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Sonaecom SGPS

Earnings Release Jul 26, 2019

1921_iss_2019-07-26_ed8a9822-8e37-4ff0-b3b7-4483c42e8ceb.pdf

Earnings Release

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SHOOD AS COM

RESULTS ANNOUNCEMENT 1H19

The consolidated financial information disclosed in this report is based on unaudited financial statements, prepared in accordance with the
International Financial Reporting Standards (IAS/IFRS), issued by the Internationa Union.

$\mathbf 1$ . Main Highlights

Consolidated turnover of 100.5 million euros increasing 27.3% y.o.y, or 12.2% on a comparable basis

NOS presenting a sustained solid revenue performance in Telco, with strong recovery in Cinemas & Audiovisuals in the 2019

Technology revenues reaching 92.8 million euros, growing 29.7% y.o.y, or 12.9%, on a comparable basis, and with International markets weighting almost 50%

Total EBITDA decreasing to 24.5 million euros, mainly explained by the capital gain related with Outsystems financing round occurred in the 1H18

Z. Sonaecom Consolidated Results

Introductory notes:

As from 1Q19, Sonaecom's accounts are reported applying IFRS 16, primarily affecting the accounting of operating lease contracts. Restated values for the corresponding periods in 2018 are presented in this report.

On March, Sonae IM sold the total share capital of Saphety. Subsequent to this operation, Sonaecom adjusted the 2018 and the 1Q19 profit and loss statements on a pro-forma basis, assuming Saphety contribution as a discontinued operation since January 2018.

Telecommunications area, which includes a 50% stake in ZOPT - consolidated through the equity method - which owns 52.15% stake in NOS, presented, in the 2Q19, a sustained solid revenue performance in Telcos, with strong recovery in Cinemas & Audiovisuals, and an EBITDA expansion above revenue growth, positively impacting margin. Despite higher level of CAPEX, driven by the transformational investments on fixed and mobile network, continued to present a year on year FCF improvement.

During the 1H19, Technology area, besides reinforcing its participation in some portfolio companies, has entered in the capital of five new companies, three of which in early stage.

Also in the 1H19, and aligned with its active portfolio management strategy, Sonae IM sold 100% of its Saphety's shares to members of management team, backed by Oxy Capital.

Turnover

Consolidated turnover in 1H19 reached 100.5 million euros, increasing 27.3%, when compared to 1H18, or 12.2%, on a comparable basis, assuming the same portfolio companies in both periods.

This positive evolution was driven by both Media and Technology area, the latter presenting a growth of 29.7% y.o.y, or 12.9%, on a comparable basis.

Operating costs

Operating costs amounted to 102.9 million euros, 32.8% above 1H18. Personnel costs grew 35.2% reflecting the increase in the average number of employees, driven by the consolidation of Nextel and Excellium. Commercial costs increased 36.0% to 47.4 million euros, mainly driven by the higher cost of goods sold, aligned with the higher level of sales. Other operating costs increased 21.1%, mainly explained by the higher level of Outsourcing costs, also explained by the consolidation of Nextel and Excellium.

EBITDA

Total EBITDA stood at 24.5 million euros, or 19.5 million euros excluding non-recurrent itens that correspond to the capital gain generated by Saphety's sale. The equity results, mostly driven by ZOPT contribution which, in turn, depends on NOS net income evolution, increased to 20.2 million euros. Underlying EBITDA stood at negative 0.9 million euros, decreasing 3.1 million euros versus 1H18, strongly impacted by the negative contribution of the new consolidated companies.

Net results

Sonaecom's EBIT decreased to 17.0 million euros, from 53.9 million in 1H18, explained by the lower level of EBITDA and the higher level of depreciations.

Net financial results stood at negative 0.4 million euros in 1H19 that compares with positive 0.04 million in the previous year.

Sonaecom's earnings before tax (EBT) decreased from 53.9 million to 16.6 million euros, driven by the lower EBIT and financial results.

Indirect results reached negative 0.8 million euros, that compare with positive 6.9 million euros in 1H18, impacted by Armilar Venture Funds' portfolio fair value adjustments.

Net results group share stood at 17.5 million euros, below the 49.8 million euros presented in 1H18.

Operating CAPEX

Sonaecom's operating CAPEX increased to 9.5 million euros, reaching 9.4% of turnover, 2.7 p.p. above 1H18. Excluding the IFRS 16 impact, operating CAPEX would be 3.8 million euros, in line with 1H18, also without IFRS 16.

Capital structure

The net cash position stood at 187.0 million euros, decreasing 19.7 million euros since December 2018. Excluding IFRS 16 impacts, Net cash position stood at 203.5 million euros, 16.1 million below December 2018, driven by 4.7 million of investment cash-out, the negative operating cash flow of 10.4 million euros and the 34.2 million euros of dividends distribution, despite the 35.5 million euros of dividends from ZOPT.

2.1 Telecommunications

NOS operating revenues were 781.7 million euros in 1H19, growing 1.2% y.o.y..

EBITDA reached 331.9 million euros, increasing 2.5% when compared to 1H18 and representing a 42.5% EBITDA margin. CAPEX amounted to 207.5 million euros in 1H19, an increase of 2.3% y.o.y. As a consequence of EBITDA and CAPEX evolution, EBITDA-CAPEX increased 2.7%.

At the end of 1H19, total net debt including leasings and long-term contracts (according to IFRS 16) amounted to 1,376.1 million euros. Net Financial Debt/EBITDA after lease payments (last 4 quarters) now stands at 2.0x EBITDA, and with an average maturity of 3.1 years.

NOS published its 1H19 results on 22nd July 2019, which are available at www.nos.pt.

During 1H19, NOS share price increased 9.2% from €5.295 to €5.78, whilst PSI20 increased by 8.6%.

Operational Indicators

A Artist

MIIIION EUFOS
Operational Indicators ('000) 2018 (r) 2019 $\Delta$ 19/18 1019 q.o.d. $1H18$ (H IH19 ∆ 19/18
Total RGUs 9.483.4 9.583.5 1.1% 9.556.5 0.3% 9.483.4 9.583.5 $1.1\%$
Convergent RGUs 3.812.1 3.927.0 3.0% 3.916.6 0.3% 3.812.1 3.927.0 3.0%

Financial indicators

Million euros
NOS HIGHLIGHTS 2Q18 $^{\rm (R)}$ 2019 $\triangle$ 19/18 1Q19 q.o.q. 1H18 $(R)$ 1H19 $\Delta$ 19/18
Operating Revenues 389.3 396.4 1.8% 385.3 2.9% 772.3 781.7 1.2%
EBITDA 166.6 171.2 2.8% 160.7 6.5% 324.0 331.9 2.5%
EBITDA margin (%) 42.8% 43.2% 0.4 pp 41.7% 1.5pp 41.9% 42.5% 0.5 pp
Net Income 44.9 47.7 6.4% 42.5 12.4% 79.8 90.2 13.0%
CAPEX 103.7 116.5 12.3% 91.0 28.1% 202.8 207.5 2.3%
EBITDA-CAPEX 62.9 54.7 $-13.0%$ 69.7 $-21.6%$ 121.1 124.4 2.7%

(R) The values were restated in order to reflect IFRS16 application impacts.

2.2 Technology

The Technology area aims to build and manage a portfolio of technology businesses around retail and telecommunications, as well as cybersecurity, with an international scale. This area currently comprises, alongside with minority stakes, Bright Pixel and Vector I fund, five controlled companies - WeDo Technologies, S21Sec, Bizdirect, Inovretail and Excellium- that generated circa 46.9% of its revenues outside the Portuguese market with 51.8% out of the total 1,279 employees based abroad.

Controlled Companies

WeDo Technologies is a worldwide leader in Revenue Assurance and Fraud Management that works with more than 180 telecommunications operators in over 100 countries. The international markets represented 78.8% of its turnover.

WeDo Technologies' market leadership was recognized by Stratecast (Frost & Sullivan's Global Stratecast Communication Services Providers Financial Assurance Market Leadership) and Gartner named WeDo as Vendor to Watch in its Report.

During 1H19, WeDo acquired six new telco customers based in Philippines, Fiji Islands, Trinidad and Tobago, Mexico, Sri Lanka and Portugal.

S21Sec is a reference multinational MSSP (Managed Security Services Provider), focused on the delivery of cyber security services and development of proprietary supporting technologies, with a global customer base, leveraging its teams in Spain, Portugal and Mexico. Since June 2018, with the integration of Nextel, S21Sec is the most relevant "pure player" (company specializing exclusively in the cybersecurity sector) in Spain and Portugal in terms of turnover and number of cybersecurity experts.

Excellium is a market-leading managed security services provider from Luxembourg, with presence in Belgium and counting with more than 100 experts. Sonae IM investment, at the end of 2018, was aimed both at accelerating growth through a capital raise and acquisition of a majority stake.

This investment, together with the stake on S21sec, turns Sonae IM's cybersecurity group as one of the most relevant cybersecurity services pure players in Europe, counting with more than 500 professionals and direct presence in 13 cities across 6 countries.

The significant European scale and cross-country presence of this group of cybersecurity companies will be key to address the increasingly challenging needs of all organizations and specially the requirements of those large and multi-national companies operating in the European space, while ensuring agile and fast response from specialized teams close to the customer.

Bizdirect is a technology company specialized in IT solutions commercialization, consulting and management of corporate software licensing contracts and Microsoft solutions integration.

During 1H19, the cloud business unit continued to improve its presence on helping customers in digital transformation and the solutions business unit achieved important new customer references. Bizdirect Competence Center, in Viseu, contributed to the international revenues that already represent 6.1% of total revenues.

InovRetail is a retail innovation company that provide data science solutions and digital tools that deliver quantifiable 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.

Bright Pixel is a company builder studio whose goal is to transform the creation of new ventures and the way companies address innovation. Bright Pixel is managing a venture lifecycle going from experimentation and lab phases that have the objective to identify ideas and projects that should be brewed in its incubation program. Bright Pixel invests and supports the development of internally brewed projects as well as assisting their first batch of invited startups in their product development roadmap and market rollout.

Bright Pixel is also investing in events, like Pixels Camp, to link its activity to the tech community as well as promoting a close relationship with its partners, by developing quick proof of concepts aimed at resolving technology and business needs in themes such as retail, media, cyber-security and telecommunications.

Minority Stakes (non-exhaustive)

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.

Armilar Venture Funds are the 3 Venture Capital funds in which Sonae IM owns participation units acquired to Novo Banco. With this transaction, concluded in December 2016, Sonae IM reinforced its portfolio with sizeable stakes in leading edge companies such as Outsystems and Feedzai, both consistently presenting meaningful and sustainable levels of growth. During 2018, Sonae IM recorded a significant capital gain with the AVP II Fund capital distribution subsequent to the partial sale of Outsystems.

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 Sonae IM in the Series A round, alongside several strategic investors (including Summit Action, the US VC fund of the Summit Series) and was recently reinforced during an internal round.

Secucloud is a Germany based company that provides a cloud security platform for protecting all devices (subscriber endpoints) and operating systems with no installation required, offered to Telcos & ISPs as a white label solution. Sonae IM totally subscribed the multi million Series B financing round.

ArcticWolf, a US based campany, 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. US technology investors Lightspeed Venture Partners and Redpoint were joined by Sonae IM and Knollwood Investment Advisory in the series B round. During 2018, the Company closed a \$45M Series C round at a significant higher valuation, in which Sonae IM participated reinforcing its stake.

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 1.5million euros, which was led by Swaanlaab Venture Factory and joined by JME Venture Capital and Sonae IM.

Jscrambler is a Portuguese startup that develops a security solution to protect Web and Mobile Applications (Javascript code). The company raised a 2.3 million dollars in a series A financing round that was led by Sonae IM with the co-investment of Portugal Ventures.

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 \$10.0 million Series A round led by London and Amsterdam based venture capital firm KEEN Venture Partners LLP ("KEEN"), together with Sonae IM and existing investor Nauta Capital. The new financing is being used to accelerate product development and double the size of the team, as it grows internationally.

Case on IT is a Spanish company that has developed Medux, a machine learning solution for the measurement, prediction and analysis of landline, mobile and television services quality. Medux measures the customer experience in markets that collectively serve over 600 million users worldwide. The company raised a Series B round of international fund with Sonae IM.

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 Sonae IM led jointly with JAL Ventures and Data Point Capital.

CiValue is an Israeli company with offices in New York, Paris, and Tel Aviv, is a disruptive provider of cloud-based Precision Marketing and Supplier Advertising Platforms for Retailers. Sonae IM, coupled with Nielsen, led a \$6M Series A investment.

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. Sonae IM co-led, with Gobi Partners, a \$20M Series C round that will enable the artificial intelligence company to further invest in its penetration among smartphone manufacturers, as well as with consumer and social communication applications.

CB4 is a company based in Israel that provides a patented AI software solution for brick and mortar retailers to identify and correct critical operational issues at store, product level. The investment was part of a series B \$16M round, led by Octopus Ventures with Sonae IM joining. Existing investors Sequoia Capital and Pereg Ventures also participated in the round.

Cellwize is a leading provider of Mobile Network Automation and Orchestration solutions for telco, based in Israel. Cellwize offers modular solutions for an agile adoption of 'zero-touch' network automation capabilities on top of a virtualized service orchestration platform. It supports network operations, especially given the increase in network density and complexity driven by 5G adoption. Sonae IM invested in a series B round of \$15M led by Deutsche Telekom Capital Partners.

Financial indicators

Million euros
TECHNOLOGY AREA 2018 (R) 2019 $\Delta$ 19/18 1019 q.o.q. 1H18 (R) 1H19 $\Delta$ 19/18
Turnover 40.2 48.7 21.2% 44.1 10.4% 71.6 92.8 29.7%
Service Revenues 20.0 23.6 17.7% 23.4 0.9% 38.1 46.9 23.2%
Sales 20.1 25.1 24.8% 20.8 21.1% 33.5 45.9 37.2%
Other Revenues 0.2 0.6 174.5% 0.6 $-9.5%$ 0.3 1.2
Operating Costs 38.0 48.9 28.4% 44.9 8.9% 68.3 93.7 37.2%
Personnel Costs 11.1 16.0 44.4% 16.3 $-1.9%$ 22.8 32.4 41.7%
Commercial Costs (1) 20.4 25.0 22.5% 20.7 20.8% 33.1 45.6 38.1%
Other Operating Costs (2) 6.6 7.9 19.8% 7.8 0.2% 12.4 15.7 26.7%
EBITDA 40.7 0.2 $-99.6%$ 4.6 $-96.7%$ 41.6 4.8 $-88.6%$
Underlying EBITDA (3) 2.3 0.4 $-82.3%$ $-0.1$ 3.6 0.3 $-91.3%$
Non recurrent itens (4) 38.3 0.0 $-100.0%$ 4.8 $-100.0%$ 38.3 4.8 $-87.5%$
Equity method (5) $-0.1$ $-0.3$ $-180.0%$ $-0.3$ 8.8% $-0.5$ $-0.5$ $-8.5%$
Discontinued Operations (6) 0.2 0.0 $-100.0%$ 0.2 $-100.0\%$ 0.2 0.2 3.5%
Underlying EBITDA Margin (%) 5.8% 0.8% $-5.0pp$ $-0.2%$ $1.1$ pp 5.0% 0.3% $-4.7$ pp
Operating CAPEX (7) 2.7 2.2 $-21.2%$ 6.3 $-65.6%$ 4.8 8.4 77.3%
Operating CAPEX as % of Turnover 6.8% 4.4% $-2.4$ pp 14.2% $-9.8$ pp 6.6% 9.1% 2.4 pp
Underlying EBITDA - Operating CAPEX $-0.4$ $-1.7$ $-6.4$ 72.6% $-1.1$ $-8.1$
Total CAPEX 10.7 8.4 $-22.0%$ 13.8 $-39.4%$ 14.5 22.1 52.9%

(1) Commercial Costs = COGS + Mktg & Sales; (2) Other Operating Costs = OutsourcingServices+ G&A + Provisions+ others; (3) Includes the businesses fully consolidated at Technology area; (4)
Includes the capital gain in Out

Turnover

Turnover increased 29.7% y.o.y., fuelled by the integration of Nextel and Excellium. On a comparable basis, assuming the same portfolio companies in both periods, Turnover increased by 12.9%.

Operating costs

Operating costs increased 37.2% to 93.7 million euros. Staff costs increased 41.7% driven by the growth in the number of employees, mainly driven by Nextel and Excellium consolidation. Commercial costs increased 38.1% mainly driven by cost of goods sold, aligned with the higher level of sales. Other operating costs increased 26.7%, mainly explained by the higher level of Outsourcing Costs, also explained by the enlarged portfolio.

EBITDA

EBITDA reached 4.8 million euros, or break even excluding non-recurrent itens related with the capital gain generated by Saphety's sale. Underlying EBITDA stood at 0.3 million euros versus 3.6 million euros presented in 1H18, significantly impacted by the consolidation of the new cybersecurity companies.

Underlying EBITDA-operating CAPEX

Underluing EBITDA-operating CAPEX stood at negative 8.1 million euros, decreasing when compared to 1H18, mainly explained by the higher level of Operating CAPEX but also driven by the lower EBITDA. Excluding the IFRS 16 impacts, operating CAPEX would have reached 3.4 million euros, in line with 1H18, also without IFRS 16.

2.3 Media

During 1H19, Público continued to pursue its digital strategy reinforcing digital competencies and presence in online platforms and continued
to implement important initiatives aimed at strengthening Público as the referen

The positive performance of online subscriptions, newspaper sales and advertising offline translated into an overall 4.1% revenue growth, when compared to 1H18.

3. Subsequent events

On July 10th, Sonae IM has reached an agreement with Mobileum, Inc., according to which Sonae IM will sell to Mobileum the entire share capital and voting rights of WeDo Consulting - Sistemas de Informação, S.A.

The closing of the transaction is subject to the fulfilment of a set of requirements defined by the parties (conditions precedent), so the effects of the transaction are dependent upon such fulfilment.

The transaction price comprises a fixed amount of 70 million USD and a variable and deferred amount, depending on the performance of the combined businesses, until 31 December 2021, with a maximum value of 27 million USD.

4. Appendix

Consolidated income statement

Million euros
CONSOLIDATED INCOME STATEMENT 2018 (R) 2019 $\Delta$ 19/18 1019 q.o.q. 1H18 (R) 1H19 $\Delta$ 19/18
Turnover 44.2 52.9 19.9% 47.6 11.2% 79.0 100.5 27.3%
Service Revenues 21.9 25.6 17.0% 24.7 3.7% 41.3 50.4 22.0%
Sales 22.2 27.3 22.7% 22.9 19.3% 37.7 50.2 33.1%
Other Revenues 0.4 0.6 33.2% 0.9 $-35.8%$ 0.7 1.4 98.8%
Operating Costs 42.9 53.5 24.6% 49.4 8.2% 77.4 102.9 32.8%
Personnel Costs 13.5 18.4 36.5% 19.0 $-3.1%$ 27.6 37.3 35.2%
Commercial Costs (1) 21.3 26.0 21.9% 21.4 21.2% 34.9 47.4 36.0%
Other Operating Costs (2) 8.1 9.1 12.0% 9.0 1.2% 15.0 18.1 21.1%
EBITDA 50.6 10.9 $-78.5%$ 13.7 $-20.5%$ 59.5 24.5 $-58.8%$
Underlying EBITDA (3) 1.7 0.0 $-98.2%$ $-0.9$ 2.3 $-0.9$
Non recurrent itens (4) 38.3 0.0 $-100.0%$ 5.0 $-100.0\%$ 38.3 5.0 $-86.8%$
Equity method (5) 10.5 10.8 2.8% 9.3 15.9% 18.8 20.2 7.2%
Discontinued Operations (6) 0.2 0.0 $-100.0%$ 0.2 $-100.0%$ 0.2 0.2 $-5.8%$
Underlying EBITDA Margin (%) 3.8% 0.1% $-3.7$ pp $-1.9%$ 2.0 pp 2.9% $-0.9%$ $-3.7$ pp
Depreciation & Amortization 3.2 4.1 30.8% 3.4 21.5% 5.7 7.5 32.8%
EBIT 47.5 6.7 $-85.8%$ 10.3 $-34.4%$ 53.9 17.0 $-68.4%$
Net Financial Results 0.4 $-0.5$ 0.1 0.0 $-0.4$
Financial Income 1.4 0.6 $-53.5%$ 1.1 $-40.9%$ 2.4 1.7 $-27.2%$
Financial Expenses 1.0 1.1 12.5% $1.0\,$ 8.4% 2.3 2.1 $-8.7%$
EBT 47.9 6.3 $-86.9%$ 10.3 $-39.4%$ 53.9 16.6 $-69.2%$
Tax results $-10.7$ 0.0 0.6 $-97.7%$ $-10.9$ 0.7
Direct Results 37.1 6.3 $-83.1%$ 11.0 $-42.8%$ 43.0 17.3 $-59.8%$
Indirect Results (7) 7.4 $-0.9$ $\blacksquare$ 0.1 6.9 $-0.8$
Net Income 44.5 5.4 $\sim$ $11.1\,$ 49.9 16.5 $-67.0%$
Group Share 44.5 6.2 $-86.1%$ 11.3 $-44.9%$ 49.8 17.5 $-64.9%$
Attributable to Non-Controlling Interests 0.0 $-0.8$ $-0.2$ 0.1 $-1.0$

Actributions to Tion Corrections, increased:

(2) Other Operating Costs = OutSourcing Services + G&A + Provisions + others;

(3) Includes the businesses fully consolidated by Sonaccom;

(4) Includes the 50% holding in Unip

The provision recorded in 4Q18 related to the incentive in favour of Armilar, as the funds have exceeded the defined return barrier, was partially reclassified to 2Q18 and 3Q18, impacting indirect results
and with the obje

Consolidated balance sheet

CONSOLIDATED BALANCE SHEET 2018 (R) 2019 $\Delta$ 19/18 1019 (R) q.o.q. 1H18 (R) 1H19 $\Delta$ 19/18
Total Net Assets 1176.2 1189.2 1.1% 1219.0 $-2.4%$ 1176.2 1189.2 1.1%
Non Current Assets 848.5 897.0 5.7% 921.1 $-2.6%$ 848.5 897.0 5.7%
Tangible and Intangible Assets 35.4 44.2 25.0% 46.1 $-4.0%$ 35.4 44.2 25.0%
Goodwill 25.1 36.3 44.6% 36.3 $-0.1%$ 25.1 36.3 44.6%
Investments 774.9 799.6 3.2% 823.5 $-2.9%$ 774.9 799.6 3.2%
Deferred Tax Assets 10.8 11.0 1.7% 10.6 3.1% 10.8 11.0 1.7%
Others 2.3 5.8 156.6% 4.6 26.7% 2.3 5.8 156.6%
Current Assets 327.7 292.3 $-10.8%$ 297.9 $-1.9%$ 327.7 292.3 $-10.8%$
Trade Debtors 45.1 48.7 8.1% 42.0 16.0% 45.1 48.7 8.1%
Liquidity 251.0 211.0 $-15.9%$ 224.2 $-5.9%$ 251.0 211.0 $-15.9%$
Others 31.6 32.6 3.0% 31.6 2.9% 31.6 32.6 3.0%
Shareholders' Funds 1053.1 1048.9 $-0.4%$ 1080.2 $-2.9%$ 1053.1 1048.9 $-0.4%$
Group Share 1054.3 1048.4 $-0.6%$ 1079.9 $-2.9%$ 1054.3 1048.4 $-0.6%$
Non-Controlling Interests $-1.2$ 0.5 0.3 71.9% $-1.2$ 0.5
Total Liabilities 123.1 140.3 14.0% 138.7 1.1% 123.1 140.3 14.0%
Non Current Liabilities 41.5 59.6 43.7% 60.6 $-1.6%$ 41.5 59.6 43.7%
Bank Loans 4.0 2.7 $-33.7%$ 2.7 $-0.4%$ 4.0 2.7 $-33.7%$
Provisions for Other Liabilities and Charges 20.5 22.4 9.7% 23.3 $-3.7%$ 20.5 22.4 9.7%
Others 17.0 34.5 103.1% 34.6 $-0.3%$ 17.0 34.5 103.1%
Current Liabilities 81.6 80.7 $-1.1%$ 78.1 3.2% 81.6 80.7 $-1.1%$
Loans 3.6 4.0 11.2% 3.3 23.5% 3.6 4.0 11.2%
Trade Creditors 24.7 23.8 $-3.6%$ 19.7 21.3% 24.7 23.8 $-3.6%$
Others 53.2 52.8 $-0.7%$ 55.2 $-4.4%$ 53.2 52.8 $-0.7%$
Operating CAPEX (1) 3.1 2.5 $-17.6%$ 6.9 $-63.6%$ 5.3 9.5 78.9%
Operating CAPEX as % of Turnover 6.9% 4.8% $-2.2$ pp 14.6% $-9.8pp$ 6.7% 9.4% $2.7$ pp
Total CAPEX 11.0 8.7 $-20.9%$ 14.5 $-39.6%$ 15.0 23.2 54.3%
Underlying EBITDA - Operating CAPEX $-1.4$ $-2.5$ $-78.7%$ $-7.9$ 68.2% $-3.0$ $-10.4$
Gross Debt 15.8 23.9 51.4% 23.5 2.0% 15.8 23.9 51.4%
Net Debt $-235.2$ $-187.0$ 20.5% $-200.7$ 6.8% $-235.2$ $-187.0$ 20.5%
$(1)$ Outside the CADEV shall dependent the con-

(1) Operating CAPEX excludes Financial Investments
(R) The values were restated in order to reflect IFRS16 application impacts and Sonaecom structure after Saphety sale.
The Balance Sheet of 2018 and 1Q19 was adjusted due

Consolidated levered FCF

Million euros

LEVERED FREE CASH FLOW 2Q18 $^{(R)}$ 2019 $\Delta$ 19/18 1019 q.o.q. 1H18 $(R)$ 1H19 $\Delta$ 19/18
Underlying EBITDA-Operating CAPEX $-1.4$ $-2.5$ -78.7% -7.9 68.2% $-3.0$ $-10.4$
Change in WC $-8.2$ -5.1 38.7% 0.4 $-5.1$ $-4.6$ 8.9%
Non Cash Items & Other 5.0 0.4 $-91.5%$ 4.1 $-89.8%$ 5.9 4.5 $-23.0%$
Operating Cash Flow $-4.7$ $-7.1$ -52.2% $-3.3$ $-114.9%$ $-2.2$ $-10.4$
Investments 47.2 $-6.3$ $\sim$ 1.6 $\sim$ 45.5 $-4.7$
Dividends 17.3 35.5 105.7% 0.0 $\sim$ 17.3 35.5 105.7%
Financial results 1.2 $-0.7$ $\overline{\phantom{0}}$ 0.9 $\overline{\phantom{0}}$ 0.7 0.2 $-70.2%$
Income taxes $-0.1$ $-0.3$ $\sim$ 0.2 0.1 $-0.1$
$F\Gamma F^{(1)}$ 60.9 21.1 $-65.3%$ $-0.6$ 61.3 20.5 -66.6%

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SONAECOM_RESULTS ANNOUNCEMENT

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.

SAFE HARBOUR

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 regulation, the telecommunications industry and economic conditions; and the effects of competition. Forwa "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 project

www.sonae.com

Investor Relations Contacts [email protected] Tlf: +351 22 013 23 49

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