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Sonaecom SGPS
Interim / Quarterly Report • Aug 31, 2021
1921_ir_2021-08-31_73fa55fa-e361-4cc5-ad60-2de22c1f30d4.pdf
Interim / Quarterly Report
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SONAECOM
MANAGEMENT REPORT & ACCOUNTS
1421
The consolidated financial in this report is bosed on unaudited financial statements, web e with the with with with with with with Union.
Table of contents
| I MANAGEMENT REPORT | |
|---|---|
| 1. Main Highlights | 3 |
| 2. Sonaecom Consolidated Results | 3 |
| 2.1 Telecommunications | 5 |
| 2.2 Technology | б |
| 2.3 Media | 8 |
| 3. Subsequent Events | 9 |
| 4. Appendix | 10 |
| 5. Qualified Shareholdings | 12 |
| 6. Statement of the Board of Directors | 13 |
| II FINANCIAL STATEMENTS | |
| 7. Financial Information | 15 |
| 7.1. Sonaecom condensed consolidated financial statements | 15 |
| 7.2. Notes to the condensed consolidated financial statements of Sonaecom | 20 |
I - MANAGEMENT REPORT
MANAGEMENT REPORT & ACCOUNTS 2021
1. Main Highlights
Consolidated Turnover of 35.7 million euros increasing 8.6% y.o.y.
Positive EBITDA evolution mainly driven by the capital sale of the stake at Arctic Wolf and by equity
results from ZOPT
NOS with strong Telco operating performance and presenting the 1st quarter of Consolidated Revenues growth since 4Q19
Technology area with solid growth and profitability improvements
∠. Sonaecom Consolidated Results
Introductory notes:
COVID 19
On 2021 January 7th, following the worsening pandemic situation it was formally declared a new state of emergency and a new national lockdown which marked almost the full quarter in Portugal. The evolution of cases numbers worldwide continued to trend up in 2Q with Europe and USA being regions strongly affected by the second wave. Since April with the vaccination process speeding-up in Europe and USA, ve have been experiencing a progressive deconfinement and reopening of economy.
The Board of Directors continued to follow in detail and with great concern all the pandemic developments, following of the competent international entities, namely the World Heath Organization and the European Centre , as well as the Portuguese Directorate-General of Health.
Aligned with the Group's Risk Management Policies, contingency plans with correspondent mitigation were constantly updated and actioned across all companies and departments, allowing to keep our employees protected and to face with the less loss of value.
The financial and operational impacts continued to be different across segments:
- The technology area continued to prove a strong resilience with no relevant impacts from pandemic situation across the globe
- · At NOS, the impacts were felt particularly in roaming and in the Cinemas and Audiovisuals activity with the closing of all cinemas from 15 January to 19 April, which inevitably impacted consolidated revenues and EBITDA evolution. However, and despite all pandemic restrictions in Portugal, 2Q benefitted from the respen of cinema theatres, with encouraging attendance, and from a slight roaming recovery.
- Publico's activity faced a significant decrease in advity during the 1Q but its digital strategy coupled with an advertising market recover resulted in a 2Q growing in almost all revenue lines.
Overal, the macroeconomic context remains uncertain and intinsically dependent on the enited, on governmental intervention to comply with vaccination plans, as well as on the support provided to the overal economy.
However, given the company's capital structure, with a significant amount in cash and a low amount of remunerated debt, no material changes in the Company's liquidity are expected. Furthermore, Sonaecom will continue to implement all measures deemed appropriate to minimize their impacts, in line recommendation of the competent entities and in the best interest of all our stakeholders.
RESTATEMENTS
Discontinued Operations
In the 1H21, and following the agreement signed with Claranet Portugal, S.A. to sell the entire share capital and voting rights of Bizdirect, which was announced on June 1st, Bizdirect was considered a discontinued operation.
The 2021 Bizdirect balance figures were classified as held for sale and all comparative periods were results as a discontinued operation in the profit and loss statement.
Minority Stakes
At the end of 2020, Sonae IM reassessed the accounting of its minority stakes. Given its active investor approach, and the existence of significant influence in the majority of those stakes, Sonae IM applied by JAS28, and elected to measure those investments at fair value through profit or loss in accordance with IFRS9.
Until 3Q20, the referred investments were recorded at fair comprehensive income (equity). The 2020 quarters presented in this document were restated to include this reclassification.
Telecommunications area, which includes a 50% stake in ZDPT - consolidated through the equity method - which owns 52.15% stake in NDS, despite being strongly impacted by COVID 19 pandemic, namely with a significant reduction of revenues from roaming and from Cinema & Audiovisuals business, continued to present a solid operating performance in Telco segment.
2Q21 benefitted from the reopen of cinema theatres on April 19th (chosed since January 15th), with encouraging attendance, and from a sight roaming recovery, which coupled with the solid performance of telect in the first quarter of consolidated revenues gowth since 4Q19.
Strategic partnerships and the launch of innovative IT, data and cloud solutions continue to drive growth in BZB, as the partner of choice for Portuguese companies and public entities in their path toward digital transformation.
Investment levels continued to reflect the FttH deployment and the preparation of mobile network for 5G launch, frequencies are attributed. 55 spectrum auction is still ongoing with limited visibility on timing due to the framework.
During 1H21, and with regard to portfolio activity, Technology area: (i) sold part of its stake in Artic Wolf for a gross amount of £56.4 M and with a gross capital gain of around €12.3 M; (ii) entered in the share capital of Selfort, that measures the effectiveness of online and offine marketing investments and Portainer management platforms globally, and iii) together with the remaining shareholders, reached an agreement with Claranet Portugal, S.A. to sell the entire share capital and voting rights of Bizdirect.
1H21 was also marked by relevant achievements indirectly held through Armilar funds. i) Feedzai, that announced a series D round with an implicit valuation that turned the company into an unicorn; and ii) Outsystems announced a 150 million dollars capital raise, co-led by Abdiel Capital at an underlying valuation of 9.5 billion dollars. Still regarding Arctic Wolf, the company recently announced a financing round of \$150 M by existing and new investors, at an underlying valuation of \$4.3bn. The rounds of Outsystems and Arctic Wolf are a good sign of the companies' strong evolution and potential.
Turnover
Consolidated turnover in 1H21 reached 35.7 million euros, increasing 8.6%, when compared to 1H2O. This positive evolution was driven by both Media and Technology area, the latter presenting a growth of 10.8% y.o.y.
Operating costs
Operating costs amounted to 40.7 million euros, 8.8% above 1H2O. Employee benefits expenses increased costs increased 9.6% to 7.5 million euros, mainly driver cost of goods sold, aligned with the higher level of sales. Other expenses increased 9.2%, mainly explained by the higher level of Outsourcing costs.
EBITDA
Total EBITDA increasing from 7.3 million euros, mainly explained by the increase on equity results and non-recurrent itens, but also by Underlying EBITDA that presented relevant improvements, especially at Cybersecurity companies. In 1H21, the non-recurrent itens stood at 10.8 million euros, mainly driven by the capital gain generated with Arctic Wolf sale. The equity results, mostly driven by ZDPT contribution which, in turn, depends on NOS net income evolution increased to 17.6 million euros.
Net results
Sonaecom's EBIT increased to 22.3 million euros in 1H2O, explained by the higher level of EBITDA and the lower level of depreciations.
Sonaecom's earnings before tax (EBT) increased from 2.5 million euros, driven by the higher EBIT and financial results.
Indirect results reached 19.0 million euros with negative 2.1 million euros in 1H2O, positively impacted by portfolio fair value adjustments, specially at Armilar Venture Funds, mainly related with Feedzai and Safetypay.
Net results group share stood at 39.9 million euros, above the 3.0 million euros presented in 1H2O.
Operating CAPEX
Sonaecom's operating CAPEX decreased to 1.9 million euros, reaching 5.4% of tumover, 2.0 p.p. below 1H2O. Excluding the IFRS 16 impact, operating CAPEX would be 1.7 million euros, 0.6 million euros below 1H2O.
Capital Structure
The net cash position stood at 204.3 million euros, and excluding the decrease generated by the amount of liquidity already allocated to assets held for sale (Bizdirect), stood 2.4 million euros below the level of December 2020. Excluding leasings, net cash at 21.3 million euros, 3.9 million below December 2020 (excluding the impact of cash allocated to assets held for sale), mainly driven by 31.5 million euros of positive net inflow from investment activity, the 29.7 million euros of dividends distribution and the negative cash-flow, financials and taxes of 3.9 million euros.
2.1 Telecommunications
NOS operating revenues were 678.5 million euros in 1H21, increasing 1.8% y.o.y..
EBITDA reached 306.6 million euros, decreasing 1.3% when compared to 1H2O and representing a 45.2% EBITDA margin. CAPEX excluding leasings amounted to 200.1 million euros in 1H21, an increase of 16.5% y.o.y. As a consequence of EBITDA and CAPEX evolution, EBITDA- CAPEX decreased 23.3%.
At the end of 1H21, total net debt including leasings and long-term contracts (according to IFRS 16) amounted to 1,446.5 million euros. Net Financial Debt/EBITDA after lease payments (last 4 quarters) now stands at 1.8x EBITDA, and with an average maturity of 2.6 years.
NOS published its 1H21 results on 21st July 2021, which are available at www.nos.pt.
During 1H21, NOS share price increased 3.4% from €2.858 to €2.956, whilst PSI20 increased by 2.8%.
Operational Indicators
| Million euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| Operational Indicators ('000) | 2020 | 2021 | A 21/20 | 1021 | q.o.q. | 1H2O | 1H21 | Δ 21/20 |
| Total RGUs | 9.747.4 | 10.000.2 | 2.6% | 9.902.2 | 1.0% - | 9.747.4 - - - | 10.000.2 | 2.6% |
| Convergent + Integrated RGUs | 4,823.9 | 5,060.5 | 4.9% | 5.002.0 | 1.2% - | 4.823.9 | 5.060.5 | 4.9% |
Financial indicators
| Million euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| NOS HIGHLIGHTS | 2020 | 2021 | Δ 21/20 | 1021 | q.o.q. | 1H2O | 1H21 | Δ 21/20 |
| Operating Revenues | 321.3 | 341.0 | 6.2% | 337.4 | 11% | 666.6 | 678.5 | 18% |
| EBITDA | 157.9 | 154.4 | -2.2% | 152.2 | 15% | 310.6 | 306.6 | -1.3% |
| EBITDA margin (%) | 49.1% | 45.3% | -3.9pp | 45.1% | 0.2pp | 46.6% | 45.2% | -1.4pp |
| Net Income | 45.3 | 43.3 | -4.4% | 30.5 | 41.8% | 35.0 | 73.9 | 111.2% |
| CAPEX excluding Leasings | 83.5 | 104.1 | 24.7% | 96.0 | 8.5% | 171.8 | 200.1 | 16.5% |
| EBITDA-CAPEX excluding Leasings | 74.3 | 50.3 | -32.4% | 56.2 | -10.6% | 138.8 | 106.5 | -23.3% |
2.2 Technology
The Technology area aims to build and manage a portfolio of technology businesses around retail and telecommunications, as well as cubersecurity, with an international scale. This area currently comprises, Bright Pixel, Vector I and Bright lnnovation funds, four controlled companies – S21Security Group, Bizdirect and hovretail- that generated more than 50% of its revenues outside the Portuguese market with 72.7% out of the total 642 employees based abroad.
Controlled Companies
Maxive Cybersecurity is the strategic holding company that combines two of the leading cybers in Europe and is positioned as one of the largest MSSPs (Managed Security Services both in terms of business and specialized personnel offering its customers a wide set of services and capabilities from both S21sec and Excellium:
S21Sec is a reference multinational MSSP, focused on the delivery of cyber security services and development of proprietary supporting technologies, with a global customer base, leveraging its teams in Spain, Portugal and Mexico. Since June 2018, with the integration of Nextel, S22Sec is the most relevant "pure player" (company specializing exclusively in the cybersecurity sector) in Spain and Portugal in terms of turnover of cubersecurity experts.
Excellium is a market-leading managed security services provider from Luxembourg, with presence in Belgium and counting with more than 100 experts.
The significant European scale and cross-country presence of this group of cybersecurity companies will be key to address the increasingly challenging needs of all organizations and specially the requirements of those and multi-national companies operating in the European space, while ensuring agile and fast response from specialized teams close to the customer.
Bizdirect is a technology company specialization, consulting and management of corporate software licensing contracts and Microsoft solutions integration.
The cloud business unit continued to improve its presence on helping customers in digital transformation and the soutions business unit achieved important new customer references. Bizdiect Competence Center, in Viseu, contributed to the international revenues.
InovRetail is a retail innovation company that provides data science solutions and digital tools that deliver quantifiable insights and actionable recommendations with direct and sustainable impact on retrics. The company's main product is the Staff Empowerment Solution, a SaaS based solution that help retailers in three key areas like Sales Performance Enhancement; Customer Experience Optimisation and Advanced Planning & Scheduling.
Minority Stakes (non-exhaustive)
Armilar Venture Funds are the 3 Venture Capital funds in which Sonae IM owns participation units acquired to Novo Banco. With this transaction, concluded in December 2015, Sonae IM reinforced its portfolio with sizeable stakes in leading edge companies such as Outsystems and Feedzai, both consistently presenting meaningful and sustainable levels of growth.
Arctic Wolf, a US based company, is a global pioneer in the SOC-as-a-Service market with cutting-edge managed detection and response (MDR), which provides a unique combination of technology and services for clients to quickly detect and contain threats. Sonae M, jointly with US technology investors Lightspeed Venture Partners and Redpoint, entered in the company's cap table in 2017 in a series B round. During 2018, the Company closed a \$45M series C round and, at the end of 2019, the Company launched a \$60M Series D round. In October 2020, the company announced it has raised \$200 million in Series E funding at a valuation of \$1.3 billion. The funding round was led by Viking Global lnvestors, with additional participation from DTCP and existing investors. Sonae IM participated in all rounds, reinforcing its stake.
Stylesage is a strategic analytics SaaS platform that helps fashion, home and beauty retailers and brands with critical pre, in and post season decisions globally. Every day, StyleSage pulls product data from competitors' commerce websites from with groundbreaking technology in machine and visual recognition, StyleSage cleans, organizes, and analyzes the massive amounts of collected data into a cloud-based dashboard that empowers brands informed, data-driven decisions in areas such line planning, markdown optimization, and global expansion.
Ometria is a London based Al powered custom with the vision to become the central hub that powers all the communication between retailers and their customers was done by Sonae M in the Series A round, alongside several strategic investors (including Summit Action, the US VC fund of the Summit Series) and was recently reinforced during series Bround.
CB4 is a company based in Israel that provides a patented Al software solution for brick and mortar critical operational issues at store, product level. The investment was part of a series B \$16M round, led by joining, Existing investors Sequoia Capital and Pereg Ventures also participated in the round.
Reblaze is an Israeli company that proprietary security technologies in a unified platform, shielding assets from threats found on the Internet. The company raised a Series A round in which Sonae IM led jointly with JAL Ventures and Data Point Capital.
Visenze is a Singapore-based company that delivers intelligent image recognition solutions that shorten as consumers search and discover on the visual web. Retailers use ViSenze to convert images into immediate improving conversion rates. Media companies use ViSenze to turn an engagement opportunity, driving incremental revenue. Sonae IM co-led, with Gobi Partners, a \$20M Series C round that will enable the artificial intelligence company to further invest in its penetration among smartphone manufacturers, as well as with consumer and social communications.
Daisy Intelligence is an Al-powered platform for retail merchandising tromotional product and price mixes for dramatically improved business results. Sonae IM partners invested in a C\$ 10M (circa E7M) series A round.
Nextail is a Spanish company that has developed a cloud-based platficial intelligence and prescriptive analytics to upgrade retailers' inventory management processes and store operations. The company raised a \$10.0 million Series A round led by London and Amsterdam based venture capital firm KEEN Venture Partners LLP ("KEEN"), together with Sonae M and Capital. The new financing is being used to accelerate product development and double the size of the team, as it grows internationally.
Sixgill is a market leader in deep and dark web cycer the 500 companies, financial institutions, governments, and law enforcement agencies metworks and reputations from cuperthreats that lurk in the deep, dark and surface webs. The advanced cuber threat intelligence platform automates all phases of the intelligence cycle — collection, and usis and dissemination of data — providing organization and actionable insights to protect their various assets in the ever-evolving cyber threatscape. Sixgill raised S15M in a second round led by Sonae M and REV Venture Partners with participation by Qur Crowd. Previous investors Elron and Terra Venture Partners also participate in the round.
Case on IT is a Spanish company that has developed Medux, a machine learning solution for the measurement, prediction and analysis of landline, mobile and television services quality. Medus measures in markets that collectively seve over 600 million users worldwide. The company raised a Series B round of international fund with Sonae IM.
CiValue is an Israeli company with offices in New York, is a disruptive provider of cloud-based Precision Marketing and Supplier Advertising Platforms for Retailers. Sonae IM, coupled with Nielsen, led a \$6M Series A investment.
Cellwize is a leading provider of Mobile Network Automation solutions for telco, based in Israel. Cellwize offers modular solutions for an agile adoption of 'zero-touch' network automation capabilities on top of a virtualized service orchestration . It supports network operations, especially given the increase in network driven by 55 adoption. Sonae IM invested in a round of \$15M led by Deutsche Telekom Capital Partners. In November 2020, the company announced a \$32 million Series B funding round led by Intel Capital and Qualcomm Ventures LC with participation from Verizon Ventures, Samsung Next, and existing shareholders.
lriusRisk (previously named Continuum Security) is a Spanish based company with an appication to address vulnerabilities early in the development process. In order to realise their international growth plans, the company has raised an investment round of 1.5 million euros, which was led by Swanlaab Venture Factory and joined by ME Venture Capital and Sonae M. In September 2020, the company raised a series A round of 6.7 million dollars participated by Paladin, 360 CP, Swanlaab IM.
Iscrambler is a Portuguese startup that develops a security solution to procect Web and Mobile Applications (lavascript code). The company raised a 2.3 million dollars in a series A financing round that was led by Sonae IM with the co-inves.
Probe.ly, having started as an internal project of Bright Pixel, won the Caixo Copital Empreender Award (Minimum Valuable Product) to an independent Web Application Security startup.
Sales Layer is a Spanish based company with a cloud-based PIM) platform, helping brands and retailers to transform their catalogs into a digital, enriched and multichannel control center. Sonae IM recently led its series A round.
Deepfence is a leading US-based cloud-native workload protection platform that aims to platform for kubernetes, virtual machines and serverless workloads. Deepfence ensures business continuity in the face the and disupting sophisticated attacks targeting cloud native technologies, the "glue" that keeps the connected. Deepfence raised \$9.5 million in Series A financing led by AllegisCyber, with participation from Sonae IM, and existing investor Chiratae Ventures.
Weaveworks is a US company that helps teams to adopt cloud native infrastructure and applications quickly, reliably and at scale. Weaveworks announced a \$36.65 million Series C funding round led by some of the world's leading public cloud and telecommunications companies, including first-time investors AMS), Ericsson, Drange Ventures, Sonae IM and Telekom Investment Pool (TIP). The round also included follow-on investments from Accel, GV, and Redline Capital.
Sellforte, based in Helsinki, Finland, is a SaaS platform for Retailers, which uses proprietary data science and Al to measure the effectiveness of online and offline marketing investments.
Portainer.io, based in New Zealand, is one of the most popular container management platforms globally. Portainer's universal tool unleashes the power of containerized applications for everyone.
Financial indicators
| Million euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| TECHNOLOGY AREA - INCOME STATEMENT | 2020 R | 2021 | മ 21/20 | 1Q21 R | q.o.q. | 1H2O R | 1H21 | മ 21/20 |
| Turnover | 13.4 | 15.1 | 12.2% | 13.6 | 11.0% | 25.9 | 28.7 | 10.8% |
| Services Rendered | ale | 11.0 | 14.2% | 10.3 | 6.8% | 19.3 | 21.3 | 10.3% |
| Sales | 3.8 | 4 1 | 7.1% | 3.3 | 24.1% | 6.6 | 73 | 12.0% |
| Other Income | 0.5 | 03 | -50.8% | 0.4 | -26.6% | 0.8 | 0.6 | -21.2% |
| Operating Costs | 14.1 | 17.7 | 25.3% | 14.0 | 25.9% | 28.7 | 31.7 | 10.6% |
| Employee Benefits Expenses | 7.7 | ਰ 5 | 22.7% | 7.8 | 21.5% | 15.9 | 17.3 | 8.6% |
| Commercial Costs 11) | 3.3 | 3.6 | 10.6% | 2.9 | 24.5% | 5.8 | 6.5 | 12.4% |
| Other Expenses (2) | 3.1 | 4.6 | 47.0% | 3.3 | 37.3% | 7.0 | 7.9 | 13.7% |
| Underlying EBITDAS) | 0.1 | -1.1 | -0.1 | -1.6 | -1.2 | 23.8% | ||
| Underlying EBITDA Margin (%) | 0.9% | -7.6% | -8.5pp | -0.7% | -6.9pp | -6.3% | -4.3% | 2.0pp |
| Operating CAPEX(4) | 0.9 | 0.8 | -14.5% | 0.9 | -12.7% | 2.0 | 1.7 | -12.5% |
| Operating CAPEX as % of Turnover | 7.0% | 5.3% | -1.7pp | 6.8% | -1.4pp | 7.6% | 6.0% | -1.6pp |
| Underlying EBITDA - Operating CAPEX | -0.8 | -1.9 | -138.2% | -1.0 | -915% | -3.6 | -3.0 | 17.6% |
| Total CAPEX | 1.5 | 2.7 | 71.8% | 3.8 | -29.6% | 6.3 | 6.4 | 1.6% |
R - Restated according with introductory notes).) Commercial Corts = Cotsouring Services + G&A + Provisions + others; (3) hcludes the businesses fully consolidated at Technology area; (4) Operating CAPEX excludes Financial Investments.
Turnover
Consolidated turnover in 1H21 reached 28.7 million euros, presenting a double-digit growth when compared to 1H2O.
Operating costs
Operating costs increased 10.6% to 31.7 million euros. Employee benefits expenses increased 12.4%, aligned with the higher level of sales. Other expenses increased 13.7%, mainly explained by the higher level of Outsourcing Costs.
Underlying EBITDA
Underlying EBITDA stood at negative 1.2 million euros, better than 1H2O, driven by the relevant improvements in Cybersecurity companies.
Underlying EBITDA-operating CAPEX
Underlying EBITDA-operating CAPEX stood at negative 3.0 million euros, increasing when compared to the higher EBITDA but also driven by the lower level of Operating CAPEX. Excluding the IFRS 16 impacts, operating CAPEX would have reached 14 million euros, 0.5 million euros below 1H2O.
2.3 Media
Publico continued to consolidate its position as the reference Portuguese speaking news on a digital strategy, reinforcing digital competencies and presence in online platforms.
Since the start of the pandemic Público's activity faced a significant decrease sales, with the temporary closure of the majority of points of sale, and a decrease of advertising revenues, with the cut on marketing expenses. However, its digital strategy coupled with an advertising market in a 2Q growing in almost all revenue lines.
The bet on the quality of journalism, combined with and digital image, has reinforced Público's prestige with direct positive impacts not only in the number of subscribers and online visits but also in the brand in the advertising market. During the last semester, digital revenues increased more than 20% and already represent 35% of total revenues, with strong performances in both subscriptions and advertising revenues. This positive performance contributed to a positive evolution at EBITDA level.
3. Subsequent events
Already at 3Q21, it was completed the sale of the entire share capital and voting rights of Bizdirect to Claranet Portugal, S.A., following the approval from the competition authority and the verification of the conditions precedent agreed between the parties. This transaction - generating total proceeds of 12.2 million euros - results in the Sonaecom's consolidated results, amounting approximately to 5.4 million euros.
4. Appendix
Consolidated income statement
| Million euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED INCOME STATEMENT | 2020 R | 2Q21 | A 21/20 | 1Q21 R | g.o.q. | 1H2O R | 1H21 | മ 21/20 |
| Turnover | 16.7 | 19.0 | 13.6% | 16.7 | 13.4% | 32.9 | 35.7 | 8.6% |
| Services Rendered | 114 | 13.1 | 15.2% | 119 | 9.9% | 229 | 25.1 | 9.6% |
| Sales | 53 | 5.9 | 10.2% | 4.8 | 22.1% | 10.1 | 10.7 | 6.3% |
| Other Income | 0.7 | 05 | -22.0% | 05 | 11% | 11 | 11 | -3.1% |
| Operating Costs | 18.2 | 22.5 | 23.5% | 18.1 | 24.3% | 37.4 | 40.7 | 8.8% |
| Employee Benefits Expenses | 10.2 | 12.4 | 21.0% | 10.3 | 20.3% | 20.9 | 22.6 | 8.4% |
| Commercial Costs(1) | 3.6 | 4.2 | 15.4% | 3.3 | 28.1% | 6.8 | 7.5 | 9.6% |
| Other Expenses(4) | 44 | 6.0 | 35.9% | 4.6 | 30.5% | 97 | 10.6 | 9.2% |
| EBITDA | 10.8 | 19.8 | 83.1% | 6.1 | 7.3 | 25.9 | ||
| Underlying EBITDA(3) | -0.6 | -14 | -148.4% | -0.9 | -69.9% | -3.0 | -2.3 | 22.8% |
| Non recurrent itens | -0.3 | 108 | 0.0 | -0.4 | 10.8 | |||
| Equity method(4) | 115 | 10.7 | -73% | 6.9 | 54.6% | 10.4 | 17.6 | 68.6% |
| Discontinued Operations13/ | 0.2 | -0.2 | 01 | 0.3 | -0.1 | |||
| Underlying EBITDA Margin (%) | -3.5% | -7.6% | -4.1pp | -5.1% | -2.5pp | -9.0% | -6.4% | 2.6pp |
| Depreciation & Amortization | 2.2 | 18 | -17.8% | 19 | -5.0% | 4.3 | 3.7 | -14.1% |
| EBIT | 8.6 | 18.1 | 109.7% | 4.2 | 3.0 | 22.3 | ||
| Net Financial Results | 0.0 | 0.1 | 0.2 | -57.3% | -0.5 | 0.2 | ||
| Financial Income | 0 9 | -0.3 | 0.6 | 1.6 | 0.4 | -78.1% | ||
| Financial Expenses | 0 d | -0.3 | 0.5 | 2.1 | 0.1 | -94.2% | ||
| EBT | 8.6 | 18.1 | 110.6% | 4.4 | 2.5 | 22.5 | ||
| Tax results | 0 d | -2.8 | 0.4 | 1.6 | -2.4 | |||
| Direct Results | ਰੇ 5 | 15.3 | 60.8% | 4.8 | 4.2 | 20.1 | - | |
| Indirect Results(b) | -2.3 | 13.6 | 5.4 | 149.4% | -2.1 | 19.0 | l | |
| Net Income | 7.2 | 28.8 | 10.3 | 180.8% | 2.1 | 39.1 | ||
| Group Share | 75 | 29.4 | 10.6 | 177.8% | 3.0 | 399 | ||
| Attributable to Non-Controlling Interests | -0.3 | -0.6 | -112.2% | -0.3 | -80.5% | -0.9 | -0.9 | 1.5% |
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Consolidated balance sheet
| Million euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED BALANCE SHEET | 2020 R | 2Q21 | Δ 21/20 | 1021 R | q.o.q. | 1H2O R | 1H21 | Δ 21/20 |
| Total Net Assets | 1,190.0 | 1,231.9 | 3.5% | 1,226.8 | 0.4% | 1,190.0 | 1,231.9 | 3.5% |
| Non Current Assets | 905.0 | ਰਦਵ ਰ | 5.6% | 954.6 | 0.1% | 905.0 | ਰਦੇ ਹੋ | 5.6% |
| Tangible and Intangible Assets and Rights of Use | 20.2 | 18.0 | -11.2% | 20.0 | -10.1% | 20.2 | 18.0 | -11.2% |
| Goodwill | 14.5 | 14.5 | 0.0% | 14.5 | 0.0% | 14.5 | 14.5 | 0.0% |
| Investments | 855.7 | 900.6 | 5.2% | 895.8 | 0.5% | 855.7 | 900.6 | 5.2% |
| Deferred Tax Assets | 4.7 | 16.3 | 16.2 | 0.4% | 4.7 | 16.3 | ||
| Others | ਰੇ ਰੇ | 6.6 | -33.5% | 8.1 | -19.0% | ਰ ਰੋ | 6.6 | -33.5% |
| Current Assets | 284.9 | 256.0 | -10.2% | 272.2 | -6.0% | 284.9 | 256.0 | -10.2% |
| Trade Receivables | 34.7 | 11.1 | -68.1% | 18.0 | -38.6% | 34.7 | 11.1 | -68.1% |
| Liquidity | 2223 | 221.7 | -0.3% | 2293 | -3.3% | 222.3 | 221.7 | -0.3% |
| Others | 27.9 | 23.2 | -17.0% | 24.9 | -6.7% | 27.9 | 23.2 | -17.0% |
| Assets held for sale | 0.0 | 20.0 | 0.0 | 0.0 | 20.0 | |||
| Shareholders' Funds | 1,051.9 | 1,124.1 | 6.9% | 1,125.6 | -0.1% | 1,051.9 | 1,124.1 | 6.9% |
| Group Share | 1,047.3 | 1.111.9 | 6.2% | 1,112.8 | -0.1% | 1,047.3 | 1,111.9 | 6.2% |
| Non-Controlling Interests | 4.6 | 12.2 | 164.8% | 12.8 | -4.4% | 4.6 | 12.2 | 164.8% |
| Total Liabilities | 138.0 | 107.8 | -21.9% | 101.3 | 6.4% | 138.0 | 107.8 | -21.9% |
| Non Current Liabilities | 66.0 | 42.8 | -35.1% | 42.8 | -0.1% | 66.0 | 42.8 | -35.1% |
| Loans | 2.4 | 1.6 | -32.4% | 1.9 | -15.7% | 2.4 | 1.6 | -32.4% |
| Provisions | 30.4 | 0.7 | -97.7% | 0.7 | -7.3% | 30.4 | 0.7 | -97.7% |
| Others | 33.2 | 40.5 | 22.1% | 40.2 | 0.8% | 33.2 | 40.5 | 22.1% |
| Current Liabilities | 72.1 | 50.4 | -30.1% | 58.4 | -13.7% | 72.1 | 50.4 | -30.1% |
| Loans | 1.6 | 2.8 | 70.6% | 3.1 | -10.7% | 1.6 | 2.8 | 70.6% |
| Trade Payables | 26.9 | 8.6 | -68.1% | 17.0 | -49.5% | 26.9 | 8.6 | -68.1% |
| Others | 43.5 | 39.0 | -10.3% | 38.3 | 2.0% | 43.5 | 39.0 | -10.3% |
| Liabilities directly associated with the assets held for sale | 0.0 | 14.6 | 0.0 | 0.0 | 14.6 | |||
| Operating CAPEX(1) | 11 | 0.8 | -31.6% | 1.1 | -30.9% | 2.4 | 19 | -21.0% |
| Operating CAPEX as % of Turnover | 6.9% | 4.1% | -2.7pp | 6.8% | -2.6pp | 7.4% | 5.4% | -2.0pp |
| Total CAPEX | 18 | 2.6 | 50.4% | 4.0 | -33.8% | 6.8 | 6.6 | -2.4% |
| Underlying EBITDA - Operating CAPEX | -1.7 | -2.2 | -29.0% | -2.0 | -12.3% | -5.4 | -4.2 | 22.0% |
| Gross Debt | 17.7 | 17.4 | -1.4% | 191 | -8.7% | 17.7 | 17.4 | -1.4% |
| Net Debt | -204.6 | -204.3 | 0.2% | -210.2 | 2.8% | -204.6 | -204.3 | 0.2% |
R - Restated according with introductory notes;
(1) Operating CAPEX excludesFinancial Investments.
Consolidated levered FCF
Million euros
| LEVERED FREE CASH FLOW | 2020 R | 2021 | Δ 21/20 | 1021 R | q.o.q. | 1H2O R | 1H21 | Δ 21/20 |
|---|---|---|---|---|---|---|---|---|
| Underlying EBITDA-Operating CAPEX | -1.7 | -2.2 | -29.0% | -2.0 | -12.3% | -5.4 | -4.2 | 22.0% |
| Change in WC | -6.6 | 8.2 | -1.0 | -4.6 | 7.2 | |||
| Non Cash Items & Other | 2.2 | -2.9 | 0.2 | 2.5 | -2.8 | |||
| Operating Cash Flow | -6.1 | 3.0 | -2.8 | -7.6 | 0.2 | - | ||
| Investments | -2 g | 34.3 | -2.8 | -6.6 | 31.5 | |||
| Dividends | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| Financial results | 0.0 | 13 | 0.2 | -0.1 | 15 | |||
| Income taxes | 0.8 | -6.2 | 0.5 | 15 | -5.7 | |||
| FCF(t) | -8.3 | 32.4 | -4 9 | -12.9 | 275 |
R - Restatedaccording withintroductorynotes;
(1) FCF Levered afterFinancial Expenses but before CapitalFlows and Financingrelated up-front Costs.
5. Qualified Shareholdings
In compliance with the Article 9, paragraph (c) of the Securities and Exchange Commission Regulation 05/2008, and according to the notifications received by the Company, the qualified shareholdings representing at least 2% of the share capital of Sonaecom SGPS, S.A., indicating the number of shares held and the percentage of voting rights, calculated in accordance with article 20 of the Portuguese Securities Code, at 30 June 2021, are described as follows:
| Shareholder | Number of shares | % of Share capital | % Share capital and voting rights* |
% of exercisable voting rights** |
|---|---|---|---|---|
| Efanor Investimentos, SGPS, S.A. (1) | ||||
| Directly | 275 086 083 | 88.36% | 88.36% | 89.97% |
| Sontel BV | 194 063 119 | 62.33% | 62.33% | 63.47% |
| Sonae- SGPS, S.A. | 81 022 964 | 26.02% | 26.02% | 26.50% |
| Discerene Group, LP | 8 694 396 | 2.79% | 2.79% | 2.84% |
| Azvalor Asset Management S.G.I.I.C. S.A. | 6 340 147 | 2.04% | 2.04% | 2.07% |
(1) Sonaecom, SGPS, S.A. is a company indirectly control strents, SGPS, S.A. ("Efanor"), as Elanor indirectly controls Sonae SGPS, S.A. and Sontel BV. With effects as from 29th November 2007, Elanor controllingshareholder, under the terms of articles 20% and 22% of the Portuguese Securities Code.Investimentos, SGPS, SA and the latter indirectly owns Sonae - SGPS S.A. and Sontel BV.
* Voting rights calculated based on the Company's share capital with voting rights, as per subparagraph 3 of article 16 of the Portuguese Securities Code
**Voting rights calculated based on the Company's share capital with voting rights that are not subject to suspension of exercise
රි. Statement of the Board of Directors
In compliance with Article 246 Paragraph 1, c) of the Portuguese Securities individually declare that, to their knowledge, the Condensed Financial Statements and the mid-term Management Report referring to the first half of 2021 were prepared meeting the standards of the applicable, giving a truthful (fairly) and appropriate image, in all material respects, of the assets and liabilities, financial position and the results of the mid-term Management Report faithfully describes the business evolution and position of the companies included in the consolidation perimeter for the first six months of 2021 and contains a description of the major risks and uncertainties with which they are confronted.
The Board of Directors,
Ângelo Gabriel Ribeirinho dos Santos Paupério
Maria Cláudia Teixeira de Azevedo
João Pedro Magalhães da Silva Torres Dolores
Eduardo Humberto dos Santos Piedade
Cristina Maria de Araújo Freitas Novais
II - FINANCIAL STATEMENTS
7. Condensed Financial Information
7.1. Sonaecom condensed consolidated financial statements
Condensed consolidated statement of financial position
For periods ended on 30 June 2021 and 31 December 2020
| Assets Non-current assets 2,034,408 Property, plant and equipment 1,832,588 8,240,910 Intangible assets 7,211,407 Right of use 10,609,677 8,932,028 Goodwill 14,520,952 14,520,952 б 807,795,660 Investments in joint ventures and associated companies 819,242,583 7 Financial assets at fair value through other comprehensive income 7,299,791 7,507,992 8 Financial assets at fair value through profit or loss 92,324,063 73,810,213 Deferred tax assets 16,380,468 16,298,105 Other non-current assets 7,602,700 6,590,021 Total non-current assets 966,808,629 955,945,889 Current assets Inventories 251,827 228,278 Trade receivables 22,616,717 11,067,398 Other receivables 8,314,544 8,850,622 Income tax assets 1,814,652 1,904,814 Other current assets 13,971,930 12,209,714 Cash and cash equivalents 233,707,494 221,691,533 Total current assets 280,682,164 255,952,359 9 Assets held for sale 19,971,483 1,247,490,793 Total assets 1,231,869,731 Shareholders' funds and liabilities Shareholders' funds Share capital 230,391,627 230,391,627 Own shares (7,686,952) (7,686,952) Reserves and retained earnings 818,589,511 849,216,389 Consolidated net income/(loss) for the period 60,125,890 39,945,124 1,101,420,076 1,111,866,188 Non-controlling interests 13,080,206 12,213,466 Total Shareholders' funds 1,114,500,282 1,124,079,654 Liabilities Non-current liabilities Loans 2,146,527 1,609,337 Lease liabilities 11,072,814 9,805,213 Provisions 30,007,840 690,537 Deferred tax liabilities 28,054,313 30,445,968 Other non-current liabilities 264.105 266,291 Total non-current liabilities 71,545,599 42,817,346 Current liabilities Loans 1,546,801 2,786,371 Trade payables 16,886,338 8,607,396 Lease liabilities 3,408,625 3,218,721 Other payables 9,639,257 14,101,106 Income tax liabilties 1,852 Other current liabilities 29,963,891 21,706,665 Total current liabilities 61,444,912 50,422,111 9 Liabilities directly associated with the assets held for sale 14,550,620 132,990,511 Total Liabilities 107,790,077 1,247,490,793 Total Shareholders' funds and liabilities 1,231,869,731 |
(Amounts expressed in Euro) | Notes | June 2021 (not audited) |
December 2020 |
|---|---|---|---|---|
The notes are an integral part of the condensed consolidated financial statements.
The Certified Accountant
Condensed consolidated income statement by nature
For periods of 6 months ended on 30 June 2021 and 2020 (restated)
| (Amounts expressed in Euro) | Notes | June 2021 | June 2020 (not audited) (not audited and restated) |
|---|---|---|---|
| Sales | 10 | 10,690,245 | 10,057,072 |
| Services rendered | 10 | 25,059,625 | 22,860,129 |
| Other income | 1,057,552 | 1,091,894 | |
| 36,807,422 | 34,009,095 | ||
| Cost of sales | (6,713,916) | (6,158,941) | |
| External supplies and services | (10,593,402) | (10,026,108) | |
| Employee benefits expense | (22,631,081) | (20,883,804) | |
| Amortisation and depreciation | (3,719,464) | (4,328,158) | |
| Provisions | (133,292) | (102,789) | |
| Impairment losses | (107,926) | (14,289) | |
| Other expenses | (474,406) | (175,519) | |
| (44,373,487) | (41,689,608) | ||
| Gains and losses in joint ventures and associated companies | ნ | 41,265,897 | 10,216,032 |
| Gains and losses on assets at fair value through profit or loss | 8 | 13,499,571 | (1,801,098) |
| Financial expenses | (866,068) | (2,114,116) | |
| Financial income | 1,103,485 | 1,646,665 | |
| Current income / (loss) | 47,436,820 | 266,970 | |
| Income taxation | (8,234,617) | 1,540,929 | |
| Consolidated net income/(loss) for the period of continued operations | 39,202,203 | 1,807,899 | |
| Consolidated net income/(loss) for the period of discontinued operations | 11 | (130,819) | 272,993 |
| Consolidated net income/(loss) for the period | 39,071,384 | 2,080,892 | |
| Attributed to: | |||
| Shareholders of parent company | 39,945,124 | 2,968,233 | |
| Non-controlling interests | (841,035) | (955,316) | |
| Non-controlling interests (discontinued operations) | (32,705) | 67,975 | |
| Earnings per share | |||
| Including discontinued operations | |||
| Basic | 0.13 | 0.01 | |
| Diluted | 0.13 | 0.01 | |
| Excluding discontinued operations | |||
| Basic | 7.19 | 0.50 | |
| Diluted | 7.19 | 0.50 | |
The notes are an integral part of the condensed consolidated financial statements.
The Certified Accountant
Condensed consolidated statement of comprehensive income
For periods of 6 months ended on 30 June 2021 and 2020 (restated)
| (Amounts expressed in Euro) | Notes | June 2021 (not audited) |
June 2020 (not audited and restated) |
|---|---|---|---|
| Consolidated net income / (loss) for the period | 39,202,203 | 1,807,899 | |
| Components of other consolidated comprehensive income, net of tax, that will be reclassified | |||
| subsequently to profit or loss: | |||
| Changes in reserves resulting from the application of equity method | б | 445,428 | (2,668,501) |
| Changes in currency translation reserve and other | (53,932) | 123.079 | |
| Components of other consolidated comprehensive income, net of tax, that will not be reclassified | |||
| subsequently to profit or loss: | |||
| Changes in reserves resulting from the application of equity method | 6 | (419,547) | (676.907) |
| Fair value of investments | 173,693 | (368.084) | |
| Consolidated comprehensive income for the period | 39,347,845 | (1,414,430) | |
| Attributed to: | |||
| Shareholders of parent company | 40,214,488 | (619,797) | |
| Non-controlling interests | (866,643) | (794.633) |
The notes are an integral part of the condensed consolidated financial statements.
The Certified Accountant
Condensed consolidated statement of changes in equity
For periods of 6 months ended on 30 June 2021 and 2020 (restated)
| Reserves | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Reserves of own | Non-controlling | Net | ||||||||
| (Amounts expressed in Euro) | Share capital | Own shares | Share premium | Legal reserves | shares | Other reserves | Total reserves | interests | income / (loss) | Total |
| 2021 Balance at 31 December 2020 Appropriation of the consolidated net result of 2020 |
230,391,627 | (7.686,952) | 775,290,377 | 20,683,925 | 7.686.952 | 14.928.257 | 818,589,511 | 13,080,206 | 60,125,890 | 1,114.500,282 |
| Transfers to other reserves | 153,812 | 59,972,078 | 60.125.890 | (60,125,890) | ||||||
| Dividend Distribution | (29,659,595) | (29,659,595) | (29,659,595) | |||||||
| Percentage change in subsidiaries | ||||||||||
| Consolidated comprehensive income for the period ended at 30 June 2021 | 145,642 | 145.642 | (866,643) | 39.945.124 | 39,224,123 | |||||
| Other changes | 14.941 | 14.941 | 97 | 14.844 | ||||||
| Balance at 30 June 2021 | 230,391,627 | (7.686,952) | 775,290,377 | 20,837,737 | 7.686.952 | 45,401,323 | 849,216,389 | 12.213.466 | 39.945.124 | 1,124,079,654 |
| Reserve | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Amounts expressed in Euro) | Share capital | Own shares | Share premium | Legal reserves | Reserves of own shares |
Other reserves | Total reserves | Non-controlling interests |
Net income / (loss) |
Total |
| 2020 | ||||||||||
| Balance at 31 December 2019 (restated) | 230.391.627 | (7,686,952) | 775,290,377 | 18.545.192 | 7,686,952 | (3,246,742) | 798.275.779 | (636,155) | 52.168.120 | 1.072.512.419 |
| Appropriation of the consolidated net result of 2019 | ||||||||||
| Transfers to other reserves | 2.138.733 | 50.029,387 | 52168.120 | (52,168,120) | ||||||
| Dividend Distribution | (25,378,829) | (25,378,829) | (175,000) | (25,553,829) | ||||||
| Percentage change in subsidiaries | 6.000.000 | 6,000,000 | ||||||||
| Consolidated comprehensive income for the period ended at 30 June 2020 (restated) | (3,590,413) | (3,590,413) | (794,633) | 2.968.233 | (1,416,812) | |||||
| Other changes | 163,772 | 163.772 | 218.032 | 381.804 | ||||||
| Balance at 30 June 2020 | 230.391.627 | (7,686,952) | 775.290.377 | 20.683.925 | 7.686.952 | 17.977.175 | 821638.429 | 4.612.244 | 2.968.233 | 1,051,923,581 |
The notes are an integral part of the condensed consolidated financial statements.
The Certified Accountant
Condensed consolidated cash flow statement
For periods of 6 months ended on 30 June 2021 and 2020
| (Amounts expressed in Euro) | June 2021 (not audited) |
June 2020 (not audited) |
||
|---|---|---|---|---|
| Operating activities | ||||
| Receipts from trade debtors | 59,714,251 | 63,414,977 | ||
| Payments to trade creditors | (36,761,798) | (45,420,826) | ||
| Payments to employees | (26,582,492) | (22,566,254) | ||
| Cash flows generated by operations | (3,630,039) | (4,572,103) | ||
| Payments / receipts relating to income taxes | (149,890) | (112,260) | ||
| Other receipts / payments relating to operating activities | 3,463,333) | (1,500,978) | ||
| Cash flows from operating activities (1) | (7,243,262) | (6,185,341) | ||
| Investing activities | ||||
| Receipts from: | ||||
| Financial investmens | 36,417,920 | |||
| Tangible assets | 25,289 | 20,586 | ||
| Intangible assets | 686,176 | |||
| Dividends | 50 | |||
| Interest and similar income | 290,759 | 323,984 | ||
| Others | 918,548 | |||
| Payments for. | ||||
| Financial investments | (3,256,335) | (4,329,572) | ||
| Tangible assets | (285,037) | (545,794) | ||
| Intangible assets | (220,576) | (813,617) | ||
| Variation in loans granted | (249,932) | |||
| Cash flows from investing activities (2) | 33,890,618 | (4,908,169) | ||
| Financing activities | ||||
| Receipts from: | ||||
| Capital increases, supplementary capital and share premium | 6,000,000 | |||
| Loans obtained | 681,240 | 500,000 | ||
| Payments for: | ||||
| Leasing | (1,882,938) | (1,957,818) | ||
| Interest and similar expenses | (22,420) | (140,120) | ||
| Dividends | (29,659,595) | (25,553,829) | ||
| Loans obtained | (1,306,717) | |||
| Cash flows from financing activities (3) | 30,883,713) | (22,458,484) | ||
| Net cash flows (4)=(1)+(2)+(3) | (4,236,357) | (33,551,994) | ||
| Effect of the foreign exchanges | 9,887 | (31,985) | ||
| Effect of the assets and liabilities held for sale (Note 9) | (7,789,491) | |||
| Cash and cash equivalents at the beginning of the period | 233,707,494 | 255,876,965 | ||
| Cash and cash equivalents at the end of the period | 221,691,533 | 22,292,986 |
The notes are an integral part of the condensed consolidated financial statements.
The Certified Accountant
6.2. Notes to the condensed consolidated financial statements of Sonaecom
1. Introductory note
SONAECOM, SGPS, S.A. (hereinafter referred to as 'the Company' or 'Sonaecom') was established on 6 June 1988, under the name Sonae – Tecnologias de Informação, S.A. and has its head office at Lugar de Espido, Via Norte, Maia – Portugal. It is the parent company of the Group of companies listed in note 4 and 5 ('the Group').
On 1 June 2000, the company was admitted to trading on Euronext Lisbon, however, with effect from February 24, 2014, it was excluded from the PSI-20.
Sonaecom SGPS, S.A. is owned directly by Sontel BV and Sonae SGPS, SA and Efanor Investimentos SGPS, S.A. is the ultimate controlling company.
In addition to the holding activity, the group's businesses essentially consist of media and technology activities. The Group operates in Portugal and has subsidiaries from the information systems consultancy segment operating in about 4 countries.
The condensed consolidated financial statements are presented in the unit, except when were referred, being the group's main currency. Foreign currency translated into the functional currency of each entity at the exchange rate on the date of the transaction. The financial statements of subsidiaries with another corrency have been converted into euros using the average exchange rates at the reporting date.
Relevant events occurred during the period
On 2021 January 7th, following the worsenic situation it was formally declared a new state of emergency and a new national lock-down which marked almost the full quarter in Portugal. The evolution of cases numbers worldwide continued to trend up in 2Q with Europe and USA being regions strongly affected by the second wave. Since April with the vaccination process speeding-up in Europe and USA, we have been experiencing a progressive deconfinement and reopening of economy.
The Board of Directors continued to follow in detail and with great concern all the pandemic developments, following closely the position of the competent international entities, namely the World Health Organization and the European Centre for Disease Prevention and Control, as well as the Portuguese Directorate-General of Health.
Aligned with the Group's Risk Management Policies, contingency plans with correspondent mitigation actions were constantly updated and actioned across all companies and departments, allowing to keep our employees protected and to face this the less loss of value.
The financial and operational impacts continued to be different across segments:
- The technology area continued to prove a strong resilience with no relevant impacts from pandemic situation across the globe
- · At NOS, the impacts were felt particularly in roaming and in the Cinemas and Audiovisuals activity with the closing of all cinemas from 15 January to 19 April, which inevitably impacted consolidated revenues and EBTDA evolution. However, and despite all pandemic restrictions in Portugal, 2Q benefitted from the reopen of cinema theatres, with encouraging attendance, and from a slight roaming recovery.
- Publico's activity faced a significant decrease in advertising activity during the 1Q but its digital strategy coupled with an advertising market recover resulted in a 2Q growing in almost all revenue lines.
Overall, the macroeconomic context remains uncertain and intrinsically dependent on the epidemiological evolution and control, on governmental intervention to comply with vaccination plans, as well as on the support provided to the overall economy.
However, given the company's capital structure, with a significant amount in cash and bank deposits and a low amount of remunerated debt, no material changes in the Company's liquidity are expected. Furthermore, Sonaecom will continue to imeasures deemed appropriate to minimize their impacts, in line recommendation of the competent entities and in the best interest of all our stakeholders.
2. Main accounting policies and basis of presentation
The condensed consolidated financial statements for the period ended at 30 June 2021, were prepared in accordance with IAS 34 -Interim Financial Reporting. Consequently, these financial statements do not include all the informational Financial Reporting Standards (IFRS), so they should be read with the consolidated financial st December 2020. The accounting policies and measurement criteria, adopted by the Group at 30 June 2021 are consistent with those used in the preparation of 31 December 2020 financial statements, except for the period, in accordance with IAS 34.
The condensed consolidated financial statements of Sonaecom Group were prepared on the assumption of operations, based on the books and accounting records of the companies included in the consolidation, which were prepared in accordance with the International Financial Reporting Standards ('FRS') as adopted and effective in the European Union and, based on historical cost, except for the revaluation of certain financial instruments.
3. Change in accounting policies and comparability of consolidated financial statements
During the period there were no changes in accounting policies, except for the adoption of new standards whose application became effective on 1 January 2021 which had no material impact on the Group's condensed financial statements.
The following standards, interpretations, and revisions have been approved (endorsed) by the European Union, and have mandatory application to the financial years beginning on or after 1 January 2021 and were first adopted in the period ended 30 June 2021:
• • Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Reform of the reference interest rate (phase 2): These amendments deal with issues that arise during the reform of an interest rate reference which include the replacement of a reference interest rate with another alternative, allowing for the application of exemptions.
The Group concluded that the application of these standards did not have a materially effect on the financial statements.
The following standards, interpretations, and revisions, with mandatory application in future financial years, were, until the date of approval of these financial statements, approved ('endorsed') by the European Union:
- Amendment to IFRS 3 Reference to the Conceptual framework: This amendment updates the references to the Conceptual Framework without changing the accounting requirements for business combinations.
- Amendment to IAS 16 Proceeds before intended use: This amendment changes the accounting treatment of the proceeds obtained from the sale of production the production test phase of property, plant and equipment, prohibiting their deduction to the acquisition cost of assets.
- Amendment to IAS 37 Onerous Contracts cost of fulfilling a contract: This amendment specifies that when assessing whether a contract is onerous or not. Only expenses directly related to the performance of the contract can be considered.
The following standards, interpretations, and revisions have not, until the period ended at 30 June 2021, been approved ('endorsed') by the European Union:
• IFRS 17: Insurance contracts (includes changes to the standard): This new standard replaces IFRS 4 which becomes mandatory since 2004. IFRS 17 apply to all entities issuing insurance contracts and investment contracts with discretionary participation characteristics.
- Annual Improvements 2018-2020 annual provides improvements to: IFRS 1 (Subsidiary as first-time IFRS adopter), IFRS 9 (Derecognition of liabilities), IFRS 16 (Leasing incentives) and IAS 41 (Taxation and measurement of fair value). This amendment is applied prospectively.
- · Amendment to IAS I Classification of liablities as current or non-current: This amendment intends to clarify that liabilities are classified as either current or non-current balances depending on the rights that an entity has to defer its payment, at the end of each reporting period.
- Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: The changes require companies to disclose their material accounting policy instead of their significant accounting policies. The amendments to the practical file of IFRS 2 provide guidance on how to apply the concept of materiality to accounting policy disclosures.
- Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Error: The changes clarify how companies should differentiate changes in accounting policies from changes in accounting estimates.
- Amendments to IFRS 16 Leases Rents related to Covid-19 after 30 June 2021: Extension of amendments to IFRS 16 Covid-19 related to rent concessions for rent payments due on or before 30 June 2022.
- Amendments to IAS 12 Income tax: The amendments clarify how companies account for deferred taxes on transactions such as leases and decommissioning obligations.
To ensure the comparability of the financial statements, the condensed consolidated financial statements for the period ended at 30 June 2020 were restated by the effects described below:
Restatement of consolidated financial statements
Review of the classification of minority participations
In the year ended 31 December 2020, a review of the classification of minority investments in the subsidiaries SonaelM, Bright Development and Bright Vector I, recorded in the Group to date in accordance with IFRS 9 at fair value through other compehensive income, was made. As a result of this review, the Group concluded that it had a significant influence on the majority of these investments. Accordingly, and considering that the investment activity carried subsidiaries fits, for the purposes of the exemption provided for in paragaph 18 of IAS 28, as a venture capital activity, the Group opted for the equity method, starting to measure, the minority investments held by them, at fair value through profit or loss in accordance with IFRS 9.
The financial statements for the period ended at 30 June 2020 were restated in order to incorporate the changes described above.
Digitmarket classification as a discontinued operating unit
In the period ended 30 June 2021, following the agreement with Claranet Portugal, SA for the share capital and voting rights of Digitmarket Sistemas de Informação S.A., announced on June 1, Digitmarket (75% held by Sonae Investment -Software and Technology, SGPS, SA, 15% by AITEC Capital, SGPS, SA. and 10% by Banco BPI, SA), was considered a discontinued operating unit.
In this regard and according to IFRS 5, 2021Digitmarket assets and liabilities were classified as held for sale. At Consolidated statement of income by nature, the result for the year was classified under the heading 'Consolidated net income/(loss) for the period of discontinued operations' and the comparative period restated to reflect, in a single heading on the profits or losses after the taxes of discontinued operating units.
The impacts of restating the consolidated accounts in accordance with the changes described above for the period ended at 30 June 2020 can be summarised as follows:
| (Amounts expressed in Euro) | June 20 (reported) |
Restatement of classification of minority interests |
Restatement of Digitmarket's contribution to discontinued units |
June 20 (restated) |
|---|---|---|---|---|
| BALANCE SHEET | ||||
| Non-current assets | ||||
| Financial assets at fair value through other comprehensive income (note 7) | 59,583,495 | (54,496,471) | 5,087,024 | |
| Financial assets at fair value through profit or loss (note 8) | 54,496,471 | 54,496,471 | ||
| Shareholders' funds | ||||
| Reserves and retained earnings | 819,711,705 | 1,926,724 | 821,638,429 | |
| STATEMENT OF COMPREHENSIVE INCOME | ||||
| Total Revenues | 70,702,223 | (36,693,128) | 34,009,095 | |
| Cost of sales | (39,137,678) | 32,978,737 | (6,158,941) | |
| External supplies and services | (11,645,381) | 1,619,273 | (10,026,108) | |
| Employee benefits expense | (22,418,651) | 1,534,847 | (20,883,804) | |
| Depreciation and amortisation | (4,490,466) | 162,308 | (4,328,158) | |
| Other expenses | (178,865) | 3,346 | (175,519) | |
| Other financial expenses | (2,151,672) | 37,556 | (2,114,116) | |
| Other financial income | 1,650,734 | (4,069) | 1,646,665 | |
| Gains and losses on assets at fair value through profit or loss ( note 8) | (1,801,098) | (1,801,098) | ||
| Income taxation | 1,578,418 | (125,626) | 88,137 | 1,540,929 |
| Net income/(loss) for the year of continued operations | 4.007,616 | (1,926,724) | (272,993) | 1,807,899 |
| Net income/(loss) for the year of discontinued operations | 272,993 | 272,993 | ||
| Non-controlling interests | (887,341) | (67,975) | (955,316) | |
| Non-controlling interests (discontinued operations) | 67,975 | 67,975 |
4. Companies included in the consolidation
Group companies included in the consolidation method, their head offices, main activities, shareholders and percentage of share capital held at 30 June 2021 and 2020, are as follows:
| Percentage of share capital neld | |||||||
|---|---|---|---|---|---|---|---|
| 2021 | 2020 | ||||||
| Company (Commercial brand) | Head office | Main activity | Shareholder | Direct | Effective* | Direct | Effective* |
| Parent company | |||||||
| SONAECOM, S.G.P.S., S.A. ('Sonaecom') Subsidiaries |
Maia | Management of shareholdings | |||||
| Bright Developement Studio, S.A. ('Bright') | Lisbon | Research, development and commercialization of projects and service solutions in the area of information technology, communications and retail, and consulting activities for business and management. |
Sonae IM | 100% | 100% | 100% | 100% |
| Bright Ventures Capital, SCR, S.A. | Lisbon | Realization of investment in venture capital, management of venture capital funds and investment in venture capital fund units. |
Bright | 100% | 100% | 100% | 100% |
| Digitmarket - Sistemas de Informação, S.A. ('Digitmarket' – using the brand 'Bizdirect') |
Maia | Development of management platforms and commercialisation of products, services and information, with the internet as its main support. |
Sonae IM | 75% | 75% | 75% | 75% |
| Excellium Group, S.A. ('Excellium') | Contern | Excellium assist enterprises to perform business and risk assessments, define security policies and procedures, respond to security incidents and deliver computer forensics services. |
Maxive | 59.20% | 59.20% | 59.20% | 59.20% |
| Excellium Services, S.A. ('Excellium Services') | Contern | Provide services within the IT and cibersecurity domain mainly to Luxembourgish institutions, banks and insurance companies. |
Excellium | 100% | 59.20% | 100% | 59.20% |
| Excellium Services Belgium, S.A. ('Excellium Services Belgium') | Wavre | Provide services within the IT and cibersecurity domain mainly to Belgium institutions, banks and insurance companies. |
Excellium | 100% | 59.20% | 100% | 59.20% |
| Excellium Factory SARL ('Excellium Factory') (a) | Raouad-Ariana | Vehicle for the Excellium product development in Africa. | Excellium | liquidated | 80% | 47.36% | |
| novretail, S.A. | Oporto | Industry and trade of electronic equipment and software; development, installation, implementation, training and maintenance of systems and software products; rental equipment, sale of software use license; consulting business, advisory in retail segments, industry and services. |
Sonae IM | 100% | 100% | 100% | 100% |
| Inovretail España, SL ('Inovretail España') | Madrid | Industry and trade of electronic equipment and software; development, installation, implementation, training and maintenance of systems and software products; rental equipment, sale of software use license; consulting business, advisory in retail segments, industry and services. |
Inovretail | 100% | 100% | 100% | 100% |
| Fundo Bright Vector I ('Bright Vector I') | Lisbon | Venture Capital Fund | Sonae IM | 50.13% | 5013% | 50.13% | 50.13% |
| Fundo Bright Tech Innovation I - ('Bright Tech Innovation I') (c) | Maia | Venture Capital Fund | Sonaecom Sonae IM Bright bCl |
10% 10% 10% 10% |
50% | 25% 25% |
25% 25% |
| Maxive- Cybersecutiry, SGPS.S.A ("Maxive') (b) | Maia | Management of shareholdings. | SPAR Sonae IM |
10% 100% |
100% | 100% | 100% |
| Mxtel, S.A. de CV (Mxtel) | Mexico City | Rendering of engineering and IT consulting services specializing in information security and management of telecommunications services. |
S21 Sec Gestion | 99.93% | 80.90% | ਰੇਰ ਰੇਡ ਕੇ ਤੇ ਕੇ ਕੇ ਕਿ ਕਿ ਕਿ ਅਤੇ ਇੱਕ ਸਿੰਘ ਦੇ ਸੰਗ੍ਰਹਿ ਹੈ। ਇਹ ਕਿ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱ | 80.90% |
| PCJ - Público, Comunicação e Jornalismo, S.A. ('PCJ') | Maia | Editing, composition and publication of periodical and non-periodical material and the exploration of radio and TV stations and studios. |
Sonaecom | 100% | 100% | 100% | 100% |
| Praesidium Services Limited ('Praesidium Services') | Berkshire | Rendering of consultancy services in the area of information systems. | Sonae IM | 100% | 100% | 100% | 100% |
| Público - Comunicação Social, S.A. ('Público') | Oporto | Editing, composition and publication of periodical and non-periodical material |
Sonaecom | 100% | 100% | 100% | 100% |
| S21Sec Portugal Cybersecurity Services, S.A.('S21 Sec Portugal') | Maia | Commercialization of products and management services, implementation and consulting in information systems and technologies areas. |
521 Sec Gestion | 100% | 80.90% | 100% | 80.90% |
| S21 Sec Gestion, S.A. ('S21 Sec Gestion') | Guipuzcoa | Consulting, advisory, audit and maintenance of all types of facilities and advanced communications services and security systems. Purchase and installation of advanced communications and security systems produced by others. |
Maxive | 80.90% | 80.90% | 80.90% | 80.90% |
| 521 Sec Information Security Labs, S.L. ('S21 Sec Labs') | Navarra | Research, development and innovation, as well as consulting, maintenance and audit for products, systems, facilities and communication and security services. |
S21 Sec Gestion | 100% | 80.90% | 100% | 80.90% |
| S21 Sec, S.A. de CV ('S21 Sec, S.A. de CV') | Mexico City | Computer consulting services | S21 Sec Gestion S21 Sec Labs |
ರಿ9.9996% 0.0004% |
80.90% | 99.9996% 0.0004% |
80.90% |
| Sonaecom - Serviços Partilhados, S.A. ('Sonaecom SP') | Maia | Support, management consulting and administration, particularly in the areas of accounting, taxation, administrative procedures, logistics, human resources and training. |
Sonaecom | 100% | 100% | 100% | 100% |
| Sonae Investment Management - Software and Technology, SGPS, S.A. ("SonaelM') |
Maia | Management of shareholdings in the area of corporate ventures and joint ventures. |
Sonaecom | 100% | 100% | 100% | 100% |
(a) Company liquidated in June 2021
(b) In February 2022, Sonaecom- Cyber Security and Intelligence, SGPS, S.A changed its name to Maxive- Cybersecutiry, SGPS.S.A
(c) In December 2020, new participation units
All the above companies were included in the consolidation in accordation method under the terms of IFRS 10 – 'Consolidated Financial Statements'.
5. Changes in the group
During the periods ended at 30 June 2021 and 2020, the following changes occurred in the Group:
a) Acquisitions
| Shareholder | Subsidiary | Date |
|---|---|---|
| 2021 | ||
| Bright Vector I | Automaise, Lda ('Automaise') (note 8) - increase | Jan-21 |
| Sonae IM | Sellforte Solutions Oy ('Sellforte') (note 8) | Feb-21 |
| Sonae IM | Aryaka Networks ('Aryaka') (note 8) | Apr-21 |
| Sonae IM | Portainer.io Limited ('Portainer') (note 8) | Apr-21 |
| Shareholder | Subsidiary | Date |
|---|---|---|
| 2020 | ||
| Sonae IM | Sales Layer Tech, S.L. (note 8) | Mar-20 |
| Fundo Bright Vector I | Portugate S.A. ('Replai') (note 8) | Jun-20 |
b) Constitutions
| Shareholder | Subsidiary | Date |
|---|---|---|
| 2020 | ||
| Sonae IM and Sonaecom | Bright Tech Innovation I | Jun-20 |
c) Discontinued
| Shareholder | Subsidiary | Date |
|---|---|---|
| 2021 | ||
| Excellium | Excellium Factory SARL ('Excellium Factory') | Jun-21 |
6. Investments in joint ventures and associated companies
The associated companies and the companies jointly controlled, their head offices, percentage of ownership and value in profit and loss statement at 30 June 2021 and 2020 are as follows:
| Percentage of ownership | Value in profit and loss statement | ||||||
|---|---|---|---|---|---|---|---|
| 30 June 2021 | 30 June 2020 | 30 June 2021 | 30 June 2020 | ||||
| Head Office | Direct | Total | Direct | Total | |||
| ZOPT, SGPS, S.A. ('ZOPT') (a) | Oporto | 50.00% | 50.00% | 50.00% | 50.00% | 17,599,433 | 10,555,528 |
| Unipress - Centro Gráfico, Lda. ('Unipress') | Vila Nova de Gaia | 50.00% | 50.00% | 50.00% | 50.00% | (24,964) | (17,591) |
| SIRS - Sociedade Independente de Radio difusão Sonora, S.A. ('Rádio Nova') |
Oporto | 50.00% | 50.00% | 50.00% | 50.00% | (19,771) | (34,819) |
| Intelligent Big Data, S.L. ('Big Data') (b) | Gipuzcoa | 50.00% | 50.00% | (526) | |||
| Fundo de Capital de Risco Armilar Venture Partners II (Armilar II) (c) |
Lisboa | 44.33% | 44.33% | 50.74% | 50.74% | 733,883 | 137,923 |
| Fundo de Capital de Risco Armilar Venture Partners III (Armilar III) |
Lisboa | 42.80% | 42.80% | 42.80% | 42.80% | 20,028,537 | 328,922 |
| Fundo de Capital de Risco Armilar Venture Partners Inovação e Internacionalização (Armilar I+I) |
Lisboa | 38.25% | 38.25% | 38.25% | 38.25% | 2,875,094 | (666,862) |
| Secucloud Network GmbH ('Secucloud') (d) Hamburg | 27.45% | 27.45% | 70,511 | (90,928) | |||
| Probe.ly | Lisbon | 21.21% | 21.21% | 21.21% | 2121% | 3,174 | 4,385 |
| Suricate Solutions | Luxembourg | 20.00% | 11.84% | 20.00% | 1184% | ||
| Alfaros SAR | Tunisia | 40.00% | 23.68% | 40.00% | 23.68% | ||
| Int- | דחת חמר ו"ו | 10 216 072 |
(a) Includes the incorporation of the results of the subsidiaries in proportion to the capital held.
(b) Company liquidated in november 2020.
(c) The participation change is related to the amortization of units held in the Fund
(d) Company sold in April 2021
In case of investments in associates that are venture capital organizations, IAS 28 contains an option to keep these investments held by them measured at fair value. The Group made this option, applying the equity method to Armilar Funds.
In accordance with IFRS 11, the classification of investments in joint ventures is determined based on the existence of an agreement that clearly demonstrate and regulate the Group held associated and jointly controlled companies, as decomposed below.
The division by company of the amount included in the investments in associated companies and joint ventures at 30 June 2021 and 31 December 2020 is as follows:
| 30 June 2021 | 31 December 2020 | |||||
|---|---|---|---|---|---|---|
| Ownership value | Goodwill | Total investment | Ownership value | Goodwill | Total investment | |
| Investments in companies jointly controlled | ||||||
| Zopt | 593,081,000 | 87,527,500 | 680,608,500 | 575,455,685 | 87,527,500 | 662.983.185 |
| Unipress | 380,130 | 321,700 | 701,830 | 405.135 | 321,700 | 726,835 |
| ടിന്റെ | 19,730 | 19,730 | ||||
| 553,392,312 | 87,849,200 | 681,310,330 | 575,880,550 | 87,849,200 | 663,729,750 | |
| Investments in associated companies | ||||||
| Armilar | 77,003,567 | 77.003.567 | 96.578.405 | 96.578.405 | ||
| Armilar II | 45.070.366 | 45.070.366 | 31,302,286 | 31,302,286 | ||
| Armilar I+I | 15,695,759 | 15.695,759 | 16,025,832 | 16,025,832 | ||
| Secucloud | (2,499,722) | 2,499,722 | ||||
| Probe.ly | (160,097) | 297,168 | 137,071 | (163,271) | 297,168 | 133.897 |
| Suricate Solutions | 20,953 | 20,953 | 20,953 | 20,953 | ||
| Alfaros SARL | 4,537 | 4.537 | 4.537 | 4.537 | ||
| 141.741,429 | 4.716.910 | 137,932,253 | 141.269.020 | 2.796.890 | 144.065.910 | |
| Total | 695,133,741 | 92,566,110 | 819,242,583 | 717.149.570 | 90,646,090 | 807,795,660 |
In the period ended at 30 June 2021, due to changes to the Armilar Funds Regulation, the amount related to the contractual incentive (Incentive Scheme) to be paid to the Fund Management Company, recorded in "Provisions" in the amount of EUR 28,781, was reclassified to "Investments in joint ventures and associated companies".
The amount on the income statement related to Zopt results from net income of Zopt and the impact on results of the process of allocating the fair value to the assets and liabilities acquired by Zopt.
At 30 June 2021, it was considered that the impairment tests carried out in 2020 did not have significant variations.
With regard to ZOPT's financial participations in Finstar consolidated), the Board of Directors of NOS and ZOPT is certain that the patrimony seizure to Mrs. Isabel dos Santos, in the shares held by her in Finstar and ZAP Media (where she holds 70% of the capital), does not change the control as defined in IFRS 11, it is not expected to have relevant consequences for the operational management of companies, in addition to restrictions of dividends in these companies.
At 4 April 2020, SONAECOM, was informed by its subsidiary ZOPT of the communication received from the Lisbon Central Criminal Instruction Court ('Court') to proceed to the preventive arrest of 26.075% of NOS' share capital, corresponding to half the shareholding in NOS held by ZOPT and, indirectly, by the companies Unitel International Holding Limited, controlled by Mrs. lsabel dos Santos. Under the terms of the communication, the arrested shares) are depived of the right to vote and the right to receive dividends, which must be deposited with Caixa Geral de Depositos, S.A. (CGD) at the order of the court. The other half of ZOPT's participation in NDS' share captal, corresponding to an identical percentage of 26.075% - and which, at least in line with the criterion used by the Court, embodies the 50% held in ZDPT by SDNAECOM - was not subject to arrest, nor the rights attached to it were subject to any limitation.
It is the understanding of the board of directors of ZOPT and SONAECOM that the measure of arrest imposed is illegitimate and offends several fundamental rights of ZOPT – third in relation to the decreed arrest-, no being legally liable to determine the deprivation of voting rights, not even to inhibit the holder of the arrested shares rights, which deprivation we understand for this reason, be null and without any effect. Thereafter, ZOPT has deducted third-party embargoes.
At 12 June 2020, ZOPT was notified of the Lisbon Central Criminal Investigation Court, which authorizes it to execcise the voting right corresponding to the 26.075% of NOS share capital preventively seized under the aforementioned Court order. For this reason, the Boards of Directors of ZDPT and SONAECOM consider that the conditions of control of ZOPT over NOS are met, and the measure does not have material effects on the control of this company.
Also in June 2020, the Investigating Judge rejected the third-party embargoes deducted by ZOPT based on the Portuguese courts' inability to assess and decide upon them, a decision which, having been appealed by the Court of Appeal already in 2021 awaiting further developments, namely the judicial pronouncement on the seizures.
At 19 August 2020, Sonaecom communicated the intention of the shareholders of ZOPT (Sonaecom, Unitel International Holdings, BV and Kento Holding Limited) to liquidate the company, mairtaining Sonaecom as the reference shareholder of NOS. To date, the efforts to dissolve the ZOPT have not yet been carried out.
In the last quarter of 2020, the seizure of 233,790,325 shares corresponding to 32.65% of capital of ZOPT held by UNITEL was also decreed, with deprivation of the exercise of voting right to receive dividends, and 124,234,675 shares corresponding to 17.35% of capital of ZOPT held by KENTO, also with no exercise of the right to receive dividends. Additionally, in lanuary 2021, ZOPT was also notified by Caixa Geral de Depositos (CGD), as the beneficiary of the shares held by Kento in ZOPT, referring to being vested with the power to exercise the voting rights inherent in the ent rights, and that Kento was deprived of exercising such rights without the prior, express and witten authorization of CGD It is the understanding of the Board of Directors of ZOPT, that whenever there is no question of protecting the of the shares, in the exercise of voting rights, CGD as Kento's pledge creditor, must act in accordance with Kento's instructions, which means voting in the sense defined by Kento.
In March 2021, in response to the application filed in November by ZOPT, the Public Prosecutor's Office stated that dividends falling to Unitel International Holding Limited to be deposited in Caixa Geral de Depósitos, SA, not intending to block the distributions of dividends to those two commercial companies by ZOPT SGPS, but only to ensure that they remain within the scope of these records.
The Public Prosecutor's Office further understands third-party dividends to satisfy an alleged claim by Caixa Geral de Depósitos over Kento Holding Limited. If such credit exists, it will be the responsibility of Caixa Geral de Depósitos to assert its alleged rights by the appropriate procedural means.
Despite the facts described above considering that, no steps have yet been taken to liquidation of ZOPT, that there has been no change in the board of directors of ZDPT and that decisions on the operating activity of the investee company continue to be taken in accordance with what was being done, we concluded that the profile of joint control over the ZOPT has not changed.
ZOPT Group provisions
The evolution in provisions occurred during the first 6 months of 2021 compared to 31 December 2020 was as follows:
- Actions by MEO against NOS S.A., NOS Madeira and NOS Açores and by NOS S.A. against MEO
The court ruled on 16 March 2021 and disregarded the remaining pre-scheduled dates for the final hearing. On the present ate, we await the scheduling of new dates for the hearing of the Board of Directors, corroborated by the attorneys accompanying the process, that it is, in formal and substantive terms, likely that NOS SA will be able to MED already having been convicted for the same offences by ANACOM.
- Interconnection tariffs
At 30 June 2021, there are accounts receivable include EUR 37,139,253 and EUR 43,475,093, respectively, resulting from a dispute between the subsidiary NDS SA and, essentially, the operator MEO – Serviços de Comunicação e Multimédia, S.A. (previously named TMN – Telecomunicações Móveis Nacionais, S.A.), in relation of interconnection tariffs of 2001. In what concerns to that dispute with MED, the result was totally favourable to NOS S.A., having already become final. In March 2021, MED filed a new lawsuit against NOS, in which it claimed the price of interconnection services between TMN and Optimus for 2001 at 55\$00 (EUR 0.2743) per minute. NOS filed a defense at the beginning of June challenging the petition by MEO and at his moment, the deadline for carrying out the other procedural steps is currently running.
רק Contractual Penalties
At 30 June 2021, the amounts billed and to be received from these indemnities amount to EUR 108.1 million.
COVID-19
With the emergence, spread and infection of the new coronavirus CDVD-19, several measures were taken to contain the virus with very significant estimated impacts on the Portuguese economics, namely, limitations on travelrights and closure of several facilities and establishments.
ln the uncertainty of this threat, it is essential that companies design and implement, in a timely manner, structured and efficient contingency plans that guarantee employee protection and business continuity or that, at least, mitigate the resulting effects.
This is a situation of uncertainty and very dunamic, which makes it extremely difficult to estimate impacts, which always have to consider several scenarios and countless variables. Evidence of this difficulty is the historical drops and sharp volatility of exchanges, all over the World; the great variations that occurred in the future projections of macroeconomic indicators, as well as the disparity of these projections between the several entities.
NOS is committed to support their customers during the current COVID-19 public health crisis. At a time when many Portugueses are changing their habits and routines and working remotely, keeping customers connected is the main objective of NOS facilitate access to services, through data offers, suspension of monthly payment of premium sports channels, reinforcement of the ability to implement business services and guaranteeing a safe and secure service in our stores, in order to safeguard customers, employees and partners. The NOS Telecommunications Network supports a set of basic services of our society, which include our National Health System. In this context of global health emergency, the maintenance of Portuguese communications is a fundamental task.
The impacts on ZDPT through participation in NOS were felt in the results of the financial year ended at 31 December 2020, with a drop in revenues, consolidated EBTDA and operational cash-flows of - 6.2% (EUR - 30.8 million) and - 3.8% (EUR -65.2 million), respectively, which shows a reduction in activity in:
- i. movie premieres, slightly offset by cinema rentals negotiations;
- ii.
- Equipment sales: with the closure of shopping centers and travel restrictions, there was a reduction in the sale of mobile iii. phones and equipment, which is partially offset by the increase in online sales (in the long run there may be a positive effect on the evolution customer take-up of digital channels);
- iv. use of mobile data; and,
- v. Drop in revenue related to premium sports during the national championship was suspended and advertising content.
On the other hand, the projections made for the Portuguese economy, led to a reassessment of projections and estimates, which resulted in the reinforcement, in the first haf of 2020, of impairments, of accounts receivable (28.2 million euros) and other costs recognised, related to onerous contracts (10.8 million euros), as well as the recording of impairments in the item "Losses) in subsidiaries", in the amount of 8.5 million euros, as well as the recording of impairments in the item "Losses , (Gains) in subsidiaries", in the amount of 6.3 million euros. In line with the current recommendations, the Group proceeded to sensitivity analysis to the assumptions used in the impairment tests to Goodwill conducted in the end of 2020, with no evidence of impairment being concluded. The most affected segment by COVID-19 was the cinemas one, with a recovery estimation to pre-pandemic values in 2023.
In the half ended 30 June 2021, the impacts on NDS were felt particularly in the Cinemas activity with the closure of movie theaters since mid-January 2021 and in the Telco segment with impacts in terms of roaming revenues.
Liquidity and interest rate risk
Prudent liquidity risk management impling an adequate level of cash and cash equivalents to meet assumed liabilities, associated with the negotiation of credit lines with financial institutions.
At 30 June 2021, the average maturity of the NOS group's financing is 2.6 years, with no non-compliance with the covenants due to the reduction in results projected for this year, being expected.
Credit risk
Credit risk is essentially related to credit for services provided to customers, monitored on a regular business basis and for which expected credit losses are determined considering i) the customer's risk profile; ii) the client's financial condition; and iv) future perspective of the evolution of the collections.
In terms of the projection of future impacts at NOS, these will depend on the extent, namely timing, of the virus and the respective containment measures, making it difficult to predict the scale of the knowledge, however, that it will occur in the areas mentioned above. NOS 'capital structure is within the 2x Net Financial Debt / EBITDA After Leasings Payments (EBITDA -Leasings Payments (Capital and Interest)) threshold, so the Board of Directors of NOS believes that the company will overcome the
7. Financial assets at fair value through other comprehensive income
At 30 June 2021 and 31 December 2020, this caption was composed as follows:
| 30 June 2021 | 31 December 2020 | |
|---|---|---|
| Deepfence | 2,103,675 | 2,037,325 |
| Nextail | 1,628,760 | 1,628,760 |
| lriusrisk | 1,416,514 | 1,416,514 |
| Style Sage | 1,481,137 | 1,378,547 |
| Sensei | 405,900 | 405,900 |
| Others | 472,006 | 432,745 |
| 7,507,992 | 7,299,791 |
At 30 June 2021, these investments correspond to shareholdings in which the Group has no significant influence.
According to IFRS 9 these investments at fair value through other comprehensive income' as they are held as long-term strategic investments and there is no expectation that these investments will be sold in the short and, so, were irrevocably designated as investments at fair value through other comprehensive income. For investments with a maturity of less than a year the acquisition costs were considered as a reasonable approximation of their fair value. For investments with a maturity greater than a year the subsequent changes in fair value are presented through other comprehensive income. The fair value of the investments is calculated in the currency of the investment and converted to euros at the end of the reporting year.
In the periods ended at 30 June 2021 and 2020, the change in investments at fair value through other comprehensive income was as follows:
| 30 June 2021 | 30 June 2020 (restated) |
|
|---|---|---|
| Opening balance | 7,299,791 | 5,344,811 |
| Fair value | 208,201 | (257,787) |
| Closing balance | 7.507.992 | 5,087,024 |
StyleSage
Stylesage is a strategic analytics SaaS platform that helps fashiers and brands with critical pre, in and post season decisions globally. Every day, StyleSage pulls product data from competitors' ecommerce websites from around the world. Then, with groundbreaking technology in machine learning and visual recognition, StyleSage cleans, organizes the massive amounts of collected data into a cloud-based dashboard that empowers brands informed, data-driven decisions in areas such line planning, markdown optimization, and global expansion.
Nextail
Nextail is a Spanish company that has developed a cloud-based platform that combines and prescriptive analutics to upgrade retailers' inventory management processes and store operations. The company raised a S10.0 million Series A round led by London and Amsterdam based venture capital firm KEEN Venture Partners LLP ("KEEN"), together with Sonae M and existing investor Nauta Capital. The new financing is being used to accelerate product development and double the size of the team, as it grows internationally.
IriusRisk
lriusRisk (previously named Continum Security) is a Spanish based company with an application to address vulnerabilities early in the development process. In order their international growth plans, the company has raised an investment round of EUR 1.5 million, which was led by Swanlaab Venture Factory and joined by JME Venture Capital and Sonae M. In
September 2020, the company raised a series A round of 6.7 million dollars participated by Paladin, 360 CP, Swanlab JME Venture Capital and Sonae IM.
Deepfence
Deepfence is a leading US-based cloud-native workload protection platform that aims to provide a unified security platform for kubernetes, virtual machines and serverless worklads. Deeplence ensures business continuity in the face of persistent threats by detecting and disrupting sophisticated attacks targeting cloud-native technologies, the "glue" that keeps the current world connected. Deepfence raised \$9.5 million in Series A financing led by AllegisCyber, with participation from Sonae M, and existing investor Chiratae Ventures.
8. Financial assets at fair value through profit or loss
At 30 June 2021 and 31 December 2020, this caption was composed as follows:
| 30 June 2021 | 31 December 2020 | |
|---|---|---|
| Arctic Wolf | 23,815,705 | 46,129,113 |
| Cellwise | 8,235,901 | 7,976,141 |
| Ometria | 8,031,046 | 7,664,993 |
| Sixgill | 5,048,820 | 4,889,580 |
| Case on IT | 2,244,546 | 4,402,087 |
| Weaveworks | 4,207,349 | 4,074,649 |
| CB4 | 3,411,425 | 3,278,059 |
| Sales Layer | 2,500,358 | 2,500,358 |
| Sellforte | 2,500,000 | |
| Visenze | 2,456,085 | 2,378,620 |
| Reblaze | 2,314,043 | 2,241,058 |
| CiValue | 1,884,893 | 1,825,443 |
| Jscrambler | 1,550,000 | 1,550,000 |
| Aryaka | 1,369,362 | - |
| Daisy Intelligence | 1,126,503 | 1,050,496 |
| Others | 3,114,177 | 2,363,466 |
| 73,810,213 | 92,324,063 |
lnvestments not irrevocably designated in the intitial Assets at fair value for other comprehensive income, are classified as 'Investments at fair value through profit or loss in accordance with IFRS 9. Are also included in this caption the investments in associated companies, held by a venture capital or equivalent, in which the Group opted, in the initial recognition to measure at fair value through results in accordance with IFRS 9. In the case of the investments of less than 1 year, their acquisition cost was considered a reasonable approximation of their ralue. For investments over 1 year, subsequent changes in fair value are presented through profit or loss. The investments is calculated in the currency of the investment and converted to euros at the end of the reporting year.
In the periods ended at 30 June 2021 and 2020, the change in investments through profit and loss was as follows:
| 30 June 2021 | 30 June 2020 (restated) |
|
|---|---|---|
| Opening balance | 92,324,063 | 53,022,211 |
| Acquisitions/Capital Increases | 4.404.499 | 3,275,358 |
| Fair value | 1,220,291 | (1,801,098) |
| Exits | (24,138,640) | |
| Closing balance | 73,810,213 | 54.496.471 |
At 30 June 2021, the item "Exits" refers to the partial sale of SonaelM's stake in Artic Wolf for the amount of EUR 36.4 million, which generated a capital gain of EUR 12.3 million.
In the periods ended 30 June 2021 and 2020, the movement in net income was as follows:
| 30 June 2021 | 30 June 2020 (restated) |
|
|---|---|---|
| Gains and losses recognized profit or loss | 13,499,571 | (1,801,098) |
| 13,499,571 | (1,801,098) |
At 30 June 2021, the caption "Gains and losses recognized profit or loss" includes the amount of EUR 12,279,280 referring to the capital gain from the partial sale of SonaelM's stake in Artic Wolf.
ArcticWolf
ArcticWolf, a US based company, is a global pioneer in the SOC-as-a-Service market with cutting-edge managed detection and response (MDR), which provides a unique combination of technology and services for clients to quickly detect and contain threats. Sonae M, jointly with US technology investors Lightspeed Venture Partners and Redpoint, entered in the company's cap table in 2017 in a series Bround. During 2018, the Company closed a \$45M series C round and, at the end of 2019, the Company launched a \$60M Series D round. In October 2020, the company announced it has raised \$200 million in Series E funding at a valuation of \$1.3 billion. The funding round was led by Viking Global Investors, with additional participation from DTCP and existing investors. The funding round was led by Viking Global Investors, with additional participation from DTCP and existing investors. Sonae IM participation its stake.
Ometria
Ometria is a London based Al powered customer maketing platform with the vision to become the central the communication between retailers and their customers. This investment was done by Sonae M in the Series A round, alongside several strategic investors (including Summit Action, the US VC fund of the Summit Series) and was recently reinforced during series B round.
CB4
CB4 is a company based in Israel that provides a patented Al software solution for brick and mortar retailers to identify and correct critical operational issues at store, product level. The investment was part of a series B \$16M round, led by Octopus Ventures with Sonae IM joining. Existing investors Sequoia Capital and Pereg Ventures also participated in the round.
Rehlaze
Reblaze is an Israeli company that proprietary security technologies in a unified platform, shielding assets from threats found on the Internet. The company raised a Series A round in which Sonae IM led jointly with JAL Ventures and Data Point Capital.
Visenze
Visenze is a Singapore-based company that delivers intelligent image recognition that shorten the path to action as consumers search and discover on the visual web. Retailers use ViSenze to convert images into immediate product search opportunities, improving conversion rates. Media companies use ViSenze to turn any image or video into an engagement opportunity, driving incremental revenue. Sonae M co-led, with Gobi Partners, a \$20M Series C round that will enable the artificial intelligence company to further invest in its penetration among smartphone manufacturers, as well as with consumer and social communication applications.
Daisy Intelligence
Daisy Intelligence is an Al-powered platform for retail merchandising teams focused on optimizing promotional product and price mixes for dramatically improved business results. Sonae IM partners invested in a C\$ 10M (circa EUR 7M) series A round.
Sixgill
Sixgill is a market leader in deep and dark web cyber threat intelligence. Sixgill helps Fortune 500 companies, financial institutions, governments, and law enforcement agencies protect their finances, networks and reputations from cuberthreats that lurk in the deep, dark and surface webs. The advanced cuber threat intelligence platform automates all phases of the intelligence cucle -- collection, analysis and dissemination of data - providing organization and actionable insights to protect their various assets in the ever-evolving cyber threatscape. Sixgill raised \$15M in a second round led by Sonae IM and REV Venture Partners with participation by Our Crowd. Previous investors Elron and Terra Venture Partners also participate in the round.
Case on IT
Case on IT is a Spanish company that has developed Medux, a machine learning solution for the measurement, prediction and analysis of landine, mobile and television services quality. Medux measures the customer experience in markets that collectively serve over 600 million users worldwide. The company raised a Series B round of international fund with Sonae IM.
ciValue
ciValue is an Israeli company with offices in New York, Paris, and Tel Aviv, is a disruptive provider of cloud-based Precision Marketing and Supplier Advertising Platforms for Retailers. Sonae IM, coupled with Nielsen, led a \$6M Series A investment.
Cellwize
Cellwize is a leading provider of Mobile Network Automation solutions for telco, based in Israel. Cellwize offers modular solutions for an agile adoption of 'zero-touch' network automation capabilities on top of a virtualized service orchestration platform. It supports network operations, especially given the increase in network driven by 5G adoption. Sonae Minvested in a round of \$15M led by Deutsche Telekom Capital Partners. In November 2020, the company announced a \$32 million Series B funding round led by Intel Capital and Qualcomm Ventures LLC with participation from Verizon Ventures, Samsung Next, and existing shareholders.
Jscrambler
lscrambler is a Portuguese startup that develops a security soution to protect Web and Mobile Applications (Javascript code). The company raised a \$2.3 million in a series A financing round that was led by Sonae M with the co-investment of Portugal Ventures.
Sales Layer
Sales Layer is a Spanish based company with a cloud-based Product Information Management (PIM) platform, helping brands and retailers to transform their catalogs into a digital, enriched and multichannel control center. Sonae IM recently led its series A round.
Weaveworks
Weaveworks is a US company that helps teams to adopt cloud native computing, managing cloud native infrastructure and applications quickly, reliably and at scale. Weaveworks announced a \$36.65 million Series C funding round led by some of the world's leading public cloud and telecommunications companies, including first-time investors (AWS), Ericsson, Grange Ventures, Sonae IM and Telekom Investment Pool (TIP). The round also included follow-on investments from Accel, GV, and Redline Capital.
Sellforte
Sellforte, based in Helsinki, Finland, is a SaaS platform for Retailers, Brands and Telcos, which uses proprietary data science and Al to measure the effectiveness of online and offline marketing investments.
Portainer
New Zealand-based Portainer.io is one of the world's most popular container management platform makes it easy to manage applications in container environments.
Aryaka
Aryaka, founded in 2009, is a pioneer in offering long-distance connectivity in a service model, taking on the mission of connecting organizations globally while maintaining application performance as well as operational simplicity.
9. Assets and liabilities held for sale
In the period ended 30 June 2021, assets and liabilities held for sale include the assets and liabilities of Digitmarket, a subsidiary sold in July 2021, in accordance with IFRS 5.
The details of Assets and Liabilities held for sale can be detailed as follows:
| (Amounts expressed in Euro) | June 2021 |
|---|---|
| Assets | |
| Non-current assets | |
| Property, plant and equipment,intangible assets and Right of use | 905,739 |
| Deferred tax assets | 155,564 |
| Other non-current assets | 61,338 |
| Total non-current assets | 1,122,641 |
| Current assets | |
| Inventories | 198,413 |
| Trade receivables | 7,947,063 |
| Other current assets | 2,913,875 |
| Cash and cash equivalents | 7,789,491 |
| Total current assets | 18,848,842 |
| Assets held for sale | 19,971,483 |
| Liabilities | |
| Non-current liabilities | |
| Lease liabilities | (186,561) |
| Provisions | (12,661) |
| Total non-current liabilities | (199,223) |
| Current liabilities | |
| Trade payables | (8,290,898) |
| l ease liabilities | (119,057) |
| Other current liabilities | (5,941,442) |
| Total current liabilities | (14,351,397) |
| Liabilities directly associated with the assets held for sale | (14,550,620) |
The item "Cash and cash equivalents" includes the alscation to assets held for sale of the liquidity applied in the amount of 7,725,000 euros.
In the period ended 30 June 2021 and 2020 (restated) the amounts of Digitmarket's income statement were recorded under the heading "Consolidated net income/(loss) for the period of discontinued operations" (Note 11), in accordance with IFRS 5.
10. Sales and services rendered
At 30 June 2021 and 2020, this caption was composed as follows:
| 30 June 2021 | 30 June 2020 (restated) |
|
|---|---|---|
| Technologies | 28,668,498 | 25,978,080 |
| Media and others | 7.081.372 | 6,939,121 |
| 35,749,870 | 32,917,201 |
The detail of unrecognised revenue related to performance obligations of contracts with customers not satisfied in the period ended at 30 June 2021, by type of contract and according to its duration, is as follows:
| Contract with customer duration | |||||
|---|---|---|---|---|---|
| 2021 | 2022 | 2023 | >2023 | Total | |
| Technologies: | |||||
| Cybersecurity | 4.431.554 | 7.118.325 | 4.320.159 | 777.008 | 16.647.046 |
| Total revenue from contracts with customers | 4,431,554 | 7.118.325 | 4,320,159 | 777.008 | 16,647,046 |
11. Discontinued units
Bizdirect
In the periods ended 30 June 2021 and 2020, the net income and cash flows from discontinued operations can be detailed as follows:
| (Amounts expressed in Euro) | June 2021 | June 2020 (restated) |
|---|---|---|
| Sales | 20,678,415 | 34,121,378 |
| Services rendered | 2,574,960 | 3,125,274 |
| Other income | 10,861 | 1,219 |
| 23,264,236 | 37,247,871 | |
| Cost of sales | (19,715,473) | (33,106,838) |
| External supplies and services | (1,773,679) | (2,045,931) |
| Employee benefits expense | (1,780,393) | (1,534,847) |
| Depreciation and amortisation | (150,359) | (162,307) |
| Other expenses | (5,823) | (3,331) |
| (23,425,727) | (36,853,254) | |
| Other financial expenses | (15,575) | (47,061) |
| Other financial income | 18,685 | 13,575 |
| Current income / (loss) | (158,381) | 361,130 |
| Income taxation | 27,562 | (88,137) |
| Consolidated net income/(loss) for the period of discontinued operations | (130,819) | 272,993 |
| Attributed to: | ||
| Non-controlling interests (discontinued operations) | (32,705) | 67,975 |
| Cash flows from operating activities (1) | (903,596) | 1,612,171 |
| Cash flows from investment activities (2) | (14,112) | (7,711) |
| Cash flows from financing activities (3) | (118,474) | (815,197) |
| Net cash flows (4)=(1)+(2)+(3) | (1,036,181) | 789,263 |
12. Related parties
During the periods ended at 30 June 2021 the balances and transactions maintained with related parties were mainly associated with the normal operational activity of the Group and to the concession and obtainment of loans.
The balances and transactions with related parties during the periods ended at 30 June 2021 and 2020 were as follows:
| Balances at | |||||||
|---|---|---|---|---|---|---|---|
| 30 June 2021 | |||||||
| Accounts receivable | Accounts payable | Treasury applications | Other assets | Other liabilities | |||
| Parent Company (Sonae SGPS) | 2,474,186 | 8,384,215 | 380,785 | 11,877 | |||
| Companies jointly controlled | 836,285 | 270,760 | 303,570 | 375,160 | |||
| Associated companies | 6,750 | 2,123,076 | 10,600 | ||||
| Others related parties | 6,386,834 | 75,056 | 60,164 | 645,968 | |||
| 9,697,305 | 8,736,781 | 2,867,594 | 1,043,605 | ||||
| Balances at 30 June | |||||||
| 2020 (restated) | |||||||
| Accounts receivable | Accounts payable | Treasury applications | Other assets | Other liabilities | |||
| Parent Company (Sonae SGPS) | 3,881,303 | 4,797,055 | 914,598 | 11,948 | |||
| Companies jointly controlled | 6,056,754 | 407,894 | 4.700 | 696,381 4,011,531 |
894,349 | ||
| Associated companies | 1,842 | ||||||
| Others related parties | 8.061.189 | 86,613 | 289,319 | 72,351 | |||
| 17,999,247 | 5,293,403 | 4,700 | 5,911,830 | 978,648 | |||
| Transactions at | |||||||
| Sales and services Supplies and services | Interest and similar | Interest and similar | 30 June 2021 Supplementary |
||||
| rendered | received | income | expense | income | |||
| Parent Company (Sonae SGPS) | 75 | 182,655 | 252,657 | ||||
| Companies jointly controlled | 1,299,043 | 371,112 | 112,522 | ||||
| Associated companies | 182,056 | 44,778 | |||||
| Others related parties | 925.075 | 418.254 | 46.349 | ||||
| 2,224,193 | 1,154,077 | 297,436 | 46,349 | 112,522 | |||
| Transactions at 30 June | |||||||
| Sales and services Supplies and services | Interest and similar | Interest and similar | 2020 Supplementary |
||||
| rendered | received | income | expense | income | |||
| Parent Company (Sonae SGPS) | 5.547 | 158.011 | 314.212 | ||||
| Companies jointly controlled | 1,276,465 | 341.812 | 81 | 127.000 |
During the period ended 30 June 2021, the company distributed as dividends the amount of 7,859,28 euros to Sonae (6,724,906 euros in 2020) and 18,824,123 euros to Sontel BV (16,107,239 euros in 2020).
778,436
2,060,448 ____________________________________________________________________________________________________________________________________________________________________
332
468,763
968,918
54,740
369,034
The transactions between Group companies were eliminated in consolidation, and therefore are not disclosed in this note.
All the above transactions were made at market prices.
Both accounts receivable and payable with related parties will be paid in cash and have no guaranties attached.
During the periods ended at 30 June 2021, no impairment losses have been recognised as accounts receivables of related parties.
Associated companies
Others related parties
48,037
178,537
3,500
13. Segment information
In the periods ended at 30 June 2021 and 2020, the following business segments were identified:
- Media;
- Technologies; and
- Holding activities.
These segments were identified taking into considerations: the fact of being group units that develop activities where we can separately identify revenues and expenses, for which financial is separately developed and their operating results are regularly reviewed by management and over which decisions are made. For example, decisions about allocation of resources, for having similar products/services and also taking into consideration the shold (in accordance with IFRS 8).
The segment 'Holding activities' includes all the parent company that have as their main activity the management of shareholdings.
Excluding the ones mentioned above, the remaining activities of the Group have been classified as unallocated.
Inter-segment transactions during the years ended at 30 June 2021 and 2020 were eliminated in the se transactions were made at market prices.
lnter-segment transfers or transactions were entered under the normal commercial terms and conditions that would also be available to unrelated third parties and were mainly related to interest on treasury applications and management fees.
Dverall information by business segment at 30 June 2020, prepared in accordance with the same accounting policies and measurement criteria adopted in the preparation of the consolidated financial statements, can be summarised as follows:
| Media | Technologies | Holding Activities | Subtotal | Eliminations and others | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Jun 21 | Jun 20 | June 2021 | June 2020 (restated) |
June 2021 | June 2020 | June 2021 | June 2020 | June 2021 | June 2020 | June 2021 | June 2020 (restated) |
|
| Revenues: | ||||||||||||
| Sales and services rendered | 6,959,487 | 6.482.561 | 28,668,497 | 25,882,079 | 195,000 | 171.250 | 35,822,984 | 32.535.890 | (73,114) | 381,311 | 35,749,870 | 32,917,201 |
| Other income | 290.819 | 224,480 | 631,292 | 801,349 | 126,140 | 19,925 | 1,048,251 | 1,045,754 | 9.301 | 46,140 | 1,057,552 | 1,091,894 |
| Total revenues | 7,250,306 | 6,707,041 | 29,299,789 | 26,683,428 | 321,140 | 191 175 | 36,871,235 | 33,581,644 | (63,813) | 427,451 | 36,807,422 | 34,009,095 |
| Depreciation and amortisation | (317,153) | (596,079) | (3,215,839) | (3,504,857) | (18,179) | (15,701) | (3,551,171) | (4,116,637) | (168,293) | (211,521) | (3,719,464) | (4,328,158) |
| Provisions and impairment losses | (230,714) | (52,938) | (10,504) | (64,139) | (241,218) | (117,078) | (241,218) | (117,078) | ||||
| Net operating income / (loss) for the segment | (1.070,362) | (1,917,544) | (5,640,021) | (5,503,573) | (886,735) | (696,821) | (7,597,118) | (8,117,938) | 31,053 | 437.425 | (7,566,065) | (7,680,513) |
| Interest income | 8.853 | તે 436 | 86.451 | તર,084 | 555,415 | 488,123 | 650,719 | 590,643 | (291,427) | (159,763) | 359,292 | 430,880 |
| Interest expenses | (16,896) | (8,394) | (468,008) | (413,918) | (888) | (984) | (485,792) | (423,296) | 294.303 | 137,272 | (191,489) | (286,024) |
| Gains and losses on financial assets at fair value through profit or loss | 13,499,571 | (1,801,098) | 13,499,571 | (1,801,098) | 13,499,571 | (1,801,098) | ||||||
| Gains and losses in joint ventures and associated companies | (44,735) | (52,410) | 23,711,200 | (287,086) | 17,599,432 | 10,555,528 | 41,265,897 | 10,216,032 | 41,265,897 | 10,216,032 | ||
| Other financial results | (7,092) | (5,638) | 109,234 | (566,643) | (1.169,628) | (1,643,188) | (1.067,486) | (2,215,469) | 1,137,100 | 1,603,162 | 69,614 | (612,307) |
| Income taxation | 332,721 | 433,001 | (8,686,414) | 1,046,618 | 75,042 | 50,535 | (8,278,651) | 1,530,154 | 44,034 | 10.775 | (8,234,617) | 1,540,929 |
| Consolidated net income/(loss) for the period | (797,511) | (1,541,549) | 22,612,013 | (7,432,616) | 16,172,638 | 8.753.193 | 37,987,140 | (220,972) | 1,215,063 | 2,028,871 | 39,202,203 | 1,807,899 |
| Consolidated net income/(loss) for the period of discontinued operations |
(133.137) | 308.042 | (133.137) | 308,042 | 2,318 | (35,049) | (130,819) | 272,993 | ||||
| Attributable to: | ||||||||||||
| Shareholders of parent company | (797,511) | (1,541,549) | 22,511,581 | (7,192,549) | 16,172,638 | 8.753.193 | 37,886,708 | 19.095 | 1,217,381 | 2,949,138 | 39,945,124 | 2,968,233 |
| Non-controlling interests | (943,191) | (942,996) | (943,191) | (942,996) | 102,156 | (12,320) | (841,035) | (955,316) | ||||
| Non-controlling interests (discontinued operations) | (32,705) | 67,975 | (32,705) | 67,975 | (32,705) | 67,975 | ||||||
| June 2021 | December 2020 | June 2021 | December 2020 | June 2021 | December 2020 | June 2021 | December 2020 | June 2021 | December 2020 | June 2021 | December 2020 | |
| Assets: | ||||||||||||
| Tangible, intangible assets, Right of use and goodwill | 2,890,027 | 2,948,598 | 27,141,753 | 29,755,984 | 86,537 | 70,200 | 30,118,317 | 32,774,782 | 2,378,658 | 2.631.165 | 32,496,975 | 35,405,947 |
| Inventories | 228,278 | 194 413 | 57.414 | 228,278 | 251,827 | 228,278 | 251,827 | |||||
| Investments in joint ventures and associated companies | 648,884 | 693,619 | 137,932,257 | 144,065,913 | 680,608,499 | 662,983,184 | 819,189,640 | 807,742,716 | 52,943 | 52,944 | 819,242,583 | 807,795,660 |
| Financial assets at fair value through other comprehensive income | 3,047,947 | 3.047.949 | 7,460,045 | 7,251,842 | 10,507,992 | 10,299,791 | (3,000,000) | (3,000,000) | 7,507,992 | 7,299,791 | ||
| Financial assets at fair value through profit or loss | 73,810,213 | 92,324,063 | 73,810,213 | 92.324.063 | 73,810,213 | 92,324,063 | ||||||
| Other non-current assets and deferred tax assets | 3,096,461 | 2,924,374 | 12,517,060 | 13,714,766 | 144,810,101 | 176,955,566 | 160,423,622 | 193,594,706 | (137.535,496) | (169,611,538) | 22,888,126 | 23,983,168 |
| Other current assets of the segment | 11,162,398 | 11,957,020 | 52,481,528 | 73,224,153 | 188,651,752 | 187,926,829 | 252,295,678 | 273,108,002 | 3,428,403 | 7,322,335 | 255,724,081 | 280,430,337 |
| Assets held for sale | 20,071,774 | 20,071,774 | (100,291) | 19,971,483 | ||||||||
| Liabilities: | ||||||||||||
| Liabilities of the segment | 10,592,744 | 10.487.209 | 117,426,768 | 137,985,308 | 2,109,243 | 2,427,059 | 130,128,755 | 150.899.576 | (22,338,678) | (17,909,065) | 107,790,077 | 132.990.511 |
| Liabilities directly associated with the assets held for sale | 15,111,432 | 15,111,432 | (560,812) | 14,550,620 | ||||||||
| CAPEX | 264,760 | 6.093.911 | 6.414.293 | 24,885,132 | 5,964,636 | 46,518,317 | 12,643,689 | 77,497,360 | (6,031,572) | (49,428,786) | 6,612,117 | 28,068,574 |
During the period ended at 30 June 2021 and 2020, the inter-segments sales and services were as follows:
| Multimedia | Information Systems | Holding Activities | |
|---|---|---|---|
| 2021 | |||
| Multimedia | 92,489 | ||
| Information Systems | - | 37,500 | |
| Holding Activities | |||
| External trade debtors | 6,959,487 | 28,668,497 | 65,011 |
| 6,959,487 | 28,668,497 | 195,000 | |
| 2020 (restated) | |||
| Multimedia | - | - | |
| Information Systems | 80,000 | ||
| Holding Activities | |||
| External trade debtors | 6,482,561 | 25,882,079 | 91,250 |
| 6,482,561 | 25,882,079 | 171,250 |
During the periods ended at 30 June 2021 sales and services rendered in the Media and Holding Activities segments were obtained predominantly in the Portuguese market representing aproximately 95% and 100% (97% and 100% in 2020), respectively.
During the period ended at 30 June 2021, for the Technologies segment, the Spanish market is also dominant, representing 49.5 % of revenue (53% in 2020).
14. Subsequent Events
ln July 2021, it was completed the sale of the share capital and voting rights of Bizdirect to Claranet Portugal, S.A., following the approval from the competent competition authority and the verification of the conditions precedent agreed between the parties.
This transaction - generating total proceeds of 12.2 million euros - results in the Sonaecom's consolidated results, amounting approximately to 5.4 million euros.
Sonaecom SGPS is listed on the Euronext Stock Exchange. Information is available on Reuters under the symbol SNC.LS and on Bloomberg under the symbol SNC:PL.
SAFE HARBOUR
This document may contain forward-looking information and statements, based on management's current expectations or beliefs. Forward-looking statements are statements that are not historical facts.
These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including but not limited to, changes in regulation, the telecommunications industry and economic conditions; and the effects of competition. Forward-looking statements may be identified by words such as "believes", "expects", "intends", "should", "seeks", "estimates", "future" or similar expressions.
Although these statements reflect our current expectations, which we believe are reasonable, investors, and, generally, the recipients of this document are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. You are cautioned not to put undue reliance on any forward-looking information or statements. We do not undertake any obligation to update any forward-looking information or statements.
Report available on Sonaecom's corporate website www.sonaecom.pt
Investor Relations Contacts Tlf: +351 22 013 23 49