Earnings Release • Nov 3, 2022
Earnings Release
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Maia, 3rd November 2022
Direct Results increased 32.4% to $\epsilon$ 23.4m in 3Q22, mainly explained by the improvement of NOS equity method contribution to Sonaecom results. In 9M22, Direct Results improved 35.3% voy to €51.1m.
Indirect Results of €11.6m in 3Q22, reflecting Bright Pixel's portfolio positive revaluation. In 9M22, Indirect Results reached €31.3m, a 6.2% improvement from last year.
Net Income (Group Share) of €35.2m in 3Q22, reaching €83.3m in 9M22, a 22.7% growth from the €67.9m posted last year driven by both direct and indirect results growth.
NAV of Bright Pixel portfolio registered a positive evolution and reached $\epsilon$ 457m.
Capital Structure remains strong with a net cash position of €223.8m.
During the quarter, Sonaecom has proceeded with the termination of the Shareholders' Agreement that governed the relations between the shareholders of ZOPT, SGPS, S.A. - Sonaecom itself, Unitel International Holdings, BV and Kento Holding Limited. Pursuant to the resolution taken at ZOPT Shareholders' General Meeting held on September 28th, it was decided to proceed with the amortization of Sonaecom's Shareholding in ZOPT and with the reimbursement of the supplementary contributions made by Sonaecom, in exchange for the delivery of shares representing 26,075% of the NOS share capital that are not seized, and an amount in cash.
As a result of the aforementioned resolution, Sonaecom is no longer a shareholder of ZOPT and a shareholding of 26.075% of the NOS share capital is now attributable to Sonaecom, and will be directly held by the Company once the legal and regulatory procedures are concluded. Sonaecom will continue to ensure a framework of shareholder stability at NOS allowing the company to develop its important project in the telecommunications sector.
Bright Pixel's 3Q22 was marked by further portfolio expansion, with two new investments in the Retail Tech segment, and by relevant achievements in some portfolio companies, namely in (i) IriusRisk, with a series B financing round of \$28.7m led by Paladin Capital Group; (ii) Probe.ly, with a series A financing round of €7.7m co-led by Iberis Capital and Semapa Next; (iii) Didimo, with a series A financing round of \$7.1m led by Armilar Venture Partners. Bright Pixel participated in all these rounds.
Already in October, Bright Pixel, and remaining shareholders, have completed the sale of the total share capital and voting rights of Maxive - Cybersecurity, SGPS, S.A., to Thales Europe, S.A.S following the agreement reached in May, 17th, 2022. This transaction had an underlying Enterprise Value of the target
VOV
of €120m and will have a positive impact on Sonaecom consolidated results amounting to approximately €64.8m.
Since May, the 2022 Maxive balance sheet figures were classified as held for sale and all comparative periods were restated to include Maxive results as a discontinued operation in the profit and loss statement.
R - Restated according with introductory note;
(1) Includes the 50% holding in Unipress, the 50% holding in SIRS, the 26.075% holding in NOS and the 13.07% holding in Probe.ly;
(2) Includes equity method and fair value adj
Consolidated turnover in 3Q22 reached $\oplus$ 4.3m, increasing 5.2%, when compared to 3Q21R. This positive evolution was driven by both Media and Bright Pixel, the latter presenting a 34.2% yoy growth. Consequently, turnover grew 8.8% and reached €13.1m in 9M22.
EBITDA increased €3.9m to €22.5m in 3Q22, mainly explained by the contribution from equity method consolidated companies which increased to $\epsilon$ 25.4m ( $\epsilon$ 11.0m in 3Q21R) and being mostly driven by NOS. In 9M22 EBITDA reached €52.7m, a 27.2% growth from 9M21R, due to €43.8m from equity method contributions (+53.4% vs. 9M21R) and non-recurrent items of $\epsilon$ 17.8m, mainly driven by the capital gains generated with the sale of CiValue, Beamy and Cellwize.
As such, Direct Results increased to €23.4m in 3Q22, from €17.7m in 3Q21R, mainly explained by higher EBITDA level and net financial results, which also justifies the performance in 9M22 in which Direct Result increased 35.3% yoy to €51.1m.
Indirect Results reached €11.6m in 3Q22 and €31.3m in 9M22, both positively impacted by portfolio fair value adjustments.
Net income group share stood at €35.2m in 3Q22, above the €27.9m presented in 3Q21R, while in 9M22 increased 22.7% to €83.3m.
The net cash position excluding leasing responsibilities, stood at €230.6m, €51.0m below December 2021 (excluding the impact of cash allocated to assets held for sale), mainly driven by the €16.3m of positive
net inflow from investment activity offset by the €59.3m of dividends distribution and the negative operating cash-flow, financial cost and taxes of €8.1m.
During the last quarter, corporate venture arm continued very active, investing more than $\epsilon$ 20m in portfolio expansion and follow-ons.
Two new companies in the Retail Tech segment were added to the portfolio and relevant financing rounds occurred in some portfolio companies, including a \$28.7m series B financing round at Iriusrisk, a \$7.1m series A financing round at Didimo and a €7.7m series A financing round at Probe.ly. Bright Pixel participated in all these rounds, reinforcing its investment and improving the value of its previous stakes.
At the end of 9M22, the cash invested in the active portfolio reached €192m, +12.0% QoQ and +14.5% vs YE21.
On the exit side and during 3Q22, Bright Pixel received the cash proceeds of $\epsilon$ 23.5m from the sale of its minority stake in Cellwize. Already in October, with cash impacts in 4Q22, the company concluded the sale of Maxive, and its subsidiaries S21sec and Excellium, to Thales Europe (with a capital gain of €64.8m).
Overall, active NAV stood at €457m at the end of 9M22, implying +9.8% QoQ and +15.8% vs YE21, which clearly reflects the impact of the recent acquisitions, as well as the positive evolution in the value of our historical investments.
NOS published its 3Q22 results on October 24th. This was another quarter of positive operational performance, with the growth from the telco business and the continued improvement from the cinema activity.
3Q22 turnover increased 4.1% yoy to €381.5m, with Telco +3.0% and Audiovisuals & Cinema +22.8%, totalling €1.1bn at the end of 9M22 (+7.5% yoy). Regarding profitability, 3Q22 EBITDA grew 3.9% yoy to €178m, with +5.1% yoy in the telco business and totalling €500m in 9M22, +€22m yoy with a 44.5% margin.
This positive operational performance, combined with a capital gain of $\epsilon$ 74.7m from the sale of a portfolio of towers to Cellnex, as agreed and announced in April 2022, led Net income to more than double in 3Q22 vs last year, to $\epsilon$ 106m. This implied an equity method contribution to Sonae's results of $\epsilon$ 25m in the quarter (+€14m vs last year) and reaching €44m in 9M22.
Total capex stood at €120m in 3Q22 impacted by NOS' 5G deployment programme and its FttH1 network expansion.
FCF, strongly impacted by the cash proceeds from the sale of towers, (ex-dividend, financial investments and own shares), achieved €149m in 3Q22 and €183m in 9M22, with a very positive yoy performance.
Finally, regarding the capital structure, after the above-mentioned cash-in from the towers' sale, net financial debt/EBITDA after lease payments stood at 1.85x, slightly below NOS' target. The all-in average cost of debt stood in line with last year (1.3%) and the average maturity profile stood at 2.5 years at the end of the period.
Público, a reference Portuguese speaking news organization focused on a digital strategy that combines quality of journalism with an innovative and digital image restated its leadership position on the daily Portuguese newspaper sector, and on the digital subscription market. The positive performance of online subscriptions, newspaper and contents resulted into an overall 2.5% yoy revenue increase in 3Q22 (+7.2% in 9M22). The quarter was also marked by a strong increase in direct costs, mainly from paper resulting in a slightly decrease on profitability, when compared to 3Q21.
<sup>1 FttH - Fiber to the Home
On October 11th, Sonaecom's subsidiary, Sonae Investment Management - Software and Technology, SGPS, S.A. (Bright Pixel Capital) and remaining shareholders have completed the sale of the total share capital and voting rights of Maxive - Cybersecurity, SGPS, S.A., to Thales Europe, S.A.S further the agreement reached with the latter on May, 17th, 2022.
The transaction has an underlying Enterprise Value of the target of €120m and has a positive impact on the consolidated results of Sonaecom amounting to approximately €64.8m.
| $\epsilon$ m | 3Q21 R | 3Q22 | VOV | 9M21R | 9M22 | yoy |
|---|---|---|---|---|---|---|
| Turnover | 4.1 | 4.3 | 5.2% | 12.0 | 13.1 | 8.8% |
| EBITDA | 18.7 | 22.5 | 20.6% | 41.4 | 52.7 | 27.2% |
| Underlying EBITDA (1) | $-1.5$ | $-1.5$ | $-3.6%$ | $-4.1$ | $-5.7$ | $-37.0%$ |
| Non recurrent itens | 10.4 | 0.0 | $-100.0\%$ | 21.2 | 17.8 | $-16.0%$ |
| Equity method $^{(2)}$ | 11.0 | 25.4 | 129.9% | 28.6 | 43.8 | 53.4% |
| Discontinued Operations (3) | $-1.3$ | $-1.3$ | 0.2% | $-4.3$ | $-3.4$ | 21.6% |
| Depreciation & Amortization | 0.4 | 0.5 | 15.7% | 1.2 | 1.4 | 15.1% |
| EBIT | 18.2 | 22.0 | 20.8% | 40.2 | 51.2 | 27.6% |
| Net Financial Results | 0.3 | 1.3 | 1.2 | 3.8 | ||
| EBT | 18.6 | 23.3 | 25.5% | 41.4 | 55.0 | 32.9% |
| Tax results | $-0.9$ | 0.1 | $-3.6$ | $-3.9$ | $-8.1%$ | |
| Direct Results | 17.7 | 23.4 | 32.4% | 37.8 | 51.1 | 35.3% |
| Indirect Results (4) | 10.5 | 11.6 | 10.8% | 29.5 | 31.3 | 6.2% |
| Net Income | 28.2 | 35.1 | 24.4% | 67.3 | 82.4 | 22.5% |
| Group Share | 27.9 | 35.2 | 26.0% | 67.9 | 83.3 | 22.7% |
| Attributable to Non-Controlling Interests | 0.3 | $-0.1$ | $-0.6$ | $-0.9$ | $-38.9%$ |
R - Restated according with introductory note;
(1) Includes the businesses fully consolidated by Sonaecom;
(2) Includes the 50% holding in Unipress, the 50% holding in SIRS, the 26.075% holding in NOS and the 13.07% holdin
| $\epsilon$ m | 30.09.2021 R | 30.06.2022 | 30.09.2022 |
|---|---|---|---|
| Total Net Assets | 1,249.1 | 1,309.8 | 1,351.4 |
| Non Current Assets | 984.3 | 985.8 | 1,014.4 |
| Tangible and Intangible Assets and Rights of Use | 18.4 | 7.2 | 7.0 |
| Goodwill | 14.5 | 1.2 | 1.2 |
| Investments | 928.4 | 958.8 | 988.2 |
| Deferred Tax Assets | 16.2 | 11.9 | 11.4 |
| Others | 6.7 | 6.7 | 6.6 |
| Current Assets | 264.9 | 265.0 | 280.1 |
| Trade Receivables | 10.0 | 3.2 | 3.2 |
| Liquidity | 222.8 | 229.2 | 230.6 |
| Others | 32.1 | 32.7 | 46.4 |
| Assets held for sale | 59.1 | 56.8 | |
| Shareholders' Funds | 1,152.7 | 1,198.7 | 1,240.5 |
| Group Share | 1,141.4 | 1,191.3 | 1,233.2 |
| Non-Controlling Interests | 11.2 | 7.4 | 7.3 |
| Total Liabilities | 96.5 | 111.1 | 110.9 |
| Non Current Liabilities | 45.5 | 48.0 | 51.1 |
| Loans | 1.4 | 0.0 | 0.0 |
| Provisions | 0.6 | 0.5 | 0.4 |
| Others | 43.4 | 47.5 | 50.6 |
| Current Liabilities | 51.0 | 28.9 | 27.0 |
| Loans | 3.5 | 0.0 | 0.0 |
| Trade Payables | 7.6 | 1.1 | 1.0 |
| Others | 39.9 | 27.8 | 26.0 |
| Liabilities directly associated with the assets held for sale | 34.2 | 32.8 | |
| Operating CAPEX (1) | 0.8 | 0.8 | 1.2 |
| Operating CAPEX as % of Turnover | 6.9% | 9.5% | 9.3% |
| Total CAPEX | 11.8 | 27.1 | 47.4 |
| Underlying EBITDA - Operating CAPEX | $-5.0$ | $-5.0$ | $-6.9$ |
| Gross Debt | 18.2 | 7.2 | 6.8 |
| Net Debt | $-204.6$ | $-222.0$ | $-223.8$ |
R - Restated according with introductory note;
(1) Operating CAPEX excludes Financial Investments.
| $\epsilon$ m | 3Q21 R | 3Q22 | VOV | 9M21 R | 9M22 | yoy |
|---|---|---|---|---|---|---|
| Underlying EBITDA-Operating CAPEX | $-1.8$ | $-1.9$ | $-7.5%$ | $-5.0$ | $-6.9$ | $-38.6%$ |
| Change in WC | $-7.9$ | 22.1 | $-2.5$ | 45.2 | ||
| Non Cash Items & Other | 3.3 | $-23.8$ | 0.8 | $-41.5$ | ||
| Operating Cash Flow | $-6.3$ | $-3.6$ | 42.8% | $-6.6$ | $-3.2$ | 51.9% |
| Investments | 3.4 | 3.8 | 9.9% | 34.9 | 16.3 | $-53.4%$ |
| Financial results | 5.3 | 1.1 | -79.2% | 7.3 | 3.9 | $-45.9%$ |
| Income taxes | $-0.7$ | 0.3 | $-6.7$ | $-8.8$ | $-32.0%$ | |
| $FCF^{(1)}$ | 1.7 | 1.6 | $-9.8%$ | 28.9 | 8.2 | $-71.6%$ |
R - Restated according with introductory note;
(1) FCF Levered after Financial Expenses but before Capital Flows and Financing related up-front Costs.
(Non-exhaustive)
InovRetail is a retail innovation company that provides data science solutions and digital tools that deliver guantifiable insights and actionable recommendations with direct and sustainable impact on retailer's key metrics. The company's main product is the Staff Empowerment Solution, a SaaS based solution that help retailers in three key areas like Sales Performance Enhancement, Customer Experience Optimisation and Advanced Planning & Scheduling. Currently, the company is launching a new omnichannel solution to create a fully personalized shopping experience.
Armilar Venture Funds are the 3 Venture Capital funds in which Bright Pixel owns participation units acquired to Novo Banco. With this transaction, concluded in December 2016, Bright Pixel reinforced its portfolio with sizeable stakes in leading edge companies such as Outsystems and Feedzai, both consistently presenting meaningful and sustainable levels of growth.
Arctic Wolf, a US based company, is a global pioneer in the SOC-as-a-Service market with cutting-edge managed detection and response (MDR), which provides a unique combination of technology and services for clients to quickly detect and contain threats. Bright Pixel, jointly with US technology investors Lightspeed Venture Partners and Redpoint, entered in the company's cap table in 2017 in a series B round. Since then, the Company closed a \$45m series C round in 2018, a \$60m Series D round at the end of 2019, a \$200m Series E round in October 2020 funding at a valuation of \$1.3bn and, in 2021, a \$150m, held by existing and new investors, at an underlying valuation of \$4.3bn.
Stylesage is a strategic analytics SaaS platform that helps fashion, home and beauty retailers and brands with critical pre, in and post season decisions globally. Every day, StyleSage pulls product data from competitors' ecommerce websites from around the world. Then, with groundbreaking technology in machine learning and visual recognition, StyleSage cleans, organizes, and analyzes the massive amounts of collected data into a cloud-based dashboard that empowers brands and retailers to make informed, data-driven decisions in areas such line planning, markdown optimization, and global expansion.
Ometria is a London based AI powered customer marketing platform with the vision to become the central hub that powers all the communication between retailers and their customers. This investment was done by Bright Pixel in the Series A round, alongside several strategic investors (including Summit Action, the US VC fund of the Summit Series) and was reinforced during series B and C rounds.
Reblaze is an Israeli company that provides proprietary security technologies in a unified platform, shielding assets from threats found on the Internet. The company raised a Series A round in which Bright Pixel led jointly with JAL Ventures and Data Point Capital.
Visenze is a Singapore-based company that delivers intelligent image recognition solutions that shorten the path to action as consumers search and discover on the visual web. Retailers use ViSenze to convert images into immediate product search opportunities, improving conversion rates. Media companies use ViSenze to turn any image or video into an engagement opportunity, driving incremental revenue. Bright Pixel co-led, with Gobi Partners, a \$20m Series C round to enable the artificial intelligence company to further invest in its penetration among smartphone manufacturers, as well as with consumer and social communication applications.
Daisy Intelligence is an AI-powered platform for retail merchandising teams focused on optimizing promotional product and price mixes for dramatically improved business results. Bright Pixel partnered with Framework Venture Partners invested in a C\$10m (circa €7m) series A round.
Nextail is a Spanish company that has developed a cloud-based platform that combines artificial intelligence and prescriptive analytics to upgrade retailers' inventory management processes and store operations. The company raised a \$10m Series A round led by London and Amsterdam based venture capital firm KEEN Venture Partners LLP ("KEEN"), together with Bright Pixel and existing investor Nauta Capital. The new financing was to be used to accelerate product development and double the size of the team, as it grows internationally.
Cybersixgill is a market leader in deep and dark web cyber threat intelligence. The company helps Fortune 500 companies, financial institutions, governments, and law enforcement agencies protect their finances, networks and reputations from cyberthreats that lurk in the deep, dark and surface webs. The advanced cyber threat intelligence platform automates all phases of the intelligence cycle – collection, analysis and dissemination of data – providing organizations with unparalleled information and actionable insights to protect their various assets in the ever-evolving cyber threatscape. Bright Pixel co-led its series B \$15m round and participated in its new \$35m round raised in 2022 led by More Provident and Pension Funds and REV Venture Partners.
IriusRisk (previously named Continuum Security) is a Spanish based company with an application security platform to address vulnerabilities early in the development process. In order to realise their international growth plans, the company has raised an investment round of €1.5m, which was led by Swanlaab Venture Factory and joined by JME Venture Capital and Bright Pixel. In September 2020, the company raised a series A round of \$6.7m participated by Paladin, 360 CP, Swanlaab, JME Venture Capital and Bright Pixel. In August 2022, IriusRisk raised a Series B round of \$28.7m led by Paladin Capital Group with the participation from existing investors Bright Pixel, Swanlaab Venture Factory, 360 Capital and Inveready.
Jscrambler is a Portuguese startup that develops a security solution to protect Web and Mobile Applications (Javascript code). In 2018, the company raised a \$2.3m in a financing round that was led by Bright Pixel with the co-investment of Portugal Ventures. In 2021, the Company raised €10m in a series A with the participation of Ace Capital Partners.
Probe.ly, having started as an internal project of Bright Pixel, won the Caixa Capital Empreender Award 2017, has stepped from MVP (Minimum Valuable Product) to an independent Web Application Security startup. In June 2022, the company raised a series A round of €7.7m co-led by Iberis Capital and Semapa Next and with the participation of Bright Pixel, TIIN Capital | Dutch Security Tech Fund, Caixa Capital, Portugal Ventures and EDP Ventures.
Sales Layer is a Spanish based company with a cloud-based Product Information Management (PIM) platform, helping brands and retailers to transform their catalogs into a digital, enriched and multichannel control center. Bright Pixel led its series A round and recently participated in its series B round.
Deepfence is a leading US-based cloud-native workload protection platform that aims to provide a unified security platform for kubernetes, virtual machines and serverless workloads. Deepfence ensures business continuity in the face of persistent threats by detecting and disrupting sophisticated attacks targeting cloud-native technologies, the "glue" that keeps the current world connected. Deepfence raised \$9.5m in
Series A financing led by AllegisCyber, with participation from Bright Pixel, and existing investor Chiratae Ventures.
Weaveworks is a US company that helps teams to adopt cloud native computing, managing cloud native infrastructure and applications quickly, reliably and at scale. Weaveworks raised a \$36.65m Series C funding round led by some of the world's leading public cloud and telecommunications companies, including first-time investors Amazon Web Services (AWS), Ericsson, Orange Ventures, Bright Pixel and Telekom Investment Pool (TIP). The round also included follow-on investments from Accel, GV, and Redline Capital.
Sellforte, based in Helsinki, Finland, is a SaaS platform for Retailers, Brands and Telcos, which uses proprietary data science and AI to measure the effectiveness of online and offline marketing investments.
Portainer.io, based in New Zealand, is one of the most popular container management platforms globally. Portainer's universal tool unleashes the power of containerized applications for everyone.
Citcon, is a US-based leading mobile wallet payment provider with a fintech platform that enables seamless global commerce at scale by connecting the world's businesses with more than 100+ mobile wallets, local and alternative payment methods. Citcon raised \$30m in Series C financing led by Norwest Venture Partners and Cota Capital with the participation of Bright Pixel and Sierra Venture.
Safebreach, pioneer in the Breach and Attack Simulation (BAS) market, is the world's most widely used continuous security validation platform. The patented platform automatically and safely executes thousands of attack methods to validate network, endpoint, cloud, container and email security controls against its Hacker's Playbook™, the world's largest collection of attack data broken down by methods, tactics and threat actors. SafeBreach raised \$53.5m in Series D funding, led by Bright Pixel and Israel Growth Partners (IGP), with additional participation from Sands Capital, Bank Leumi and ServiceNow.
Experify, is the first platform to enable a truly authentic product review experience by connecting prospective buyers with purchasers. Experify raised \$4m seed round, led by Vertex Ventures US, with the participation of Bright Pixel and the Berkeley SkyDeck Fund.
Hackuity, is a risk-based vulnerability management solution that empowers cybersecurity teams and leaders to comprehensively collect, prioritize, and remediate security weaknesses before they can be exploited by their adversaries. Hackuity raised a €12m funding round, led by Bright Pixel with the participation of previous investor Caisse des Dépôts.
Didimo, a leading creator of high-fidelity digital humans with 3D technology. Didimo enables anyone to quickly and easily create lifelike digital models that businesses and individuals can use to interact and to provide or enjoy services online. In 2020, Didimo announced €1m in funding from new investors led by Armilar Venture Partners along with Bright Pixel and PME Investimentos in cooperation with the 200M Co-Investment Fund. In August 2022, Didimo raised \$7.1m in Series A funding led by Armilar Venture Partners, with the participation of Bright Pixel, Portugal Ventures and Techstars.
Codacy, is a PT-based automated code review and engineering productivity tool. It provides intelligence for software engineering teams to reach their full potential. Codacy raised a \$15m Series B funding round led by Bright Pixel Capital, also backed by existing investors Armilar Venture Partners, EQT Ventures, Join Capital, Caixa Capital, Faber Ventures and Iberis Capital.
Sonaecom SGPS is listed on the Euronext Stock Exchange. Information is available on Reuters under the symbol SNC.LS and on Bloomberg under the symbol SNC:PL.
This document may contain forward-looking information and statements, based on management's current expectations or beliefs. Forward-looking statements are statements that are not historical facts.
These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including, but not limited to, changes in requlation, the telecommunications industry and economic conditions; and the effects of competition. Forward-looking statements may be identified by words such as "believes", "expects", "anticipates", "projects", "intends", "should", "seeks", "estimates", "future" or similar expressions.
Although these statements reflect our current expectations, which we believe are reasonable, investors, analysts and, generally, the recipients of this document are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. You are cautioned not to put undue reliance on any forward-looking information or statements. We do not undertake any obligation to update any forward-looking information or statements.
Report available on Sonaecom's corporate website www.sonaecom.pt
Investor Relations Contacts [email protected] Tlf: +351 22 013 23 49
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