 2013 into two major segments: B2B and B2C 2 B2B comprises Business and Carrier customers sub-segments 3 B2C comprises Residential and SOHO customers sub-segments 4 Excluding Petrotel
B2B1,2
PLNm
B2C2,3
B2B1,3
• Revenue was PLN 243m in Q2 2014, down by 4% compared to
Q1 2014 and down by 12% y-o-y
• RGUs: 1,897k (-3% q-o-q, -9% y-o-y)
• Substantial growth in TV (by 27% y-o-y and 1% q-o-q)
and progress in on-net broadband
• Adjusted EBITDA was PLN 75m for a margin of 30.8% in Q2
2014
• Capital expenditure at PLN 19m in Q2 2014 resulted in
Adjusted OpFCF at the level of PLN 55m
• Revenue was PLN 172m in Q2 2014 (-1% q-o-q and -10% y-o-y)
• RGUs: 492k (+2% q-o-q, +6% y-o-y)
• Voice ARPUs under pressure and lower transit revenue
due to MTR declines
• Adjusted EBITDA was PLN 78m for a margin of 45.3% in Q2
2014. Decrease reflects mainly pressure on prices, lower fixed
voice and higher allocation of network costs
• Capital expenditure at PLN 27m in Q2 2014 resulted in
Adjusted OpFCF at the level of PLN 51m
PLNm
PLNm
Other (unallocated expenses and Petrotel) 3
• Net of Petrotel EBITDA, unallocated costs of support functions
(Finance, IT, HR, Management & Supervisory Boards, etc)
running between 6-7% of revenue
• Unallocated capex in Q2 2014 mainly related to IT and CDN
integration capex
• As part of the N2 Project, Management expects to allocate most
of Other expenses and Other capex to either B2B or B2C in the
reported results by Q3 2014 (comparatives will be restated)
PLNm
192 179 179 174 172
49.4%54.1%
50.9% 49.6%45.3%
36.0%40.4%
30.3%
37.3%
29.9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
50
100
150
200
250
300
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014
Revenues Adjusted EBITDA margin % FCF %
277 270 263 253 243
26.8%28.1%
24.9%
29.6% 30.8%
19.2% 18.9%
12.3%
20.9%22.8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
50
100
150
200
250
300
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014
Revenues Adjusted EBITDA margin % FCF %
29 29 33 27 2815 14
38
11 11
6.1%6.3%
7.3%
6.2%6.6%
3.2%3.1%
8.3%
2.5% 2.5%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
0
5
10
15
20
25
30
35
40
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014
Opex Capex Opex as % of Revenue Capex as % of Revenue
investor.netia.pl 10
Network coverage and sales potential in B2B and B2C addressed
with versatile product offering
Office buildings connected by Netia in 10 largest Polish cities1 NGA and TV potential coverage for Netia
Multifunctional TV approach fully in line with Netia’s strategy
Note: TV Ready HPs based on ADSL+, LLU and ETTH (with bandwidth +14 Mb/s) come on top of NGA HPs thus
producing the total TV (3play) potential for New Netia’s addressable market (homes passed
Note: For illustrative purposes only
1 Out of ~800 business locations analysed1 Adaptation of ex-Aster CATV infrastructure
36%
36%
28%
On-net fiber
optic
On-net other
technology
Off-net
(subject to
lease)
Acknowledged companies choose Netia as their business partner
('000 homes passed)Homes passed
(HP)NGA HP TV ready HP NGA HP TV ready HP
Cu 1,682 897 1,138 897 1,138
ETTH 659 248 413 257 414
PON 160 160 160 167 168
Total 2,501 1,305 1,712 1,321 1,719
CATV 446 - - 400 400
Total
Proforma2,947 1,305 1,712 1,721 2,119
% of Total on-net HP 44% 58% 58% 72%
LLU 4,930 - 2,163 - 2,163
Total 7,877 1,305 3,875 1,721 4,282
June 30, 2014 With ongoing upgrades12
� Telewizja Polska
� Raiffeisen Polbank
� Ghelamco Poland
�General Directorate
for Environmental
Protection
investor.netia.pl 11Source: Company
RGUs by access type
Customer Locations and RGUs
Products and offering
Average ARPU per Customer Location
B2C segment in a nutshell
• Customers served over own network (copper and Ethernet) and
regulated access (LLU, BSA, WLR)
• Focus on bundles: 3play services (BB+V+TV) for Residential and 2play
(BB+V) for SOHO
• Fixed broadband offered on the ‚best effort’ basis (highest feasible
transfer speed) and mobile broadband with 2/4 GB download limit
• Netia Spot – an innovative Wi-Fi home router solution with free
access to Fon Spots, a global WiFi network
• Netia Player – a multimedia STB (incl. an IPTV/DTT decoder
functions) with content, widgets and multimedia sharing
• Personal TV including HBO GO content (over-the-top solution)
• E-store and variety of value-added solutions (incl. virtual disc,
antivirus, fax-server, email and other functionalities)
• Unified communications solutions, cloud and P2P solutions for SOHO
`000
PLN`000
30
35
40
45
50
55
60
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014
1,522 1,485 1,442 1,395 1,344
2,093 2,056 2,014 1,959 1,897
1.38x 1.38x 1.40x 1.40x 1.41x
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
-
500
1,000
1,500
2,000
2,500
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014
Customer locations RGUs RGUs x
2,093 2,056 2,014 1,959 1,897
740 745 751 752 750
35%36%
37% 38% 40%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
500
1,000
1,500
2,000
2,500
Q2 13 Q3 13 Q4 13 Q1 14 Q2 14
Total B2C RGUs Own Network RGUs Own Network (%)
investor.netia.pl 12
• Customers served primarily over Netia’s own network (capex driven
end-to-end connection to the client’s premises)
• Offered services dedicated to all main industrial sectors, including
finance & banking, public administration, real estate, FMCG, transport
& logistics, construction, power supply, contact centres and media
• Data transmission (IP VPN, MPLS, MetroEthernet)
• Voice (ISDN/POTS, SIP Trunk)
• Co-location services and intelligent network services
• ICT related solutions (integrated platforms such as NGA, NVA)
• NGN (IntegralNet – virtual PABX)
• Opportunistic wholesale deals leveraging Netia’s own backbone
network and metro fibre rings in major Polish cities
• Dedicated services for Internet Service Providers
Source: Company
RGUs by access type
Customer Locations and RGUs1
Products and offering
Revenue by service
B2B segment in a nutshell
`000
PLNm`000
Source: Company
75 75 75 75 73
465 470 478 484 492
6.2x 6.2x 6.4x 6.5x 6.7x
1.0
2.0
3.0
4.0
5.0
6.0
7.0
0
100
200
300
400
500
600
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014
Customer locations RGUs RGUs x
465 470478 484
492
367 372380 389 399
79% 79% 80% 80% 81%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0
100
200
300
400
500
600
Q2 13 Q3 13 Q4 13 Q1 14 Q2 14
Total B2B RGUs Own Network RGUs Own Network (%)
1 Analyses B2B broadband and voice revenues. B2B Other Data network revenues and Other Services revenues excluded
38 38 37 37 37
40 40 40 39 39
64 62 60 58 55
4940 41 41 41
192
179 179 174 172
0
50
100
150
200
250
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014
Broadband Other Data Voice Other services
investor.netia.pl 13
B2C, 48.2%
Business,
40.2%
Carriers, 11.7%
B2C, 47.7%
Business, 41.2%
Carriers, 11.2%
B2C, 58.9%
Business,
31.8%
Carriers, 9.3%
B2B strength balances recent pressure on low-end part
of the B2C segment
Note: For illustrative purposes only1 Excluding non-allocated Opex of PLN 41.1m and non-allocated Capex of PLN 21.4m in H1 2014 2 Excluding Petrotel
Revenue breakdown in H1 20141,2 Adjusted EBITDA breakdown in H1 20141,2
• B2B segment (business customers and carriers)
contributing 41.1% of revenue, but 52.3% of
Adjusted EBITDA and 51.8% of Adjusted OpFCF
• B2B segment margins supported by higher on-
network share of RGUs and higher Capex
intensity than the B2C Segment (Residential and
SoHo customers)
• Residential on-net EBITDA and OpFCF share
much higher than revenue share due to lack of
regulatory access payments
CommentsAdjusted OpFCF breakdown in H1 20141,2
- 23.8% on-net
- 35.1% off-net
B2B
B2B
B2B
investor.netia.pl 14
Strong assets base
• Backbone fiber network of approximately 10,980km
• Own backbone network of approximately 3,580km
• Leased backbone network of approximately 7,400km
• Metro fiber network of approximately 16k km (incl. 13,500 km of own network),
Metropolitan fiber infrastructure in 48 biggest cities of Poland
• Over 140 C/DWDM sites in all major cities
• SDH network based mainly on Alcatel (Huawei and Lucent also used)
(2,000+ SDH sites with STM -16 and STM -64)
• Two independent networks (Ethernet and IP) carrying all packet traffic
• Carrier Ethernet and Metro Ethernet for L2 services
• IP core network for other services
• 6 VoIP switches, 28 PSTN switches
• Access network based on variety of solutions (FTTH, FTTB, ETTH, FITL, VDSL, ADSL)
• 5 Collocation Centers (Tier III class)
• International point of interconnect in Cieszyn (route to Prague and Frankfurt)
Netia leverages own network and regulatory access
opportunites to maximise growth potential in all segments
Source: Company
Own networks Regulatory access
Regulated BSA/WLR access strategy
• Single play customers represent a base for cross selling
• Migration of 1play (BSA) customers to higher margin LLU services (shared LLU)
began in Q2 2009
• Migration of 2play customers to full LLU access from November 2009
• 100k clients migrated in total by the end of Q3 2011
• TP offers Voice & 2 Mb/s Internet for ~76 PLN1
• Netia bills voice and Internet for ~ 72 PLN1
• Netia pays to TP ~26 PLN for Internet and 20 PLN for WLR
• TOTAL cost ~ 46 PLN
• Gross margin 36%
• Netia does not invest in DSLAM
• Netia can only resell services offered by TP i.e. bandwidths
LLU model offers excellent opportunities
• NETIA controls services delivered over DSLAM (i.e., speeds, Value Added
Services like IPTV, VOD, PVR )
• At the end of Q3 2011 Netia served 175k LLU clients (an average of 260 clients
/ node)
LLU roll-out
• Target to unbundle 5.0m TP lines with 700 DSLAM in 2008-2011
• Netia bills 2play revenues for voice and 4Mb/s Internet service at ~ 61 PLN1
• Netia pays TP 22 PLN monthly line rental fee
• Gross margin 64%
• Netia has to invest in its own DSLAM (~200K PLN / node)
• NETIA controls services delivered over DSLAM
• Speeds
• Value Added Services like IPTV, VOD, PVR
1 Based on a standard comparable 2play contract, for illustrative purposes only2 TP lines in retail (excluding wholesale to altnets) Source: Company, TP, UKE, press releases
Households(14.2m) SOHO/SME (1.2m) Corpo (30k)
TP 10.1m Voice + 1.7m Broadband
Netia 398k Voice + 60k Broadband
Netia 649k Voice + 405k Broadband
Other altnets 1.0m Other altnets 0.7m
Other altnets 547k WLR, 54k BSA, 2k LLU
TP2 4.6m Voice + 2.3m Broadband
Netia 652k WLR, 258k BSA, 163k LLU
Households(14.2m) SOHO/SME (1.2m) Corpo (30k)
Netia addressable market today is: • 7m active TP lines plus dormant lines
• 649k Netia own lines (2.4m homes passed)
• WiMax national license
• Ethernet networks acquisitions
2006 pre regulatory access Q2 2014 with regulatory access
investor.netia.pl 15
Network support for B2C and B2B Divisions
Source: Company
Synergetic approach
Fiber Optic Backbone
• Over 140 C/DWDM sites in all major
cities
• SDH network based mainly on Alcatel
(Huawei and Lucent is also used)
(2000+ SDH sites with STM -16 and
STM -64)
DWDM Core Network
• Carrier Ethernet and Metro Ethernet for
L2 services
• 320+ Ethernet nodes with 10Gbps
uplink
• 120+ Ethernet nodes with 1Gbps uplink
• 1450+ (870+ ADSL and 580+ VDSL)
access nodes with 1Gbps uplink
Carrier and Metro Ethernet
• Access network base on variety
solutions: FTTH, FTTB, ETTH, FITL, VDSL,
ADSL . Traffic is aggregated at the
BRAS routers. In Netia Networsk
Juniper and RedBack BRAS are used.
• Backbone fiber network of approximately 3,580
km+ 7.,400 km leased
• Own metro fiber networks of
approximately13,500 km
• Metropolitan fiber infrastructure in 48 biggest
cities of Poland
• Copper network of approximately 13k km
investor.netia.pl 16
• Staffing: standardized
recruitment (professional
methodology, Targeted
Selection, AC, tests), qualified
internal recruiters, induction
• Performance management:
(MBO and effectiveness
assessments for all employees,
clear roles, job descriptions)
• Training & Development: skills
assessment & development
plans for each employee.
Training policy
• Compensation & Benefits:
defined compensation policy
based on market, job
evaluation, benefits
management, SOP
• Good established relations with
unions
• Netia repeatedly recognised as
one of Top Employers in
Poland
• Netia in the RESPECT Index of
responsible companies listed
on the Warsaw Stock Exchange
Our entrepreneurial culture to support Business Units
IT platforms
• IT platforms are Client oriented
• The platforms are Product and
Service oriented
• High usage auto configuration
mechanisms
• Platforms are highly
configurable
• Good support for short Time-
to-Market indicator
• Dedicated HR management
systems (SAP, Janus, Flow)
Organisation Company culture Values
• Agility: people used to change
& open-minded
• Constant focus on internal
communication, various media
and forms of communication,
vertical & horizontal
communication streams
• Building company culture
based on values (workshops,
trainings, rules of behaviour)
• Focus on engagement of
employees (employee surveys,
follow-up initiatives,
empowerment)
• Directness: we direct to each
other by name
• Open space arrangements
facilitate an efficient
information flow
• Trust1. We respect one another and our work;
we communicate openly and keep our
promises
2. We act in good faith and trust in the
good intentions of our employees
3. We share our knowledge and
experience; we care about our own
development and help others to
develop themselves
• Audacity1. We do not rest on our laurels; the
success achieved motivates us to seek
new possibilities and reach for more
2. Our thought process is non-standard;
we are prepared to take risks; we are
open to new ideas and act with
courage to implement them
3. We are determined to reach goals and
never give up
• Excellence1. We strive for excellence and set an
example
2. We delight our customers with the
simplicity and intuitiveness of solutions
3. We consider the committed mistakes as
an opportunity of self-improvement
and self-development
• Pride1. We create our company and we are its
ambassadors
2. Our work makes us proud of our job
3. We celebrate shared success
appreciating contribution of each of us
B2
BB
2C
investor.netia.pl 17
2014 Guidance and Distribution Policy
2014 Full Year Guidance Distribution Policy
Unchanged Policy
Based on its free cash flow projections, Management estimates that
the Company may distribute up to PLN 146m, pro forma PLN 0.42
per outstanding share from 2014 onwards with some scope to
moderately increase payments over time. Leverage may rise to 1.0x
EBITDA in the medium term to facilitate such payments.
Pay-out in 2014
• Company paid a PLN 0.42 dividend per share on June 17
• AGM adopted a new PLN 200m share buy-back program to
maximise flexibility in the form of payment of future distributions
Revenues (PLNm)
Adjusted EBITDA (PLNm)
Adjusted EBITDA margin
Adjusted EBIT (PLNm)
Capex (PLNm)
Adjusted OpFCF (PLNm)
The above financial guidance excludes the impact
of one-off integration costs and one-off integration
Capex related to Dialog and Crowley acquisitions
1,735
505
29%
75
200
305
1,675
505
30%
75
215
290
Previous Revised
• Despite revenue guidance reduction Adjusted EBITDA stays unchanged due to strict cost control and scalability of off-net business
model
• Expected increase in capital expenditure relates mainly to the CPE and network costs associated with accelerating gross additions
in H2 2014
• No RGU guidance for 2014 as Management focuses on product features, restructuring and cost reduction. Nonetheless on-net
RGUs expected to grow
investor.netia.pl 18
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
April/07
October/07
April/08
October/08
April/09
October/09
April/10
October/10
April/11
October/11
April/12
October/12
April/13
October/13
April/14
October/14
Netia mWIG
Netia shareholders and stock performance
1 The above number of shares and % of total capital/total votes reflects the status from notifications provided to Netia by shareholders based on art. 69 of the Public Offer, Terms of Introducing Financial Instruments into an Organized System of Trade and Public Companies Act.
Source: Company
As of July 11, 2014
Shareholder structure1
Share price performance since launch of broadband driven
growth strategy (April 2007)
Ex-dividend Day (PLN 0.42 per share)
Shareholder Number of shares (m) % Capital % Votes
Mennica Polska 45.3 13.01% 13.01%
SISU Capital 44.3 12.74% 12.74%
FIP 11 FIZAN 34.9 10.02% 10.02%
ING OFE 33.3 9.56% 9.56%
Aviva OFE 20.2 5.82% 5.82%
PZU OFE 19.3 5.54% 5.54%
Navicorp Trust Polska 17.4 5.00% 5.00%
Free float 133.3 38.30% 38.30%
Total 347.9 100% 100%
Mennica Polska
13.0%
SISU Capital
12.7%
FIP 11 FIZAN
10.0%
ING OFE
9.6%Aviva OFE
5.8%PZU OFE
5.5%
Navicorp Trust
Polska
5.0%
Free float
38.3%
PLN m EUR m
Enterprise value (as of September 1, 2014) 2,226.7 528.9
Market capitalisation (as of September 1, 2014) 1,861.3 442.1
Bank debt and accrued interest (as of June 30, 2014) 413.7 98.3
Cash and short term deposits (as of June 30, 2014) 48.3 11.5
Shares outstanding (m) 347.9 347.9
Share price (3m average price as of September 1, 2014)(PLN) 5.35 1.27
Daily volume average (k shares) (as of Sept. 1, 14 YTD incl. block trades) 1,085 1,085
PLN/EUR spot rate as of Sept. 1, 2014 4.2099 nm
investor.netia.pl 19
Management team
Adam Sawicki,, 43, joined Netia in June 2014. Prior to joining Netia he hasbeen pursuing independent advisory projects. In 2012 Mr. Sawicki wasappointed to the Management Board of KGHM Polska Miedź SA as ExecutiveVice President, Corporate Affairs. In 2011 and 2012 he was President of theManagement Board and Chief Executive Officer of Ruch Internet. From2008 to2011 he was Chief Executive Officer of GTS Central Europe, creating oneregional telecommunication operator from 5 independently operating entities
in Central and Eastern Europe. He started his professional career in 1996 in Telia Swedtel,Stockholm. For 12 years he worked in a number of senior management positions in variouscompanies of the Telia Group (later TeliaSonera). During that time he participated in numerousprojects including, among others, strategic transformation of operators, both on the business(B2B) and the residential (B2C) markets. He graduated in Business Administration and Economicsfrom Stockholm University. He also completed the General Manager Program from HarvardBusiness School.
Management Board
Paweł Szymański, 42, joined Netia in September 2014. An experienced CEOand CFO from the largest domestic and regional concerns. A professional withwide experience in Finance, he combines managerial skills with soundknowledge of global financial markets acquired when working for the largestinvestments banks both in Warsaw and London. A graduate of Warsaw Schoolof Economics, from 1997 to 2003 he worked for Schroders and Citigroup inLondon. In 2003 he was appointed CEO of Bank Handlowy’s brokerage arm.From 2004 to 2007, he ran PKN Orlen's Finance Division. From 2007 to 2008, he
worked at CTL Logistics as Vice-President responsible for Finance. Between 2010 and 2013, hewas actively involved in the restructuring of RUCH, initially as Vice-President for Financial Affairs,and from 2012 to 2013 as CEO. Prior to agreeing to join Netia Mr. Szymański was Vice-Presidentand CFO in Marvipol SA.
Adam Sawicki
Chief Executive Officer
Paweł Szymański
Chief Financial Officer
Management Team
Tomasz SzopaManaging Director - B2C Unit
VacancyManaging Director - B2B Unit
Andrzej KondrackiHead of Strategy, M&A, Investor Relations
& Corporate Development
Jacek WiśniewskiActing Head of Technology & Operations
Anna Rajtar-KlepuszewskaActing Head of Human Resources
Marcin OsieckiActing Head of Legal &
Corporate Security
investor.netia.pl 20
Key managers highly incentivised
• The highest number of options which can be granted: 27,253,674
• The highest grant per annum: 3,893,382
out of which the options which can be granted to the Management Board : 1,946,691
• The highest number of shares which may be issued under the new stock option plan: 13,626,837
• Options may be exercised within the defined open periods and not earlier that three years from the grant date
and not later than on May 26, 2020
• As well as three years’ service, option vesting is dependent on delivering business goals set by the Supervisory
Board
• 7.3m options were outstanding as of March 2014, with strike prices ranging between PLN 4.54 and PLN 6.00
with the earliest vesting date in 2014
1 New stock option plan was adopted by Netia’s supervisory board on February 25, 2011 Source: Company
Stock option plan for 2011-20201
investor.netia.pl 21