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NOS SGPS
Earnings Release • Oct 30, 2024
1904_iss_2024-10-30_f9eb1c55-59fa-476f-a4cf-ddb5ae883f89.pdf
Earnings Release
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3Q24 Earnings announcement
1 Relatório Anual Integrado 2023 01 02 03 04
2.1 Valorizamos as Nossas Pessoas2.2 2.3 2.4 2.5
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Highlights of 3Q24 results
- • Market share of Telco revenues rises according to the latest official data, reflecting the continued success of the business strategy;
- • Consolidated revenues grew by 6.1% yoy, with a 6.3% increase in the Telco segment and strong performance in the cinema exhibition and audiovisuals business;
- • Improved operating efficiency reflected in consolidated EBITDA growth of 6.3% to €213 million, representing a margin of 49.2% of revenues, +0.1 p.p.;
- • Operating FCF grew by 9.8% to €77.1 million, driven by strong operational performance and the structural reduction in CAPEX, through the achievement of approximately 96.8% 5G coverage;
- • Reinforced capital structure, one of the most robust in the sector, with a Net Financial Debt/EBITDA AL ratio of 1.50x;
Message from Miguel Almeida, CEO
"Our unequivocal commitment to deliver the best, most accessible and trustworthy, communication and technology services in Portugal, was again reflected in our accomplishments this quarter.
Consistent execution on strategy is materializing in strong business momentum and sustained health in financial results, with yet another quarter of growth in Revenues, of more than 6% yoy, and equally robust profitability and cash generation.
Continued growth in our market share of retail revenues, a relevant measure of our overall operating success. Key to this performance is our consistent increase in mobile share, and growth in our fixed and convergent customer base led by the ongoing expansion of our next generation network to 5.7 million households.
The weight of Tech driven solutions in our portfolio, primarily for the enterprise market, is posting encouraging growth as we continue to launch innovative projects, often in collaboration through our 5GHub, with local businesses and academic and technological research partners. We are also very pleased with the early results we are seeing in our adjacent value-added operations such as NOS' security and smart home solutions and our cloud-based consultancy business Ten-Twenty-One. Our strategic focus on technological innovation and transformation was further consolidated this quarter with the acquisition of a 20% stake in Daredata, one of the Portuguese leading newcomers to the field of AI, Generative AI, and Machine Learning, representing another important milestone to unlock the full potential of AI based solutions for global markets.
The core services we provide make progress possible, by allowing individuals, businesses, and communities, even in the most remote corners of the country, to communicate, work, learn and be entertained, with reliable and high-capacity access to the very best technology has to offer. In August we became the first operator to cover all municipalities in Portugal with our 5G network and we continue to be rated the fastest operator by Ookla. The nature of our services makes us an important enabler of increased national competitiveness and geographic cohesion, as is reflected in the European Commission´s recent "2030 Digital Decade" report in which Portugal is recognized as one of the most advanced countries in Europe in terms of 5G deployment and well positioned to complete 2030 targets ahead of schedule.
The sustained health of our operating and financial results provides us the foundations to reinvest in the quality and reach of our networks, product offerings and customer experience, bolstering our long-term commitment to Portugal and to all our stakeholders."
Financial Performance
The Consolidated Financial Statements for 3Q24 have been subject to a limited review.
| Table 1. | ||||||
|---|---|---|---|---|---|---|
| Profit and Loss Statement | 3Q23 | 3Q24 | 3Q24 / 3Q23 | 9M23 | 9M24 | 9M24 / 9M23 |
| (Millions of Euros) | ||||||
| Operating Revenues | 407.9 | 432.7 | 6.1% | 1,183.1 | 1,248.2 | 5.5% |
| Telco | 384.9 | 409.3 | 6.3% | 1,131.6 | 1,198.9 | 6.0% |
| Consumer Revenues | 275.7 | 289.0 | 4.8% | 808.9 | 847.9 | 4.8% |
| Business Revenues | 84.1 | 92.0 | 9.4% | 248.2 | 269.1 | 8.4% |
| Wholesale and Others | 25.1 | 28.2 | 12.4% | 74.5 | 81.9 | 9.8% |
| Audiovisuals & Cinema | 32.2 | 32.7 | 1.7% | 77.2 | 75.1 | (2.7%) |
| Others and Eliminations | (9.2) | (9.2) | 0.6% | (25.7) | (25.8) | 0.6% |
| Operating Costs Excluding D&A | (207.5) | (219.7) | 5.9% | (630.1) | (663.2) | 5.3% |
| Telco | (199.9) | (211.4) | 5.8% | (615.3) | (648.3) | 5.4% |
| Audiovisuals & Cinema | (16.7) | (17.5) | 4.7% | (40.4) | (40.7) | 0.5% |
| Others and Eliminations | 9.2 | 9.2 | 0.6% | 25.7 | 25.8 | 0.6% |
| EBITDA(1) | 200.4 | 213.0 | 6.3% | 553.0 | 585.1 | 5.8% |
| EBITDA Margin | 49.1% | 49.2% | 0.1pp | 46.7% | 46.9% | 0.1pp |
| Telco | 185.0 | 197.8 | 6.9% | 516.3 | 550.6 | 6.6% |
| EBITDA Margin | 48.1% | 48.3% | 0.3pp | 45.6% | 45.9% | 0.3pp |
| Cinema Exhibition and Audiovisuals | 15.4 | 15.2 | (1.7%) | 36.7 | 34.5 | (6.2%) |
| EBITDA Margin | 47.9% | 46.4% | (1.6pp) | 47.6% | 45.9% | (1.7pp) |
| Operating costs Excluding D&A AL | (236.2) | (251.2) | 6.3% | (714.4) | (754.8) | 5.7% |
| Telco | (226.1) | (240.3) | 5.8% | (692.1) | (732.3) | 5.8% |
| Audiovisuals & Cinema | (19.3) | (20.1) | 4.1% | (48.0) | (48.3) | 0.7% |
| Others and Eliminations | 9.2 | 9.2 | 0.6% | 25.7 | 25.8 | 0.6% |
| EBITDA AL(1) | 171.7 | 181.6 | 5.8% | 468.7 | 493.4 | 5.3% |
| EBITDA AL margin | 42.1% | 42.0% | (0.1pp) | 39.6% | 39.5% | (0.1pp) |
| Telco | 158.9 | 169.0 | 6.4% | 439.5 | 466.6 | 6.2% |
| EBITDA AL margin | 41.3% | 41.3% | 0.0pp | 38.8% | 38.9% | 0.1pp |
| Audiovisuals & Cinema | 12.8 | 12.6 | (2.0%) | 29.2 | 26.8 | (8.2%) |
| EBITDA AL margin | 39.8% | 38.4% | (1.4pp) | 37.9% | 35.7% | (2.1pp) |
| Leasings | (28.7) | (31.4) | 9.3% | (84.3) | (91.6) | 8.7% |
| Telco | (26.1) | (28.8) | 10.2% | (76.8) | (84.0) | 9.4% |
| Cinema Exhibition and Audiovisuals | (2.6) | (2.6) | 0.0% | (7.5) | (7.6) | 1.6% |
| Depreciation and Amortization | (122.8) | (128.6) | 4.7% | (359.9) | (375.9) | 4.5% |
| (Other Expenses) / Income | 0.1 | 0.2 | 37.6% | (1.1) | 71.8 | (6600.9%) |
| Operating Profit (EBIT)(2) | 77.7 | 84.6 | 8.8% | 192.1 | 280.9 | 46.3% |
| Share of profits (losses) of associates and joint ventures | 1.4 | 2.4 | 70.9% | 4.6 | 7.1 | 52.7% |
| (Financial Expenses) / Income | (19.0) | (18.8) | (0.9%) | (48.5) | (59.1) | 22.0% |
| Leases Financial Expenses | (8.0) | (8.5) | 7.1% | (23.0) | (25.2) | 9.4% |
| Funding & Other Financial Expenses | (11.0) | (10.2) | (6.8%) | (25.5) | (33.9) | 33.4% |
| Income Before Income Taxes | 60.2 | 68.2 | 13.3% | 148.3 | 228.9 | 54.4% |
| Income Taxes | (14.4) | (15.6) | 8.4% | (21.8) | (27.6) | 26.5% |
| Net Income Before Associates & Non-Controlling Interests | 44.4 | 50.2 | 13.1% | 121.8 | 194.2 | 59.5% |
| Net income | 45.8 | 52.6 | 14.9% | 126.4 | 201.3 | 59.2% |
| Net income attributable to Non-controlling interests | (0.0) | 0.1 | (363.3%) | 0.1 | 0.2 | 90.4% |
| Net Income attributable to NOS shareholders | 45.9 | 52.6 | 14.6% | 126.3 | 201.1 | 59.2% |
(1) EBITDA AL = Operating Profit AL + Depreciation and Amortization + Integration Costs + Net Losses/Gains on Disposal of Assets + Other Non-Recurrent Losses/Gains (2) EBIT = Income Before Financials and Income Taxes.
Note: In 1Q24 B2C and B2B revenues have been restated to reflect a more accurate allocation between segments.
Consolidated revenue growth, with positive trends in all segments
Consolidated revenues increased by 6.1% yoy to €432.7 million, leveraged by robust performance in the core Telco & IT business and strong operational performance in the cinema exhibition and audiovisuals area.
Strong performance in all Telco & IT business areas resulted in an increase of 6.3% yoy, totalling €409.3 million. In the Consumer segment, revenues were up 4.8% yoy, upholding the trends from the previous quarter, with growth in core services, namely convergent and integrated RGUs, thereby bolstering continuous improvement in the value mix. Revenues in the Corporate segment grew by 9.4% to €92.0 million, with the positive momentum seen in this segment, which was up 14.7%, having been leveraged by a higher volume of IT projects. Wholesale and Other business raised total revenues by €3.1 million to €28.2 million, driven by strong growth of 21.4% in the share of sales of low-margin value-added call services with a volatile profile.
The cinema exhibition and audiovisuals business totalled €32.7 million in revenues, up 1.7% yoy. "Inside Out 2", a film released and shown during 3Q24, with approximately 1.3 million tickets sold in the Portuguese market, reached number one in box office admissions since records began in Portugal. However, this record was not enough to surpass the "Barbenheimer" phenomenon and the other box office hits screened in 3Q23, with total tickets sales down 5.3% yoy, helping to explain the unchanged revenues in the cinema exhibition segment. Audiovisuals revenues were up 22.6%, thanks to the success of the portfolio of movies distributed by NOS Audiovisuais, including "Inside Out 2" and "Deadpool & Wolverine".
| Operating Indicators | 3Q23 | 3Q24 | 3Q24 / 3Q23 | 9M23 | 9M24 | 9M24 / 9M23 |
|---|---|---|---|---|---|---|
| Cinema | ||||||
| Revenue per Ticket - box office (Euros) | 5.9 | 6.1 | 3.7% | 5.9 | 6.1 | 4.0% |
| Tickets Sold - NOS ('000) | 2,810.4 | 2,661.2 | (5.3%) | 6,345.9 | 5,706.6 | (10.1%) |
| Tickets Sold - Total Portuguese Market (1) ('000) | 4,182.0 | 4,021.0 | (3.8%) | 9,607.0 | 8,749.3 | (8.9%) |
| Screens (units) (1) Source: ICA - Portuguese Institute For Cinema and Audiovisuals |
214 | 214 | 0.0% | 214 | 214 | 0.0% |
EBITDA sees sustained growth of +6.3% in 3Q24 to €213.0 million
EBITDA growth higher than yoy revenue growth, achieved through proactive management of the cost base and driven by the transformation programme in progress. Exploiting the potential of new technologies, particularly AI, is resulting in operational and structural efficiencies that are helping to empower the business and redesign the cost structure in many business areas, with encouraging results in major operational lines, such as customer service and operational network management. The 5.9% increase in Consolidated OpEx reflects, among other things, the impact of positive operating momentum in the corporate segment, whose continued higher number of IT projects inevitably leads to a rise in associated costs. Indirect, operating and structural costs were primarily impacted by higher energy costs, reflecting the yoy increase in regulated prices in the Portuguese market.
Leasing costs were up 9.3% to €31.4 million, reflecting a higher number of sites with radio access sharing and inflation adjustments in payments to Cellnex, capped at 2%. Without the impacts of leases, EBITDA AL rose by 5.8% to €181.6 million, representing a 42.0% margin.
Net Income grows 14.6% to €52.6 million
Consolidated Net Income in 3Q24 totalled €52.6 million, up €6.7 million. This increase was due to a combination of factors, including: i) strong operational performance, with an EBITDA contribution of €12.6 million; ii) an increase of €5.8 million in D&A to €128.6 million, mainly as a result of revisions to the useful lives of some assets; iii) a reduction in Financing and Other Costs of €0.2 million yoy to €18.8 million, due to more favourable interest rates; iv) a positive contribution of €1.0 million from our holdings in associated companies and JVs, with positive performance from our holding in ZAP; v) an increase of €1.2 million in income taxes due to higher earnings before taxes.
Structural decline in total CAPEX, down 4.9% to €92.9 million
The deceleration trend in total investments continued in 3Q24, down €4.8 million yoy to €92.9 million, with a continuing structural decline in Telco investment reaching 21.5% in 3Q24, down 2.5 p.p. yoy. The investment made in our 5G network allows us to reach every municipality in Portugal, covering approximately 96.8% of the population at the end of 3Q24. With regard to fixed network coverage, NOS continues to expand in the most sustainable and efficient way possible, both through its own construction and sharing/wholesale agreements, reaching 5.7 million households at the end of 3Q24, with a total of 80.1% covered by FttH. As a result of the investment dynamics explained above, expansionary CAPEX reduced 14.5% yoy to €17.7 million. CAPEX related to customers increased by €2.5 million yoy to €36.2 million, reflecting the positive operating dynamics with a higher total of net additions yoy.
| Table 3. | ||||||
|---|---|---|---|---|---|---|
| (1) CAPEX (Millions of Euros) |
3Q23 3Q24 |
3Q24 / 3Q23 | 9M23 | 9M24 | 9M24 / 9M23 | |
| Total CAPEX Excluding Leasing Contracts & Other Contractual Rights | 97.7 | 92.9 | (4.9%) | 292.8 | 277.9 | (5.1%) |
| Telco | 92.5 | 88.0 | (4.9%) | 278.7 | 262.2 | (5.9%) |
| % of Telco Revenues | 24.0% | 21.5% | (2.5pp) | 24.6% | 21.9% | (2.8pp) |
| o.w. Technical CAPEX | 58.8 | 51.8 | (11.9%) | 171.5 | 154.1 | (10.1%) |
| % of Telco Revenues | 15.3% | 12.7% | (2.6pp) | 15.2% | 12.9% | (2.3pp) |
| Baseline Telco | 38.1 | 34.1 | (10.5%) | 106.2 | 106.1 | (0.1%) |
| Network Expansion / Substitution and Integration Projects and Others |
20.7 | 17.7 | (14.5%) | 65.3 | 48.0 | (26.5%) |
| o.w. Customer Related CAPEX | 33.7 | 36.2 | 7.5% | 107.2 | 108.1 | 0.8% |
| % of Telco Revenues | 8.8% | 8.8% | 0.1pp | 9.5% | 9.0% | (0.5pp) |
| Audiovisuals and Cinema Exhibition | 5.2 | 4.9 | (5.8%) | 14.1 | 15.8 | 11.7% |
| Leasing Contracts & Other Contractual Rights | 10.4 | 22.1 | 113.2% | 66.1 | 51.0 | (22.8%) |
| Total Group CAPEX | 108.0 | 115.0 | 6.4% | 358.9 | 328.9 | (8.3%) |
(1) CAPEX = Increase in tangible and intangible fixed assets, contract costs and rights of use Note: In 1H24 Network and Baseline CAPEX have been restated to reflect a more accurate allocation
Operating Cash Flow up 9.8% to €77.1 million
Higher operating cash flow sustained by solid operational performance and a structural decline in investment needs, with growth of 9.8% to €77.1 million.
Total Free Cash Flow grew €88.2 million to €117.4 million, impacted by positive operational performance and several effects of a noncurrent nature. The positive variation in cash flow due to income tax of 70.1 million euros results from the fact that the payments made each year are calculated on the basis of the previous year's tax results. The payment in 3Q23 of 31.9 million euros is therefore impacted by non-current results relating to the capital gain on the sale of the 2022 towers. The receipt in 3Q24 of 38.3 million euros reflects the difference between the amount advanced in 2023 and the tax calculated in 2024 for that year. Free Cash Flow was also boosted by the receipt of €12.9 million in activity fees in the wake of favourable court rulings initially announced in 4Q23.
| Table 4. | ||||||
|---|---|---|---|---|---|---|
| Cash Flow (Millions of Euros) | 3Q23 | 3Q24 | 3Q24 / 3Q23 | 9M23 | 9M24 | 9M24 / 9M23 |
| EBITDA AL | 171.7 | 181.6 | 5.8% | 468.7 | 493.4 | 5.3% |
| Total CAPEX Excluding Leasings & Other Contractual Rights | (97.7) | (92.9) | (4.9%) | (292.8) | (277.9) | (5.1%) |
| EBITDA AL - Total CAPEX Excluding Leasings & Other Contractual Rights |
74.0 | 88.7 | 19.8% | 175.9 | 215.5 | 22.5% |
| % of Revenues | 18.1% | 20.5% | 2.4pp | 14.9% | 17.3% | 2.4pp |
| Non-Cash Items Included in EBITDA AL - CAPEX and Change in Working Capital |
(3.8) | (11.6) | 205.8% | (6.7) | (1.5) | (77.9%) |
| Operating Cash Flow | 70.2 | 77.1 | 9.8% | 169.1 | 214.0 | 26.5% |
| Interest Paid | (8.6) | (9.3) | 7.9% | (20.7) | (28.7) | 38.6% |
| Income Taxes Paid | (31.9) | 38.3 | 305.5% | (42.3) | 37.6 | (212.0%) |
| Disposals | 0.2 | 0.1 | (68.6%) | 0.7 | 57.6 | 8442.6% |
| Other Cash Movements (1) | (0.8) | 11.2 | (1572.7%) | (13.0) | 51.6 | (497.1%) |
| Total Free Cash-Flow Before Dividends, Financial Investments and Own Shares Acquisition |
29.2 | 117.4 | 301.8% | 93.8 | 332.1 | 254.0% |
| Financial Investments | (0.6) | (1.4) | 128.8% | (0.6) | (1.1) | 74.8% |
| Acquisition of Own Shares | 0.0 | 0.0 | n.a. | (5.2) | (4.3) | (17.6%) |
| Dividends | 0.0 | 0.0 | n.a. | (220.0) | (179.0) | (18.7%) |
| Free Cash Flow | 28.6 | 116.0 | 305.5% | (132.0) | 147.8 | (212.0%) |
| Debt Variation Through Financial Leasing, Accruals & Deferrals & Others |
(2.7) | (0.2) | (92.9%) | (5.2) | (0.7) | (85.9%) |
| Change in Net Financial Debt | 25.9 | 115.8 | 347.4% | (137.2) | 147.0 | (207.1%) |
(1) Includes Cash Restructuring Payments and Other Cash Movements.
Reinforced capital structure, one of the most robust in the sector
At the end of 3Q24, NOS had a Net Financial Debt of €942 million, while total debt, including leasing agreements (per IFRS 16), was €1,571 million. The Net Financial Debt/EBITDA AL ratio was 1.50x in 3Q24, significantly below our strategic financing goal of around 2x.
The average all-in cost of debt in 3Q24 was 4.0%, down slightly (11 b.p.) from the previous quarter.
NOS holds a solid liquidity position of €390.6 million, split between unissued and available commercial paper programmes totalling €359.5 million and Cash and Cash Equivalents totalling €31.1 million.
On 30 September 2024, 29% of NOS' debt was issued at a fixed rate, while another 39% was covered by interest rate collars. The total average maturity of debt on 30 September was 2 years and 3 months. Currently, more than 90% of NOS' total financial debt is tied to ESG performance KPIs, reiterating our commitment to achieving NOS' global aspirations in sustainability performance.
| Table 5. | ||||
|---|---|---|---|---|
| Balance Sheet (Millions of Euros) | 3Q24 | 3Q24 / 3Q23 | ||
| Non-current Assets | 2,919.2 | 2,832.9 | (3.0%) | |
| Current Assets | 570.2 | 510.3 | (10.5%) | |
| Total Assets | 3,489.3 | 3,343.3 | (4.2%) | |
| Total Shareholders' Equity | 945.9 | 1,011.4 | 6.9% | |
| Non-current Liabilities | 1,761.1 | 1,443.9 | (18.0%) | |
| Current Liabilities | 782.3 | 888.0 | 13.5% | |
| Total Liabilities | 2,543.4 | 2,331.9 | (8.3%) | |
| Total Liabilities and Shareholders' Equity | 3,489.3 | 3,343.3 | (4.2%) | |
| Table 6. | ||||
| Net Financial Debt (Millions of Euros) | 3Q23 | 3Q24 | 3Q24 / 3Q23 | |
| Short Term | 110.0 | 254.0 | 131.0% | |
| Medium and Long Term | 1,031.4 | 719.5 | (30.2%) | |
| Total Debt | 1,141.4 | 973.5 | (14.7%) | |
| Cash and Short Term Investments | 11.9 | 31.1 | 160.8% | |
| Net Financial Debt (1) | 1,129.4 | 942.3 | (16.6%) | |
| Net Financial Debt / EBITDA after lease payments (last 4 quarters) (2) | 1.92x | 1.50x | (0.2pp) | |
| Leasings and Long Term Contracts | 633.8 | 628.7 | (0.8%) | |
| Net Debt | 1,763.3 | 1,571.0 | (10.9%) | |
| Net Debt / EBITDA (last 4 quarters) | 2.50x | 2.10x | (0.16pp) | |
| Net Financial Gearing (3) (1) Net Financial Debt = Borrowings – Leasings - Cash |
65.1% | 60.8% | (4.2pp) |
(2) EBITDA After Lease Payments = EBITDA - Lease Cash Payments (Capital & Interest)
(3) Net Financial Gearing = Net Debt / (Net Debt + Total Shareholders' Equity).
Appendix
Table 7.
| Telco - operating indicators ('000) |
3Q23 | 4Q23 | 1Q24 | 2Q24 | 3Q24 | 9M23 | 9M24 |
|---|---|---|---|---|---|---|---|
| Homes Passed | 5,369.3 | 5,427.3 | 5,490.0 | 5,566.7 | 5,661.5 | 5,369.3 | 5,661.5 |
| FttH Coverage | 71.2% | 74.4% | 76.5% | 78.0% | 80.1% | 71.2% | 80.1% |
| Total RGUs(1) | 10,984.7 | 11,014.3 | 11,068.9 | 11,142.2 | 11,266.0 | 10,984.7 | 11,266.0 |
| o.w. Consumer RGUs | 9,238.3 | 9,255.1 | 9,294.8 | 9,358.1 | 9,464.5 | 9,238.3 | 9,464.5 |
| o.w. Business RGUs | 1,746.4 | 1,759.2 | 1,774.1 | 1,784.1 | 1,801.6 | 1,746.4 | 1,801.6 |
| Mobile RGUs(2) | 5,895.6 | 5,917.1 | 5,960.1 | 6,017.0 | 6,117.9 | 5,895.6 | 6,117.9 |
| Pre-Paid | 2,126.7 | 2,069.0 | 2,015.2 | 1,999.1 | 2,019.1 | 2,126.7 | 2,019.1 |
| Post-Paid | 3,768.9 | 3,848.2 | 3,944.9 | 4,017.9 | 4,098.8 | 3,768.9 | 4,098.8 |
| Pay TV Fixed Access (3) | 1,455.3 | 1,459.8 | 1,463.9 | 1,469.5 | 1,479.1 | 1,455.3 | 1,479.1 |
| Pay TV DTH | 214.3 | 210.2 | 206.3 | 202.7 | 198.0 | 214.3 | 198.0 |
| Fixed Voice | 1,819.9 | 1,821.7 | 1,825.4 | 1,828.6 | 1,833.1 | 1,819.9 | 1,833.1 |
| Broadband | 1,546.6 | 1,551.9 | 1,558.6 | 1,566.1 | 1,577.8 | 1,546.6 | 1,577.8 |
| Others and Data | 53.0 | 53.6 | 54.5 | 58.4 | 60.2 | 53.0 | 60.2 |
| Convergent + Integrated Customers | 1,131.5 | 1,142.9 | 1,161.0 | 1,174.4 | 1,186.9 | 1,131.5 | 1,186.9 |
| Fixed Convergent + Integrated Customers as % of Fixed Access Customers |
68.0% | 68.6% | 69.5% | 70.2% | 70.6% | 68.0% | 70.6% |
| Residential ARPU / Unique Subscriber With Fixed Access (Euros)(4)(5) | 50.6 | 50.5 | 50.8 | 51.3 | 52.0 | 49.9 | 51.3 |
| Net Adds | |||||||
| Homes Passed | 5.3 | 58.0 | 62.7 | 76.7 | 94.8 | 85.3 | 234.2 |
| Total RGUs | 104.8 | 29.5 | 54.6 | 73.3 | 123.8 | 202.5 | 251.8 |
| o.w. Consumer RGUs | 94.0 | 16.8 | 39.7 | 63.3 | 106.4 | 176.2 | 209.4 |
| o.w. Business RGUs | 10.8 | 12.8 | 14.9 | 10.1 | 17.4 | 26.3 | 42.4 |
| Mobile | 81.5 | 21.5 | 43.0 | 56.8 | 100.9 | 161.7 | 200.8 |
| Pre-Paid | 14.0 | (57.7) | (53.7) | (16.2) | 20.0 | (23.0) | (49.9) |
| Post-Paid | 67.5 | 79.3 | 96.7 | 73.0 | 80.9 | 184.8 | 250.6 |
| Pay TV Fixed Access | 8.0 | 4.5 | 4.1 | 5.6 | 9.6 | 20.9 | 19.3 |
| Pay TV DTH | (4.0) | (4.2) | (3.9) | (3.6) | (4.7) | (15.6) | (12.2) |
| Fixed Voice | 6.8 | 1.8 | 3.8 | 3.2 | 4.5 | 11.2 | 11.4 |
| Broadband | 12.1 | 5.3 | 6.7 | 7.5 | 11.7 | 23.1 | 25.9 |
| Others and Data | 0.3 | 0.6 | 0.9 | 3.8 | 1.8 | 1.1 | 6.6 |
| Convergent + Integrated Customers | 12.8 | 11.4 | 18.0 | 13.4 | 12.5 | 40.0 | 44.0 |
1) Consumer and Business RGUs have been restated in line with B2B & B2C Revenues restatement in 1Q24
2) Mobile Pre-paid & Post-paid RGUs have been restated 3) Fixed Access Subscribers include customers served by the HFC, FTTH and ULL networks and indirect access
4) Fixed residential ARPU reestated from 1Q19 to include Revenues of SIM cards integrated in residential bills
5) Current quarter figures are estimates subject to possible review after final allocations determined
Table 8.
| Cinemas - operating indicators | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 3Q24 | 9M23 | 9M24 |
|---|---|---|---|---|---|---|---|
| Revenue per Ticket - box office (Euros) | 5.9 | 5.8 | 6.1 | 6.0 | 6.1 | 5.9 | 6.1 |
| Tickets Sold - NOS ('000) | 2,810.4 | 1,710.4 | 1,722.6 | 1,322.8 | 2,661.2 | 6,345.9 | 5,706.6 |
| Tickets Sold - Total Portuguese Market(1) ('000) | 4,182.0 | 2,683.3 | 2,673.9 | 2,054.4 | 4,021.0 | 9,607.0 | 8,749.3 |
| Screens (units) | 214.0 | 214.0 | 214.0 | 214.0 | 214.0 | 214.0 | 214.0 |
| (1) Source: ICA – Instituto do Cinema e do Audiovisual |
(1) Source: ICA – Instituto do Cinema e do Audiovisual
| Table 9. | |||||||
|---|---|---|---|---|---|---|---|
| Profit and Loss Statement | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 3Q24 | 9M23 | 9M24 |
| (Millions of Euros) | |||||||
| Operating Revenues | 407.9 | 414.3 | 403.3 | 412.2 | 432.7 | 1,183.1 | 1,248.2 |
| Telco | 384.9 | 401.2 | 389.0 | 400.7 | 409.3 | 1,131.6 | 1,198.9 |
| Consumer Revenues (1) | 275.7 | 281.1 | 277.4 | 281.4 | 289.0 | 808.9 | 847.9 |
| Business Revenues (1) | 84.1 | 94.7 | 87.5 | 89.7 | 92.0 | 248.2 | 269.1 |
| Wholesale and Others (1) | 25.1 | 25.4 | 24.1 | 29.6 | 28.2 | 74.5 | 81.9 |
| Audiovisuals & Cinema | 32.2 | 22.2 | 22.8 | 19.7 | 32.7 | 77.2 | 75.1 |
| Others and Eliminations | (9.2) | (9.1) | (8.5) | (8.1) | (9.2) | (25.7) | (25.8) |
| Operating Costs Excluding D&A | (207.5) | (250.7) | (218.8) | (224.6) | (219.7) | (630.1) | (663.2) |
| Telco | (199.9) | (247.1) | (215.1) | (221.8) | (211.4) | (615.3) | (648.3) |
| Audiovisuals & Cinema | (16.7) | (12.7) | (12.2) | (10.9) | (17.5) | (40.4) | (40.7) |
| Others and Eliminations | 9.2 | 9.1 | 8.5 | 8.1 | 9.2 | 25.7 | 25.8 |
| EBITDA (2) | 200.4 | 163.6 | 184.5 | 187.6 | 213.0 | 553.0 | 585.1 |
| EBITDA Margin | 49.1% | 39.5% | 45.7% | 45.5% | 49.2% | 46.7% | 46.9% |
| Telco | 185.0 | 154.1 | 173.9 | 178.9 | 197.8 | 516.3 | 550.6 |
| EBITDA Margin | 48.1% | 38.4% | 44.7% | 44.7% | 48.3% | 45.6% | 45.9% |
| Cinema Exhibition and Audiovisuals | 15.4 | 9.5 | 10.6 | 8.7 | 15.2 | 36.7 | 34.5 |
| EBITDA Margin | 47.9% | 42.9% | 46.5% | 44.4% | 46.4% | 47.6% | 45.9% |
| Depreciation and Amortization | (122.8) | (123.8) | (122.3) | (125.0) | (128.6) | (359.9) | (375.9) |
| (Other Expenses) / Income | 0.1 | 32.3 | 31.3 | 40.3 | 0.2 | (1.1) | 71.8 |
| Operating Profit (EBIT) (3) | 77.7 | 72.1 | 93.4 | 103.0 | 84.6 | 192.1 | 280.9 |
| Share of profits (losses) of associates and joint ventures | 1.4 | 0.4 | 2.7 | 2.0 | 2.4 | 4.6 | 7.1 |
| (Financial Expenses) / Income | (19.0) | (20.7) | (20.7) | (19.6) | (18.8) | (48.5) | (59.1) |
| Leases Financial Expenses | (8.0) | (8.0) | (8.3) | (8.4) | (8.5) | (23.0) | (25.2) |
| Funding & Other Financial Expenses | (11.0) | (12.8) | (12.5) | (11.2) | (10.2) | (25.5) | (33.9) |
| Income Before Income Taxes | 60.2 | 51.8 | 75.4 | 85.4 | 68.2 | 148.3 | 228.9 |
| Income Taxes | (14.4) | 3.1 | (7.5) | (4.6) | (15.6) | (21.8) | (27.6) |
| Net Income Before Associates & Non-Controlling Interests | 47.2 | 55.4 | 70.5 | 82.8 | 55.1 | 131.1 | 208.4 |
| Net Income | 45.8 | 54.9 | 67.8 | 80.8 | 52.6 | 126.4 | 201.3 |
| Net income attributable to Non-controlling interests | (0.0) | 0.2 | (0.0) | 0.1 | 0.1 | 0.1 | 0.2 |
| Net Income attributable to NOS shareholders | 45.9 | 54.7 | 67.8 | 80.7 | 52.6 | 126.3 | 201.1 |
2) EBITDA = Operating Profit + Depreciation and Amortization + Integration Costs + Net Losses/Gains on Disposal of Assets + Other Non-Recurrent Losses/Gains
3) EBIT = Income Before Financials and Income Taxes.
Note: In 1Q24 B2C and B2B revenues have been restated to reflect a more accurate allocation between segments.
| Leasings | (28.7) | (29.1) | (29.1) | (31.1) | (31.4) | (84.3) | (91.6) |
|---|---|---|---|---|---|---|---|
| Telco | (26.1) | (26.6) | (26.7) | (28.5) | (28.8) | (76.8) | (84.0) |
| Cinema Exhibition and Audiovisuals | (2.6) | (2.5) | (2.5) | (2.6) | (2.6) | (7.5) | (7.6) |
| Operating costs Excluding D&A AL | (236.2) | (279.8) | (248.0) | (255.7) | (251.2) | (714.4) | (754.8) |
| Telco | (226.1) | (273.7) | (241.8) | (250.3) | (240.3) | (692.1) | (732.3) |
| Audiovisuals & Cinema (1) | (19.3) | (15.2) | (14.6) | (13.5) | (20.1) | (48.0) | (48.3) |
| Others and Eliminations | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 25.8 |
| EBITDA AL | 171.7 | 134.5 | 155.3 | 156.5 | 181.6 | 468.7 | 493.4 |
| EBITDA AL margin | 42.1% | 32.5% | 38.5% | 38.0% | 42.0% | 39.6% | 39.5% |
| Telco | 158.9 | 127.5 | 147.2 | 150.4 | 169.0 | 439.5 | 466.6 |
| EBITDA AL margin | 41.3% | 31.8% | 37.8% | 37.5% | 41.3% | 38.8% | 38.9% |
| Cinema Exhibition and Audiovisuals | 12.8 | 7.0 | 8.1 | 6.2 | 12.6 | 29.2 | 26.8 |
| EBITDA AL margin | 39.8% | 31.6% | 35.7% | 31.3% | 38.4% | 37.9% | 35.7% |
| Table 10. | |||||||
|---|---|---|---|---|---|---|---|
| CAPEX (1) (Millions of Euros) |
3Q23 | 4Q23 | 1Q24 | 2Q24 | 3Q24 | 9M23 | 9M24 |
| Total CAPEX Excluding Leasing Contracts & Other Contractual Rights | 97.7 | 94.8 | 91.9 | 93.1 | 92.9 | 292.8 | 277.9 |
| Telco | 92.5 | 89.0 | 86.3 | 87.9 | 88.0 | 278.7 | 262.2 |
| % of Telco Revenues | 24.0% | 22.2% | 22.2% | 21.9% | 21.5% | 24.6% | 21.9% |
| o.w. Technical CAPEX | 58.8 | 53.9 | 50.2 | 52.1 | 51.8 | 171.5 | 154.1 |
| % of Telco Revenues | 15.3% | 13.4% | 12.9% | 13.0% | 12.7% | 15.2% | 12.9% |
| Baseline Telco | 38.1 | 38.0 | 37.9 | 34.2 | 34.1 | 106.2 | 106.1 |
| Network Expansion / Substitution and Integration Projects and Others |
20.7 | 15.9 | 12.4 | 17.9 | 17.7 | 65.3 | 48.0 |
| o.w. Customer Related CAPEX | 33.7 | 35.2 | 36.1 | 35.8 | 36.2 | 107.2 | 108.1 |
| % of Telco Revenues | 8.7% | 8.8% | 9.3% | 8.9% | 8.8% | 9.5% | 9.0% |
| Audiovisuals and Cinema Exhibition | 5.2 | 5.7 | 5.6 | 5.2 | 4.9 | 14.1 | 15.8 |
| Leasing Contracts & Other Contractual Rights | 10.4 | 21.2 | 13.5 | 15.4 | 22.1 | 66.1 | 51.0 |
| Spectrum licenses | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total Group CAPEX | 108.0 | 116.0 | 105.5 | 108.5 | 115.0 | 358.9 | 328.9 |
(1) CAPEX = Increase in Tangible and Intangible Fixed Assets, Contract Costs and Rights of Use Note: In 1Q24 Network and Baseline CAPEX have been restated to reflect a more accurate allocation
Table 11.
| Cash Flow (Millions of Euros) |
3Q23 | 4Q23 | 1Q24 | 2Q24 | 3Q24 | 9M23 | 9M24 |
|---|---|---|---|---|---|---|---|
| EBITDA AL | 171.7 | 134.5 | 155.3 | 156.5 | 181.6 | 468.7 | 493.4 |
| Total CAPEX Excluding Leasings & Other Contractual Rights | (97.7) | (94.8) | (91.9) | (93.1) | (92.9) | 292.8 | (277.9) |
| EBITDA AL - Total CAPEX Excluding Leasings & Other Contractual Rights |
74.0 | 39.7 | 63.4 | 63.4 | 88.7 | 175.9 | 215.5 |
| % of Revenues | 18.1% | 9.6% | 15.7% | 15.4% | 20.5% | 14.9% | 17.3% |
| Non-Cash Items Included in EBITDA AL - CAPEX and Change in Working Capital |
(3.8) | 11.5 | 5.3 | 4.8 | (11.6) | (6.7) | (1.5) |
| Operating Cash Flow | 70.2 | 51.2 | 68.7 | 68.2 | 77.1 | 169.1 | 214.0 |
| Interest Paid | (8.6) | (13.7) | (8.2) | (11.2) | (9.3) | (20.7) | (28.7) |
| Income Taxes Paid | (31.9) | (16.2) | (0.2) | (0.5) | 38.3 | (42.3) | 37.6 |
| Disposals | 0.2 | 0.8 | 0.1 | 57.4 | 0.1 | 0.7 | 57.6 |
| Other Cash Movements (1) | (0.8) | 14.6 | 18.8 | 21.5 | 11.2 | (13.0) | 51.6 |
| Spectrum licenses | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total Free Cash-Flow Before Dividends, Financial Investments and Own Shares Acquisition |
29.2 | 36.7 | 79.3 | 135.4 | 117.4 | 93.8 | 332.1 |
| Financial Investments | (0.6) | 0.0 | 0.1 | 0.2 | (1.4) | (0.6) | (1.1) |
| Acquisition of Own Shares | 0.0 | 0.0 | (3.2) | (1.0) | 0.0 | (5.2) | (4.3) |
| Dividends | 0.0 | 0.6 | 0.0 | (179.0) | 0.0 | (220.0) | (179.0) |
| Free Cash Flow | 28.6 | 37.3 | 76.2 | (44.4) | 116.0 | (132.0) | 147.8 |
| Debt Variation Through Financial Leasing, Accruals & Deferrals & Others |
(2.7) | 2.8 | (1.9) | 1.4 | (0.2) | (5.2) | (0.7) |
| Change in Net Financial Debt | 25.9 | 40.1 | 74.3 | (43.0) | 115.8 | (137.2) | 147.0 |
(1) Includes Cash Restructuring Payments and Other Cash Movements.
Table 12.
| Net Financial Debt (Millions of Euros) |
3Q23 | 4Q23 | 1Q24 | 2Q24 | 3Q24 | 9M23 | 9M24 |
|---|---|---|---|---|---|---|---|
| Short Term | 110.0 | 157.7 | 199.4 | 320.8 | 254.0 | 353.0 | 157.7 |
| Medium and Long Term | 1,031.4 | 949.8 | 828.8 | 751.4 | 719.5 | 654.5 | 949.8 |
| Total Debt | 1,141.4 | 1,107.5 | 1,028.2 | 1,072.1 | 973.5 | 1,007.4 | 1,107.5 |
| Cash and Short Term Investments | 11.9 | 18.2 | 13.1 | 14.0 | 31.1 | 15.2 | 18.2 |
| Net Financial Debt (1) | 1,129.4 | 1,089.3 | 1,015.1 | 1,058.1 | 942.3 | 992.2 | 1,089.3 |
| Net Financial Debt / EBITDA after lease payments (last 4 quarters) (2) | 1.92x | 1.81x | 1.66x | 1.71x | 1.50x | 1.81x | 1.81x |
| Leasings and Long Term Contracts | 633.8 | 626.5 | 620.1 | 627.0 | 628.7 | 630.2 | 626.5 |
| Net Debt | 1,763.3 | 1,715.8 | 1,635.2 | 1,685.1 | 1,571.0 | 1,622.4 | 1,715.8 |
| Net Debt / EBITDA (last 4 quarters) | 2.50x | 2.39x | 2.22x | 2.29x | 2.10x | 2.49x | 2.39x |
| Net Financial Gearing (3) | 65.1% | 63.3% | 60.6% | 63.6% | 60.8% | 60.7% | 63.3% |
(1) Net Financial Debt = Borrowings – Leasings - Cash
(2) EBITDA After Lease Payments = EBITDA - Lease Cash Payments (Capital & Interest) (3) Net Financial Gearing = Net Debt / (Net Debt + Total Shareholders' Equity).
Disclaimer
This presentation contains forward looking information, including statements which constitute forward looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and assumptions of our management and on information available to management only as of the date such statements were made. Forward-looking statements include: (a) information concerning strategy, possible or assumed future results of our operations, earnings, industry conditions, demand and pricing for our products and other aspects of our business, possible or future payment of dividends and share buyback program; and (b) statements that are preceded by, followed by or include the words "believes", "expects", "anticipates", "intends", "is confident", "plans", "estimates", "may", "might", "could", "would", and the negatives of such terms or similar expressions. These statements are not guarantees of future performance and are subject to factors, risks and uncertainties that could cause the assumptions and beliefs upon which the forwarding looking statements were based to substantially differ from the expectation predicted herein. These factors, risks and uncertainties include, but are not limited to, changes in demand for the company's services, technological changes, the effects of competition, telecommunications sector conditions, changes in regulation and economic conditions. Further, certain forward looking statements are based upon assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from the plans, strategy, objectives, expectations, estimates and intentions expressed or implied in such forward-looking statements. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to provide reasons why actual results may differ. You are cautioned not to place undue reliance on any forwardlooking statements. NOS is exempt from filing periodic reports with the United States Securities and Exchange Commission ("SEC") pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934, as amended. Under this exemption, NOS is required to post on its website English language translations of certain information that it has made or is required to make public in Portugal, has filed or is required to file with the regulated market Eurolist by Euronext Lisbon or has distributed or is required to distribute to its security holders. This document is not an offer to sell or a solicitation of an offer to buy any securities.
Enquiries
Chief Financial Officer: José Koch Ferreira
Phone: (+351) 21 799 88 19
Analysts/Investors: Maria João Carrapato
Phone: (+351) 21 782 47 25 / E-mail: [email protected]
Press: Margarida Nápoles
Phone: (+351) 21 782 48 07 / E-mail: [email protected]
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