Novabase SGPS

Earnings Release • Nov 27, 2015

REPORT AND ACCOUNTS - 3rd QUARTER 2015

I - Management Report

• 1. Key Indicators Evolution
• 2. Short Summary of the Activity
• 3. Stock Performance
• 4. Outlook 2015

II - Consolidated Financial Statements

III - Condensed Consolidated Accounts

Consolidated Results 9M15

Privileged Information November 5, 2015

Highlights:

Turnover: 169.3 M€ (158.6 M€ in 9M14)

EBITDA: 10.5 M€ (9.9 M€ in 9M14)

Net Profit: 4.4 M€ (2.0 M€ in 9M14)

Net Cash: 2.2 M€ (6.9 M€ in 12M14)

Message from the Chairman and CEO Luís Salvado

"The success of Novabase's internationalization strategy is confirmed by these results, in line with our goals for this year.

International business grew 25% and now accounts for 45% of total activity. In Europe, operations increased 55% representing half of the international activity. The services rose 12%, driven by a strong growth in Business Solutions outside Portugal.

EBITDA and Net Profit also showed a positive trend, despite the very challenging environment in the domestic market and the significant international expansion costs. These effects caused a greater pressure in the profitability of Business Solutions. Our cash position deteriorated 5 M€ since the beginning of the year.

Regardless of the adverse and particularly demanding conditions of some markets we operate in, including our domestic market, we are committed towards the accomplishment of our 2015 Guidance. In 2016, internationalization will continue to be our top priority adjusting our targets and resources to the potential and specific circumstances of each 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

Novabase SGPS, S.A. Public Company . Euronext code: NBA.AM . Registered in TRO of Lisbon and Corporate Tax Payer nº 502.280.182 . Share Capital: 15,700,697.00 € . Head Office: Av. D. João II, 34, 1998-031 Lisbon - PORTUGAL

1. Key Indicators Evolution

Turnover (M€)

EBITDA (M€)

EBITDA presents a 6% growth YoY and at the lower end of the range of the annual Guidance.

Earnings per share (EPS) in 9M15 reached 0.14 euros per share, registering an increase of 114% towards the EPS from the previous year of 0.07 euros per share.

Profitability improved as a result of the measures adopted in the end of 2014.

From EBITDA to Net Profit 9M15 Vs 9M14 (M€)

The Financial Results were negative in 0.4 M€, an increase of 1.5 M€, fundamentally based on the foreign exchange differences recorded compared to the same period of last year.

Results from discontinued operations are null in 9M15, compared to 0.2 M€ in 9M14. Note that, that gain reflected the completion of the closure process of the 'Mobility Solutions' area with a value lower than the one provisioned.

Non-controlling interests in 9M15 amounted to 0.4 M€, which compares to -0.9 M€ in 9M14. This variation is mainly due to evolution of the results of international subsidiaries.

Net cash

Novabase ended the 9M15 with 2.2 M€ in net cash, which compares to 6.9 M€ in the 12M14. However, considering the last 12 months, we observed a positive trend, with a generation of 3.0 M€.

On May 29, 2015, Novabase paid its shareholders a total amount of 0.9 M€ (0.03€/share). Additionally, on May 21, 2015, occurred the payment of 0.4 M€ to Non-controlling interests.

Cash use of 4.7 M€ in 9M15 includes the payment of dividends to Shareholders and Noncontrolling interests.

O r Clear progress in terms of international expansion and differentiation of the offerings.

Europe was the continent with greater expression in 9M15, representing half of international business.

New partnerships fall under Novabase's international expansion strategy.

2. Short Summary of the Activity

The first nine months of 2015 were marked by a significant increase in international activity, in line with the goals set for the year, and by the growth in services, which now accounts for approximately 3/4 of the total business.

Overall, compared to the same period of last year, Turnover increased by 7%, due to the significant 25% growth in the international business, which now accounts for 45% of the total business (in line with the annual goal of 40-45%). The services continued to rise and its weight is 72% of the total activity. Operationally, it was also registered an improvement, with EBITDA increasing by 6%, reflecting the measures implemented in late 2014 (restructuring aiming to improve competitiveness in the domestic operations and freeing resources to the effort of internationalization).

Given the Guidance, the results of the nine months of 2015 were in line on Turnover, and at the lower end of the EBITDA range.

To highlight that Novabase won several managed services contracts for the European Commission. These contracts, led by Novabase, are included in the framework agreement signed in consortium with another European company.

With regard to new partnerships, Novabase IMS is since the beginning of 2015, Gold partner of EMC, the Storage and Backup market leader in Portugal. In the second quarter, Novabase and OutSystems signed a strategic partnership to offer new joint products and services in the markets where they do business. Likewise, Novabase and SAP strengthened their partnership, to resell SAP products and solutions in Africa. Note that Novabase has been a recognized SAP partner for more than 15 years, and received certification as a SAP Channel Partner in 2013.

In the Venture Capital area, the Venture Capital Fund Novabase Capital Inovação e Internacionalização sold part of its investment in the company Feedzai, in a round of a venture capital investment, led by Oak HC/FT, a leading world venture capital firm in the area of fintech. Feedzai works in the area of data science and is one of the references of innovation in Novabase Capital' portfolio.

Also worthy of note, is the distinction of Novabase with the 2014 Innovation Partner award from IBM, at the National Business Partners' Conference, which acknowledges the work being done by our Financial Services area. Additionally, Novabase IMS has been recognized by Microsoft as Gold Partner, with the Cloud Productivity competency. The subsidiary Collab won the award for "Best Global Customer Satisfaction" Technology company in 2015, at the Portuguese Association of Contact Centers event. On the other hand, Novabase Mozambique has been named Microsoft's "Communications Partner of the Year" for the WECA (West, East and Central Africa) region.

Novabase's focus in innovation materialized in world reference events.

Additionally, Novabase launched MyWizzio in New York, at Finovate Fall 2015. Finovate conferences showcase the latest and the greatest in global fintech and perform high quality networking, gathering over 1000 fintech innovators and financial institutions from all over the world.

Finally, highlight that Novabase was honoured with an "Excellence at Work" award, in the category "large companies" with more than 1000 employees, which distinguish best practices in managing people at companies, by surveying employees.

The percentage breakdown of Turnover and EBITDA by the different businesses, in the 9M15, is as follows:

The services rendered increased by 12% in 9M15, in line with Novabase strategy to increase the added value of its offerings.

From the total Turnover, 75.7 M€ were generated outside Portugal, which compares to 60.5 M€ registered in 9M14.

Business outside Portugal generated in the Business Solutions area increased to 53% of the respective Turnover (40% in 9M14). In the IMS business area, the international business in 9M15 remained at 35% and in the Venture Capital area decreased to 62% (66% in 9M14).

Novabase had on average, in the 9M15, 2384 employees, which represents an increase of 3% compared to the 9M14 (2306).

Employee breakdown by business area, in 9M15, is as follows:

Average Number of Employees

Average number of employees increased due to international expansion and services growth. Worthy of note is the recruitment of 109 new university graduates through Novabase Academy program.

Average Number of Employees

by geography 9M14

Portugal 2118 Abroad 188

Average Number of Employees by geography 9M15

2.1. Business Solutions

Turnover Business Solutions (M€)

EBITDA Business Solutions (M€)

Despite the significant international growth (+54%), BS evolution reflects the costs associated to the international expansion strategy.

2.2. Infrastructures & Managed Services

IMS evolution reflects a change in the mix products / services, with services representing over 40% of the total.

EBITDA IMS (M€)

2.3. Venture Capital

3. Stock Performance

Novabase share price in 9M15 lost 3%, comparing to a 5% gain in the PSI20 Index and a 0.3% gain in the EuroStoxx Technology Index.

In this period, a dividend of 0.03€/share was distributed.

Also to be noted that, on May 2015, Novabase was chosen to be part of Tech 40, Euronext's international technology index whose purpose is to distinguish innovative listed European companies.

Novabase and the Market

Excluding the shareholder remuneration, Novabase share price would have registered a depreciation of 1.6%.

The evolution of Novabase share prices compared to other companies in the IT sector in Europe, in 9M15, was as follows:

Novabase and other TMT

Average upside of 54%, according to the analysts who cover Novabase.

The average price target disclosed by the analysts who cover Novabase is 3.32 euros.

Rotation in 9M15 represented 15% of the capital and 4.8 million shares were traded, similar to the values in 9M14 (rotation of 15% of the capital and 4.6 million shares traded).

Summary	3Q15	2Q15	1Q15	4Q14	3Q14
Minimum price (€)	2.100	2.310	2.170	2.090	2.421
Maximum price (€)	2.535	2.619	2.580	2.530	3.520
Volume weighted average price (€)	2.329	2.414	2.337	2.165	3.089
Closing price at the end of the Quarter (€)	2.148	2.500	2.360	2.214	2.421
Nr. of shares traded	573,164		2,848,400 1,344,259 1,324,176 1,417,140
Market cap in the last day (M€)	67.5	78.5	74.1	69.5	76.0

4. Outlook 2015

The results of the nine months reflect the success of Novabase' strategic options in internationalization and differentiation of its offerings. Turnover increased, strongly driven by the international business, which now accounts for 45% of total business. Likewise, the weight of services increased to 72%. EBITDA grew by 6%, as a result of the measures implemented in the end of 2014 for the improvement of operating competitiveness.

For the last quarter, we reaffirm the continuity of the strategic focus on international growth. Despite the uncertainty in some of the markets where we operate and the very challenging conditions in the domestic market, we are committed to compliance with the guidance for the FY15.

Consolidated Statement of Financial Position Consolidated Income Statement

as at 30 September 2015 for the period of 9 months ended 30 September 2015

	30.09.15	31.12.14		30.09.15	30.09.14	Var. %
	(Thousands of Euros)			(Thousands of Euros)
Assets			CONTINUING OPERATIONS
Tangible assets	5,466	5,570	Sale of goods	46,607	49,576
Intangible assets	28,901	30,663	Cost of goods sold	(41,148)	(44,862)
Financial investments	3,351	2,415
Held-to-maturity investments	3,004	-	Gross margin	5,459	4,714	15.8 %
Deferred income tax assets	15,363	17,228
Other non-current assets	8,410	7,770	Other income
			Services rendered	122,646	109,073
Total Non-Current Assets	64,495	63,646	Supplementary income and subsidies	450	228
			Other operating income	1,209	1,372
Inventories	8,177	4,943
Trade debtors and accrued income	109,559	103,821		124,305	110,673
Other debtors and prepaid expenses	15,305	17,242
Derivative financial instruments	61	88		129,764	115,387
Held-to-maturity investments	1,003	-
Cash and cash equivalents	17,934	20,714	Other expenses
			External supplies and services	(50,831)	(41,483)
Total Current Assets	152,039	146,808	Employee benefit expense	(67,582)	(65,185)
			Provisions reversal	517	2,766
Total Assets	216,534	210,454	Other operating expenses	(1,407)	(1,633)
Shareholders' Equity				(119,303)	(105,535)
Share capital	15,701	15,701
Treasury shares	(6)	(29)	Gross Net Profit (EBITDA)	10,461	9,852	6.2 %
Share premium	43,560	43,560	Depreciation and amortization	(3,905)	(4,405)
Reserves and retained earnings	21,802	24,493
Net profit	4,417	3,112	Operating Profit (EBIT)	6,556	5,447	20.4 %
			Financial results	(392)	(1,857)
Total Shareholders' Equity	85,474	86,837
			Net Profit before taxes (EBT)	6,164	3,590	71.7 %
Non-controlling interests	9,231	12,431	Income tax expense	(2,114)	(831)
			Net Profit from continuing operations	4,050	2,759	46.8 %
Total Equity	94,705	99,268
			DISCONTINUED OPERATIONS
Liabilities			Net Profit from discont. operations	-	219	-100.0 %
Bank borrowings	11,905	8,376
Finance lease liabilities	1,519	1,613	Non-controlling interests	367	(931)
Provisions	1,950	3,638
Other non-current liabilities	64	70	Attributable Net Profit	4,417	2,047	115.8 %
Total Non-Current Liabilities	15,438	13,697
Bank borrowings	7,882	5,561
Trade payables	26,962	21,849
Other creditors and accruals	40,302	39,092
Derivative financial instruments	91	1,323
Deferred income	31,154	29,664

Other information:

Total Current Liabilities	106,391	97,489
			Other information:
Total Liabilities	121,829	111,186	Turnover	169,253	158,649
			Gross margin from sales %	11.7 %	9.5 %
Total Equity and Liabilities	216,534	210,454	EBITDA margin	6.2 %	6.2 %
			EBT % on Turnover	3.6 %	2.3 %
Net Cash	2,180	6,903	Net profit % on Turnover	2.6 %	1.3 %

Total Liabilities	121,829	111,186	Turnover	169,253	158,649	6.7 %
			Gross margin from sales %	11.7 %	9.5 %
Total Equity and Liabilities	216,534	210,454	EBITDA margin	6.2 %	6.2 %
			EBT % on Turnover	3.6 %	2.3 %
Net Cash	2,180	6,903	Net profit % on Turnover	2.6 %	1.3 %

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

(Thousands of Euros)

	Business Solutions	IMS	Venture Capital	NOVABASE
Sale of goods	243	46,364	-	46,607
Cost of goods sold	(122)	(41,026)	-	(41,148)
Gross margin	121	5,338	-	5,459
Other income	-	-	-	-
Services rendered	87,205	32,345	3,096	122,646
Supplementary income and subsidies	358	80	12	450
Other operating income	1,097	112	-	1,209
	88,660	32,537	3,108	124,305
	- 88,781	- 37,875	- 3,108	- 129,764
Other expenses	-	-	-	-
External supplies and services	(30,501)	(18,799)	(1,531)	(50,831)
Employee benefit expense	(52,368)	(13,556)	(1,658)	(67,582)
(Provisions) / Provisions reversal	349	185	(17)	517
Other operating expenses	(879)	(503)	(25)	(1,407)
	- (83,399)	- (32,673)	- (3,231)	- (119,303)
Gross Net Profit (EBITDA)	- 5,382	- 5,202	- (123)	- 10,461
Depreciation and amortization	- (2,683)	- (1,008)	- (214)	- (3,905)
Operating Profit (EBIT)	2,699	4,194	(337)	6,556
Financial results	- 363	- (945)	- 190	- (392)
Net Profit / (Loss) before Taxes (EBT)	3,062	3,249	(147)	6,164
Income tax expense Non-controlling interests	- (1,122) 123	- (624) 223	- (368) 21	- (2,114) 367
Attributable Net Profit / (Loss)	2,063	2,848	(494)	4,417

Other information :

Turnover	87,448	78,709	3,096	169,253
EBITDA	5,382	5,202	(123)	10,461
EBITDA % on Turnover	6.2%	6.6%	-4.0%	6.2%
EBT % on Turnover	3.5%	4.1%	-4.7%	3.6%

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Condensed Consolidated Accounts 3rd quarter 2015

(Unaudited)

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

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INDEX

September 2015 ● Condensed Consolidated Interim Statement of Financial Position as at 30 September 2015 ● Condensed Consolidated Interim Statement of Profit and Loss and Other Comprehensive Income for the period of 9 months ended 30 September 2015 ● Condensed Consolidated Interim Statement of Changes in Equity for the period of 9 months ended 30 September 2015 ● Condensed Consolidated Interim Statement of Cash Flows for the period of 9 months ended 30 September 2015 Selected Notes to the Condensed Consolidated Interim Financial Statements for the period of 9 months ended 30 September ● 2015 Note 1. General information Note 2. Significant accounting policies Note 3. Critical accounting estimates and judgements Note 4. Seasonality Note 5. Segment information Note 6. Property, plant and equipment and intangible assets Note 7. Deferred income tax assets and liabilities Note 8. Trade and other receivables Note 9. Cash and cash equivalents Note 10. Reserves and retained earnings Note 11. Non-controlling interests Note 12. Borrowings Note 13. Provisions Note 14. Trade and other payables	5
	6
	7
	8
	9
	10
	10
	10
	10
	10
	11
	11
	12
	12
	13
	13
	13
	13
	14
	15
Note 15. Other gains/(losses) - net	15
Note 16. Finance income	15
Note 17. Finance costs	15
Note 18. Income tax expense	16
Note 19. Earnings per share	16
Note 20. Related-party transactions	16
Note 21. Contingencies	17
Note 22. Events after the reporting period	17
Note 23. Note added for translation	17

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CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the period of 9 months ended 30 September 2015

Condensed Consolidated Interim Statement of Financial Position as at 30 September 2015

		(Amounts expressed in thousands of Euros)
	Note	30.09.15	31.12.14
Assets
Non-Current Assets
Property, plant and equipment	6	5,466	5,570
Intangible assets	6	28,901	30,663
Investments in associates		610	871
Financial assets at fair value through profit or loss		2,741	1,544
Held-to-maturity investments		3,004	-
Deferred income tax assets	7	15,363	17,228
Other non-current assets	20	8,410	7,770
Total Non-Current Assets		64,495	63,646
Current Assets
Inventories		8,177	4,943
Trade and other receivables	8	88,427	91,645
Accrued income		27,877	22,047
Income tax receivable		2,567	2,223
Derivative financial instruments		61	88
Other current assets		5,993	5,148
Held-to-maturity investments Cash and cash equivalents	9	1,003 17,934	- 20,714
Total Current Assets		152,039	146,808
Total Assets		216,534	210,454
Equity
Share capital		15,701	15,701
Treasury shares		(6)	(29)
Share premium		43,560	43,560
Reserves and retained earnings	10	21,802	24,493
Profit for the period		4,417	3,112
Total Equity attributable to owners of the parent		85,474	86,837
Non-controlling interests	11	9,231	12,431
Total Equity		94,705	99,268
Liabilities
Non-Current Liabilities
Borrowings	12	13,424	9,989
Provisions	13	1,950	3,638
Other non-current liabilities		64	70
Total Non-Current Liabilities		15,438	13,697
Current Liabilities
Borrowings	12	8,902	6,418
Trade and other payables	14	66,236	59,117
Income tax payable		8	967
Derivative financial instruments		91	1,323
Deferred income and other current liabilities		31,154	29,664
Total Current Liabilities		106,391	97,489
Total Liabilities		121,829	111,186
Total Equity and Liabilities		216,534	210,454
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 2015

				(Amounts expressed in thousands of Euros)
		9 M *		3 M *
	Note	30.09.15	30.09.14	30.09.15	30.09.14
Continuing Operations
Sales	5	46,607	49,576	23,163	14,978
Services rendered	5	122,646	109,073	33,175	37,762
Cost of sales		(41,148)	(44,862)	(20,264)	(14,294)
External supplies and services		(50,831)	(41,483)	(11,767)	(14,507)
Employee benefit expense		(67,582)	(65,185)	(21,056)	(21,007)
Other gains/(losses) - net	15	769	2,733	(480)	507
Depreciation and amortisation		(3,905)	(4,405)	(1,251)	(1,468)
Operating Profit		6,556	5,447	1,520	1,971
Finance income	16	5,369	1,180	1,039	667
Finance costs	17	(5,550)	(2,973)	(1,061)	(2,047)
Share of loss of associates		(211)	(64)	(19)	(17)
Profit Before Income Tax		6,164	3,590	1,479	574
Income tax expense	18	(2,114)	(831)	(848)	(134)
Profit from continuing operations		4,050	2,759	631	440
Discontinued operations
Profit from discontinued operations	5	-	219	-	-
Profit for the period		4,050	2,978	631	440
Other comprehensive income for the period		-	-	-	-
Total comprehensive income for the period		4,050	2,978	631	440
Profit attributable to:
Owners of the parent		4,417	2,047	955	98
Non-controlling interests	11	(367)	931	(324)	342
		4,050	2,978	631	440
Total comprehensive income attributable to:
Owners of the parent		4,417	2,047	955	98
Non-controlling interests	11	(367)	931	(324)	342
		4,050	2,978	631	440
Earnings per share from continuing and discontinued operations
attributable to owners of the parent (Euros per share)
Basic earnings per share
From continuing operations	19	0.14 Euros	0.06 Euros	0.00 Euros	Zero Euros
From discontinued operations	19	Zero Euros	0.01 Euros	Zero Euros	Zero Euros
From profit for the period	19	0.14 Euros	0.07 Euros	0.00 Euros	Zero Euros
Diluted earnings per share
From continuing operations From discontinued operations	19 19	0.14 Euros	0.06 Euros	0.00 Euros	Zero Euros
From profit for the period	19	Zero Euros 0.14 Euros	0.01 Euros 0.07 Euros	Zero Euros 0.00 Euros	Zero Euros Zero 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 2015

(Amounts expressed in thousands of Euros)

					Attributable to owners of the parent
	Note	Share capital	Treasury shares	Share premium	Legal reserves	Stock reserves	Reserves options and retained -controlling earnings	Non interests	Total Equity
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	20	-	-	-	-	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
Balance at 1 January, 2015		15,701	(29)	43,560	3,140	154	24,311	12,431	99,268
Total comprehensive income for the period		-	-	-	-	-	4,417	(367)	4,050
Transactions with owners
Dividends	10, 11	-	-	-	-	-	(936)	(412)	(1,348)
Treasury shares movements		-	(141)	-	-	-	(525)	-	(666)
Share-based payments - stock options exercise		-	164	-	-	(170)	6	-	-
Share-based payments	20	-	-	-	-	16	-	-	16
Foreign currency translation reserve		-	-	-	-	-	(4,194)	(2,421)	(6,615)
Transactions with owners		-	23	-	-	(154)	(5,649)	(2,833)	(8,613)
Changes in ownership interests in subsidiaries that do not result in a loss of control
Transactions with non-controlling interests		-	-	-	-	-	-	-	-
Balance at 30 September, 2015		15,701	(6)	43,560	3,140	-	23,079	9,231	94,705

THE ACOUNTANT THE BOARD OF DIRECTORS

Condensed Consolidated Interim Statement of Cash Flows for the period of 9 months ended 30 September 2015

				(Amounts expressed in thousands of Euros)
		9 M *		3 M *
	Note	30.09.15	30.09.14	30.09.15	30.09.14
Cash flows from operating activities
Net Cash generated / (used) in operating activities		5,899	(11,382)	(306)	(1,975)
Cash flows from investing activities
Receipts:
Proceeds on disposal of subsidiaries and associates		1,265	2,079	-	-
Loan repayments received from associates		139	3,343	103	-
Disposal of financial assets held for trading / held-to-maturity		-	10,034	-	-
Proceeds on disposal of property, plant and equipment		204	13	198	9
Interest received		212	617	11	46
Payments:		1,820	16,086	312	55
Acquisition of subsidiaries and associates		(152)	(218)	(80)	(8)
Loans granted to associates		(2,000)	(2,902)	(1,000)	(1,492)
Settlement of derivatives		(2,364)	-	(458)	-
Purchases of financial assets held for trading / held-to-maturity		(4,468)	(5,019)	-	-
Purchases of property, plant and equipment		(1,169)	(782)	(374)	(211)
Purchases of intangible assets		(468)	(625)	(24)	(165)
		(10,621)	(9,546)	(1,936)	(1,876)
Net Cash generated / (used) in investing activities		(8,801)	6,540	(1,624)	(1,821)
Cash flows from financing activities
Receipts:
Proceeds from borrowings		13,200	3,100	4,200	3,000
Capital contribution by non-controlling interests (i)		-	35	-	-
		13,200	3,135	4,200	3,000
Payments:
Repayments of borrowings		(7,350)	(4,752)	(930)	(1,685)
Dividends paid	10, 11	(1,341)	(7,663)	-	(1,394)
Payment of finance lease liabilities Interest paid		(863) (799)	(1,002) (1,028)	(305) (234)	(340) (301)
Purchase of treasury shares		(778)	(392)	-	-
		(11,131)	(14,837)	(1,469)	(3,720)
Net Cash (used) / generated in financing activities		2,069	(11,702)	2,731	(720)
Cash, cash equivalents and bank overdrafts at beg. of period	9	20,714	32,942	18,432	20,911
Net increase / (decrease) of cash, cash equivalents and bank overdrafts		(833)	(16,544)	801	(4,516)
Effect from exchange rate fluctuations on cash held		(1,947)	214	(1,299)	217
Cash, cash equivalents and bank overdrafts at end of period	9	17,934	16,612	17,934	16,612
9 M * - period of 9 months ended

3 M * - period of 3 months ended

(i) 2014: NBMSIT, Sist. De Inf. E Tecnol., S.A. (Mozambique).

THE ACOUNTANT THE BOARD OF DIRECTORS

Selected Notes to the Condensed Consolidated Interim Financial Statements

for the period of 9 months ended 30 September 2015

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 October 29, 2015. 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 2015 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 2014, 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 2014, as described in those financial statements. A number of standards and interpretations became effective in this period and are not material for the Group.

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 2015.

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 2014.

4. Seasonality

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

5. Segment information

	Business		Venture		Discontinued
	Solutions	IMS	Capital	NOVABASE	Operations
At 30 September 2014
Total segment Sales and services rendered	124,093	96,169	4,124	224,386	-
Inter-segment Sales and services rendered	48,793	16,072	872	65,737	-
Sales and services rendered	75,300	80,097	3,252	158,649	-
Depreciation and amortisation	(3,179)	(1,012)	(214)	(4,405)	-
Operating profit/(loss)	3,893	1,545	9	5,447	219
Finance costs – net	(955)	(933)	95	(1,793)	-
Share of loss of associates	-	-	(64)	(64)	-
Income tax expense	(289)	(911)	369	(831)	-
Profit/(Loss) from operations	2,649	(299)	409	2,759	219
Other information:
(Provisions) / Provisions reversal	1,137	1,073	556	2,766	-
	Business		Venture

	Solutions	IMS	Capital	NOVABASE
At 30 September 2015
Total segment Sales and services rendered	132,680	89,443	3,587	225,710
Inter-segment Sales and services rendered	45,232	10,734	491	56,457
Sales and services rendered	87,448	78,709	3,096	169,253
Depreciation and amortisation	(2,683)	(1,008)	(214)	(3,905)
Operating profit/(loss)	2,699	4,194	(337)	6,556
Finance costs – net	363	(945)	401	(181)
Share of loss of associates	-	-	(211)	(211)
Income tax expense	(1,122)	(624)	(368)	(2,114)
Profit/(Loss) from operations	1,940	2,625	(515)	4,050
Other information:
(Provisions) / Provisions reversal	349	185	(17)	517

6. Property, plant and equipment and intangible assets

During the periods ended at 30 September 2015 and 30 September 2014, 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 2014	6,120	32,095
Acquisitions / increases	1,449	625
Write-offs / disposals	(93)	-
Exchange differences	28	-
Depreciation and amortisation	(1,785)	(2,620)
Net book value at 30 September 2014	5,719	30,100
Net book value at 1 January 2015	5,570	30,663
Acquisitions / increases	1,939	468
Write-offs / disposals	(338)	-
Exchange differences	(30)	-
Depreciation and amortisation	(1,675)	(2,230)
Net book value at 30 September 2015	5,466	28,901

7. Deferred income tax assets and liabilities

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

	30.09.15	31.12.14
Balance at 1 January	17,228	14,901
Exchange differences	(448)	(1)
Profit or loss charge	(1,417)	2,328
Balance at the end of the period	15,363	17,228
The movement in the deferred income tax liabilities was as follows:
	30.09.15	31.12.14
Balance at 1 January	-	100
Profit or loss charge	-	(100)
Balance at the end of the period	-	-

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 2014	703	11,454	2,744	14,901
Profit or loss charge Exchange differences	1,669 (1)	1,116 -	(457) -	2,328 (1)
Balance at 31 December 2014	2,371	12,570	2,287	17,228
Profit or loss charge Exchange differences	204 (448)	(1,053) -	(568) -	(1,417) (448)
Balance at 30 September 2015	2,127	11,517	1,719	15,363

8. Trade and other receivables

	30.09.15	31.12.14
Trade receivables	87,219	86,262
Allowance for impairment of trade receivables	(5,537)	(4,488)
	81,682	81,774
Prepayments to suppliers	1,142	684
Employees	316	640
Value added tax	2,282	4,725
Receivables from related parties (note 20)	15	799
Financial investments disposal	67	67
Receivables from financed projects	1,830	2,889
Other receivables	4,399	4,126
Allowance for impairment of other receivables	(3,306)	(4,059)
	6,745	9,871
	88,427	91,645

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

	Trade receivables		Other receivables		Total
	30.09.15	31.12.14	30.09.15	31.12.14	30.09.15	31.12.14
Balance at 1 January	4,488	4,434	4,059	3,383	8,547	7,817
Impairment	1,937	577	-	681	1,937	1,258
Impairment reversal	(850)	(144)	(716)	(52)	(1,566)	(196)
Exchange differences	(38)	(23)	(37)	47	(75)	24
Write-offs	-	(356)	-	-	-	(356)
Balance at the end of the period	5,537	4,488	3,306	4,059	8,843	8,547

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:

	30.09.15	31.12.14
- Cash - Short term bank deposits	29 17,905	15 20,699
Cash and cash equivalents Caixa e equivalentes a caixa	17,934	20,714
- Overdrafts	-	-
	17,934	20,714

10. Reserves and retained earnings

In the Annual General Meeting of Shareholders held on April 2015, it was approved the payment to shareholders of an amount of EUR 942 thousand, corresponding to 0.03 Euros per share. The payment occurred in May, 2015.

	30.09.15	30.09.14
Payment to shareholders Remuneration of the treasury shares held by the Company	936 6	6,269 11
	942	6,280

11. Non-controlling interests

	30.09.15	31.12.14
Balance at 1 January	12,431	11,522
(*) Change in consolidation universe	-	16
(**) Distribution of dividends to non-controlling interests	(412)	(1,394)
Foreign currency translation differences for foreign operations	(2,421)	590
Profit/(loss) attributable to non-controlling interests	(367)	1,697
Balance at the end of the period	9,231	12,431

(*) In 2014, Celfocus Turquia was established.

(**) In 2015, NBASIT (Angola) distributed dividends to its shareholders, from which EUR 6 thousand are still to be settled - see note 14. In 2014, Celfocus distributed dividends to its shareholders.

12. Borrowings

	30.09.15	31.12.14
Non-current
Bank borrowings	11,905	8,376
Finance lease liabilities	1,519	1,613
	13,424	9,989
Current
Bank borrowings	7,882	5,561
Finance lease liabilities	1,020	857
	8,902	6,418
Total borrowings	22,326	16,407

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

	30.09.15	31.12.14
6 months or less	6,064	3,203
6 to 12 months	1,818	2,358
	7,882	5,561

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

	30.09.15	31.12.14
Between 1 and 2 years	4,213	4,556
Between 2 and 5 years	6,692	3,820
Over 5 years	1,000	-
	11,905	8,376
The effective interest rates at the reporting date were as follows:
	30.09.15	31.12.14
Bank borrowings	3.562%	5.007%
Gross finance lease liabilities – minimum lease payments:
	30.09.15	31.12.14
No later than 1 year	1,317	1,184
Between 1 and 5 years	1,881	2,059
	3,198	3,243
Future finance charges on finance leases	(659)	(773)
Present value of finance lease liabilities	2,539	2,470
The present value of finance lease liabilities is analysed as follows:
	30.09.15	31.12.14
No later than 1 year	1,020	857
Between 1 and 5 years	1,519	1,613
	2,539	2,470

13. Provisions

Movements in provisions are analysed as follows:

		Legal		Other Risks
	Warranties	Claims	Restructuring and Charges		Total
Balance at 1 January 2014	645	712	-	3,029	4,386
Additional provisions	108	-	1,403	756	2,267
Reversals / utilisations	(587)	(647)	-	(1,781)	(3,015)
Balance at 31 December 2014	166	65	1,403	2,004	3,638
Additional provisions	233	-	-	262	495
Reversals / utilisations	(158)	(15)	(792)	(1,218)	(2,183)
Balance at 30 September 2015	241	50	611	1,048	1,950

14. Trade and other payables

	30.09.15	31.12.14
Trade payables	25,942	20,992
Remunerations, vacations and vacation and Christmas subsidies	10,541	8,939
Bonus	6,885	7,843
Ongoing projects	5,645	4,837
Value added tax	5,618	5,878
Social security contributions	1,322	2,040
Income tax withholding	1,112	1,680
Amount to be paid to non-controlling interests - see note 11	6	-
Employees	120	320
Prepayments from trade receivables	150	820
Acquisition of financial interest in Binómio	6	-
Acquisition of financial interest in FCR Istart I	-	72
Other accrued expenses	8,736	5,529
Other payables	153	167
	66,236	59,117

15. Other gains/(losses) - net

	30.09.15	30.09.14
Impairment and impairment reversal of trade and other receivables	(371)	(7)
Impairment and impairment reversal of inventories	(8)	114
Warranties provision	(75)	553
Legal claims provision	15	457
Provisions for other risks and charges	956	1,649
Other operating income and expense	252	(33)
	769	2,733

16. Finance income

	30.09.15	30.09.14
Interest received	344	243
Positive exchange differences	2,901	848
Fair value of financial assets adjustment	1,014	-
Disposal of financial assets (*)	1,110	-
Other financial gains	-	89
	5,369	1,180

(*) Partial sale of the investment in Feedzai, Lda.

17. Finance costs

	30.09.15	30.09.14
Interest expenses
- Borrowings	(529)	(709)
- Finance lease liabilities	(243)	(269)
- Other interest	(51)	(25)
Bank guarantees charges	(126)	(106)
Bank services	(157)	(148)
Negative exchange differences	(2,611)	(1,704)
Fair value of financial assets adjustment	(1,833)	-
Other financial costs	-	(12)
	(5,550)	(2,973)

18. 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:

	30.09.15	30.09.14
Profit before income tax	6,164	3,590
Income tax expense at nominal rate (23% in 2014, 21% in 2015)	1,294	826
Tax benefit on the net creation of employment for young and long term unemployed people	(207)	(257)
Provisions and amortisations not considered for tax purposes	-	48
Recognition of tax on the events of previous years	(34)	(63)
Associates' results reported net of tax	44	15
Autonomous taxation	662	736
Losses in companies where no deferred tax is recognised	33	234
Expenses not deductible for tax purposes	(211)	(312)
Differential tax rate on companies located abroad	(538)	130
Research & Development tax benefit	975	(922)
Municipal surcharge and State surcharge	113	147
Impairment of Special Payment on Account, tax losses and withholding taxes	(17)	249
Income tax expense	2,114	831

19. Earnings per share

	30.09.15	30.09.14
Weighted average number of ordinary shares in issue	31,337,967	31,103,211
Stock options adjustment	-	273,392
Adjusted weighted average number of ordinary shares in issue	31,337,967	31,376,603
Profit attributable to owners of the parent	4,417	2,047
Basic earnings per share (Euros per share)	0.14 Euros	0.07 Euros
Diluted earnings per share (Euros per share)	0.14 Euros	0.07 Euros
Profit from continuing operations attributable to owners of the parent	4,417	1,828
Basic earnings per share (Euros per share)	0.14 Euros	0.06 Euros
Diluted earnings per share (Euros per share)	0.14 Euros	0.06 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

20. 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

	30.09.15	30.09.14
Wages and other short-term employee benefits Stock options granted	3,030 16	3,021 79
	3,046	3,100

ii) Other balances with related parties

	Non-current		Current (note 8)
	30.09.15	31.12.14	30.09.15	31.12.14
Loan to Globaleda, S.A.	-	-	-	784
Loan to Powergrid, Lda	2,050	2,050	-	-
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	2,410	1,410	-	-
Loan to Livian Technologies, Lda	2,492	1,492	-	-
Loans to other shareholders	-	-	15	15
	9,770	7,770	15	799
Provisions for loans granted to related parties	(1,360)	-	-	-
	8,410	7,770	15	799

21. Contingencies

Given the disclosed in the annual financial statements for the year 2014, the significant changes in the judicial processes are the following:

The company Qimonda Portugal S.A. has filed for insolvency, whereby NBO has claimed credits in the amount of approximately EUR 980 thousand corresponding to the unpaid invoices and compensation for breach of prior notice for termination of contract. General Creditors Assembly has voted the Recovery Plan for the company and process is in place to start making payments to creditors. Of the total amount claimed, Quimonda has paid a total amount of EUR 487 thousand in accordance to the amounts accepted and payment terms agreed upon in creditors assembly.

22. Events after the reporting period

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

23. 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.