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

Good morning, everyone. I hope you can see and hear me. Welcome to the meeting dedicated to Agora Group's Q1 results for 2025. My name is Bartosz Hojka, and I'm the CEO of the Management Board of Agora Group. Together with my fellow Management Board members, we will present to you our results for the Q1 of this year, after which we will answer your questions, those already submitted to us as well as those that may arise during or after the presentation in the Q&A session. Today's meeting will last 60 minutes. Let me remind you that questions can be submitted through a special online form or sent to us at [email protected]. You can also contact Krzysztof Mazur, our Investor Relations Manager, who will host the Q&A session after the presentation, or Anna Marucha. We encourage the media to reach out to Anna, who is our Head of PR and press spokesperson. I propose we move on to a review of the key events of the past quarter. I would like to begin with a point of particular pride for us. According to the latest Mediapanel survey, which is the industry standard in Poland for measuring media reach, Agora's media reached to over 18 million recipients every day. This makes us the #1 media group in Poland in terms of daily reach, which, as we all know, is the most crucial metric in the media industry. Everything else depends on it. Another point worth emphasizing in this context is that Agora Group holds the richest media portfolio among all players in the Polish market, and this diversity is our strength. Let's look at the advertising market in Q1. The market dynamics were largely in line with our forecast. Advertising expenditures in the past quarter amounted to PLN 3 billion, representing a year-over-year increase of 5%. Now let's move on to the cinema market. A quick word about attendance. In Q1 of 2025, Polish cinemas recorded 13 million viewers, which is nearly 18% less than a year earlier. However, it's important to note that this decline was due to a very high base effect. In Q1 of last year, major hits like Mister Blot's Academy, which was a huge box office success attracting 12.5 million viewers and due in part to premiere. We didn't see such blockbusters in Q1 this year, although the second part of Mister Blot's Academy also performed quite well, just not as spectacularly as the first. However, this does not change our outlook for the entire year. We still expect single-digit growth in cinema attendance, and the excellent results we are currently seeing in the second quarter support that expectation. So the entire second quarter is shaping up to be very promising in terms of cinema attendance. As for our commentary on our financial results, in Q1, Agora Group sales revenue amounted to over PLN 349 million. This represents a year-over-year decline of just under 7%, primarily due to lower revenues from our cinema operations, which I mentioned earlier, as well as from our film production activities, which I will discuss shortly. On the other hand, we increased advertising revenues, which grew across most segments, especially in outdoor advertising. We reduced operating costs by nearly 6%. The largest decreases were in the cost of external services, materials and energy consumption and expenses for representation and advertising. On the other hand, salary and depreciation costs increased. The net result was negatively affected by the balance of financial income and expenses, primarily due to higher loan servicing and interest costs. This was partially offset by a positive effect from exchange rate differences, resulting from the application of MSSF 16 standards. Now a breakdown of the performance across our business segments from this diverse portfolio, starting with our largest segment, Film and Book (sic) [ Movies and Books ]. In Q1, revenue in this segment was down more than 15% compared to Q1 of 2024. This decline resulted from lower ticket and concession sales, which, as previously discussed, stemmed from decreased cinema attendance and the high base in Q1 of 2024. Revenue from film production also declined due to a smaller number of films released in cinemas by NEXT FILM and lower audience members for premiere titles compared to last year. Most notably, this concerns Mister Blot's Academy. Although the second part was very popular and attracted 1 million viewers to cinemas, it still fell short of the 2.5 million who saw the first part last year. In contrast, revenue from Agora Publishing rose by over 37% and cinema advertising revenue increased by more than 9%. Operating costs declined mainly due to reduced spending on external services, advertising and representation. Wage costs increased partially due to the rise in the minimum wage and salary adjustments within our cinema operations. While reviewing the results of the Film and Book segment, it's worth highlighting the above-average performance of our film distribution company, NEXT FILM. Despite lower overall attendance, 2 of our films remained in the top 3 of the Polish box office through the end of the quarter. The second part of the Mister Blot's series, as I mentioned, attracted nearly 1 million cinema viewers, while the film 100 Days to Graduation drew over 900,000. Both titles placed on the podium, surpassed only by the third installment of the Sonic series. Looking at the Q2 results and outlook, it is worth noting several interesting premieres that have recently taken place or are coming soon. The undisputed hit is Minecraft, which premiered in cinemas on April 4, and set an all-time opening weekend attendance record in Polish cinema history. So far, the film has drawn over 2.5 million viewers and may become the biggest blockbuster of the year. Today marks the premiere of the final installment of Mission: Impossible as well as a remake of the once very popular children's animation, Lilo & Stitch. In June, attention should be paid to a new film from the John Wick universe and a refreshed version of How to Train Your Dragon. Now to the Radio segment results. In Q1, Radio segment revenues were nearly 5% higher compared to Q1 of 2024, mainly due to improved sales of proprietary airtime. The segment also saw growth in digital revenues from online advertising on the websites of Eurozet Group stations and subscriptions to TOK FM Premium. Operating costs in the Radio segment increased by just over 3% year-over-year. This was primarily due to increased spending on promotion and representation, especially for campaigns supporting Radio Zlote Przeboje as well as higher payroll costs. Overall, these factors contributed to a double-digit improvement in operating results. Eurozet Group remains the leader in large urban markets, those most attractive to advertisers. As shown in the slide, the larger the market, the greater our advantage. In Q1, we recorded a record growth in the number of digital subscribers to our podcast app, increasing by over 33% to reach 53,000 subscribers. Let's now move on to the results of the Outdoor Advertising segment. In Q1, AMS Group's sales revenue rose by 12%. It is important to emphasize that this growth significantly outpaced the overall market. The segment's operating costs increased by just under 11%, mainly due to higher system maintenance and service delivery costs. Operating results were slightly better than in the previous year. AMS remains the fastest-growing player in the digital out-of-home market, with digital revenue growth exceeding 45%. We now operate over 5,400 digital displays. We also remain a leader and pioneer an eco-friendly solutions (sic) [ EKO solutions ] in the out-of-home market. Our portfolio includes over 200 EKO bus shelters. Now let's move on to the results of the Digital and Printed Press segment. In Q1, this segment recorded a revenue decline of nearly 9%. This was primarily due to reduced revenues from printing services and sales of Gazeta Wyborcza. Advertising revenues grew mainly from the print edition of the newspaper. Operating costs in the Digital and Printed Press segment decreased across all categories with a total reduction of nearly 25%. Most notably, personnel and employee benefit costs fell due to last year's restructuring. Material and energy consumption costs as well as the cost of goods sold also dropped significantly, primarily due to lower paper consumption and reduced electricity prices. In summary, the segment significantly improved its operating results compared to Q1 of the previous year. Now a brief commentary on the results of the Internet segment. In Q1, total revenues for the segment fell by nearly 12%. This decline was mainly due to lower online ad sales by Yieldbird and Gazeta.pl, largely caused by the shrinking programmatic advertising market. Operating costs in this segment dropped by 14%, mainly due to reduced payroll expenses as a result of last year's restructuring. Representation and advertising costs also decreased. As a result, the operating loss was smaller than a year ago. In the longer term, we aim to increase revenues and improve performance in our digital businesses, including Gazeta.pl. To achieve this, we plan to intensify internal cooperation within the Agora Group by making better use of our competencies and brands. In practice, this means, among other things, joint sales efforts and closer collaboration between editorial teams. Finally, I would like to return to the announcement we made on Wednesday. We have recommended to our general meeting the payment of dividends to our shareholder. Our intention is to allocate over PLN 11.5 million (sic) [ PLN 11.6 million ] from the company's reserve capital for dividend distribution, which would result in a dividend of PLN 0.25 per share. According to our recommendation, the dividend record date is set for August 27, while the proposed payment date is September 18 of this year. In this context, I'd like to remind you that in the strategic directions we announced in spring 2023, we initially planned to resume dividend payments starting in 2026. However, we have assessed that Agora Group's current situation and outlook allow us to accelerate this process and pay out half of the dividend value stipulated in our policy already this year, thus demonstrating our determination to return to full dividend policy implementation as soon as possible. With that, I would like to conclude this brief presentation. As for our outlook for the coming quarters, in our view, nothing has changed at this point. We expect continued growth in the advertising market and a gradual recovery in cinema attendance. As you know, we anticipate single-digit growth dynamics in both of these market segments. That concludes the presentation we have prepared for you today. Additional information is available in the attachments to this presentation, which is on our website. And now we can proceed to the Q&A session. I'll hand over to our Investor Relations Manager, Krzysztof Mazur.

Thank you very much, Bartosz, for the presentation. As the CEO mentioned, my name is Krzysztof Mazur, and I will be hosting today's Q&A session. We've already received a few questions from you. The first concerns the Radio segment. And I'll hand it over to Maciej Strzelecki, who is responsible for this segment. The question is, will spending on advertising for Radio ZET be higher this year than last year? If so, by how much? And how do you assess the effectiveness of the station's recent advertising campaign?

Good morning, everyone. We're very pleased with the increase in listenership for Radio ZET last year. I believe a number of factors contributed to this growth, including work on the product itself. But our marketing efforts, particularly the advertising campaigns, also played a significant role. If you'll allow me, I won't go into more detail about our future plans as our reports are already quite comprehensive, and we would like to avoid disclosing detailed marketing strategies to competitors. I can assure you, however, that Radio ZET will certainly continue to be promoted by us. Thank you.

Thank you very much. The next one concerns the Film and Book segment. And I'll hand it over to Tomasz Jagiello. The average ticket price in Q1 was at the same level as in Q1 2024. The average concession revenue per viewer was also similar. Why was Q1 a period of relatively weak customer monetization? Is this a sign that in 2025, multiplex chains may be tempted to return to price wars?

A warm welcome to everyone, and let me start from the end. There are no signs of a return to price wars or a strategy of competing for viewers with lower prices. Each cinema chain applies its own pricing policy. If we analyze this more closely, we'll see that we're not dealing with a single price point or a narrow range of prices, but rather with a broad and diverse pricing structure. As a result, various effects may appear across different locations and operators. It's worth noting that when we enter a period with a high volume of school group screenings, we automatically see a drop in the average ticket price. On the other hand, special events such as concerts or live sports broadcasts, where ticket prices are significantly higher, cause sharp spikes in the average. Our review of pricing trends across the market shows a consistent effort to close the gap between cinema ticket prices and inflation. Comparing 2019 to 2025, inflation has significantly outpaced the price increases observed in cinemas, and the industry has been gradually but steadily closing that gap. So when we observe a phenomenon like the one mentioned in the question, I would classify them as short term. Ticket price lists are steadily increasing rather than remaining flat or declining. To understand the specifics behind such effects, a detailed analysis at the level of each cinema chain would be required. From our perspective, we do not observe any signs of falling prices. On the contrary, when we exclude special events like group visits or non-cinema screenings, prices appear to be steadily rising.

Okay. Thank you for the response. The next question is a financial one. So I'll forward it to Anna Krynska-Godlewska. In Q1, the company reported a relatively high tax charge. In Q1 of 2025, the tax amounted to nearly PLN 10.3 million against a pretax profit of PLN 2.7 million. What is the reason behind this? Could the effective tax burden for the full year of 2025 be similar to 2024?

The tax charge of PLN 10.3 million for this year consists of approximately PLN 6.4 million in current tax and nearly PLN 3.8 million in deferred tax. The tax paid in Q1 this year amounted to about PLN 5.8 million, which is comparable to the PLN 5.6 million paid in Q1 of 2024. Of course, we do not comment on forecasts related to the final tax amount for the year. However, I'd like to remind you that deviations from the theoretical amount based on the 19% tax rate are mainly due to deferred tax assets, which we include or exclude depending on the degree of certainty regarding future profitability. In the coming periods, these differences should no longer be as visible.

Thank you very much for the clarification. And now a general question about the process and condition of the companies that were spun off. Over a year ago, Gazeta Wyborcza, Gazeta.pl, and the book and music publishing unit were spun off as separate entities. How does the company assess the outcomes of this reorganization? This may be a question for you or for Bartosz.

So let me start. The spin-off of these companies beyond the operational tasks like shifting or increasing managerial responsibility for the businesses they already oversee has delivered very good results in our view. We see this in Gazeta Wyborcza and in smaller entities like Czerska or other Gazeta.pl companies. They each face their own challenges, of course, but the engagement and response of the managers operating within these independent entities have been very strong. We also believe that increased transparency regarding the financial results of each segment positively affects the business itself and Investor Relations. We think this is also more transparent for you. So overall, from our perspective, we evaluate this process very positively.

I completely agree with Anna. One of the key intentions behind this restructuring process was, as she emphasized, to shift full responsibility for business outcomes as close as possible to the actual business units. If I may add to that, I'd like to point out that when managing a large media group like Agora, the #1 media group in Poland, not only in terms of daily reach, but also in terms of the width and diversity of our media portfolio, it requires a specific management structure. This is because contrary to appearances, these markets can differ significantly from one another. Our media outlets operate in a very different context and market dynamics vary greatly across segments. It's hard to imagine effectively managing such a complex group of businesses under a fully centralized model. We want strategic and operational decisions concerning each business within the Agora Group portfolio to be made as close as possible to the market, the customer and the user. And as Anna mentioned, we are already seeing positive outcomes of this structure, most clearly in the results of Gazeta Wyborcza.

Thank you very much for your response. And another one for you, Bartosz. Not long ago, Gazeta Wyborcza hosted the World News Media Congress 2025. And could you share some reflections on this event?

Gazeta Wyborcza, along with all other media outlets belonging to the Agora Group, had the honor of hosting this congress. It is the world's largest media congress organized by the world's largest association of news media. The organization brings together 18,000 titles from 120 countries, and its members meet once a year at the congress. This tradition has continued for 76 years. Now this year, for the first time, the congress was held in Poland and essentially, for the first time in our part of Europe. The choice is symbolic. On the one hand, the WAN-IFRA members wanted to show solidarity with Ukraine and with journalists performing their duties under extremely difficult conditions there. On the other hand, it was a message from Poland, a country where the role of the media in restoring a pathway from populism has been deeply appreciated. The congress emphasized the crucial role media play in upholding democracy, the rule of law, transparency in public life and the building of a civil society. So this was also a form of recognition for all independent Polish media, which, in recent years, have operated under the pressure of a populist government. We are very satisfied as the congress serves as a platform for discussion on the most pressing challenges in our industry, and there is no shortage of them today. These include relations with global tech giants and the rapidly shifting media business model driven by their unprecedented expansion, especially in the advertising market. This challenge is further intensified by the rise of artificial intelligence. In parallel, we face issues such as manipulation, misinformation and outright lies, which proliferate mainly on social media platforms. The key question discussed at the congress was what response quality journalism can and should provide to this phenomenon. The event was an opportunity to explore these issues and exchange experiences with colleagues, editors-in-chief and publishers from around the world. It turned out that these challenges are shared across many continents, especially in light of the current global wave of populism, which remains one of the major threats to independent democratic media. To sum up, we are very satisfied. We had the honor of hosting this congress and received outstanding feedback, both for the hospitality shown by Poles and for the overall quality of the event. We feel that the nearly 1,000 delegates from 70 countries who attended the Congress left with a sense that they had participated in one of the best events of its kind in the WAN-IFRA's history.

Great. Thank you very much. Now the next few questions concern the radio segment. So I'll pass them to Maciej Strzelecki. TOK FM has boldly changed its programming schedule. Why? And what are your ambitions regarding listenership figures for TOK FM over, let's say, the next 2 years?

We discussed TOK FM during our previous earnings meeting, noting that the political temperature in Poland has significantly cooled, which has impacted the overall interest in news media. This shift created a need to reassess our programming and strategic approach to TOK FM. The recent changes in the schedule are part of a fine-tuning process aimed quite obviously at regaining part of the audience that the station had lost. I'd like to remind you that despite the recent drop in listenership, TOK FM is still performing at historically strong levels when looking at the station's long-term listenership trends. Its popularity peaked during the height of the previous government's term. After that peak, interest in the station understandably declined. Even so, current figures remain very solid. That being said, our ambitions are higher, and we hope the adjustments we're making now will help us regain and grow our audience base.

Thank you for the answer. The next question also concerns the Radio segment. Could you share how much synergy has already been achieved following the acquisition of Radio ZET? And what remains to be implemented in 2025? You also mentioned that the relocation will take place in 2026. Can you provide some guidance on the expected savings or at least how many square meters Radio ZET currently rents at its headquarters?

I think quite a lot has been already said on this topic recently. But to briefly recap, regarding the realization of synergies related to the merger with Eurozet, we were able to achieve revenue synergies relatively quickly. However, we still consider that potential to be not yet fully exhausted, and we continue to expect further synergies in this area. A separate category involves all the cost synergies that are still to be realized. And we are working on these continuously, gradually consolidating individual functions step by step. However, this is a lengthy and challenging process because both companies operate on completely different systems and solutions. This makes the process labor-intensive and the move of Eurozet to Agora's headquarters will be a clear milestone in the realization of those cost synergies. As for the questions regarding the number of square meters, unfortunately, I cannot answer at the moment. I can only say that it covers several floors on Zurawia Street. So it's a sizable office and the reduction will clearly be noticeable.

Thank you very much for the answer. Now we have a few questions regarding the Internet segment. So I'll pass them to Agnieszka Siuzdak-Zyga. The first question is, could you share a few words about the process of change in the Internet segment? What are your main goals for 2025?

Hello, everyone. When it comes to priorities in the Internet segment, especially its media component, namely Gazeta.pl, for the current year, as we already indicated during the previous meeting and again today, the key focus from our perspective is to fully explore and strategically plan the synergies and potential benefits stemming from being part of a group that includes highly diverse entities and from collaboration among them, especially the media entities, meaning Gazeta.pl, Gazeta Wyborcza and also the digital area of the Radio segment, although not limited to that. So this is our priority for the coming quarters. I believe it is, in fact, the key and most important focus.

Great. And thank you for the answer. One more question regarding the digital area. You now have a new Chief Technology Officer. Could you share a few words about the current priorities in the area of digitization or technology?

Thank you very much for the question. I'm glad that the new position within the group has been noticed so quickly. Indeed, it's directly connected to what I just mentioned. The digital area, cooperation within it, and the synergies it offers are absolutely crucial. That's why this new position was created and why setting priorities and main tasks for our new CTO is essential. In particular, it's worth focusing on 2 main areas. First, CTO will support the integration of IT and technology teams from the digital and media companies, namely Gazeta Wyborcza and Gazeta.pl. This process began several months ago. The aim here is to support and continue this transition. Additionally, as part of this process, we are planning to build a new efficient operating model that will support collaboration between teams, the exchange of competencies and the sharing of tools. Furthermore, a key area the CTO will absolutely support and emphasize is the fast-track execution of key technological business projects, especially those related to personalization and AI. Also, though not strictly within the business area, but more within support operations, the CTO will handle similar tasks in IT back-office processes where they will support the modernization of systems, tools and the operating model.

Thank you very much. The next question goes to Wojciech Bartkowiak, Head of the Digital and Printed Press segment. Why, in the company's view, did revenue from digital subscriptions to Gazeta Wyborcza decline year-over-year last quarter? By what percentage did this revenue drop? Could the reason similar to the case of TOK FM listenership be audience fatigue with politically themed content?

There are 3 reasons, I would say. The first is that Q1 is usually the weakest quarter seasonally. You can observe this in the results of previous years. I always say that subscriptions are also a somewhat seasonal product. Secondly, the second reason is related to global trends. The relationship between publishers and big tech companies is becoming increasingly complicated, which has resulted in the direct traffic to publisher websites declining globally. Algorithms are not in our favor. Big tech companies are increasingly focused on maximizing user retention globally. Now the third reason is probably the most significant one. Maciej already mentioned that political temperature plays a major role. As a reminder, if we compare Q1 of last year to Q1 this year, Q1 of last year came shortly after the formation of the new government. That period was marked by turbulent procedures and scenes of changes at the public television initial moves toward judicial reform. And generally, it was a highly charged time. This year, the temperature was somewhat lower. I won't give you an exact number, but the decline is not very deep. It's more of a seasonal dip, though somewhat deeper than in previous years due to the lower political intensity. Perhaps one more comment, if we compare the number of people who voted in the parliamentary elections to those who voted last Sunday, we're talking about 2.5 million fewer voters. That's also a measure of the cooling political climate, which has undoubtedly had some impact on us.

Thank you very much for the response. The next questions are for Tomasz Jagiello, head of the Film and Book segment and Outdoor Advertising. The first question concerns AMS. You stated that you have 5,400 digital advertising displays, which is just over 24% of AMS' total inventory. What percentage of digital displays do you aim to have by the end of 2025?

This isn't a parameter we use on a daily basis because even intuitively, the quality of digital displays varies greatly. You cannot compare the small screen in a store to large format displays in city centers. That's why what matters most to us is the overall growth of the digital segment in Outdoor Advertising and the increase of our market share. Our ambitions are not directly at quantity, but exclusively at quality and market share. That is the key performance indicator in our work. And in both of these areas, we have a lot to be proud of.

Great. And thank you for your answer. The next question concerns the Helios network. Helios has introduced the Dream auditorium format. Could you share your thoughts on how this format is performing? Are the margins significantly higher? And what are the future plans for increasing the number of Dream auditoriums?

The Dream program is part of our strategy, and we made a commitment to the market that we would bring the share of Dream auditoriums up to 10% of our total screen count. We are on track to meet this goal based on our experience. Since it's been a few years now, we can confidently say that the results couldn't be better. And yes, intuitively and factually, I can confirm the margins on premium screens are significantly higher. In terms of occupancy, it is 3x higher than that of regular auditoriums. Most importantly, the format enjoys great popularity among our customers. There are cinemas where these screens sell out completely. In line with our strategic road map, I can already confirm that this year, we will open Dream auditoriums in Dabrowa Górnicza and in Wroclaw in the Magnolia Park Shopping Center.

Thank you, Tomasz, for your answer. One more question concerning AMS. Is AMS seeing an impact from the presidential campaign on sales this quarter? If so, is it smaller or greater than the effect from last year's local government and European parliament elections?

We can all look around and see what's happening. It seems we're mostly witnessing bannerization of outdoor spaces when it comes to political campaigns. There are quite a few chaotic banners being put up. But for the overall outdoor advertising market, the current campaign has negligible significance.

Thank you very much for your answer. And the next question concerns Yieldbird. So I'll pass it to Maciej Strzelecki. Is the company expecting negative revenue trends and negative profitability in the Internet segment over the coming quarters as well? Or have external or internal factors emerged that suggest improvement? How is Yieldbird doing with SaaS-based service sales? So I suggest that maybe you answer regarding Yieldbird. And for the overall segment, I'll ask Agnieszka Siuzdak-Zyga's help.

All right. Yieldbird operates in the programmatic advertising market, as you well know. And unfortunately, this market is currently quite challenging. A lot of money is leaking to global platforms, making the competition for advertising revenue extremely tough. Now against this backdrop, we can say that Yieldbird is doing reasonably well and is developing its SaaS services as planned. We expect the new Management Board of Yieldbird to fulfill our expectations for the company, that is to contribute positively to the performance of the Internet segment.

As to more generally about the segment, Agnieszka, could you jump in?

Yes, I'll take over. Regarding the entire segment, especially Gazeta.pl, we assume that in the coming quarters, the negative revenue trend visible in Q1 year-over-year will diminish. We expect revenues to stabilize at a similar year-over-year level. Now what happened in Q1 and what caused the negative revenue dynamics for Gazeta.pl? The main issue here is reach. Specifically, as we've mentioned several times today, changes in platform policies, including Facebook's policy, which led to a significant drop in reach for publishers like Gazeta.pl. In Q1 of last year, reach on that platform was still relatively high, but following policy changes, it declined sharply, creating the year-over-year difference visible in Q1. As Maciej mentioned, this affects programmatic revenues, which are lower. In the coming quarters, we expect the decline in reach to level off and thus, its impact on revenues should be significantly reduced. Thanks to internal revenue synergies such as a unified advertising offer across our digital businesses, we also expect an improvement in revenue performance. We see this as a potentially strong additional factor. And I think the last point I'd like to make in the context of the segment's results is that despite the negative revenue situation in Q1, Gazeta.pl's performance improved year-over-year and significantly so. As for results in the upcoming quarters, and the final part of the question, it's worth emphasizing the seasonal pattern in businesses like Gazeta.pl. Q4 is typically the strongest. That's mainly due to the dynamics of the advertising market. So it's definitely a period to look forward to.

Great. Thank you very much for the answer. The next question also concerns the Radio segment. I'll pass it to Mr. Maciej Strzelecki. The number of subscriptions to the TOK FM premium service increased year-over-year by 33.2%. By how much did the revenues from these subscriptions increase during that period?

As in the case of radio advertising, I'll refer again to our policy of not disclosing detailed figures since combining the 2 data points reveals a lot about TOK FM's subscription strategy. I will just say that revenues are also growing along with the increase in subscriptions, and this growth is significant.

great. And thank you very much for the response. The next question are actually 2 concerning the Film and Book segment. So I'll redirect them to Tomasz Jagiello. What were your initial thoughts when the U.S. administration announced plans to support the Hollywood-based film industry?

Thank you for this question. Our very first thought naturally was the need to interpret and fully understand that plan. What we know for sure today is that the President announced an intention to support Hollywood. And in principle, anything that helps Hollywood is good for us, which I want to stress highly. Of course, we also know that Hollywood itself is asking not to be helped this way because it produces films abroad not out of preference, but because it's cheaper. The cost of producing major blockbusters today is enormous. Incidentally, we may expect a drop in blockbuster production costs due to the rapid development of AI technologies, but that's a side note. Coming back to the core question, if Hollywood receives help, it's good. If Hollywood asks not to be helped, maybe the President will listen to that. As for films from outside Hollywood, one could interpret the announcement of this policy as a form of restriction on the distribution of foreign films in the U.S. through applying tariffs or to licenses. But for Agora, this has negligible significance as long as the focus remains on films being shown in the U.S. rather than the other way around. And I'd like to conclude this analysis here because until we learn the specific details of the plan, and it is very difficult as in many sectors to provide an accurate interpretation or link the announcements with actual implementation. So I will leave it at that.

Thank you very much. And the next question is a follow-up to the earlier one about Helios Dream auditoriums. If Helios Dream auditoriums are so efficient and high margin, why only 10% and not significantly more? I assume this is linked to the strategic direction goal of having 10% of screens as Helios Dream by the end of the strategy and implementation. This is more of a philosophical question. How large can the premium sector be before it ceases to be premium and becomes regular?

Agora's management concluded that 10% ensures a level of exclusivity and preserves the premium character. This doesn't mean, however, that in the future, after a thorough analysis and the completion of our strategic goal, a more ambitious target won't be considered. But of course, for now, we are focusing on delivering the target we have already set, and we will certainly monitor its financial effects. It's also important to note that Helios operates within a fairly disciplined CapEx regime. Therefore, we aim to ensure the development of our cinemas is stable and measured rather than aggressive. So absolutely, everything I've said is accurate here. We do not rule out reassessing our aspirations in this area, just not until after this phase has been completed and evaluated.

Great. Thank you very much for the answer. There is just one more question for you, Tomasz. But before we move on, a quick reminder. There are about 10 minutes left in the Q&A session. So if anyone still has questions, now is the time to ask. Now the next question is, what does the projector replacement process in the Helios auditoriums look like? Do you see a chance that public funding will support multiplexes as in the case in other EU countries?

Let me start from the end. As I've mentioned before, Polish authorities, both previous and current, have not developed any support system for this, which is quite unique, particularly regarding projector replacement. One of the core elements of the European recovery and resilience plans and their equivalents in other countries was to support industries most impacted by COVID. And the cinema industry is right at the top of that list. Our industry organizations continue to work hard to convince Polish authorities that our sector deserves such support. Of course, we're doing everything we can to make this happen, and we haven't lost hope. That said, this doesn't mean that without such support, Helios won't smoothly transition into the world of laser projection technology. It's necessary because we are witnessing the end of the Xenon projector era. In about 6 to 7 years, we'll reach the end of the life cycle of current lamp-based projectors. And I prefer not to discuss this in fragments. What I can say is that in due course, likely sooner rather than later, we will present our plans and a time line for this process. However, these are still being developed, so I wouldn't want to break it into fragments just yet. We'll definitely present it in full detail.

Thank you very much for the response. Now the last few questions, yes, there's still one more related to finance. So I will hand it over to Anna Krynska-Godlewska. Could you share your insights on how the company approaches costs? To what extent do you try to ensure they are variable and dependent on operating results? And to what extent must they remain fixed?

I understand this is a question about operating leverage, and that very much depends on the type of business. In content-driven media such as radio or Gazeta.pl, Gazeta Wyborcza, or our real estate company, Czerska 8/10, most costs are fixed. In these content-based businesses, salaries make up the majority of expenses, and that's due to the structure of the business, which we can't really impact or change. However, in companies such as cinemas, AMS or even Yieldbird, here, we do see a situation in which some costs are variable. For example, payments to film producers or film copy acquisitions. If ticket sales drop, those costs decrease automatically. Conversely, when attendance rises, you can immediately see significantly better cinema results. The same goes for AMS. System maintenance and service delivery costs rise when sales increase. So those are variable costs. But it's difficult to generalize. Each business handles it differently. In the short term, we don't really have an impact whether we can shift from fixed to variable costs, so we can more theoretically search for long-term solutions. But in general, all our businesses manage cost policy very cautiously. Examples include restructuring efforts. We've had 3 historically at Helios, Gazeta.pl and Gazeta Wyborcza, where we significantly reduced salary costs, leading to considerable improvement in profitability. So honestly, it's hard to give a single definitive answer to that question.

All right. Thank you very much for the answer. And now the final questions will go to CEO Bartosz Hojka. The first one is like a collective question as several questions have been asked about this. How are talks with big tech progressing regarding the new legislation? When can we expect any outcomes? And what are your reflections on the state of these negotiations?

Negotiations with big tech companies are taking place globally, involving publishers everywhere. And generally speaking, these talks are difficult for everyone. That's a broad observation. In many markets, negotiations have been going on for years. Now on a more serious note, we are currently at a stage where it's difficult to predict the outcome of these talks, both in terms of what a final agreement might look like and when such an agreement could be reached. As I mentioned, the pace of these discussions is challenging across the board. A few months ago, the agreements were reached by the largest French publishers with the major global platforms despite substantial government support for domestic broadcasters and publishers. Even so, those talks took nearly 3 years. So as I mentioned, we're at a stage where it's difficult to predict the outcome and timing of the negotiations beyond what is specified by the new law. As we all know, negotiations are most fragile while they're ongoing. And in the interest of those talks, there's a shared willingness to conclude them with an agreement. Now the worst-case scenario is when they play out in public and through the media. And for that reason, I would prefer not to comment on the course of these discussions during today's meeting. I can only say that they are ongoing and progressing.

Thank you very much for your response. As a final point, I believe we can combine 2 questions into one. What are your main goals for 2025? Would achieving a triple-digit operating profit this year be a major challenge for the group? Given the current performance trajectory, it seems feasible. Bartosz, I think, this question, I think, is generally for you, though, if needed, perhaps Anna Krynska-Godlewska could provide support.

Sure. Our goals for 2025 naturally align with our strategic directions, which we announced in 2023. I want to highlight that we've already made significant progress. When we launched that plan, our operating profit stood at PLN 50 million. And today, it's PLN 150 million in EBITDA terms, referring to 2024 results and excluding MSSF 16. As you know, our goal is to reach PLN 200 million at EBITDA level in 2026, again, without MSSF 16 adjustments. From a group-wide perspective, we also announced 2 years ago our intent to fully reinstate our dividend policy starting in 2026. And one of our other objectives was to secure at least third place in terms of the reach of our media among Poland's largest media groups. As far as our financial target is concerned, we're clearly on a growth path. And as of today, we see no reason to doubt our ability to reach the PLN 200 million EBITDA goal next year. Now regarding the return to the dividend policy, as I mentioned, and I'm happy to reiterate, we initially announced this would occur by 2026 at the latest. We have since concluded that the company's condition and outlook allow us to accelerate that plan and pay out half of the regular dividend already this year based on 2024 earnings. So there's a clear fast track here. As for our previously stated ambition to climb to third place among Poland's largest media groups in terms of total reach, our task in 2025 and beyond will be to maintain the first place position. We've already achieved in 2025 in terms of overall reach across all our media. That will be a real effort as the competition is intense. Regarding our most important operational goals, I'd say the priority is the continued consolidation of Eurozet and Agora. We've mentioned this repeatedly. We still see untapped synergy potential from this integration. Maciej touched on some of those projects earlier today, so I won't repeat them here. We are also working intensively on our portfolio of digital media, on developing a plan for closer and more effective collaboration within the group when it comes to our digital media. The goal is to better leverage our competencies and our brands. As I've already mentioned, in practice, this means joint sales efforts and closer cooperation between our editorial teams. As for the advertising media, we aim to make the most of the several percent growth in the advertising market that we expect in 2025. The same applies to the cinema market, where we also anticipate a few percentage points of growth in attendance. We expect our cinemas to benefit from this growth, at least in proportion to the growth of the overall market.

Great. Thank you very much for the answer. And we've reached the end of the Q&A session, with that, the conclusion of our investor conference. Thank you all very much for your participation and for the many questions, as always. As always, if any issues remain unclear, please feel free to contact us at [email protected] or [email protected]. We are, of course, at your disposal. Bartosz?

Thank you very much, and see you at the presentation meeting where we will discuss the Q2 results. Thank you, and see you soon. [Statements in English on this transcript were spoken by an interpreter present on the live call.]