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NOS SGPS
Earnings Release • Jul 18, 2024
1904_iss_2024-07-18_aac0d4b1-ed1b-454f-8151-7b281237e473.pdf
Earnings Release
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2Q24 Earnings announcement
1 Relatório Anual Integrado 2023 01 02 03 04
2.1 Valorizamos as Nossas Pessoas2.2 2.3 2.4 2.5
Highlights of 2Q24 results
Another quarter of consistent strength in Telco performance, with positive trends in both B2C and B2B.
Media & Entertainment weaker than expected yoy due to fewer blockbuster movies in theatres
- • Consolidated Revenue increased by 4.7% yoy in 2Q24, led by solid performance in Telco core business, up 6.1% yoy;
- • EBITDA AL up by 3.8% in 2Q24 to 156.5 million euros, with growth in Telco EBITDA AL of 6.1%;
- • EBITDA growth of 4.8% in 2Q24 to 187.6 million euros, with Telco EBITDA up by 6.7%;
- • EBITDA AL CAPEX up by 20.3% to 63.4 million euros;
- • Underlying FCF growth of 17.8% yoy to 51.7 million euros;
- • FCF boosted by operational performance and non-recurrent effects of 83.7 million euros;
| Table 1. | ||
|---|---|---|
| 2024 2Q highlights | 2Q24 (M€) | yoy (%) |
| Consolidated Revenues | 412.2 | 4.7% |
| Consolidated EBITDA | 187.6 | 4.8% |
| Consolidated EBITDA AL | 156.5 | 3.8% |
| Consolidated EBITDA AL - CAPEX | 63.4 | 20.3% |
| Underlying FCF 1 | 51.7 | 17.8% |
1) Excluding activity fees recorded and Cellnex deal recorded in 2Q24 and VAT related to tower deals in 2Q23
Sustained momentum in overall Telco business
Strategic execution and operational discipline are driving best in class service quality and customer experience. Recognized once again as the best mobile network in Portugal, our 5G coverage reached over 96.5% of the population, and we continued to expand our fixed next generation footprint reaching 5.57 million homes by the end of 2Q24, 78% of which with FttH access technology.
Total Telco RGUs posted another quarter of healthy growth with 73k net additions, reaching 11.142 million, with particular focus again on net growth in post-paid mobile services. Convergent offers remain a key driver of customer choice, representing 70.1% of residential customer connections by the end of 2Q24. Our B2B division again recorded strong operational momentum this quarter, in particular in the larger corporate space.
Along with the rest of the Portuguese market, our cinema operation had a lower than expected attendance yoy due to the lower number of blockbuster movies in 2Q24, mostly explained by delays to launches of major movies and by the fact that 2Q23 was also a very strong quarter in terms of attendance. As a result, financial performance in our Media and Entertainment division was negatively impacted, somewhat offsetting the strong performance in Telco in 2Q24.
Financial Performance
The Consolidated Financial Statements for 2Q24 have been subject to a limited review.
As from 1Q23 we started to focus our review of operational profitability on EBITDA AL, equivalent to pre IFRS16 EBITDA. As previously guided, we no longer include EBITDA in our summary financial statements however a table reconciling EBITDA with EBITDA AL is included below and all relevant lines are included in the Profit and Loss Statement below.
| Table 2. | |||||||
|---|---|---|---|---|---|---|---|
| Profit and Loss Statement (Millions of Euros) |
2Q23 | 2Q24 | 2Q24 / 2Q23 | 1H23 | 1H24 | 1H24 / 1H23 | |
| Operating Revenues | 393.8 | 412.2 | 4.7% | 775.2 | 815.5 | 5.2% | |
| Telco | 377.5 | 400.7 | 6.1% | 746.6 | 789.6 | 5.8% | |
| Consumer Revenues | 269.5 | 281.5 | 4.5% | 533.3 | 559.1 | 4.8% | |
| Business Revenues | 83.0 | 89.9 | 8.3% | 163.8 | 177.1 | 8.1% | |
| Wholesale and Others | 25.1 | 29.2 | 16.6% | 49.5 | 53.4 | 7.9% | |
| Audiovisuals & Cinema | 24.6 | 19.7 | (20.1%) | 45.0 | 42.4 | (5.7%) | |
| Others and Eliminations | (8.3) | (8.1) | (2.5%) | (16.5) | (16.6) | 0.5% | |
| Operating costs Excluding D&A AL | (242.9) | (255.7) | 5.2% | (478.2) | (503.6) | 5.3% | |
| Telco | (235.8) | (250.3) | 6.1% | (466.0) | (492.1) | 5.6% | |
| Audiovisuals & Cinema | (15.4) | (13.5) | (12.5%) | (28.6) | (28.2) | (1.6%) | |
| Others and Eliminations | 8.3 | 8.1 | (2.5%) | 16.5 | 16.6 | 0.5% | |
| EBITDA AL(1) | 150.9 | 156.5 | 3.8% | 297.0 | 311.9 | 5.0% | |
| EBITDA AL margin | 38.3% | 38.0% | (0.3pp) | 38.3% | 38.2% | (0.1pp) | |
| Telco | 141.7 | 150.4 | 6.1% | 280.6 | 297.6 | 6.0% | |
| EBITDA AL margin | 37.5% | 37.5% | 0.0pp | 37.6% | 37.7% | 0.1pp | |
| Audiovisuals & Cinema | 9.2 | 6.2 | (32.9%) | 16.4 | 14.3 | (13.0%) | |
| EBITDA AL margin | 37.3% | 31.3% | (6.0pp) | 35.5% | 35.7% | 0.2pp | |
| Leasings | (28.2) | (31.1) | 10.3% | (55.6) | (60.2) | 8.4% | |
| Telco | (25.9) | (28.5) | 10.0% | (50.7) | (55.2) | 8.9% | |
| Cinema Exhibition and Audiovisuals | (2.3) | (2.6) | 13.2% | (4.9) | (5.0) | 2.4% | |
| Depreciation and Amortization | (116.6) | (125.0) | 7.2% | (237.0) | (247.3) | 4.3% | |
| (Other Expenses) / Income | (0.7) | 40.3 | (5562.3%) | (1.2) | 71.6 | (5897.2%) | |
| Operating Profit (EBIT) (2) | 61.7 | 103.0 | 66.9% | 114.3 | 196.4 | 71.7% | |
| Share of profits (losses) of associates and joint ventures | 0.7 | 2.0 | 181.9% | 3.2 | 4.7 | 44.7% | |
| (Financial Expenses) / Income | (16.5) | (19.6) | 18.5% | (29.5) | (40.3) | 36.7% | |
| Leases Financial Expenses | (7.6) | (8.4) | 10.6% | (15.0) | (16.6) | 10.9% | |
| Funding & Other Financial Expenses | (8.9) | (11.2) | 25.2% | (14.5) | (23.7) | 63.5% | |
| Income Before Income Taxes | 45.9 | 85.4 | 86.0% | 88.1 | 160.7 | 82.5% | |
| Income Taxes | (0.4) | (4.6) | 1202.1% | (7.5) | (12.1) | 61.3% | |
| Net Income Before Associates & Non-Controlling Interests | 44.8 | 78.8 | 75.8% | 77.4 | 144.0 | 86.1% | |
| Net income | 45.5 | 80.8 | 77.4% | 80.6 | 148.6 | 84.4% | |
| Net income attributable to Non-controlling interests | (0.0) | 0.1 | (1469.8%) | 0.1 | 0.1 | 35.6% | |
| Net Income attributable to NOS shareholders | 45.5 | 80.7 | 77.2% | 80.5 | 148.6 | 84.6% | |
(1) EBITDA AL = Operating Profit AL + Depreciation and Amortization + Integration Costs + Net Losses/Gains on Disposal of Assets + Other Non-Recurrent Losses/Gains (2) EBIT = Income Before Financials and Income Taxes.
Note: In 1Q24 B2C and B2B revenues have been restated to reflect a more accurate allocation between segments.
| Table 3. | ||||||
|---|---|---|---|---|---|---|
| EBITDA (Millions of Euros) |
2Q23 | 2Q24 | 2Q24 / 2Q23 | 1H23 | 1H24 | 1H24 / 1H23 |
| EBITDA (1) | 179.1 | 187.6 | 4.8% | 352.6 | 372.1 | 5.5% |
| EBITDA Margin | 45.5% | 45.5% | 0.0pp | 45.5% | 45.6% | 0.1pp |
| Telco | 167.6 | 178.9 | 6.7% | 331.3 | 352.8 | 6.5% |
| EBITDA Margin | 44.4% | 44.7% | 0.3pp | 44.4% | 44.7% | 0.3pp |
| Cinema Exhibition and Audiovisuals | 11.5 | 8.7 | (23.7%) | 21.3 | 19.3 | (9.4%) |
| EBITDA Margin | 46.5% | 44.4% | (2.1pp) | 48.4% | 46.5% | (1.9pp) |
| Leasings | (28.2) | (31.1) | 10.3% | (55.6) | (60.2) | 8.4% |
| Telco | (25.9) | (28.5) | 10.0% | (50.7) | (55.2) | 8.9% |
| Cinema Exhibition and Audiovisuals | (2.3) | (2.6) | 13.2% | (4.9) | (5.0) | 2.4% |
| EBITDA AL | 150.9 | 156.5 | 3.8% | 297.0 | 311.9 | 5.0% |
(1) EBITDA = Operating Profit + Depreciation and Amortization + Integration Costs + Net Losses/Gains on Disposal of Assets + Other Non-Recurrent Losses/Gains
+4.7% Consolidated Revenue growth driven by Telco performance
Consolidated revenues in 2Q24 grew by 4.7% yoy to 412.2 million euros, driven by strong Telco underlying operational performance and overshadowed by poorer than expected performance in our Audiovisuals and Cinema operations.
Telco revenues were 6.1% higher yoy, reaching 400.7 million euros, with positive momentum across all business segments. Growth in B2C revenues amounted to 4.5% yoy, driven by core services growth, namely convergent and integrated RGUs, and continued improvement in value-mix and equipment sales. B2B revenues increased by 8.3% yoy to 89.9 million euros, with strong underlying performance, in particular in the Corporate segment which grew 10.7% yoy. Wholesale and Other revenues posted a 16.6% yoy increase to 29.2 million euros, led by revenues from mass calling services which recorded a strong quarter in terms of market share gains.
Audiovisuals and Cinema revenues posted a 4.9 million euros decline yoy to 19.7 million euros in 2Q24, impacted as explained before, by the lower number of blockbuster movies exhibited in theaters. Cinema revenues decreased 29.5% yoy, with ticket sales down by 35.0%. The postponement of strong movie lineups in Portugal, such as "Inside Out 2", had a significant impact when compared with European markets where this film has already been launched and reaching #1 in many markets. Expectations for 2H24 are better with a ramp-up in blockbuster movie launches.
| Table 4. | ||||||
|---|---|---|---|---|---|---|
| Operating Indicators | 2Q23 | 2Q24 | 2Q24 / 2Q23 | 1H23 | 1H24 | 1H24 / 1H23 |
| Cinema | ||||||
| Revenue per Ticket - box office (Euros) | 5.7 | 6.0 | 6.0% | 5.9 | 6.1 | 4.3% |
| Tickets Sold - NOS ('000) | 2,033.7 | 1,322.8 | (35.0%) | 3,535.5 | 3,045.4 | (13.9%) |
| Tickets Sold - Total Portuguese Market (1) ('000) | 3,090.6 | 2,033.3 | (34.2%) | 5,425.0 | 4,728.2 | (12.8%) |
| Screens (units) (1) Source: ICA - Portuguese Institute For Cinema and Audiovisuals |
214 | 214 | 0.0% | 214 | 214 | 0.0% |
+3.8% Consolidated EBITDA AL growth for the quarter
Consolidated EBITDA AL for 2Q24 increased 3.8% to 156.5 million euros, positively impacted by 6.1% yoy growth in Telco EBITDA AL, and negatively impacted by 32.9% decline in Audiovisuals & Cinema EBITDA AL. Consolidated OPEX AL increased by 5.2% yoy to 255.7 million euros, combining a 6.1% increase in Telco OPEX AL to 250.3 million euros and a 12.5% decrease in Audiovisuals & Cinema OPEX AL to 13.5 million euros.
Direct costs were Influenced by various factors. As in the previous quarter, positive traction in the B2B segment with increased operating activity is driving IT and Rental project costs up, along with cost of goods sold due to higher levels of resale revenues yoy. In the A&C segment, the decrease in activity, as explained above, is also reflected in lower costs in this division.
Non-Direct, operating and structure cost trends remain in line with the previous quarter, with energy costs rising yoy reflecting higher regulated energy prices in the Portuguese market and leasing costs up by 10.3% due to a larger number of RAN sites shared and due to inflation related adjustments to Cellnex payments, capped at 2%. As a result of our ongoing transformation programme, we are achieving structural efficiencies that help to contain costs in some areas, such as call centre and customer related costs.
+77.2% growth in Net Results to 80.7 million euros, including a positive one-off of 30.6 million euros after taxes from the sale of a small tower portfolio
Consolidated Net Results in 2Q24 amounted to 80.7 million euros, an increase of 35.2 million euros. The increase is explained by a combination of various factors: i) increase in EBITDA AL of 5.7 million euros as explained above; ii) increase in D&A of 8.4 million euros to 125.0 million euros; iii) increase in Net financial results of 3.1 million euros yoy to 19.6 million euros due to the higher interest rate environment yoy, a trend likely to stabilize in coming quarters as 2Q24 financial costs were already slightly below 4Q23 and 1Q24 levels; iv) Positive one-offs recorded under non-recurrent costs/gains which included a capital gain after tax of 30.6 million euros related with the sale of a small tower portfolio to Cellnex, as explained in the Free Cash Flow section.
5.1% decrease in Total CAPEX to 93.1 million euros, 40.7% decrease in Network expansion CAPEX
Total CAPEX excluding leasing contracts and other contractual rights decreased 5.1% yoy to 93.1 million euros, continuing the downtrend yoy of previous quarters. With 5G population coverage at 96.5%, our intensive period of 5G network rollout is well behind us and leading to a decline in Telco CAPEX of 6.1% yoy to 87.9 million euros. Network expansion CAPEX fell 40.7% yoy, even with our ongoing expansion of FttH coverage which now stands at 78.0% of our total fixed NGN footprint of 5.57 million households. Customer related CAPEX was up by 4.3% yoy to 35.8 million euros, consequence of a higher proportion of CPE refurbishment in 2Q23. As a proportion of Telco Revenues, in 2Q24, Technical CAPEX amounted to 13.0%, down from 15.6% in 2Q23.
| Table 5. | ||||||
|---|---|---|---|---|---|---|
| (1) CAPEX (Millions of Euros) |
2Q23 | 2Q24 | 2Q24 / 2Q23 | 1H23 | 1H24 | 1H24 / 1H23 |
| Total CAPEX Excluding Leasing Contracts & Other Contractual Rights | 98.1 | 93.1 | (5.1%) | 195.2 | 185.1 | (5.2%) |
| Telco | 93.6 | 87.9 | (6.1%) | 186.2 | 174.2 | (6.5%) |
| % of Telco Revenues | 24.8% | 21.9% | (2.9pp) | 24.9% | 22.1% | (2.9pp) |
| o.w. Technical CAPEX | 59.3 | 52.1 | (12.1%) | 112.7 | 102.3 | (9.2%) |
| % of Telco Revenues | 15.7% | 13.0% | (2.7pp) | 15.1% | 13.0% | (2.1pp) |
| Baseline Telco | 29.1 | 34.2 | 17.6% | 68.1 | 72.1 | 5.8% |
| Network Expansion / Substitution and Integration Projects and Others |
30.2 | 17.9 | (40.7%) | 44.6 | 30.3 | (32.1%) |
| o.w. Customer Related CAPEX | 34.3 | 35.8 | 4.3% | 73.5 | 71.9 | (2.2%) |
| % of Telco Revenues | 9.1% | 8.9% | (0.2pp) | 9.8% | 9.1% | (0.7pp) |
| Audiovisuals and Cinema Exhibition | 4.5 | 5.2 | 15.5% | 8.9 | 10.9 | 21.8% |
| Leasing Contracts & Other Contractual Rights | 26.6 | 15.4 | (42.2%) | 55.7 | 28.9 | (48.1%) |
| Total Group CAPEX | 124.8 | 108.5 | (13.0%) | 250.8 | 214.0 | (14.7%) |
(1) CAPEX = Increase in tangible and intangible fixed assets, contract costs and rights of use Note: In 1Q24 Network and Baseline CAPEX have been restated to reflect a more accurate allocation
Free Cash Flow up by 99.2 million euros
Our solid operating performance and lower investment requirements drove an increase in Operating FCF of 24.0% to 68.2 million euros. As in previous quarters, due to the globally higher interest rate environment, interest payments were higher yoy, amounting to 11.2 million euros vs 7.4 million euros in 2Q23.
Free Cash Flow was boosted by a few one-off effects, namely: i) Receival of 26.4 million euros related with activity fees due to the favourable court ruling as announced in 4Q23 and extended in 1Q24 and ii) 57.3 million euros related to an additional small tower portfolio transferred to Cellnex, within the context of the deal announced originally in 2020 and extended in 2022. (links to market announcements 2020 and 2022)
Combining these movements, total Free Cash Flow increased by 99.2 million euros to 135.4 million euros, with underlying growth of 17.8% to 51.7 million euros.
In 2Q24 NOS paid 179 million euros in dividends to shareholders (0.35 cents per share), in respect of FY23 results distribution and as approved by the AGM held in April 2024.
Table 6.
| Cash Flow (Millions of Euros) | 2Q23 | 2Q24 | 2Q24 / 2Q23 | 1H23 | 1H24 | 1H24 / 1H23 |
|---|---|---|---|---|---|---|
| EBITDA AL | 150.9 | 156.5 | 3.8% | 297.0 | 311.9 | 5.0% |
| Total CAPEX Excluding Leasings & Other Contractual Rights | (98.1) | (93.1) | (5.1%) | (195.1) | (185.1) | (5.2%) |
| EBITDA AL - Total CAPEX Excluding Leasings & Other Contractual Rights |
52.7 | 63.4 | 20.3% | 101.9 | 126.8 | 24.5% |
| % of Revenues | 13.4% | 15.4% | 2.0pp | 13.1% | 15.5% | 2.4pp |
| Non-Cash Items Included in EBITDA AL - CAPEX and Change in Working Capital |
2.2 | 4.8 | 114.2% | (3.0) | 10.1 | (441.5%) |
| Operating Cash Flow | 55.0 | 68.2 | 24.0% | 98.9 | 136.9 | 38.4% |
| Interest Paid | (7.4) | (11.2) | 51.8% | (12.1) | (19.4) | 60.5% |
| Income Taxes Paid | (2.9) | (0.5) | (83.3%) | (2.8) | (0.6) | (77.0%) |
| Disposals | (7.4) | 57.4 | (870.5%) | (17.6) | 57.5 | (427.6%) |
| Other Cash Movements (1) | (1.1) | 21.5 | (2143.8%) | (1.9) | 40.3 | (2266.0%) |
| Total Free Cash-Flow Before Dividends, Financial Investments and Own Shares Acquisition |
36.2 | 135.4 | 273.7% | 64.6 | 214.7 | 232.4% |
| Financial Investments | (0.1) | 0.2 | (323.4%) | (0.0) | 0.3 | (1882.8%) |
| Acquisition of Own Shares | (0.7) | (1.0) | 37.4% | (5.2) | (4.3) | (17.6%) |
| Dividends | (220.0) | (179.0) | (18.7%) | (220.0) | (179.0) | (18.7%) |
| Free Cash Flow | (184.6) | (44.4) | (75.9%) | (160.6) | 31.8 | (119.8%) |
| Debt Variation Through Financial Leasing, Accruals & Deferrals & Others |
(1.5) | 1.4 | (191.1%) | (2.5) | (0.5) | (78.2%) |
| Change in Net Financial Debt | (186.1) | (43.0) | (76.9%) | (163.1) | 31.2 | (119.2%) |
(1) Includes Cash Restructuring Payments and Other Cash Movements.
Reinforced Capital Structure
At the end of 2Q24, Net Financial Debt / EBITDA AL stood at 1.71x, well below our strategic funding target level of around 2x. Net Financial Debt amounted to 1,058 million euros with total Debt including lease contracts (according to IFRS 16) at 1,685 million euros. Available unissued commercial paper facilities of 313 million euros and Cash and Equivalents of 14 million euros provide a very comfortable liquidity position of 327 million euros.
Average all-in cost of debt remained at approximately 4.1% in 2Q24. At 30 June 2024, 26% of NOS' debt was issued at fixed rate and an additional 36% was covered by interest rate collars. Total average maturity of debt at 30 June stood at 2 years and 6 months. Currently, more than 90% of NOS' total financial debt, is linked to ESG performance targets, reiterating our commitment to achieve NOS' global sustainability performance ambition.
| Table 7. | |||
|---|---|---|---|
| Balance Sheet (Millions of Euros) | 2Q23 | 2Q24 | 2Q24 / 2Q23 |
| Non-current Assets | 2,930.8 | 2,852.5 | (2.7%) |
| Current Assets | 528.5 | 510.3 | (3.5%) |
| Total Assets | 3,459.3 | 3,362.8 | (2.8%) |
| Total Shareholders' Equity | 899.5 | 964.6 | 7.2% |
| Non-current Liabilities | 1,736.5 | 1,467.5 | (15.5%) |
| Current Liabilities | 823.3 | 930.8 | 13.1% |
| Total Liabilities | 2,559.8 | 2,398.3 | (6.3%) |
| Total Liabilities and Shareholders' Equity | 3,459.3 | 3,362.8 | (2.8%) |
Table 8.
| Net Financial Debt (Millions of Euros) | 2Q23 | 2Q24 | 2Q24 / 2Q23 |
|---|---|---|---|
| Short Term | 166.9 | 320.8 | 92.2% |
| Medium and Long Term | 999.3 | 751.4 | (24.8%) |
| Total Debt | 1,166.2 | 1,072.1 | (8.1%) |
| Cash and Short Term Investments | 10.9 | 14.0 | 28.3% |
| Net Financial Debt (1) | 1,155.3 | 1,058.1 | (8.4%) |
| Net Financial Debt / EBITDA after lease payments (last 4 quarters) (2) | 2.03x | 1.71x | (0.2pp) |
| Leasings and Long Term Contracts | 644.2 | 627.0 | (2.7%) |
| Net Debt | 1,799.5 | 1,685.1 | (6.4%) |
| Net Debt / EBITDA (last 4 quarters) | 2.64x | 2.29x | (0.13pp) |
| Net Financial Gearing (3) | 66.7% | 63.6% | (3.1pp) |
(1) Net Financial Debt = Borrowings – Leasings - Cash
(2) EBITDA After Lease Payments = EBITDA - Lease Cash Payments (Capital & Interest)
(3) Net Financial Gearing = Net Debt / (Net Debt + Total Shareholders' Equity).
Appendix
Table 9.
| Telco - operating indicators ('000) |
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 2022 | 2023 |
|---|---|---|---|---|---|---|---|
| Homes Passed | 5,364.0 | 5,369.3 | 5,427.3 | 5,490.0 | 5,566.7 | 5,284.0 | 5,427.3 |
| FttH Coverage | 70.0% | 71.2% | 74.4% | 76.5% | 78.0% | 64.0% | 74.4% |
| Total RGUs(1) | 10,879.9 | 10,984.7 | 11,014.3 | 11,068.9 | 11,142.2 | 5,284.0 | 11,014.3 |
| o.w. Consumer RGUs | 9,146.0 | 9,239.9 | 9,256.6 | 9,296.3 | 9,359.5 | 9,064.0 | 9,256.6 |
| o.w. Business RGUs | 1,733.9 | 1,744.8 | 1,757.6 | 1,772.6 | 1,782.8 | 1,718.3 | 1,757.6 |
| Mobile RGUs(2) | 5,814.1 | 5,895.6 | 5,917.1 | 5,960.1 | 6,017.0 | 5,733.8 | 5,917.1 |
| Pre-Paid | 2,112.7 | 2,126.7 | 2,069.0 | 2,015.2 | 1,999.1 | 2,149.7 | 2,069.0 |
| Post-Paid | 3,701.4 | 3,768.9 | 3,848.2 | 3,944.9 | 4,017.9 | 3,584.1 | 3,848.2 |
| Pay TV Fixed Access (3) | 1,447.3 | 1,455.3 | 1,459.8 | 1,463.9 | 1,469.5 | 1,434.3 | 1,459.8 |
| Pay TV DTH | 218.4 | 214.3 | 210.2 | 206.3 | 202.7 | 229.9 | 210.2 |
| Fixed Voice | 1,813.0 | 1,819.9 | 1,821.7 | 1,825.4 | 1,828.6 | 1,808.7 | 1,821.7 |
| Broadband | 1,534.5 | 1,546.6 | 1,551.9 | 1,558.6 | 1,566.1 | 1,523.5 | 1,551.9 |
| Others and Data | 52.7 | 53.0 | 53.6 | 54.5 | 58.4 | 51.9 | 53.6 |
| 3,4&5P Subscribers (Fixed Access) | 1,370.3 | 1,381.8 | 1,387.4 | 1,393.6 | 1,400.6 | 1,353.0 | 1,387.4 |
| % 3,4&5P (Fixed Access) | 93.0% | 93.1% | 93.1% | 93.2% | 93.2% | 92.8% | 93.1% |
| Convergent + Integrated RGUs | 5,822.5 | 5,901.7 | 5,981.8 | 6,104.5 | 6,198.1 | 5,657.9 | 5,981.8 |
| Convergent + Integrated Customers | 1,118.2 | 1,130.8 | 1,141.9 | 1,159.7 | 1,172.8 | 1,091.7 | 1,141.9 |
| Fixed Convergent + Integrated Customers as % of Fixed Access Customers |
67.5% | 67.9% | 68.5% | 69.5% | 70.1% | 66.3% | 68.5% |
| % Convergent + Integrated Customers | 65.9% | 66.4% | 67.0% | 68.0% | 68.6% | 64.5% | 67.0% |
| Residential ARPU / Unique Subscriber With Fixed Access (Euros)(4)(5) | 50.0 | 50.7 | 50.5 | 50.8 | 51.3 | 48.0 | 50.3 |
| Net Adds | |||||||
| Homes Passed | 39.8 | 5.3 | 58.0 | 62.7 | 76.7 | 185.7 | 142.9 |
| Total RGUs | 8.2 | 104.8 | 29.5 | 54.6 | 73.3 | 476.8 | 232.0 |
| o.w. Consumer RGUs | 5.0 | 93.9 | 16.7 | 39.6 | 63.2 | 395.4 | 193.5 |
| o.w. Business RGUs | 3.3 | 10.9 | 12.8 | 15.0 | 10.1 | 81.4 | 38.5 |
| Mobile | 2.3 | 81.5 | 21.5 | 43.0 | 56.8 | 384.0 | 183.3 |
| Pre-Paid | (40.6) | 14.0 | (57.7) | (53.7) | (16.2) | 70.0 | (80.8) |
| Post-Paid | 42.9 | 67.5 | 79.3 | 96.7 | 73.0 | 314.0 | 264.1 |
| Pay TV Fixed Access | 5.4 | 8.0 | 4.5 | 4.1 | 5.6 | 41.5 | 25.4 |
| Pay TV DTH | (5.3) | (4.0) | (4.2) | (3.9) | (3.6) | (22.9) | (19.8) |
| Fixed Voice | 0.5 | 6.8 | 1.8 | 3.8 | 3.2 | 26.1 | 13.0 |
| Broadband | 4.6 | 12.1 | 5.3 | 6.7 | 7.5 | 38.0 | 28.3 |
| Others and Data | 0.6 | 0.3 | 0.6 | 0.9 | 3.8 | 10.0 | 1.7 |
| 3,4&5P Subscribers (Fixed Access) | 6.5 | 11.5 | 5.6 | 6.2 | 7.0 | 54.7 | 34.4 |
| Convergent + Integrated RGUs | 70.1 | 79.2 | 80.1 | 122.6 | 93.6 | 411.3 | 323.9 |
| Convergent + Integrated Customers | 10.4 | 12.6 | 11.1 | 17.8 | 13.2 | 70.6 | 50.2 |
1) Consumer and Business RGUs have been restated in line with B2B & B2C Revenues restatement in 1Q24
2) Mobile Pre-paid & Post-paid RGUs have been restated
3) Fixed Access Subscribers include customers served by the HFC, FTTH and ULL networks and indirect access 4) Fixed residential ARPU reestated from 1Q19 to include Revenues of SIM cards integrated in residential bills
5) Current quarter figures are estimates subject to possible review after final allocations determined
| Table 10. |
|---|
| ----------- |
| Cinemas - operating indicators | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 2022 | 2023 |
|---|---|---|---|---|---|---|---|
| Revenue per Ticket - box office (Euros) | 5.7 | 5.9 | 5.8 | 6.1 | 6.0 | 5.7 | 5.9 |
| Tickets Sold - NOS ('000) | 2,033.7 | 2,810.4 | 1,710.4 | 1,722.6 | 1,322.8 | 6,261.0 | 8,056.3 |
| Tickets Sold - Total Portuguese Market(1) ('000) | 3,087.2 | 4,183.0 | 2,687.4 | 2,694.9 | 2,033.3 | 5,425.0 | 4,728.2 |
| Screens (units) | 214.0 | 214.0 | 214.0 | 214.0 | 214.0 | 214.0 | 214.0 |
| (1) Source: ICA - Portuguese Institute For Cinema and Audiovisuals |
| Table 11. | |||||||
|---|---|---|---|---|---|---|---|
| Profit and Loss Statement | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 2022 | 2023 |
| (Millions of Euros) | |||||||
| Operating Revenues | 393.8 | 407.9 | 414.3 | 403.3 | 412.2 | 1,521.0 | 1,597.5 |
| Telco | 377.5 | 384.9 | 401.2 | 389.0 | 400.7 | 1,469.2 | 1,532.7 |
| Consumer Revenues (1) | 269.5 | 275.9 | 281.2 | 277.5 | 281.5 | 1,027.5 | 1,090.3 |
| Business Revenues (1) | 83.0 | 83.9 | 94.5 | 87.3 | 89.9 | 342.5 | 342.2 |
| Wholesale and Others (1) | 25.1 | 25.1 | 25.5 | 24.2 | 29.2 | 99.3 | 100.2 |
| Audiovisuals & Cinema | 24.6 | 32.2 | 22.2 | 22.8 | 19.7 | 89.6 | 99.4 |
| Others and Eliminations | (8.3) | (9.2) | (9.1) | (8.5) | (8.1) | (37.8) | (34.7) |
| Operating Costs Excluding D&A | (214.7) | (207.5) | (250.7) | (218.8) | (224.6) | (869.9) | (880.8) |
| Telco | (209.9) | (199.9) | (247.1) | (215.1) | (221.8) | (863.2) | (862.4) |
| Audiovisuals & Cinema | (13.2) | (16.7) | (12.7) | (12.2) | (10.9) | (44.6) | (53.2) |
| Others and Eliminations | 8.3 | 9.2 | 9.1 | 8.5 | 8.1 | 37.8 | 34.7 |
| EBITDA (2) | 179.1 | 200.4 | 163.6 | 184.5 | 187.6 | 651.1 | 716.7 |
| EBITDA Margin | 45.5% | 49.1% | 39.5% | 45.7% | 45.5% | 42.8% | 44.9% |
| Telco | 167.6 | 185.0 | 154.1 | 173.9 | 178.9 | 606.0 | 670.4 |
| EBITDA Margin | 44.4% | 48.1% | 38.4% | 44.7% | 44.7% | 41.2% | 43.7% |
| Cinema Exhibition and Audiovisuals | 11.5 | 15.4 | 9.5 | 10.6 | 8.7 | 45.1 | 46.3 |
| EBITDA Margin | 46.5% | 47.9% | 42.9% | 46.5% | 44.4% | 50.3% | 46.5% |
| Depreciation and Amortization | (116.6) | (122.8) | (123.8) | (122.3) | (125.0) | (480.9) | (483.6) |
| (Other Expenses) / Income | (0.7) | 0.1 | 32.3 | 31.3 | 40.3 | 100.0 | 31.2 |
| Operating Profit (EBIT) (3) | 61.7 | 77.7 | 72.1 | 93.4 | 103.0 | 270.2 | 264.2 |
| Share of profits (losses) of associates and joint ventures | 0.7 | 1.4 | 0.4 | 2.7 | 2.0 | 22.1 | 5.1 |
| (Financial Expenses) / Income | (16.5) | (19.0) | (20.7) | (20.7) | (19.6) | (35.2) | (69.2) |
| Leases Financial Expenses | (7.6) | (8.0) | (8.0) | (8.3) | (8.4) | (25.9) | (31.0) |
| Funding & Other Financial Expenses | (8.9) | (11.0) | (12.8) | (12.5) | (11.2) | (9.3) | (38.2) |
| Income Before Income Taxes | 45.9 | 60.2 | 51.8 | 75.4 | 85.4 | 257.1 | 200.1 |
| Income Taxes | (0.4) | (14.4) | 3.1 | (7.5) | (4.6) | (32.7) | (18.8) |
| Net Income Before Associates & Non-Controlling Interests | 44.8 | 44.4 | 54.5 | 65.1 | 78.8 | 202.3 | 176.3 |
| Net Income | 45.5 | 45.8 | 54.9 | 67.8 | 80.8 | 224.4 | 181.3 |
| Net income attributable to Non-controlling interests | (0.0) | (0.0) | 0.2 | (0.0) | 0.1 | (0.1) | 0.3 |
| Net Income attributable to NOS shareholders | 45.5 | 45.9 | 54.7 | 67.8 | 80.7 | 224.6 | 181.0 |
1) Current quarter figures are estimates subject to possible review after final allocations determined 2) EBITDA = Operating Profit + Depreciation and Amortization + Integration Costs + Net Losses/Gains on Disposal of Assets + Other Non-Recurrent Losses/Gains
3) EBIT = Income Before Financials and Income Taxes.
Note: In 1Q24 B2C and B2B revenues have been restated to reflect a more accurate allocation between segments.
| Leasings | (28.2) | (28.7) | (29.1) | (29.1) | (31.1) | 103.3 | 113.5 |
|---|---|---|---|---|---|---|---|
| Telco | (25.9) | (26.1) | (26.6) | (26.7) | (28.5) | 93.3 | 103.4 |
| Cinema Exhibition and Audiovisuals | (2.3) | (2.6) | (2.5) | (2.5) | (2.6) | 10.1 | 10.0 |
| Operating costs Excluding D&A AL | (242.9) | (236.2) | (279.8) | (248.0) | (255.7) | (766.6) | (767.3) |
| Telco | (235.8) | (226.1) | (273.7) | (241.8) | (250.3) | (770.0) | (758.9) |
| Audiovisuals & Cinema (1) | (15.4) | (19.3) | (15.2) | (14.6) | (13.5) | (34.5) | (43.1) |
| Others and Eliminations | 8.3 | 9.2 | 9.1 | 8.5 | 8.1 | 37.8 | 34.7 |
| EBITDA AL | 150.9 | 171.7 | 134.5 | 155.3 | 156.5 | 547.7 | 603.2 |
| EBITDA AL margin | 38.3% | 42.1% | 32.5% | 38.5% | 38.0% | 36.0% | 37.8% |
| Telco | 141.7 | 158.9 | 127.5 | 147.2 | 150.4 | 512.7 | 566.9 |
| EBITDA AL margin | 37.5% | 41.3% | 31.8% | 37.8% | 37.5% | 34.9% | 37.0% |
| Cinema Exhibition and Audiovisuals | 9.2 | 12.8 | 7.0 | 8.1 | 6.2 | 35.0 | 36.3 |
| EBITDA AL margin | 37.3% | 39.8% | 31.6% | 35.7% | 31.3% | 39.0% | 36.5% |
Table 12.
| CAPEX (1) (Millions of Euros) |
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 2022 | 2023 |
|---|---|---|---|---|---|---|---|
| Total CAPEX Excluding Leasing Contracts & Other Contractual Rights | 98.1 | 97.7 | 94.8 | 92.0 | 93.1 | 495.9 | 387.6 |
| Telco | 93.6 | 92.5 | 89.0 | 86.3 | 87.9 | 473.0 | 367.8 |
| % of Telco Revenues | 24.8% | 24.0% | 22.2% | 22.2% | 21.9% | 32.2% | 24.0% |
| o.w. Technical CAPEX | 59.3 | 58.8 | 53.9 | 50.2 | 52.1 | 325.1 | 225.4 |
| % of Telco Revenues | 15.7% | 15.3% | 13.4% | 12.9% | 13.0% | 22.1% | 14.7% |
| Baseline Telco | 29.1 | 38.1 | 38.0 | 37.9 | 34.2 | 161.2 | 144.2 |
| Network Expansion / Substitution and Integration Projects and Others |
30.2 | 20.7 | 15.9 | 12.4 | 17.9 | 163.9 | 81.2 |
| o.w. Customer Related CAPEX | 34.3 | 33.7 | 35.2 | 36.1 | 35.8 | 147.9 | 142.4 |
| % of Telco Revenues | 9.1% | 8.8% | 8.8% | 9.3% | 8.9% | 10.1% | 9.3% |
| Audiovisuals and Cinema Exhibition | 4.5 | 5.2 | 5.7 | 5.6 | 5.2 | 22.9 | 19.8 |
| Leasing Contracts & Other Contractual Rights | 26.6 | 10.4 | 21.2 | 13.5 | 15.4 | 129.9 | 87.2 |
| Spectrum licenses | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total Group CAPEX | 124.7 | 108.0 | 116.0 | 105.5 | 108.5 | 625.8 | 474.8 |
(1) CAPEX = Increase in Tangible and Intangible Fixed Assets, Contract Costs and Rights of Use Note: In 1Q24 Network and Baseline CAPEX have been restated to reflect a more accurate allocation
| Table 13. | |||||||
|---|---|---|---|---|---|---|---|
| Cash Flow | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 2022 | 2023 |
| (Millions of Euros) | |||||||
| EBITDA AL | 150.9 | 171.7 | 134.5 | 155.3 | 156.5 | 547.7 | 603.2 |
| Total CAPEX Excluding Leasings & Other Contractual Rights | (98.1) | (97.7) | (94.8) | (92.0) | (93.1) | (495.9) | (387.6) |
| EBITDA AL - Total CAPEX Excluding Leasings & Other Contractual Rights |
52.7 | 74.0 | 39.7 | 63.4 | 63.4 | 51.8 | 215.6 |
| % of Revenues | 13.4% | 18.1% | 9.6% | 15.7% | 15.4% | 3.4% | 13.5% |
| Non-Cash Items Included in EBITDA AL - CAPEX and Change in Working Capital |
2.2 | (3.8) | 11.5 | 5.3 | 4.8 | 2.9 | 4.7 |
| Operating Cash Flow | 54.9 | 70.2 | 51.2 | 68.7 | 68.2 | 54.7 | 220.3 |
| Interest Paid | (7.4) | (8.6) | (13.7) | (8.2) | (11.2) | (10.5) | (34.4) |
| Income Taxes Paid | (10.5) | (31.9) | (16.2) | (0.2) | (0.5) | (29.4) | (58.5) |
| Disposals | 0.2 | 0.2 | 0.8 | 0.1 | 57.4 | 165.7 | 1.4 |
| Other Cash Movements (1) | (1.1) | (0.8) | 14.6 | 18.8 | 21.5 | 12.5 | 1.6 |
| Spectrum licenses | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total Free Cash-Flow Before Dividends, Financial Investments and Own Shares Acquisition |
36.2 | 29.2 | 36.7 | 79.3 | 135.4 | 193.0 | 130.5 |
| Financial Investments | (0.1) | (0.6) | 0.0 | 0.1 | 0.2 | (1.6) | (0.6) |
| Acquisition of Own Shares | (0.7) | 0.0 | 0.0 | (3.2) | (1.0) | (7.1) | (5.2) |
| Dividends | (220.0) | 0.0 | 0.6 | 0.0 | (179.0) | (142.3) | (219.4) |
| Free Cash Flow | (184.6) | 28.6 | 37.3 | 76.2 | (44.4) | 42.0 | (94.7) |
| Debt Variation Through Financial Leasing, Accruals & Deferrals & Others |
(1.5) | (2.7) | 2.8 | (1.9) | 1.4 | (2.5) | (2.5) |
| Change in Net Financial Debt | (186.1) | 25.9 | 40.1 | 74.3 | (43.0) | 39.5 | (97.1) |
| (1) Includes Cash Restructuring Payments and Other Cash Movements. |
Table 14.
| Net Financial Debt (Millions of Euros) |
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 2022 | 2023 |
|---|---|---|---|---|---|---|---|
| Short Term | 166.9 | 110.0 | 157.7 | 199.4 | 320.8 | 353.0 | 157.7 |
| Medium and Long Term | 999.3 | 1,031.4 | 949.8 | 828.8 | 751.4 | 654.5 | 949.8 |
| Total Debt | 1,166.2 | 1,141.4 | 1,107.5 | 1,028.2 | 1,072.1 | 1,007.4 | 1,107.5 |
| Cash and Short Term Investments | 10.9 | 11.9 | 18.2 | 13.1 | 14.0 | 15.2 | 18.2 |
| Net Financial Debt (1) | 1,155.3 | 1,129.4 | 1,089.3 | 1,015.1 | 1,058.1 | 992.2 | 1,089.3 |
| Net Financial Debt / EBITDA after lease payments (last 4 quarters) (2) | 2.03x | 1.92x | 1.81x | 1.66x | 1.71x | 1.81x | 1.81x |
| Leasings and Long Term Contracts | 644.2 | 633.8 | 626.5 | 620.1 | 627.0 | 630.2 | 626.5 |
| Net Debt | 1,799.5 | 1,763.3 | 1,715.8 | 1,635.2 | 1,685.1 | 1,622.4 | 1,715.8 |
| Net Debt / EBITDA (last 4 quarters) | 2.64x | 2.50x | 2.39x | 2.22x | 2.29x | 2.49x | 2.39x |
| Net Financial Gearing (3) | 66.7% | 65.1% | 63.3% | 60.6% | 63.6% | 60.7% | 63.3% |
(1) Net Financial Debt = Borrowings – Leasings - Cash
(2) EBITDA After Lease Payments = EBITDA - Lease Cash Payments (Capital & Interest)
(3) Net Financial Gearing = Net Debt / (Net Debt + Total Shareholders' Equity).
Disclaimer
This presentation contains forward looking information, including statements which constitute forward looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and assumptions of our management and on information available to management only as of the date such statements were made. Forward-looking statements include: (a) information concerning strategy, possible or assumed future results of our operations, earnings, industry conditions, demand and pricing for our products and other aspects of our business, possible or future payment of dividends and share buyback program; and (b) statements that are preceded by, followed by or include the words "believes", "expects", "anticipates", "intends", "is confident", "plans", "estimates", "may", "might", "could", "would", and the negatives of such terms or similar expressions. These statements are not guarantees of future performance and are subject to factors, risks and uncertainties that could cause the assumptions and beliefs upon which the forwarding looking statements were based to substantially differ from the expectation predicted herein. These factors, risks and uncertainties include, but are not limited to, changes in demand for the company's services, technological changes, the effects of competition, telecommunications sector conditions, changes in regulation and economic conditions. Further, certain forward looking statements are based upon assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from the plans, strategy, objectives, expectations, estimates and intentions expressed or implied in such forward-looking statements. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to provide reasons why actual results may differ. You are cautioned not to place undue reliance on any forwardlooking statements. NOS is exempt from filing periodic reports with the United States Securities and Exchange Commission ("SEC") pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934, as amended. Under this exemption, NOS is required to post on its website English language translations of certain information that it has made or is required to make public in Portugal, has filed or is required to file with the regulated market Eurolist by Euronext Lisbon or has distributed or is required to distribute to its security holders. This document is not an offer to sell or a solicitation of an offer to buy any securities.
Enquiries
Chief Financial Officer: José Koch Ferreira
Phone: (+351) 21 799 88 19
Analysts/Investors: Maria João Carrapato
Phone: (+351) 21 782 47 25 / E-mail: [email protected]
Press: Margarida Nápoles
Phone: (+351) 21 782 48 07 / E-mail: [email protected]
| Conference Call – 19 July – 12:00pm | Webcast – 19 July – 12:00pm |
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