Novabase SGPS

Quarterly Report • Nov 27, 2014

REPORT AND ACCOUNTS - 3RD QUARTER 2014

I - Management Report

• 1. Key Indicators Evolution
• 2. Short Summary of the Activity
• 3. Stock Performance
• 4. Outlook 2014

II - Consolidated Financial Statements

III - Condensed Consolidated Accounts

Consolidated Results 9M14

Privileged Information November 6, 2014

Highlights:

Turnover: 158.6 M€ (157.8 M€ in 9M13)

EBITDA: 9.9 M€ (11.4 M€ in 9M13)

Net Profit: 2.0 M€ (4.6 M€ in 9M13)

Net Cash: -0.8 M€ (20.3 M€ in 12M13)

Message from the CEO - Luís Paulo Salvado

"The results now disclosed are aligned with our strategic priorities and reflect the very challenging conditions in the domestic market.

Excluding TV/SIP business, sold in 2013, the Turnover increased by 8%, strongly driven by the non-domestic activity. The comparable international growth was 51%, and already accounts for 38% of total business. Services also increased its weight to 69% of the total business, thanks to a 9% growth.

EBITDA decreased by 14% due to the high pressure on prices in the domestic market and as a result of the costs associated with the enhancement of the internationalization strategy. Net Profit registered a contraction of 55%, penalized by the Financial Results, which reflect the new situation of the company balance sheet and the greater international exposure. Since the beginning of the year, the cash declined by 21 M€, mainly due to investment in working capital and payment of dividends.

Excluding the shareholder remuneration, Novabase share price maintained its valuation in the first nine months of the year, with a performance above the PSI 20 and below Eurostoxx Technology.

Given the robustness of our commercial pipeline for the Q4, we are working to comply with the guidance, despite the very challenging and demanding conditions in the domestic market."

INVESTOR RELATIONS OFFICE: María Gil Marín Tel. +351 213 836 300 Fax: +351 213 836 301 investor.relations@novabase.pt

Report available on website : www.novabase.pt

1. Key Indicators Evolution

EBITDA below the range of the annual Guidance linearized of 14-17 M€ and 6.4%-7.7% of margin: -15.3% below the middle of the range (-0.8 points %).

Earnings per share (EPS) in 9M14 reached 0.07 euros per share, registering a decrease of 55.9% towards the EPS from the previous year of 0.15 euros per share.

From EBITDA to Net Profit 9M14 Vs 9M13 (M€)

The Financial Results reached a net negative value of 1.9 M€, a decrease of 1.8 M€, especially due to the foreign exchange differences recorded and because of the decline in the short term bank deposits gains compared to the same period of last year.

Results from discontinued operations in 9M14 reached a 0.2 M€ profit. This figure reflects the completion of the closure process of the 'Mobility Solutions' area, discontinued during 2008, with a value lower than the one provisioned.

Net cash

In the 9M14, Novabase shows a negative evolution in cash generation. Novabase ended the 9M14 with -0.8 M€ in net cash, which compares to 20.3 M€ in the 12M13.

On June 5, 2014, Novabase paid its Shareholders a total amount of 6.3 M€ (0.20€/share). Additionally, this quarter, occurred the payment of 1.4 M€ to Noncontrolling interests.

Cash use of 21.1 M€ includes the payment of dividends to Shareholders and Non-controlling interests and a significant investment in working capital.

2. Short Summary of the Activity

The first nine months of 2014 were marked by a significant increase of the international business considering the same perimeter, however, we also observed a relevant contraction of business in Portugal.

Overall, compared to the same period of last year, the Turnover increased by 0.5%, affected by the sale of the Digital TV/SIP area. Removing this effect, the international business grew 51.0%, and now accounts for 38.1% of the total business, above the annual goal of 35%. In the nine months of 2014, the weight of services increased to 68.8%. EBITDA registered a decrease of 13.9%, due to the strong pressure on prices in the domestic market and the costs associated to the reinforcement of the international expansion strategy.

The results of the nine months of 2014, are below the Turnover Guidance (- 3.8%), and below the range of the EBITDA Guidance (-15.3% in value and -0.8 percentage points, comparing to the middle of the range).

Following the transaction of sale of non-strategic assets of Digital TV/SIP, in the end of 2013, the table below shows the Turnover and EBITDA generated by this business in 9M12 and 9M13, which are included in the Venture Capital area:

Digital TV/SIP business	9M12	9M13
Turnover (M€)	8.269	10.523
EBITDA (M€)	-1.580	-0.928

Highlights include the opening of the new logistics centre of Novabase Angola, in Talatona, in the first quarter of 2014, to support local operations more efficiently and on a larger scale.

In the second quarter of 2014, the subsidiary of Novabase, Celfocus, opened a new Delivery and R&D (research and development) centre in the UPTEC science and technology park's at Oporto University. This unit reflects the continued strategic investment of Novabase in R&D for the specialization of its offerings.

In the Venture Capital area, the Venture Capital Fund Novabase Capital Inovação e Internacionalização invested in the companies Wizdee, a company specializing in the development of Business Intelligence self-service solutions through natural language, City Pulse, a company with differentiated expertise in the areas of mobility and smart-cities, and Livian Technologies, a company dedicated to developing intelligent multichannel solutions for the financial sector.

This new infrastructure will keep pace with Novabase Angola's recent growth, and is in line with the company's international expansion strategy.

These investments reflect the strengthening of Novabase's strategic commitment to innovative technology-based SMEs, with complementary offerings.

Also worthy of note, is the distinction of Novabase IMS which was given the "Growth" award in the Enterprise Group category, during the annual HP partners gala, HP Partners Awards 2014. This award highlights Novabase IMS for being the partner who grew the most in the business areas of Systems, Storage, Networking and Services. Additionally, is the distinction of Collab by the Portuguese Association of Contact Centers (APCC), in the Gold category, for four out of five awards: ACD Technologies, Call Recorder Technologies, CTI + IVR + Dialler Technologies and the Global Customer Satisfaction Technologies Award. This subsidiary was also highlighted in the categories of Contact Centre Workforce Optimization and Contact Centres IP-Based, together with the category of Private Cloud Communications, in the Gartner 2014 Hype Cycle for Contact Centre Infrastructure and the 2014 Hype Cycle for Unified Communications and Collaboration.

Additionally, highlight the new certifications from Microsoft achieved in Angola and Mozambique: Gold certification in Volume Licensing, Gold certification in Server Platform and Silver certification in Collaboration and Content. Novabase continues to invest in internationalization, with certifications being a key differentiating factor.

Finally, mentioning the distinction of Novabase by Thomson Reuteurs as the Best Company in Investor Relations in Portugal, in the category of Small Caps.

The percentage breakdown of Turnover and EBITDA by the different businesses, in the 9M14, is as follows:

Rise in services, in line with Novabase strategic orientation to increase the added value of its offers.

Of the overall Turnover generated in 9M14, the services rendered represent 68.8%, which compares to 63.6% in 9M13.

Of the 158.6 M€ Turnover, 38.1% is generated outside Portugal, that is 60.5 M€, which compares to the 50.6 M€ registered in 9M13.

However, it is to be noted that in 9M13 the Digital TV/SIP business was still being consolidated, which contributed with 10.5 M€, that is 20.8% of total Turnover generated outside of Portugal.

Turnover by geography 9M13 Turnover by geography 9M14

International Turnover increased by 51.0%, removing the effect of the sale of the Digital TV/SIP business.

Business outside Portugal generated in the Business Solutions area increased to 40.0% of the respective invoicing (31.2% in 9M13). In the IMS business area, the international business in 9M14 increased to 35.3% (21.6% in 9M13) and in the Venture Capital area decreased to 65.6% (91.9% in 9M13 but 61.7% in 9M13 without Digital TV/SIP business).

Novabase had on average, in the 9M14, 2306 employees, which represents an increase of 7.7% compared to the 9M13 (2142).

Employee breakdown by business area, in 9M14, is as follows:

Average Number of Employees

Average Number of Employees by geography 9M13

Abroad 170

Portugal 1972

Average Number of Employees by geography 9M14

Average number of employees' evolution in line with the services growth (8.6%). Includes the talent renovation by the recruitment of 117 university graduates through Novabase Academy program, which had its first edition in Angola and second edition in Mozambique.

Removing the effect of the sale of the Digital TV/SIP subsidiaries, the international team grew 27.0%, according to the focus of Novabase on markets outside Portugal.

2.1. Business Solutions

Turnover Business Solutions (M€)

Despite the growth of the international component (+29.1%), BS evolution reflects the strong pressure on prices in the domestic market and the costs associated to the intensification of the international expansion strategy.

EBITDA Business Solutions (M€)

2.2. Infrastructures & Managed Services

Turnover IMS (M€)

EBITDA IMS (M€)

IMS evolution is due to the significant international growth (+88.4%), which partially offset the difficulties experienced in the domestic market.

2.3. Venture Capital

VC evolution primarily reflects the exit of the Digital TV/SIP business.

Excluding the shareholder remuneration, Novabase share price would have registered an appreciation of 0.4%.

3. Stock Performance

Novabase share price in 9M14 lost 7.2%, comparing to a 12.5% loss in the PSI20 Index and a 2.2% gain in the EuroStoxx Technology Index.

In this period, a dividend of 0.20€/share was distributed.

The evolution of Novabase share prices compared to other companies in the IT sector in Europe, in 9M14, was as follows:

Novabase and other TMT

The average price target disclosed by the analysts who cover Novabase is 3.75 euros.

Rotation in 9M14 represented 14.6% of the capital and 4.6 million shares were traded, below the values in 9M13 (rotation of 19.1% of the capital and 6.0 million shares traded).

Summary	3Q14	2Q14	1Q14	4Q13	3Q13
Minimum price (€)	2.421	3.551	2.790	2.610	2.310
Maximum price (€)	3.520	4.100	3.940	3.110	3.080
Volume weighted average price (€)	3.089	3.892	3.447	2.868	2.735
Closing price at the end of the Quarter (€)	2.421	3.580	3.920	2.610	3.080
Nr. of shares traded		1,417,140 1,283,056 1,898,155 2,314,482 1,929,789
Market cap in the last day (M€)	76.0	112.4	123.1	82.0	96.7

In the end of the third quarter of 2014, Novabase presented a Price to Sales multiple of 0.37x and a Price to Earnings multiple of 13.72x, which represents a discount of 54% and 27%, respectively, compared to the average of other companies in the sector in Europe (source: Reuters, ttm values at 30/9).

Average upside of 54.9%, according to the analysts who cover Novabase.

Capitalização bolsista no último dia (M€) 76,0 112,4 123,1 82,0 96,7

4. Outlook 2014

The results of the nine months of 2014 are in line with the management priorities set for the year. Thus, the international business accounts for 38.1% of the total business, and the weight of services grew to 68.8%. Turnover registered a slight increase of 0.5%, affected by the exit of the Digital TV/SIP business. EBITDA decreased by 13.9%, year on year, due to the strong pressure on prices in the domestic market and the costs associated to the reinforcement of the international expansion strategy.

For the last quarter we reaffirm the continuity of the strategic focus on internationalization. Despite the very challenging and demanding conditions in the domestic market, given the robustness of our commercial pipeline, we are committed to compliance with the guidance for the FY14.

Consolidated Statement of Financial Position Consolidated Income Statement as at 30 September 2014 for the period of 9 months ended 30 September 2014

	30.09.14	31.12.13		30.09.14	30.09.13	Var. %
	(Thousands of Euros)			(Thousands of Euros)
Assets			CONTINUING OPERATIONS
Tangible assets	5,719	6,120
Intangible assets	30,100	32,095	Sale of goods	49,576	57,366
Financial investments	2,371	2,217	Cost of goods sold	(44,862)	(49,457)
Deferred income tax assets	15,762	14,901
Other non-current assets	7,770	4,868	Gross margin	4,714	7,909	-40.4 %
Total Non-Current Assets	61,722	60,201	Other income
			Services rendered	109,073	100,417
Inventories	6,008	8,925	Supplementary income and subsidies	228	145
Trade debtors and accrued income	98,480	85,296	Other operating income	1,372	1,121
Other debtors and prepaid expenses	17,451	21,806
Derivative financial instruments	463	514		110,673	101,683
Financial assets held for trading	-	5,015
Cash and cash equivalents	16,612	32,942		115,387	109,592
Total Current Assets	139,014	154,498	Other expenses
			External supplies and services	(41,483)	(39,849)
Assets for continuing operations	200,736	214,699	Employee benefit expense	(65,185)	(59,336)
			Provisions reversal	2,766	1,715
Assets for discontinued operations	-	-	Other operating expenses	(1 ,633)	(681)
Total Assets	200,736	214,699		(105,535)	(98,151)
Shareholders' Equity			Gross Net Profit (EBITDA)	9,852	11,441	-13.9 %
Share capital	15,701	15,701	Depreciation and amortization	(4,405)	(4,164)
Treasury shares	(29)	(295)
Share premium	43,560	43,560	Operating Profit (EBIT)	5,447	7,277	-25.1 %
Reserves and retained earnings	25,473	23,756	Financial results	(1,857)	(58)
Net profit	2,047	7,510
			Net Profit before taxes (EBT)	3,590	7,219	-50.3 %
Total Shareholders' Equity	86,752	90,232	Income tax expense Net Profit from continuing operations	(831) 2,759	(1,627) 5,592	-50.7 %
Non-controlling interests	11,791	11,522
Total Equity	98,543	101,754	DISCONTINUED OPERATIONS Net Profit from discont. operations	219	-
Liabilities			Non-controlling interests	(931)	(998)
Bank borrowings	9,581	13,024
Finance lease liabilities	1,014	1,007	Attributable Net Profit	2,047	4,594	-55.4 %
Provisions	1,727	4,386
Deferred income tax liabilities	-	100
Other non-current liabilities	70	70
Total Non-Current Liabilities	12,392	18,587
Bank borrowings	7,993	6,202
Trade payables	18,811	22,268
Other creditors and accruals	34,212	40,736
Derivative financial instruments	1,428	77
Deferred income	27,256	24,755	Other information:
Total Current Liabilities	89,700	94,038	Turnover Gross margin from sales %	158,649 9.5 %	157,783 13.8 %	0.5 %
Total Liabilities for cont. operations	102,092	112,625	EBITDA margin EBT % on Turnover	6.2 % 2.3 %	7.3 % 4.6 %
			Net profit % on Turnover	1.3 %	2.9 %
Total Liabilities for discont. operations	101	320
Total Liabilities	102,193	112,945
Total Equity and Liabilities	200,736	214,699
Net Cash	(824)	20,271

	30.09.14	31.12.13		30.09.14	30.09.13	Var. %
	(Thousands of Euros)				(Thousands of Euros)
Assets			CONTINUING OPERATIONS
Tangible assets	5,719	6,120
Intangible assets	30,100	32,095	Sale of goods	49,576	57,366
Financial investments	2,371	2,217	Cost of goods sold	(44,862)	(49,457)
Deferred income tax assets	15,762	14,901
Other non-current assets	7,770	4,868	Gross margin	4,714	7,909	-40.4 %
Total Non-Current Assets	61,722	60,201	Other income
			Services rendered	109,073	100,417
Inventories	6,008	8,925	Supplementary income and subsidies	228	145
Trade debtors and accrued income	98,480	85,296	Other operating income	1,372	1,121
Other debtors and prepaid expenses	17,451	21,806
Derivative financial instruments	463	514		110,673	101,683
Financial assets held for trading	-	5,015
Cash and cash equivalents	16,612	32,942		115,387	109,592
Total Current Assets	139,014	154,498	Other expenses
			External supplies and services	(41,483)	(39,849)
Assets for continuing operations	200,736	214,699	Employee benefit expense	(65,185)	(59,336)
			Provisions reversal	2,766	1,715
Assets for discontinued operations	-	-	Other operating expenses	(1 ,633)	(681)
Total Assets	200,736	214,699		(105,535)	(98,151)
Shareholders' Equity			Gross Net Profit (EBITDA)	9,852	11,441	-13.9 %
Share capital	15,701	15,701	Depreciation and amortization	(4,405)	(4,164)
Treasury shares	(29)	(295)
Share premium	43,560	43,560	Operating Profit (EBIT)	5,447	7,277	-25.1 %
Reserves and retained earnings	25,473	23,756	Financial results	(1,857)	(58)
Net profit	2,047	7,510
			Net Profit before taxes (EBT)	3,590	7,219	-50.3 %
Total Shareholders' Equity	86,752	90,232	Income tax expense	(831)	(1,627)
			Net Profit from continuing operations	2,759	5,592	-50.7 %
Non-controlling interests	11,791	11,522
			DISCONTINUED OPERATIONS
Total Equity	98,543	101,754	Net Profit from discont. operations	219	-
Liabilities			Non-controlling interests	(931)	(998)
Bank borrowings	9,581	13,024

Turnover	158,649	157,783	0.5 %
EBITDA margin	6.2 %	7.3 %
Net profit % on Turnover	1.3 %	2.9 %

Novabase S.G.P.S., S.A. Public Company - Stock Code BVL: NBA.IN Share Capital 15,700,697.00 Euros - Corporate Registration CRCL N.º 1495

Head-office Av. D. João II, 34, Parque das Nações, 1998-031 Lisbon, PORTUGAL Corporate Tax Payer N.º 502 280 182

Consolidated Income Statement by SEGMENTS for the period of 9 months ended 30 September 2014

(Thousands of Euros)

	Business			Venture Discontin.
	Solutions	IMS	Capital	Operations	NOVABASE
CONTINUING OPERATIONS
Sale of goods	183	49,074	319	-	49,576
Cost of goods sold	(139)	(44,680)	(43)	-	(44,862)
Gross margin	44	4,394	276	-	4,714
Other income	-	-	-	-	-
Services rendered	75,117	31,023	2,933	-	109,073
Supplementary income and subsidies	158	70	-	-	228
Other operating income	892	174	306	-	1,372
	76,167	31,267	3,239	-	110,673
	- 76,211	- 35,661	- 3,515	- -	- 115,387
Other expenses	-	-	-	-	-
External supplies and services	(21,946)	(18,170)	(1,367)	-	(41,483)
Employee benefit expense	(47,938)	(15,591)	(1,656)	-	(65,185)
Provisions reversal	1,137	1,073	556	-	2,766
Other operating expenses	(392) -	(416) -	(825) -	- -	(1,633) -
	(69,139) -	(33,104) -	(3,292) -	- -	(105,535) -
Gross Net Profit (EBITDA)	7,072	2,557	223	-	9,852
Depreciation and amortization	- (3,179)	- (1,012)	- (214)	- -	- (4,405)
Operating Profit (EBIT)	3,893	1,545	9	-	5,447
Financial results	- (955)	- (933)	- 31	- -	- (1,857)
Net Profit / (Loss) before Taxes (EBT)	2,938	612	40	-	3,590
Income tax expense	- (289)	- (911)	- 369	- -	- (831)
Net Profit / (Loss) from cont. operations	2,649	(299)	409	-	2,759
DISCONTINUED OPERATIONS	-
Net Profit from discontinued operations	-	-	-	219	219
Non-controlling interests	(736)	(21)	(174)	-	(931)
Attributable Net Profit / (Loss)	1,913 -	(320) -	235 -	219 -	2,047 -
Other information :
Turnover	75,300	80,097	3,252	-	158,649
EBITDA	7,072	2,557	223	-	9,852

EBITDA % on Turnover 9.4% 3.2% 6.9% 6.2% EBT % on Turnover 3.9% 0.8% 1.2% 2.3%

Condensed Consolidated Accounts 3rd quarter 2014

(Unaudited)

NOVABASE S.G.P.S., S.A.

(Page left intentionally blank)

INDEX

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the period of 9 months ended 30
September 2014	5
● Condensed Consolidated Interim Statement of Financial Position as at 30 September 2014	6
Condensed Consolidated Interim Statement of Profit and Loss and Other Comprehensive Income for the period of 9 months ended 30 September 2014	7
● Condensed Consolidated Interim Statement of Changes in Equity for the period of 9 months ended 30 September 2014	8
● Condensed Consolidated Interim Statement of Cash Flows for the period of 9 months ended 30 September 2014	9
Selected Notes to the Condensed Consolidated Interim Financial Statements for the period of 9 months ended 30 September	10
	10
	10
Note 3. Critical accounting estimates and judgements	10
Note 4. Seasonality	10
Note 5. Segment information	11
Note 6. Property, plant and equipment and intangible assets	11
Note 7. Deferred income tax assets and liabilities	12
Note 8. Trade and other receivables	12
Note 9. Cash and cash equivalents	13
Note 10. Reserves and retained earnings	13
Note 11. Non-controlling interests	13
Note 12. Borrowings	13
Note 13. Provisions	14
Note 14. Trade and other payables	14
Note 15. Other gains/(losses) - net	15
Note 16. Income tax expense	15
Note 17. Earnings per share	15
Note 18. Related-party transactions	16
Note 19. Contingencies	16
Note 20. Events after the reporting period	16
Note 21. Note added for translation	16
	Note 1. General information Note 2. Significant accounting policies

(Page left intentionally blank)

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the period of 9 months ended 30 September 2014

Condensed Consolidated Interim Statement of Financial Position as at 30 September 2014

		(Amounts expressed in thousands of Euros)
	Note	30.09.14	31.12.13
Assets
Non-Current Assets
Property, plant and equipment	6	5,719	6,120
Intangible assets	6	30,100	32,095
Investments in associates		897	961
Financial assets at fair value through profit or loss		1,474	1,256
Deferred income tax assets	7	15,762	14,901
Other non-current assets	18	7,770	4,868
Total Non-Current Assets		61,722	60,201
Current Assets
Inventories		6,008	8,925
Trade and other receivables	8	82,973	87,975
Accrued income		27,145	12,421
Income tax receivable		2,125	2,236
Derivative financial instruments		463	514
Other current assets		3,688	4,470
Financial assets held for trading		-	5,015
Cash and cash equivalents	9	16,612	32,942
Total Current Assets		139,014	154,498
Assets for discontinued operations		-	-
Total Assets		200,736	214,699
Equity
Share capital		15,701	15,701
Treasury shares		(29)	(295)
Share premium		43,560	43,560
Reserves and retained earnings	10	25,473	23,756
Profit for the period		2,047	7,510
Total Equity attributable to owners of the parent		86 ,752	90,232
Non-controlling interests	11	11,791	11,522
Total Equity		98,543	101,754
Liabilities
Non-Current Liabilities
Borrowings	12	10,595	14,031
Provisions	13	1,727	4,386
Deferred income tax liabilities	7	-	100
Other non-current liabilities		70	70
Total Non-Current Liabilities		12,392	18,587
Current Liabilities
Borrowings	12	8,704	7,353
Trade and other payables	14	51,977	61,764
Income tax payable		335	89
Derivative financial instruments		1,428	77
Deferred income and other current liabilities		27,256	24,755
Total Current Liabilities		89,700	94,038
Liabilities for discontinued operations		101	320
Total Liabilities		102,193	112,945
Total Equity and Liabilities		200,736	214,699

THE ACOUNTANT THE BOARD OF DIRECTORS

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Condensed Consolidated Interim Statement of Profit and Loss and Other Comprehensive Income for the period of 9 months ended 30 September 2014

				(Amounts expressed in thousands of Euros)
		9 M *		3 M *
	Note	30.09.14	30.09.13	30.09.14	30.09.13
Continuing Operations
Sales	5	49,576	57,366	14,978	12,122
Services rendered	5	109,073	100,417	37,762	31,912
Cost of sales		(44,862)	(49,457)	(14,294)	(9,352)
External supplies and services		(41,483)	(39,849)	(14,507)	(12,558)
Employee benefit expense		(65,185)	(59,336)	(21,007)	(19,257)
Other gains/(losses) - net	15	2,733	2,300	507	497
Depreciation and amortisation		(4,405)	(4,164)	(1,468)	(1,463)
Operating Profit		5,447	7,277	1,971	1,901
Finance income		1,180	2,422	667	1,012
Finance costs		(2,973)	(2,448)	(2,047)	(928)
Share of loss of associates		(64)	(32)	(17)	(16)
Profit Before Income Tax		3,590	7,219	574	1,969
Income tax expense	16	(831)	(1,627)	(134)	(395)
Profit from continuing operations		2,759	5,592	440	1,574
Discontinued operations
Profit from discontinued operations		219	-	-	-
Profit for the period		2,978	5,592	440	1,574
Other comprehensive income for the period		-	-	-	-
Total comprehensive income for the period		2,978	5,592	440	1,574
Profit attributable to:
Owners of the parent		2,047	4,594	98	1,023
Non-controlling interests	11	931	998	342	551
		2,978	5,592	440	1,574
Total comprehensive income attributable to:
Owners of the parent		2,047	4,594	98	1,023
Non-controlling interests	11	931	998	342	551
		2,978	5,592	440	1,574
Earnings per share from continuing and discontinued operations
attributable to owners of the parent (Euros per share)
Basic earnings per share
From continuing operations	17	0.06 Euros	0.15 Euros	Zero Euros	0.03 Euros
From discontinued operations	17	0.01 Euros	Zero Euros	Zero Euros	Zero Euros
From profit for the year	17	0.07 Euros	0.15 Euros	Zero Euros	0.03 Euros
Diluted earnings per share From continuing operations	17
		0.06 Euros	0.15 Euros	Zero Euros	0.03 Euros
From discontinued operations From profit for the year	17 17	0.01 Euros 0.07 Euros	Zero Euros 0.15 Euros	Zero Euros Zero Euros	Zero Euros 0.03 Euros
9 M * - period of 9 months ended 3 M * - period of 3 months ended

THE ACOUNTANT

THE BOARD OF DIRECTORS

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Condensed Consolidated Interim Statement of Changes in Equity for the period of 9 months ended 30 September 2014

(Amounts expressed in thousands of Euros)

	Attributable to owners of the parent
						Stock	Reserves	Non
	Note	Share	Treasury	Share	Legal		options and retained -controlling		Total
		capital	shares	premium	reserves	reserves	earnings	interests	Equity
Balance at 1 January, 2013		15,701	(371)	43,560	3,042	130	38,215	10,613	110,890
Total comprehensive income for the period		-	-	-	-	-	4,594	998	5,592
Transactions with owners
Dividends	10	-	-	-	-	-	(18,781)	-	(18,781)
Legal reserve		-	-	-	98	-	(98)	-	-
Treasury shares movements		-	76	-	-	-	387	-	463
Share-based payments	18	-	-	-	-	147	-	-	147
Foreign currency translation reserve		-	-	-	-	-	(232)	(226)	(458)
Transactions with owners		-	76	-	98	147	(18,724)	(226)	(18,629)
Changes in ownership interests in subsidiaries that do not result in a loss of control
Transactions with non-controlling interests		-	-	-	-	-	-	-	-
Balance at 30 September, 2013		15,701	(295)	43,560	3,140	277	24,085	11,385	97,853
Balance at 1 January, 2014		15,701	(295)	43,560	3,140	326	27,800	11,522	101,754
Total comprehensive income for the period		-	-	-	-	-	2,047	931	2,978
Transactions with owners
Dividends	10, 11	-	-	-	-	-	(6,269)	(1,394)	(7,663)
Treasury shares movements		-	(20)	-	-	-	(132)	-	(152)
Share-based payments - stock options exercise		-	286	-	-	(278)	(8)	-	-
Share-based payments	18	-	-	-	-	79	-	-	79
Foreign currency translation reserve		-	-	-	-	-	815	732	1,547
Transactions with owners		-	266	-	-	(199)	(5,594)	(662)	(6,189)
Changes in ownership interests in subsidiaries that do not result in a loss of control
Transactions with non-controlling interests		-	-	-	-	-	-	-	-
Balance at 30 September, 2014		15,701	(29)	43,560	3,140	127	24,253	11,791	98,543

THE ACOUNTANT THE BOARD OF DIRECTORS

Condensed Consolidated Interim Statement of Cash Flows for the period of 9 months ended 30 September 2014

			(Amounts expressed in thousands of Euros)
		9 M *	3 M *
Note	30.09.14	30.09.13	30.09.14	30.09.13
Cash flows from operating activities
Net Cash generated / (used) in operating activities	(11,382)	(4,718)	(1,975)	1,899
Cash flows from investing activities
Receipts:
Proceeds on disposal of subsidiaries and associates	2,079	-	-	-
Loan repayments received from associates	3,343	478	-	34
Proceeds on disposal of financial assets held for trading	10,034	15,000	-	15,000
Proceeds on disposal of property, plant and equipment	13	46	9	5
Interest received	617	923	46	271
	16,086	16,447	55	15,310
Payments:
Acquisition of subsidiaries and associates Loans granted to associates	(218) (2,902)	(191) (3,909)	(8) (1,492)	(104) (999)
Purchases of financial assets held for trading	(5,019)	(10,015)	-	(5,015)
Purchases of property, plant and equipment	(782)	(1,318)	(211)	(170)
Purchases of intangible assets	(625)	(779)	(165)	(189)
	(9,546)	(16,212)	(1,876)	(6,477)
Net Cash generated / (used) in investing activities	6,540	235	(1,821)	8,833
Cash flows from financing activities
Receipts:
Proceeds from borrowings	3,100	6,493	3,000	-
Capital contribution by non-controlling interests (i)	35	2,000	-	-
	3,135	8,493	3,000	-
Payments:
Repayments of borrowings	(4,752)	(3,496)	(1,685)	(1,295)
Dividends paid 10, 11	(7,663)	(3,080)	(1,394)	-
Payment of finance lease liabilities	(1,002)	(1,151)	(340)	(404)
Interest paid	(1,028)	(1,087)	(301)	(411)
Purchase of treasury shares	(392)	-	-	-
	(14,837)	(8,814)	(3,720)	(2,110)
Net Cash used in financing activities	(11,702)	(321)	(720)	(2,110)
Cash, cash equivalents and bank overdrafts at beg. of period 9	32,942	40,452	20,911	27,037
Net increase / (decrease) of cash, cash equivalents and bank overdrafts	(16,544)	(4,804)	(4,516)	8,622
Effect from exchange rate fluctuations on cash held	214	(11)	217	(22)
Cash, cash equivalents and bank overdrafts at end of period 9	16,612	35,637	16,612	35,637
9 M * - period of 9 months ended 3 M * - period of 3 months ended

(i) In 2014: NBMSIT, Sist. De Inf. E Tecnol., S.A. (Mozambique). In 2013: FCR NB Capital Inovação e Internacionalização.

THE ACOUNTANT

THE BOARD OF DIRECTORS

Selected Notes to the Condensed Consolidated Interim Financial Statements for the period of 9 months ended 30 September 2014

1. General information

Novabase, Sociedade Gestora de Participações Sociais, SA (hereunder referred to as Novabase or Group), with its head office in Av. D. João II, 34, Parque das Nações, 1998-031 Lisbon, Portugal, holds and manages financial holdings in other companies as an indirect way of doing business, being the Holding Company of Novabase Group.

Novabase is listed on the Euronext Lisbon.

These condensed consolidated interim financial statements were approved for issue by the Board of Directors on November 27, 2014. In the opinion of the Board of Directors these financial statements fairly present the Group operations, as well as its financial position, financial performance and cash flows.

2. Significant accounting policies

These condensed consolidated interim financial statements for the period of nine months ended 30 September 2014 have been prepared in accordance with IAS 34, 'Interim financial reporting'. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2013, which have been prepared in accordance with IFRSs, as adopted by the European Union (EU).

These financial statements are presented in thousands of euros (EUR thousand).

These financial statements have not been audited.

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2013, as described in those financial statements.

Taxes on income in this interim period were accrued using the tax rate that would be applicable to expected total annual earnings for the year 2014.

3. Critical accounting estimates and judgements

The preparation of interim financial statements requires Management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant estimates and judgments made are the same as those that applied to the consolidated financial statements for the year ended 31 December 2013.

4. Seasonality

The activity of Business Solutions and IMS is usually lower in 3rd quarter due to holiday period.

5. Segment information

	Business		Venture
	Solutions	IMS	Capital	NOVABASE
At 30 September 2013
Total segment Sales and services rendered	124,414	79,650	16,292	220,356
Inter-segment Sales and services rendered	49,594	10,037	2,942	62,573
Sales and services rendered	74,820	69,613	13,350	157,783
Depreciation and amortisation	(2,788)	(872)	(504)	(4,164)
Operating profit/(loss)	6,008	2,015	(746)	7,277
Finance costs – net	(169)	195	(52)	(26)
Share of loss of associates	-	-	(32)	(32)
Income tax expense	(1,289)	(1,014)	676	(1,627)
Profit/(Loss) from operations	4,550	1,196	(154)	5,592
Other information:
(Provisions) / Provisions reversal	(133)	1,523	325	1,715
	Business		Venture		Discontinued
	Solutions	IMS	Capital	NOVABASE	operations
At 30 September 2014

				-
48,793	16,072	872	65,737	-
75,300	80,097	3,252	158,649	-
(3,179)	(1,012)	(214)	(4,405)	-
3,893	1,545	9	5,447	219
(955)	(933)	95	(1,793)	-
-	-	(64)	(64)	-
(289)	(911)	369	(831)	-
2,649	(299)	409	2,759	219
1,137	1,073	556	2,766	-
	124,093	96,169	4,124	224,386

The amount of discontinued operations reflects the completion of the closure process of the 'Mobility Solutions' area, discontinued during 2008, with a value lower than the one provisioned.

6. Property, plant and equipment and intangible assets

During the periods ended at 30 September 2014 and 30 September 2013, the movements in the net book value of property, plant and equipment and intangible assets, were as follows:

	Property, plant	Intangible
	and equipment	assets
Net book value at 1 January 2013	7,101	31,660
Acquisitions / increases	2,227	779
Write off's / disposals	(138)	-
Exchange differences	(7)	-
Depreciation and amortisation	(2,157)	(2,007)
Net book value at 30 September 2013	7,026	30,432
Net book value at 1 January 2014	6,120	32,095
Acquisitions / increases	1,449	625
Write off's / disposals	(93)	-
Exchange differences	28	-
Depreciation and amortisation	(1,785)	(2,620)
Net book value at 30 September 2014	5,719	30,100

7. Deferred income tax assets and liabilities

The movement in the deferred income tax assets was as follows:

	30.09.14	31.12.13
Balance at 1 January	14,901	12,249
Exchange differences	13	(16)
Profit or loss charge	848	2,668
Balance at the end of the period	15,762	14,901
The movement in the deferred income tax liabilities was as follows:
	30.09.14	31.12.13
Balance at 1 January	100	100
Profit or loss charge	(100)	-
Balance at the end of the period	-	100

The movement in deferred tax assets during the period, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:

	Tax	Tax	Provisions /
	Losses	Incentives	Adjustments	Total
Balance at 1 January 2013	1,300	8,491	2,458	12,249
Profit or loss charge Exchange differences	(581) (16)	2,963 -	286 -	2,668 (16)
Balance at 31 December 2013	703	11,454	2,744	14,901
Profit or loss charge Exchange differences	1,375 13	412 -	(939) -	848 13
Balance at 30 September 2014	2,091	11,866	1,805	15,762

8. Trade and other receivables

	30.09.14	31.12.13
Trade receivables	75,842	77,309
Allowance for impairment of trade receivables	(4,507)	(4,434)
	71,335	72,875
Prepayments to suppliers	1,179	503
Employees	289	125
Value added tax	3,925	3,012
Receivables from related parties (note 18)	799	4,788
Financial investments disposal	67	67
Disposal of Digital TV international business	400	2,478
Receivables from financed projects	3,535	2,963
Other receivables	4,788	4,547
Allowance for impairment of other receivables	(3,344)	(3,383)
	11,638	15,100
	82,973	87,975

Movements in allowances for impairment of trade and other receivables are analysed as follows:

	Trade receivables		Other receivables		Total
	30.09.14	31.12.13	30.09.14	31.12.13	30.09.14	31.12.13
Balance at 1 January	4,434	4,809	3,383	4,121	7,817	8,930
Impairment	201	2,805	-	234	201	3,039
Impairment reversal	(142)	(2,703)	(52)	(735)	(194)	(3,438)
Exchange differences	14	(25)	13	(4)	27	(29)
Write off's	-	(452)	-	(233)	-	(685)
Balance at the end of the period	4,507	4,434	3,344	3,383	7,851	7,817

9. Cash and cash equivalents

With reference to the consolidated statement of cash flows, the detail and description of Cash, cash equivalents and bank overdrafts is analysed as follows:

	30.09.14	31.12.13
- Cash	22	16
- Short term bank deposits	16,590	32,926
Cash and cash equivalentsxa Caixa e equivalentes a cai	16,612	32,942
- Overdrafts	-	-
	16,612	32,942

10. Reserves and retained earnings

In the Annual General Meeting of Shareholders held on May 2014, it was approved the payment to shareholders of an amount of EUR 6,280 thousand, corresponding to 0.20 Euros per share. The payment occurred in June, 2014.

	30.09.14	30.09.13
Payment to shareholders Remuneration of the treasury shares held by the Company	6,269 11	18,781 60
	6,280	18,841
11. Non-controlling interests
	30.09.14	31.12.13
Balance at 1 January	11,522	10,613
Transactions with non-controlling interests	-	(431)
Dividends paid by Celfocus to non-controlling interests	(1,394)	-
Foreign currency translation differences for foreign operations	732	(398)
Profit attributable to non-controlling interests	931	1,738

12. Borrowings

	30.09.14	31.12.13
Non-current
Bank borrowings	9,581	13,024
Finance lease liabilities	1,014	1,007
	10,595	14,031
Current
Bank borrowings	7,993	6,202
Finance lease liabilities	711	1,151
	8,704	7,353
Total borrowings	19,299	21,384

The periods in which the current bank borrowings will be paid are as follows:

	30.09.14	31.12.13
6 months or less	5,642	3,237
6 to 12 months	2,351	2,965
	7,993	6,202

The maturity of non-current bank borrowings is as follows:

	30.09.14	31.12.13
Between 1 and 2 years	4,673	4,701
Between 2 and 5 years	4,908	8,323
Over 5 years	-	-
	9,581	13,024
The effective interest rates at the reporting date were as follows:
	30.09.14	31.12.13
Bank borrowings	4.721%	5.325%
Gross finance lease liabilities – minimum lease payments:
	30.09.14	31.12.13
No later than 1 year	992	1,386
Between 1 and 5 years	1,410	1,338
	2,402	2,724
Future finance charges on finance leases	(677)	(566)
Present value of finance lease liabilities	1,725	2,158
The present value of finance lease liabilities is analysed as follows:
	30.09.14	31.12.13
No later than 1 year	711	1,151
Between 1 and 5 years	1,014	1,007

13. Provisions

Movements in provisions are analysed as follows:

	Warranties	Legal Claims	Other Risks and Charges	Total
Balance at 1 January 2013	747	240	1,449	2,436
Additional provisions Reversals	45 (147)	472 -	3,009 (1,429)	3,526 (1,576)
Balance at 31 December 2013	645	712	3,029	4,386
Additional provisions Reversals	17 (570)	- (457)	3 (1,652)	20 (2,679)
Balance at 30 September 2014	92	255	1,380	1,727

2,158 1,725

14. Trade and other payables

	30.09.14	31.12.13
Trade payables	18,100	21,117
Remunerations, vacations and vacation and Christmas subsidies	10,148	8,481
Bonus	5,873	9,127
Ongoing projects	4,240	4,849
Value added tax	4,749	7,198
Social security contributions	1,316	1,839
Income tax withholding	1,177	1,488
Employees	70	277
Prepayments from trade receivables	819	756
Acquisition of financial interest in FCR Istart I	72	72
Other accrued expenses	5,209	6,282
Other payables	204	278
	51,977	61,764

15. Other gains/(losses) - net

	30.09.14	30.09.13
Impairment and impairment reversal of trade and other receivables	(7)	461
Impairment and impairment reversal of inventories	114	78
Warranties provision	553	59
Legal claims provision	457	-
Provisions for other risks and charges	1,649	1,117
Other operating income and expense	(33)	585
	2,733	2,300

16. Income tax expense

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average rate applicable to profits of the consolidated entities as follows:

	30.09.14	30.09.13
Profit before income tax	3,590	7,219
Income tax expense at nominal rate (25% in 2013, 23% in 2014)	826	1,805
Tax benefit on the net creation of employment for young and long term unemployed people	(257)	(308)
Provisions and amortisations not considered for tax purposes	48	52
Recognition of tax on the events of previous years	(63)	(129)
Associates' results reported net of tax	15	8
Autonomous taxation	736	559
Losses in companies where no deferred tax is recognised	234	(2)
Expenses not deductible for tax purposes	(312)	(198)
Differential tax rate on companies located abroad	130	(34)
Research & Development tax benefit	(922)	(447)
Municipal surcharge and State surcharge	147	106
Impairment of Special Payment on Account, tax losses and withholding taxes	249	215
Income tax expense	831	1,627

17. Earnings per share

	30.09.14	30.09.13
Weighted average number of ordinary shares in issue	31,103,211	30,749,788
Stock options adjustment	273,392	352,515
Adjusted weighted average number of ordinary shares in issue	31,376,603	31,102,303
Profit attributable to owners of the parent	2,047	4,594
Basic earnings per share (Euros per share)	0.07 Euros	0.15 Euros
Diluted earnings per share (Euros per share)	0.07 Euros	0.15 Euros
Profit from continuing operations attributable to owners of the parent	1,828	4,594
Basic earnings per share (Euros per share)	0.06 Euros	0.15 Euros
Diluted earnings per share (Euros per share)	0.06 Euros	0.15 Euros
Profit from discontinued operations attributable to owners of the parent	219	-
Basic earnings per share (Euros per share)	0.01 Euros	-
Diluted earnings per share (Euros per share)	0.01 Euros	-

18. Related-party transactions

For reporting purposes, related-party considers subsidiaries, associates, shareholders with management influence and key elements in the Group management.

i)	Key management compensation
		30.09.14	30.09.13
	Salaries and other short-term employee benefits	3,021	3,643
	Stock options granted	79	147
		3,100	3,790
ii)	Acquisition and merger of financial interests with related parties
		30.09.14	31.12.13
	Acquisitions to former shareholders of Collab	-	(151)
	Merger of Techno Trend GmbH into TV Lab	-	422
		-	271

iii) Other balances with related parties

		Non-current		Current (note 8)
	30.09.14	31.12.13	30.09.14	31.12.13
Loan to NB Digital TV GmbH	-	-	-	2,800
Loan to Globaleda, S.A.	-	-	784	784
Loan to Powergrid, Lda	2,050	2,050	-	-
Loan to DTV Research, Lda	-	-	-	1,182
Loan to Bright Innovation, Lda	1,477	1,477	-	-
Loan to SmartGeo Solutions, Lda	99	99	-	-
Loan to Radical Innovation, Lda	994	994	-	-
Loan to Power Data, Lda	248	248	-	-
Loan to City Pulse, Lda	1,410	-	-	-
Loan to Livian Technologies, Lda	1,492	-	-	-
Loans to other shareholders	-	-	15	22
	7,770	4,868	799	4,788

(*) New investment made by FCR NB Capital Inovação e Internacionalização.

19. Contingencies

Given the disclosed in the annual financial statements for the year 2013, the significant changes in the judicial processes are the following:

In the court procedures brought by former collaborators of the company Novabase Digital TV claiming payment of credits due referring to the years they were in service prior to 2012 (and petitioned the Court to recognize the existence of a formal employment contract rather than a services agreement and have petitioned the Company to be condemned to the payment of credits in an amount totaling EUR 270 thousand), an Agreement has been reached in seven of the eight pending procedures, wherein Novabase paid the Plaintiffs an amount equal to 56% of the amount initially claimed and the Plaintiffs dropped all claims against Novabase.

20. Events after the reporting period

No events worthy of note happened until the date of conclusion of this report.

21. Note added for translation

These financial statements are a translation of financial statements originally issued in Portuguese. In the event of discrepancies, the Portuguese language version prevails.