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Information on the impact of the new Social Agreement on the financial result for the 4th quarter of 2017

With reference to the information included in the Current Report 26/2017 Orange Polska informs that EBITDA for the 4th quarter of 2017 will be adjusted by PLN 196 million as a result of the Social Agreement for the years 2018–2019 and the final settlement of the Social Agreement for the years 2016–2017.

 

The above mentioned amount consists of:

1.       A charge of PLN 200 million reported as employment termination expense, and

2.       A one-time decrease of PLN 4 million in labour expense.

 

The amount reported as employment termination expense has been determined for the maximum number of employees who can leave Orange Polska under the new Social Agreement and their expected seniority structure, and accounts for certain additional benefits.

 

The decrease in labour expense (by PLN 4 million) consists of:

·         release of actuarial provisions amounting to PLN 25 million, and

·         additional social obligations of Orange Polska, which were an integral part of the negotiated plan for the workforce optimisation, totalling PLN 21 million.

 

The resulting amount of PLN 196 million will be reported below the adjusted EBITDA and will not influence the full-year adjusted EBITDA guidance for 2017, which, in line with the information included in the Current Report 22/2017, is around PLN 3.0 billion.

 

In December 2017, the Management Board of Orange Polska signed with trade unions the Social Agreement for 2018–2019, which in particular determines a financial package for employees leaving Orange Polska and sets the volume of voluntary departures in the following two years. Under the Agreement, up to 2,680 employees will be entitled to take advantage of the voluntary departure package. Each time a Social Agreement is concluded for subsequent years, provisions for the related expense are established, reflecting the upper limit of voluntary departures and benefits for the leaving employees.

 

 

Orange Polska reports the information on the impact of the new Social Agreement on the financial result for the 4th quarter of 2017 to the public, so that all parties, including analysts and investors, can account for it in their analyses. 

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