Agora S.A. (AGO) Earnings Call Transcript & Summary

Good afternoon. Welcome to the meeting to discuss the results of Agora Group of Q3 2021. It is a great pleasure for me to welcome you, especially that it is the best Q3 of Agora for the last 13 years. Those who are joining us for the first time, my name is Bartosz Hojka. I'm President of the Board of Agora. And today, it is a pleasure for me to discuss our results presentation and then together with my colleagues from the Management Board to answer all your questions about the results. At the beginning of our meeting, I would like to remind you what the current division of competencies in the Management Board is, especially that there has been some significant reshuffling in recent period. Anna Krynska-Godlewska in the Board is responsible for legal, finance, administration and new undertakings. Agnieszka Sadowska, who joined the Board at the beginning of August, is responsible for Gazeta.pl, for employees as well as ESG. Tomasz Jagiello, Book and Film, Helios' Step Inside, what is the company which is developing our food and beverage activity in cooperation with Helios, NEXT FILM, what is a company that is involved in the film distribution, Agora publishing as well as AMS Group. Tomasz Grabowski, new technologies, big data as well as internet companies, subsidiaries. And I am responsible in the management for radio, press, corporate sales, corporate communications and internal audit. Corporate Communication, the head of this division and her team, are also with us today for a few days. This team has been accepting your questions about our results for Q3. But it has been receiving the questions all the time, so you can ask them during the presentation using a special form on the internet site or with the address [ [email protected] ]. After this introduction, I propose that we can move on to the discussion of the results of Agora Group in Q3. Starting with the market environment. Cinema market gradually, however much faster than we assumed, is restoring its value. In the recent months, the turnout in the cinemas is not only much higher than it was the case last year, but it is also returning to the levels before the pandemic, what is of 2019. And as we know, the 2019 was the record year of all times. The influence on the turnout in the public cinemas in the period between January and September as the time impacted by the pandemic on the 21st of May only, the administrative restrictions were lifted, including the one that was most difficult for them, which was the administrative lockdown of all the cinemas. But in Q3 only, the activity of the cinemas was still subject to some restrictions in connection with the limitation of the number of sold tickets. We can sell 75% of seats in the room, but the turnout as compared with the previous year went up by 123%, and it's almost 8 million. And an important comment is that in those periods discussed here, the number of tickets really decreased because it is not really taking into account the UIP information because there is no information from the distributors. The data is not comparable year-on-year. As far as the advertisement market is concerned, the value of advertisement expenditures in Poland in total was about PLN 2.3 billion, [indiscernible] went out year-on-year by 12.5%. It's also worthwhile noting that the value of advertisement spending between July and September was 9.5% higher as compared with Q3 2019, what is in the period before the beginning of the pandemic. At the same time, we have to remember that 2019 was a record high year from the perspective of the value of the market of advertisement. This is mainly the result of the increase of the spendings on internet advertisement and on television, but to a lesser extent, in the remaining segments the spendings were lower than in the equivalent period of 2019. The significant restructuring or reconstruction of the advertisement market that we have been observing in Q3, let me remind you the dynamics of the growth of the advertisement market is 12.5% as well as the fact that the value of the spending on promotional advertisement was higher as compared to with 2019 before the pandemic, decided that we changed our estimates of the advertisement market in 2021. According to the current forecast in the total 2021, we assume that advertisers will increase the spendings to promote their goods and services between 13% and 16% as compared with 2020. And it is more than what we have estimated earlier, but -- because we estimated it between 8% and 11%. When we split it into different segments of advertisement market, can be -- you can find it in our presentation, which you can find on our internet site. You can now find it in the slide. And certainly, more detailed information about that is also published today in the periodic report. Let me now move on to the discussion of the results of the whole group in Q3. The total revenues of Agora Group amounted to almost PLN 266.5 million and were higher by 38% year-on-year. The main source of the growth was the increase of revenues from cinema activity in connection with the gradual lifting of administrative restrictions on the functioning of the cinemas as well as the return of the largest film productions' premiers. But it's also worthwhile noting that we also have noted the increase of revenues from all important sources, for example, advertisement. And it went up by 14.5% and it increased in all the operational segments of the group. Let me just mention that the largest growth was in the Internet segment, and what contributed to greater even revenues of Gazeta.pl internet company as well as Film and Book segment in connection with the return to the cinema activity. I would like to stress here that this growth was higher than the market. That is quite obvious that the revenues from the sales of cinema tickets also went up together with the food and beverage sales in the cinemas. And it went up dynamically in Q3 in connection with a very fast restoration of the cinema market. The value of the revenues from the publication sales went up by 4% mainly in connection with the Book publishing Agora as well as the Press segment, in particular, the subscription of the content of the Wyborcza.pl. The revenues from the food and beverage activity went up by over 27% in spite of the limitations of the food and beverage activity in connection with the pandemic. This year and last year, the revenues from Step Inside company were higher. This company now runs 10 restaurants with the brand name Pasibus as part of the strategic cooperation with Helios. Revenues from film activity was significantly higher as compared to 2020, and it was mainly connected with a higher number of new film titles in the cinema distribution. The revenues from the remaining sales were by 20% higher. And the growth was influenced by the higher revenues in Film and Book category, mainly in connection with the fees from the internet sales as well as the rental of the space in the cinemas of Helios. And here, the cost went up by over 29%. And they were higher in all the operational segment of the group, mainly because of the larger order of magnitude of the activity as well as in connection with lifted restrictions connected with the COVID-19 pandemic as well as the higher return of the revenues in the whole group, remuneration in the group to the standard value. And this is the return to the plus 20% level. And the EBITDA is almost PLN 50 million, which is 50% more than in Q3 2020 and EBIT profit was over PLN 11 million. I would like to draw your attention to a single of -- one-off events, which influence the comparability of the results. And you can find them very well collected in one slide as an attachment to the presentation, which you can find on the internet site. As you can see here, Agora Group is returning to its results, the best results since 2008 of Q3 are due to hard work of the whole team as well as beneficial market situation, especially the cinema turnout, which it's skyrocketing as well as the record high advertisement spendings in Poland. In the previous quarter, we also observed the improvement of the comparable results, operational results of the group. And this is the data from which the one-off events are deducted. And here, EBIT and EBITDA of July, September were higher than in 2019, before the pandemic. And we are returning to a very strong net result. This success was determined by several factors I already mentioned. First of all, the dynamics of sales of advertisement in the group higher than the market, including high quality and attractive online advertisement as well as significant improvement of sales of tickets to Helios cinemas. We also are happy with the measurable results of the course towards digitization, the growing number of the users of subscription of Gazeta as well as TOK FM as well as digital, out-of-home and the broader implementation of the digital solutions in the whole organization, including cinemas in the form of the sales of tickets online. We are going to talk about it soon. In the subsequent slides, we are going to sum up the activity from the different segments of the group, starting with Film and Book. The dynamic growth of revenues from here has been already mentioned by myself a few times, a very strong restoration of the market. When I look at this slide, I would like to ask you to draw your attention to what you can see to the left on the bottom of the page, looking at the example of Helios and show to you how fast the cinema market is returning to the pre-pandemic status. When we compare the results of individual months of 2021 with 2019, the time before the pandemic, we can see that there is a systematic recovery. In July, we sold 61% of the number of tickets of July 2019. In September (sic) [ August ], it was already 74%, in September, 79% and in October, it was exactly the same number of tickets sold as in October 2019. And this is excellent sign for November and December, during which there will be very many interesting films entering the cinemas. And the list is in the attachment to this presentation. So have a look. Additionally, the total revenues from this segment in connection with the film distribution was PLN 5 million, and it is much higher than what was in the previous year. And it is due to the introduction of a higher number of new titles by NEXT FILM. For example, there were several films that were introduced in this year, for example, the Tesciowie comedy as well as others in the comparable period of the previous year and just Tarapaty 2, that was Tarapaty 2, it was the Polish production in 2020. The revenues from the food and beverage activity were also higher. The revenues of Agora publishing house went up by 3%. And the publishing house sold 300,000 books and music as well as film publications in the period under discussion. And now a few words about the cost. Operational cost of the segment were over 40% higher as compared with the comparable period of 2020. And it was due to the fact of the opening of the cinemas in May as well as the lesser restrictions as to the activity in Q3 2021. The cost of third-party services were also higher in connection with the copies of the films purchased as well as the fees to the producers of the films. The increase of the remuneration cost to employees and benefits to the employees was also connected with the opening of the cinemas. And you also remember that in 2020, there was the deduction of the remuneration and the benefits in Agora Group for the period of 6 months. That is why this situation in which the remunerations are growing year-on-year will also happen during the discussion of the next operational segment. The growth of the consumption, the cost of consumption of materials and energy as well as goods and materials by 50%, that was mainly connected with the growth of the bar sales as well as food and beverage activity. And the cost of representation and advertisement went up in connection with the higher revenues for promotion in film distribution that was conducted with the higher number of new titles in the cinemas than it was the case in the previous year. The result of Film and Book segment in Q3 2021 were influenced by the restrictions connected with the COVID-19 pandemic. Since 2000 -- since September -- since June 26, the cinemas are going to sell 75% of the tickets only, but the limit is not included in people who are vaccinated in 2020. The cinemas were closed between May and July. [ Restaurants ] were closed from March 14, and they were serving dishes only to go. Pasibus restaurants renewed their activity gradually starting May 18, 2020, offering also 50% of the seats in every restaurant. To sum up in Q3, Film and Book segment had the EBIT profit above PLN 10 million and EBITDA at the amount of over PLN 29 million. Next to the dynamic restoration of the cinema market, the influence was also positive in connection with the write-off of PFR loan, PLN 3 million. And now the next segment that I can present here is the Press. In Q3, the total revenues of Press was PLN 52 million, and it was 9% higher than the year before. The revenues of Press from the sales of publications went up by over 2%. And the revenues from the sales of advertisement went up by 15%, up to PLN 16 million. The advertisement revenues of Gazeta Wyborcza went up twice as high as the spendings for press advertisement. In Q3, digital revenues of daily from the digital subscription and the digital advertisement were close to PLN 16.5 million, which contributed 39.5% of its total revenues. It is mainly the result of the higher contracts from the subscription of the Gazeta.pl. And year-on-year, it went up by 25%. And the number of those paid subscriptions by the end of September was over 262,000, which is the 9% growth as compared with the equivalent period of the previous year. The operational cost of the Press segment went up by over 33%, and that was determined by the higher cost of the remunerations and benefits to employees. The dynamics of this category was influenced by the decreasing of the working time and remuneration by 20% for the period of 6 months in 2020. A significant growth was visible in the cost of representation and advertisement, which went up by over 83%, which is the effect of the higher spending for the promotion of Gazeta Wyborcza. There was also higher cost of depreciation of the segment, mainly in connection with the execution of the product [ connect ] that would support for the activity of the Wyborcza and other pl service. But the cost of the printing services were lower mainly in connection with the cost of the print of Wyborcza. In Q3, the Press segment noted lower operational result as compared with 2020, EBIT profit was over PLN 5 million and EBITDA was PLN 7 million. But it was impacted by a number of different saving activities, which were taken up in 2020. That is why it is worthwhile looking at the cleared results of this segment when we eliminate the influence of one-off events and then the comparable results of the segment are significantly better, both at the level of EBIT as well as EBITDA. EBIT of the segment grows by over 94% and EBITDA by almost 65%. When we look now at the results of the outdoor advertisement in Q3 2021, then sales from the advertisement here was higher than the previous year by almost 9%. In that period, the value of the spendings for other advertisement went up by over 16%. This lower increase of revenues is lower than the market. And it is connected mainly with the fact that Citylight -- city transport carriers that are returning to their regular levels is lower than other types of services. It is a segment of the market where we are the strongest in the out-of-home advertisement. The growth of the cost of the maintenance of the system by over 18% resulted from the higher cost of the TV channel, but it is also connected with the growth of the digital systems in the shopping malls. The cost of the execution of the campaign went up in connection with the higher revenues, higher revenues of remunerations and benefits to employees. It's exactly the same situation as in the case of all other operational segments under the whole group. And to sum it up, we can say that Q3 outdoor advertisement revenues grew by 11%, translated on to the improvement of the operational EBIT by 60%. And the EBITDA also improved and the margin of EBITDA exceeded 34%. And I wanted to stress it. Let us move on now to the results of Internet. In Q3, the total revenues of Internet segment were higher by almost 14.5% year-on-year. The main factor that influenced that growth was the higher revenues from advertisement by Gazeta.pl as well as the Yieldbird company. The revenues of HRLink also went up. The operational cost of Internet segment went up by over 22%. And that growth was influenced by the higher spendings on third-party services, mainly connected with the cost of lease of the advertisement space. The cost of remuneration and benefits to employees were higher together with the depreciation of the foreign party services. Third-party services also went up by significant amount. And it was connected with Yieldbird and HRLink, and it was also connected to the cost of other third-party services in Gazeta.pl. The cost of remuneration and benefits to employees were higher year-on-year by 31.5%. And as in the case of other operating segments, we have to do here with the effect of the lower base of the previous year. And the cost of depreciation was higher by over 9%. It was influenced mainly by the investment. That was the investment in optimization of space as well as development of advertising products as well as the improvement of the visibility of the portal in the results of hits of the most frequently used browsers. And that segment completed Q3 with a lower result than in the equivalent period of 2020 both at the level of EBIT as well as EBITDA just as in the case of the Press segment, which we have already discussed as well as radio. We are going to move on to -- this market was influenced by a number of one-off events. So when we analyze fully comparable results, we consider the growth of results both at the level of EBIT as well as EBITDA. The EBIT level was the growth of 38% and EBITDA almost 30% higher. And now we are moving on to Radio. In Q3, the revenues of this segment went by over 16% in the period under discussion. The revenues from the sales of airtime in the stations of Agora Group went up together with the agency activities in the sales of airtime in the stations of other broadcasters. It's also worthwhile noting that in Q3, the spending for radio advertisement went up by 4%, and it means that the revenues from the radio advertisement grow 3x faster than the market. The operating cost of the radio went up by 38.5%. The cost of third-party services went up by over 23% because with the higher cost of the purchase of the airtime in other stations and were also higher cost connected with the agency service for the Helios cinema chain. The cost of remuneration, benefits to employees went up by 21%, and I think that everyone remembers why. The cost of advertisement and presentation went up by over 113%, which is mainly the effect of the limitation of representation and advertisement expenditures in the previous year. And as I said before, just like in Internet and in Press in Q3, the operational results of Radio segment both at the level of EBIT and EBITDA were lower in connection with one-off events. So when we compare the equivalent data, we can see that the operational results of the segment where better. The EBIT went up together with EBITDA. And finally, a few words of a summary of Q3 and a few sentences about prospects for Q4. Q3 for the whole Agora Group was a time of quite intensive work. But as you can see, it was a successful work for the recovery of financial results. We noted a solid growth of revenues in all the segments of the group and all important revenue categories at July, August. Well, I want to say that it was really the best Q3 of Agora since 2008 for the last 13 years. That was due to market conditions. We were able to take advantage of the revival in the advertisement market, which has the higher value than in the period before the pandemic. And in the Agora Group, the advertisement revenues in Press and Radio segments went up higher than in the market. The first one twice as fast and the other one, 3x as fast as compared to the previous year. The lifting of the COVID restrictions was important for our cinema activity, food and beverage as well as out-of-home advertisement. The growth of the cost of the group in Q3 was the result of significant saving activities that we undertook the previous year, including cutting the remuneration as well as a significant reduction of the cost of representation and advertisement as well as increasing of the scale of our activity in connection with the lifting of restrictions. When we talk about the last quarter of 2021, we have to remember that we are functioning in a quite uncertain environment. Different scenarios are possible in connection with the third wave of COVID-19 incidents. But when we listen to the declarations of the government and Ministry of Health, for now, we should not be expecting any drastic restrictions and limitations to be introduced just as we had to deal with in the previous periods. However, there is a growing seriousness of the risk in the upcoming period in connection with the challenges connected with the growing inflation pressure, higher cost of energy, higher cost of goods and services as well as the remuneration pressure. These factors can significantly influence the pace of recovery of our financial results in the subsequent quarters. However, I would like to stress that we are expecting again the growth of spending in the advertisement market in Q4. We count that our advertisement solutions, not only digital solutions, will enjoy a great interest of clients as it has been the case similarly to the offer of Helios, which is preparing fantastic [indiscernible] for the audience for the end of the year. In Helios, we consider for about -- well, about 40% of the revenues is connected with Internet sales. We are also going to grow our food and beverage activity with Pasibus brand name that is really doing very well in the market. That's it what we prepared for you in the presentation for our today's meeting. Once again, I encourage you to study a very interesting set of attachments, including the list of the most important titles of the films that are going to enter the cinemas for Q4. And then we will know what's worthwhile being watched. Now together with my colleagues from the Board, I will be very happy to take your questions.

Hello. So let me start. I will be asking questions that we have received today and yesterday. The first question, [ Jacek from Mutual ]. The first question is about Gazeta Wyborcza and Agora. To which stage currently the allocation of Gazeta Wyborcza is to the subsidiary of Agora?

For the time being, we are not working on isolating and allocating Gazeta Wyborcza to a subsidiary.

The second question about Gazeta Wyborcza as well. It is about local publications of Gazeta Wyborcza. In how many cities do you plan to open the local additions of Gazeta Wyborcza?

Now we want to say that Wyborcza launched local services in 6 new locations. And the results are very promising, both as far as the number of views are concerned. And it is the total number of over 13 million by mid-November as well as the number of sold subscriptions for users of these services. Wyborcza intends to continue the process of launching of local services of this sort next year. At this stage, we are still not revealing which locations these are going to be, but Wyborcza is having a [indiscernible] greatest appetite to the former capital of regions from the previous breakdown to 49 [indiscernible], the towns above 70,000 population.

Next question is for Anna Krynska-Godlewska. And this question is about property [indiscernible]. Let me quote the question. Has Agora already sold the property from the old printing house in terms of what is the value of the transaction?

No, we have not sold it yet. And that property -- well, we haven't sold that property. We have published an announcement, and we are waiting for the proposal. So we can't talk about the price of the transaction yet.

Thank you. Next, the whole list -- 2 questions of Tomasz Jagiello. And these questions are about cinema market. Mr. Jagiello, can you please answer these questions? The first question is information came up that some distributors in connection with the next wave of the pandemic can withdraw the coming new titles entering the cinemas. If it happens, how would it influence not only Helios [ strain ] in the coming months, but the whole cinema sector in the country that was hit so much by the pandemic? Tomasz, you are muted.

Yes, I have to unmute. It is one of the most popular sentences globally in recent 2 years. Thank you very much for the question. Good afternoon. I knew that question before because Nina gave it to me yesterday. And I have to tell you that I spent some time on following similar statements. To my joy, I haven't found a single statement that any distributor wants to withdraw their [indiscernible] plans. It's a benefit this year as compared with the previous year when cinemas in summer functioned in the situation when the infection rate was relatively low, and United States was devastated. Then Hollywood withdrew from the new titles, and we were only getting information on which titles were going to come later. And now the pandemic situation in most of the world is not as dynamic as in Poland. That is why most probably Hollywood will not pay attention to Poland. If [ all the ] cinemas are open, the American titles will enter exactly on the dates for which they were announced. As far as the Polish films are concerned, we do not have any information for the important titles to be delayed this Friday, [indiscernible] and next week, another film you're waiting for, [indiscernible]. And we are not getting any signals that there would be any delays due to the pandemic. So it is with joy that I have to say that I do not agree with the statement that there are possible postponements if the cinemas are open. Let me just reiterate that we are not getting any signals that would confirm the effect of the potential or possible lockdown of the cinemas now.

Thank you very much. I have another question from [ Pavel from Mutual ]. Is Helios planning to introduce by itself additional requirements from the audience, for example, the necessity to present COVID passport before they enter the cinema?

There's no difference between Helios and other service providers, which are now facing the necessity to receive persons and ask themselves the question whether we are having to do with vaccinated or unvaccinated clients. 2 or 3 months ago, we introduced a system just for a week, a system in which we asked viewers to declare whether or not they were vaccinated. And it was quite [ a cruel ] completion of that. We received thousands of fans on Facebook, and they were very well organized. That's why we withdrew from that attempt, and we are not going to repeat those activities for the protection of our own people because this is something for another story, what was happening throughout that week. But I would like to note that from what I know, we are the only company now that we differentiate the 2 types of tickets, regular and those for the vaccinated people, asking the clients to declare themselves. Those who agree to this that they are ready to buy a ticket for people who are vaccinated. First of all, it increases the comfort of our knowledge as to the number of people who are vaccinated in the cinema. And secondly, we can cope better. We can adjust better to the limits that are imposed on the number of seats available for sale. We try hard, and we are prepared to take any solution the government is to introduce. We already have over 18 months of experience. We have cinemas in the yellow zone, red zone, black zone. We are coping. And I think that we are going to survive this wave as well, especially that from what the government is saying, in 2 weeks' time, it's going to be -- we are going to have the peak behind us. So it may be just historical situation. In 3 weeks' time, we may be growing up to the new rises.

Thank you very much. And I would like to take advantage of having you and ask 2 more questions we received from [ Ukash from Pap ]. One question is about the cinemas, and the other one is about outdoor. The first one, a warm up about the cinemas. What are your expectations in terms of the turnout in Q4 as compared with the equivalent period of 2019? 100% in October is impressive. But November and December, unfortunately, we are not going to see another film with 007.

Thank you very much. I would like to tell you that 2 years ago, in 2019, 007 was not on screen, and we managed. As far as Q4 is concerned, the prospects, the results of October are solving this question in 30% with optimistic or actually more realistic assumption that there are now going to be any restrictions in the cinemas, [indiscernible] in November. It's also going to be about Pitbull. I can just mention [ Time, Gucci ], Matrix, Spider-Man. And this is a very important, West Side Story, holiday period. So I have to tell you that what's different than in 2020, our film booking department has a headache how to fit in all those attractive movies on screen to provide for the attractive offer. And it's going to be also Clifford the Big Red Dog. So I'm really very optimistic. I'm really very optimistic, even more optimistic than I should perhaps because making sure that I never say too much ahead.

So let me ask a question about outdoor. All right. New segment and a difficult question. The dynamic of sales of advertisement in the outdoor in Q3 and since the beginning of the year is much lower than the market dynamics. Why? When do you expect that these values converge?

Thank you very much for this question. It will allow me to go through the baptism of fire, the first question I am answering in history, and this is a question about outdoor. I have to thank the President of the Board because 80% of the answer is already included in the first statement initiating our meeting. So I do not want to and I should not repeat or correct what the President said before. Let me just say something from a different perspective. I have to admit that the comparison to 2020, it may be a habit from the activity of the cinema. But it is not really very tangible. It doesn't really give us very much information because 2020 was also a year of lockdown, limitations in communication. And it really devastated different businesses. It's important for us to see what the outdoor market really is and the AMS position. I would note the numbers as compared with 2019. So in real terms, the outdoor market is 27% down. It is not a tragedy, although the drop eats most of the profit, but AMS is 34% down. And I agree that it is a little more, but it is not as if we were comparing it to 2020, half of it. Just I would like to reiterate it to using a little bit different words to make it sound well. COVID devastated these 2 segments of outdoor market connected with urban transport, Citylights as well as the advertisement of vehicles. I really have -- I don't really have to explain why city transport was a victim. It is not going to be new information to you. Well, sorry, I'm saying this for the first time. I do not really remember how it was presented. In these 2 segments of the outdoor market, AMS has a very strong position. That is why it had to bear most of the consequences. As far as the recovery of these sector is concerned, they are so strongly connected with the pandemic that I am convinced and we can already see it in the trends of Q3, I am convinced that we are going to have better news, especially that as I'm saying, in 2 weeks' time, there's a huge problem that the government is saying is going to be dealt with.

And last-minute question from [ Erling from Trust Service ]. Is Helios considering the return to the cooperation with Gazeta Wyborcza?

Yes, certainly. If only we talk with representatives of the publishing or editing office and when we sit down together and we analyze which elements influenced the loosening of that cooperation, we will certainly reach a communication here.

Yes. Thank you very much. Thank you very much for that. Now I have the whole cycle of questions about radio. And now I would like to invite Mr. Hojka to answer questions about radio. And my first question is about the subscription proposal of TOK FM. At the end of Q1, the number of subscribers was 25,700, at the end of Q2 it was 25.4, now it is 25. What are the causes of the drops? And what is the churn for TOK FM Premium? Does Agora continue to state that in 2022, it is going to be possible to get the [indiscernible] of 30,000 of subscriptions in the TOK FM Premium?

We are not giving precise data pertaining to the churn for this proposal. But when we are talking about the slight decreases, we believe that they are transient, and they simply result from high base we were able to get last year at the beginning of the lockdown. Now talking about the further prospects of the development of the offer, we believe that they are good. And we keep up our target of 30,000 subscribers, digital subscribers Premium of TOK FM next year.

Thank you very much. Next question, the evaluation of the pace of work on the passive survey of the media of the National Broadcasting Council. How does the Board evaluate it?

We do not really feel authorized to evaluate the pace of the work of market regulators. It seems to be obvious for everyone that the pace is not really sky high or very, very, very rapid. But it is quite understandable. Usually a new standard of surveys is developed in a prolonged period of time, sometimes years. This process is difficult and complicated because we are talking here about the survey of different media. So it's not surprising in my opinion.

Thank you very much. Another question about radio. The National Broadcasting Board soon is going to announce competition for the Polish digital radio multiplex. Does Agora want to participate in the competition?

Before I answer the question, I would like to stress again that many times, not just us, but other participants of the commercial market have been criticizing the forcing of the obsolete technology, which just for the [indiscernible] is called the digital technology in the radio market. However, talking about now the question about our participation, the potential competition, let's wait and see how it is announced. Knowing the terms of the competition, we will make a decision if we want to participate.

Thank you. Two more questions about the subscription model from 2 different persons. But I will try to ask them as just one question. One is very direct. What is the prospects for the subscription growth of Gazeta Wyborcza for the coming years? And the other one, de facto is about the same. But as in the context of the yesterday's conference organized by Gazeta Wyborcza. And there is a request for your comment about the prospects for the business model, whether the subscription base of Wyborcza.pl is closer to the glass ceiling level.

First of all, we have to stress that the base of subscribers Wyborcza built is large. It exceeds 260,000 of paid digital subscriptions, what places us, as we know, quite high in the global ranking from this perspective. And certainly, as the volume grows, the potential of its further growth is slowly saturating. The growth will not have the same dynamics as it experienced in the previous years. But there is a potential for further growth. However, what we are concentrating now, what we have been concentrating since last year, the introduction of the new offer, the change of the tariffs. And it's connected with the growth of revenues from the volume that we have already built. And I believe that you can see this in the results that we also showed for Q3. The growth of revenues from the digital subscription is almost 25% year-on-year.

Thank you very much. There's a question from [ Matti Bobrowski ], and it's a market question. It's about the dynamics of revenues from advertisement. For the first time for a long period, you have been presenting in the results presentation so strongly that as a group you had a stronger dynamics of advertisement revenues than the market. Do you feel that this situation may also happen in the subsequent quarters or throughout the whole 2022? If it is really the case, why do you feel so optimistic?

Matti, we -- it may happen. We count on it to happen. Why? Well, it's because of hard work, high competencies of the team. And first of all, it is about -- well, on a serious note, it's about high quality of advertisement offer. The fact that we can guarantee to our advertisers the access to unique groups of audiences and high effectiveness of advertisement in Agora Media. What does not help us to increase our share in the advertisement market is the state-owned companies. And we have recently noted a greater advertisement activity of state-owned companies. And as we know, the advertisement spending bypass us from the state-owned companies. And there are some quarters and there are some months when our dynamics is worse than the market dynamics. But we are going to do everything possible. We are going to try to really make every effort to go as fast as the market at least. And best of all, it would be great if we were faster or better than the market as it was the case in Q3.

Thank you very much. And now I would like to invite Anna Krynska-Godlewska to answer another question. It is a question about the review of strategic options. Let me quote it. When can we expect the finalization of the review of strategic options? The objective of it was to select the most beneficial way for the execution of long-term objective, which is the development of the group leading to the maximization of the value for the current and future shareholders of Agora. Is it going to happen this year? Or is this subject still urgent?

Well, ladies and gentlemen, we are now during the process of the review of strategic options. At the current state, we are not ruling out any scenarios. We will keep you informed about it. I think that this year is too early a little bit. Next year, we will return to you with it.

Thank you very much. Let me quote another question. It's a question from [ Ursula ] about the debt of the group. Can you please comment on the position on the debt of the group as well as the prospects of change to this extent?

Probably. Well, we didn't show it to you. But when you look at the financial report, you can see that the total indebtedness of the group is PLN 164 million without the influence of the IFRS. And I think that this is something that is interesting for you. Let me stress that this year, the whole group paid back over PLN 82 million of loans, including Agora of PLN 38 million. As we can see, our liquidity and financial situation is stable. De facto, we still have the financial secured. Agora has not used it itself, and Helios still have revenues -- funds available from the credits it was granted. Now the resources that we are generating operationally, we use them to pay back the credits, and we also are doing more for investment purposes. So as far as the prospects are concerned, we intend to reduce our indebtedness on a regular basis on the basis of the agreement, and I do not see any risks pertaining to this.

Thank you very much. Thank you now. And now I would like to invite...

Nina, I think that you are muted. Something interrupted.

Sorry for that. Thank you. Now I would like to invite Agnieszka Siuzdak. And the question asked of you is about the cooperation between Gazeta Wyborcza and Gazeta.pl and is as follows. The content of Gazeta Wyborcza from October is not published in Gazeta.pl as well as external services under license agreements. I would like to ask for a few words of comment as for the change of the way of action, what are the business expectations, what the effect for Wyborcza.pl and Gazeta.pl? And this is a question from [ Matti Bobrowski ] from the Brokers House.

Thank you very much for this question. It's really a pleasure to see you on this virtual platform. Just as in the case of Mr. Jagiello, it gives me a possibility to have the total first performance here. And it is true that in October, Gazeta Wyborcza decided to withdraw Wyborcza.pl content from the main page of Gazeta.pl. And it was motivated mainly by the world to increase the direct traffic for Wyborcza.pl. But unfortunately, well, the total consequences of this decision and for both media outlets, Gazeta.pl and Wyborcza.pl can be evaluated only after the expiry of a longer period of time because we are here talking about the potential impact on certain business aspects which change in long term. So I think that only in a few months, we will be able to fully answer this question.

Thank you very much. And now going back to your first performance. I have another question. And this is a question from [ Matti ], I think, again, [ Matti Bobrowski ]. And the question is, I would like to ask new members of the Management Board that participate in the results presentations to stress the main points in the business areas they are responsible for, which are going to be very dear to them in the coming quarters. So starting with you using the opportunity of having you?

Well, what is the most important for me, well, I would really like to answer that question as far as Gazeta.pl, which is part of Internet segment, the essence of the development in the coming quarters is the continuation of the actions and activities taken up months or even years ago. And here, the first priority is the whole program of work and consistent improvement of space from the perspective of advertisers as well as users. These works are to be continued in the coming months or coming quarters. They are really bringing excellent results, and we are noting really very good results in the mobility. And you may have seen this in this presentation, the previous one, we also are improving the downloading speed of the site and it translates on the important indicators. And in the coming months, we are going to examine also the possibility of new advertisement network that we introduced in some of the article pages. We will check to what extent it is going to improve the quality of experience of our readers in different sites. And also it translates on the quality of advertisement offer. This is what Bartosz Hojka talked about. And it also translates on the reader satisfaction. So in the case of Gazeta.pl, it is really a priority. From the perspective of the editing, sports, automotive, fashion subjects as well as aspects connected with the environment or social responsibility, we are planning subsequent actions of the editing office, different undertakings. And we hope to get new also awards as a result of these campaigns. As far as HR is concerned, we are going to focus on recruitment challenges. Next year, we want to strengthen the recruitment team, and we want to build a uniform employer branding policy. In ESG, however, for now, we are here talking about the new requirements for reporting. You know that starting 2023, the requirement for all larger businesses is going to be the reporting to what extent the company operates in a way which is environmentally sustainable. And this is what we are dealing with now. So as far as the priorities are concerned, these are the main items.

Thank you very much. And now [indiscernible]. We have 2 questions and also a question about your priorities. So the first substantive question is about Yieldbird company. It's a traditional question, and this comes from [ Matti Bobrowski ]. As usually, I would like to ask for a few words of comment about the prospects for Yieldbird. What is the market for this entity now? And what is your prospect for 2022?

Thank you very much for this question. As far as the priorities are concerned, I will move on to this question later. As far as the Yieldbird is concerned, it is an important asset for us now, and it focuses now mainly on the development of the product area. We are building a product, which we use to concur more foreign markets. We also are building the new portfolio of customers. We are going away a little bit from a typical translation of the product in the service-based model. We invest very much in the product. We believe in the product. We can see here also the growth of the market for the Yieldbird company. We count on a higher growth dynamics next year as compared to the current year. We are also doing some pivot in terms of the way of our functioning. We are quite optimistic as far as the growths are concerned and further prosperity of the company.

Thank you very much. My second question is about HRLink, and it is as follows. Now there is the public offer of [indiscernible]. So I would like to ask to remind us the HR -- well, the business prospects for HRLink. What are your targets?

HRLink, as you know, it is a company that operates on the basis of the model that we recently identified as a combination of the offer of GoldenLine, our other company, together with the product offered by HRLink, which is a digital matching between offers and our database about potential candidates. Certainly [indiscernible] is one of the competitors that we have in the market, and we are aware of what our competition does. But we invest very much in the development of our product. We invest very much in the development of relationships with the current new clients, especially as the quality of the product is concerned. We are also watching what is going to happen to [indiscernible]. We are counting that the movement in the market will increase the market weight, the digital recruitment or that matching in terms of the profiles of candidates for work and potential employers. So we are very optimistic about it. And we are determined to invest in the company and continue developing it.

Thank you very much. And now the last question is about your priorities.

Well, priorities, you know from what Bartosz Hojka said at the beginning, I am responsible now of our 2 large areas. One is technology. And as you know, a company like ours, Agora is also a highly technological company. What we want to do is -- well, in the first quarters of the operation, we are going to focus on the optimization of our technology and I'm making sure that the solution that we already have in the group were modernized deeply, especially in the areas where we can see some impact actions. But what is even more important is that we intend to invest in new things. Where in our digital world, we can see the possibilities of executing a quality leap on the basis of different technologies like machine learning technology or cloud-based technologies we invest very much in. We are going to build at a competitive advantage with -- on the basis of these 3 thick legs will allow us not to improve our IT by 20% or 30%, but to perform just a quantum leap. It's another thing that we are going to invest in, and I'm going to deal with it very much. And the other area is Internet-based companies. And as you can see that we are now reviewing the strategic options, and we are considering how to optimize our portfolio from the perspective of a better use of it in the future. We are also scanning the market actively, looking for the opportunities to strengthen the portfolio or expanding the portfolio or entering different alliances or cooperation agreements with our partners. So I count on my experience from the previous career will be used towards the development of the market.

Thank you very much. And now 2 last questions of Mr. Hojka. Can you please answer the question, Mr. President? The first question is about the strategy. Do you still plan to introduce the update of the strategy? If so, when?

It is still the period of significant uncertainty concerning the main business segments of Agora. Uncertainty is connected with further development of -- well, let us hope the elimination of the COVID-19 pandemic. In recent months, we have been focused on the recovery of our results. But it is true that it is the time when we are now getting down to work on strategic plans. And I think that next year is going to be the year when we will update the plans.

And the second question, it is a general market question, and it's about whether the new approach of TV stations is already visible in the approach of advertisers to spendings in other mass media. What is your opinion about it?

We are looking at it with great attention. And now the most active company in this area is Polsat. We also are watching what impact it has or it may have on the advertisement market in Poland. But for now, it is too early to be able to draw conclusions from the change.

Thank you very much. And now we also have one unique question, which is about the tariffs of advertisements of Agora. Do Agora companies assume that there will be the price rises of their advertisement services for 2022? If so, how much of the price change it is going to entail?

As you know perfectly well, we cannot give a precise answer to a question which is formulated in this way due to different limitations, both of a competitive as well as of regulatory nature. But we do realize, as I said before, that we are having to deal with the significant inflation pressure. And usually, certain situation translates onto the level of prices of the offer to goods and services by businesses.

Thank you very much. These were all questions that we received for today's conference. Thank you very much, ladies and gentlemen, for the attendance in today's meeting. I would like to invite you to the discussion of the results of Q4 and the whole 2021. And this meeting is going to take place in March. I hope that we are going to convey to you the results which are not going to be worse, but even better than the results that we presented today. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]