Agenda - nos.pt · New Ways of Working TRANSFORMATION PROGRAMME Customer Lighthouse Next Gen...

11

22

Agenda

Results Update 1Q20 38

Executing on Strategy 10

NOS at a Glance 3

Appendix 63

Financial Highlights 28

3

44

Agenda



NOS at a Glance 3

Appendix 63


55

Launch of Optimus The 3rd Mobile operator in the market

Spin-off of ZON, the largest Pay TV player in Portugal, (previously PT Multimedia) from Portugal Telecom Group

27 August Merger between ZON and Optimus

Next generation network expansion FttH Network sharing agreement signed with Vodafone

14 May Rebranding to

Premium sport Content Sharing Agreement signed with PT, Vodafone and Nowo

Reduction stake in Sport TV to 25%

Institutional Presentation

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Letter of Intent signed with Vodafone to negotiate mobile network sharing agreement

Disposal of NOS Towering to Cellnex

Disposal of NOS International Carrier Services

66


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€67 M€33 M

NOSAudiovisuais

(100%)

€69 M€23 M

NOS Cinemas

(100%)

€1,381 M€584 M

NOS Comunicações

(100%)

ZAP(equity consolidation)

(30%)€176 M

Sport TV (equity consolidation)

(25%)€188 M

Dreamia(equity consolidation)

(50%)€176 M

NOS Group€ 1,458M

€ 640 M

€ M Revenues

€ M EBITDA

77

98%

NOS

Altice

Vodafone

Nowo

90%

NOS

Altice

Vodafone

Nowo

96%

NOS

Altice

Vodafone

Nowo

168%

NOS

Altice

Vodafone

Others

89%

NOS

Altice

Vodafone

Nowo

3,464M€

NOS

Altice

Vodafone

Nowo

Source: ANACOM. Pay TV, Fixed Broadband and Fixed Voice: residential penetration


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Pay TV, Total Market 4.1M subs [% Subs, Anacom Data 1Q20] Fixed BB, Total Market 4.0M subs [% Subs, Anacom Data 1Q20] Multiple Play Bundles, Total Market 3.7 Subs [% Subs, 1Q20]

Fixed Voice, Total Market 5.1M accesses [% Subs, Anacom Data 1Q20] Mobile, Total Market 17.3M subs [% Subs, Anacom Data 1Q20] Retail Revenues [YtD; FY19]

88

European AvaragePortugal

Source: Market Regulators. European average includes Sweden, Spain, UK, France and Germany.


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NOS, Convergent + Integrated Penetration [%] Service Penetration [%] Total Market Retail Revenues, YoY Change [Millions of Euros; % ]

99Sources: Market Regulators; Operator Reports; FttH Council Europe.


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Homes Passed by Operator and Techonology FttH Availability [%, 2019] Capex as % of Revenues [ % ]

10

1111

Agenda



NOS at a Glance 3

Appendix 63


1212

NOS has a

of assets and skills…

…which will be complemented and

leveraged to

within a strategy focused

on domestic market share growth…

…supported by benchmark operational efficiency that

willdrive margin growth and

while maintaining a strong

balance sheet…

…that will enableus to


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1313

25% 26% 26%

29% 30% 31%33% 33%

Telco Revenue Market Share


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Note: Retail Revenue Market Shares reported by ANACOM used as from 2015.

2018 Target

1414

0.0%

10. 0%

20. 0%

30. 0%

40. 0%

50. 0%

60. 0%

70. 0%

20. 0

25. 0

30. 0

35. 0

40. 0

45. 0


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Residential Fixed Access ARPU, Fixed Access Convergent Penetration [Euros, %] Relative Performance of Pay TV, Fixed BB, Fixed Voice and Mobile RGUs [Rebased, 1=1Q14]

Note: Converged + Integrated Fixed Access Subscriber penetration used from 1Q18.

1515

A History of Innovation

IRIS

2011

YoutubeLeanback

2017

RDK STB 4K

2016

nPVR

2014

7 Day Restart

2013

UMA New

Interface

2018

NOS Play

2015


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New generation of internet

equipments

2019

UMA v2hybrid

set-top box

2020

1616

NOS TV Internet equipmentsUMA


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Hybrid Set-Top Box

https://rdkcentral.com/

17


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Customer centric value propositions

Personalized customer-base management

Take advantage of technological disruptions

Explore segments and channel opportunities

18


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19


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20


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2121

IT SolutionsIaaS and Data centre services, Managed Services Security

and IT Governance

Better segmentation with greater use of analytics and targeted sales channels

Central ProVirtual solution for professional

management calls

Wi-Fi ProProvides tailor made

professional WiFi solutions for SMEs

Transformation of operating and service model and focus on customer service and satisfaction

Offer simplification and focus on segment relevant innovation with more IT based solutions


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2222

Evolve HFC Grow FttH+

Full duplex(N+0)

Distributedarchitecture

DOCSIS 3.1

10 GPON

Footprint

Mbps


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2323

FttH Swap: HP delivered to date (cumulative)CAPEX Per Home FttH Network (NOS, DST and VDF)

VDF to NOS NOS to VDF

2.6 million FttH households to be swapped withVodafone until 2022 (1.2 million NOS, 1.4 million Vodafone)


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0

50

100

150

200

250

(Euro)

201920162015 2017

Cost per Home (FttH – NOS)

Cost per Home (FttH – Total)

-60%

2018

2424

NOS FttH Evolution (NOS, DST and VDF) [Million Homes]% NOS Homes Passed with FttH

HFC FTTH (NOS)Note: FttH includes DST and Vodafone


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2525


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4 February 2020

•

•

•

14 April 2020

•

•

•

•

≈

•

• ≈ ≈

2626

+200% 4G capacity

Increased 4G capacity and coverage in 92.5% (indoor coverage) and 99% (outdoor coverage) of the network

Option to gradually refarm 2100Mhz(+4G capacity and 3G network renewal)

Future Proof 4G network

Complete modernization of 3G network

Global network optimization

+ Voice Capacity / EDGE data

+ 2G capacity (TRX): 25%

15% of sites with reinforced coverage

Global network optimization plan

Improve 3Gand 4G data QoE

+ data coverage(99% of populationcovered)

Enable new4G offers over 150/50M

+ voicecoverage

Improvement of voicecall quality

Decrease in dropped calls


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2727

Before After Before After Before After

implemented “Excellent” retention rate

23%

24%

100%


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User Throughput Voice Quality Drop Call

28

Digital

Data Management & Adv. Analytics

RPA & AI

New Ways of Working

TRANSFORMATION PROGRAMME

CustomerLighthouse

Next Gen Marketing & Sales

CustomerService 4.0

Service Failure Avoidance and Mgmt

Offer Simplification

Segment of One

RelationshipLifecycle Management

E2E Process Integrity

New Service Models

Smart Network and Operations

Zero Waste

Simplify & Automate

Customer Experience Offer and Business Model Customer Centric Processes Fitness Enablers


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STRATEGIC AMBITION

CORE OBJECTIVES

Revolutionize Customer Centricity focusing on quality and experience

1.

Build a Fitter Operating Model

2.

Achieve NPS leadership

Boost digital weight on total client interactions

Capture recurring cash savings

2929

Focus on vision and ambition

set-up

Main focus on initiative design

and planning

Main focus on implementation

and capture of quick wins

Main focus onmonitoring and

boosting impacts100

FY18 FY22

60

FY17

0

FY21

40

FY20FY19

80

20

All initiatives in monitoring mode

1st wave initiatives into monitoring mode

Launch of 1st

wave initiatives

Launch of 3rd

wave initiatives

1st wave initiatives into execution

mode

Launch of 2nd wave initiatives

2nd wave initiatives into execution

mode


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3030


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1 2 3

3131


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42 3 wbcsd1

3232


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321 4

33

3434

Agenda



NOS at a Glance 3

Appendix 63


3535


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Note: Growth rates as reported in each period.

Consolidated Revenues (YoY, %)

Audiovisuals Revenues (YoY, %)

Telco Revenues (YoY, %)

Cinema Exhibition Revenues (YoY, %)

3636


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Fixed Growth [2014-2019] Mobile Growth [2014-2019] NOS Network OPEX [M €]

3737


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Other

CommercialCosts

CustomerRelated

W&S

Supplies & ExternalServices

Support +Maintenance

Direct Costs [M €] Non-Direct Costs [M €]Total OPEX [M €]

3838

6.0%

8.0%

10. 0%

12. 0%

14. 0%

16. 0%

100.0

120.0

140.0

160.0

180.0

200.0

220.0

41. 0%

42. 0%

43. 0%

44. 0%

45. 0%

46. 0%

47. 0%

380.0

430.0

480.0

530.0

580.0

630.0

680.0


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38. 0%

39. 0%

40. 0%

41. 0%

42. 0%

43. 0%

44. 0%

45. 0%

46. 0%

47. 0%

380.0

430.0

480.0

530.0

580.0

630.0

0.0%

2.0%

4.0%

6.0%

8.0%

10. 0%

12. 0%

14. 0%

16. 0%

18. 0%

20. 0%

0.0

20. 0

40. 0

60. 0

80. 0

100.0

120.0

140.0

160.0

180.0

200.0

Non-Recurrent Impact

Consolidated EBITDA and Margin (Millions of Euros, %) Telco EBITDA and Margin (Millions of Euros, %)

OCF Incl. Leasings, % of Revenues (Millions of Euros, %) FCF Bef. Dividends, Recurrent FCF as % of Revenues (Millions of Euros)

Recurrent FCF Growth

3939


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Total CAPEX Including Leasings (Millions of Euros) Telco CAPEX Excl Leasings, % of Telco Revenues (Millions of Euros, %)

2019 Customer CAPEX Breakdown (%) 2019 Technical CAPEX Breakdown (%)

4040

Average Cost of Debt [%]

Net Financial Debt, Net Financial Debt/EBITDA AL [€millions, X]

credit rating in 1Q18 (reaffirmed in 1Q20 by S&P)

recognizes operational prospects and financial

stability

Stable Outlook

Stable Outlook


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Cash & Liquidity Position

1.2x

1.4x

1.6x

1.8x

2.0x

2.2x

2.4x

500

600

700

800

900

1,000

1,100

1,200

1.2x

1.4x

1.6x

1.8x

2.0x

2.2x

2.4x

2.6x

2.8x

3.0x

500

600

700

800

900

1,000

1,100

1,200

1,300

1,400

Net Debt, Net Debt/EBITDA [€millions, X]

4141


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Dividend Per Share [Euro Cents]

Payout as % of Net Income [%] Payout as % of Free Cash Flow [%]

4242

43

Agenda



NOS at a Glance 3

Appendix 63


44

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Results Update 1Q20

•

•

•

•

•

4545

Agenda

Results Update 1Q20

i

ii

iv

iii

4646

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Results Update 1Q20

Fixed Access Pay TV – Net Adds [Thousands] Fixed BB and Fixed Voice – Net Adds [Thousands] Mobile – Net Adds [Thousands]

4747

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Results Update 1Q20

NOS Ntw Expansion / Fixed Pay TV Net Adds [Thousands] Fixed Residential Churn [Rebased, 1Q15 = 100]

4848

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Results Update 1Q20

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10. 0

500.0

550.0

600.0

650.0

700.0

750.0

800.0

850.0

900.0

950.0

1,000.0

Convergent+Integrated Sub, RGUs/Sub [Thousands, Unit]

Convergent+Integrated Penetration of Fixed Access Subs [%] Fixed Residential ARPU [Euros]

4949

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Results Update 1Q20

≈ ≈

Traffic Evolution [%]

5050

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Results Update 1Q20

•

•

•

•

•

•

[Millions of Euros]

5151

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Results Update 1Q20

5252

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Results Update 1Q20

Open Stores [%] Traffic in Stores [%] New Pay TV Customer Sales[Sales Channels Split, %]

5353

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Results Update 1Q20

NOS Cinema Tickets Sold [Millions] NOS Cinema YoY Growth [%]

5454

Agenda

Results Update 1Q20

i

ii

iv

iii

5555

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Results Update 1Q20

5656

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Results Update 1Q20

5757

Agenda

Results Update 1Q20

i

ii

iv

iii

5858

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Results Update 1Q20

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

200.0

220.0

240.0

260.0

280.0

300.0

320.0

340.0

360.0

380.0

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

200.0

250.0

300.0

350.0

400.0

-20.0%

-10.0%

0.0%

10. 0%

20. 0%

30. 0%

40. 0%

0.0

5.0

10. 0

15. 0

20. 0

25. 0

30. 0

35. 0

40. 0

Consolidated Revenues and YoY Change [Millions of Euros, %] Telco Revenues and YoY Change [Millions of Euros, %] AV & Cinema Revenues and YoY Change [Millions of Euros, %]

5959

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Results Update 1Q20

Telco Revenue Growth [%] Consumer, Business, Wholesale & Others YoY Change [%]

6060

0.0%

20. 0%

40. 0%

60. 0%

80. 0%

100.0%

120.0%

0.0

2.0

4.0

6.0

8.0

10. 0

12. 0

14. 0

16. 0

18. 0

20. 0%

25. 0%

30. 0%

35. 0%

40. 0%

45. 0%

50. 0%

55. 0%

60. 0%

50. 0

70. 0

90. 0

110.0

130.0

150.0

170.0

60

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Results Update 1Q20

0.0%

10. 0%

20. 0%

30. 0%

40. 0%

50. 0%

60. 0%

70. 0%

80. 0%

90. 0%

100.0%

50. 0

70. 0

90. 0

110.0

130.0

150.0

170.0

190.0

Consolidated EBITDA, EBITDA Margin [Millions of Euros, %] Telco EBITDA, EBITDA Margin [Millions of Euros, %] AV & Cinema EBITDA, EBITDA Margin [Millions of Euros, %]

616161

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Results Update 1Q20

(120.0)

(100.0)

(80.0)

(60.0)

(40.0)

(20.0)

0.0

20.0

(120.0)

(100.0)

(80.0)

(60.0)

(40.0)

(20.0)

0.0

20.0

Consolidated Net Income [Millions of Euros] Cost Breakdown Below EBITDA [Millions of Euros]

626262

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Results Update 1Q20

0.0%

5.0%

10. 0%

15. 0%

20. 0%

25. 0%

30. 0%

35. 0%

40. 0%

45. 0%

50. 0%

28. 0

29. 0

30. 0

31. 0

32. 0

33. 0

34. 0

35. 0

36. 0

37. 0

38. 0

Total, Telco and AV & Cinema CAPEX Excl. Leasing Contracts [Millions of Euros] Technical CAPEX [Millions of Euros, %] Customer CAPEX, % of Telco Revenues [Millions of Euros, %]

6363

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Results Update 1Q20

0.0

10. 0

20. 0

30. 0

40. 0

50. 0

60. 0

70. 0

80. 0

90. 0

0.0

10. 0

20. 0

30. 0

40. 0

50. 0

60. 0

70. 0

0.0

10. 0

20. 0

30. 0

40. 0

50. 0

60. 0

EBITDA – Total, CAPEX Total Excl. Leasings [Millions of Euros] Operating Cash Flow [Millions of Euros] Free Cash Flow [Millions of Euros]

6464

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Results Update 1Q20

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

175.0

375.0

575.0

775.0

975.0

1,175.0

1,375.0

Net Financial Debt, Net Financial Debt/EBITDA After Leases [Millions of Euros, X] Average Cost of Debt [%]

6565

Agenda

Results Update 1Q20

i

ii

iv

iii

6666

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Results Update 1Q20

14 April 2020

•

•

•

•

•

•

1 April 2020

•

•

•

•

•

6767

6868

Agenda



NOS at a Glance 3

Appendix 63


6969


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7070


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7171

Population (1) 10,276,617 -

GDP per Capita (Current Prices) (2) 19,632.45 -

GDP Growth 2019 (3) +2.2% -

GDP Growth Forecaste 2020 (3) -3.7% -

GDP Growth Forecast 2021 (3) +0.7% -

GDP Growth Forecast 2022 (3) +3.1% -

1st Homes (4) 4,148,007 -

Pay TV (4) 4,114,823 99.2%

Broadband (4) 4,007,053 95.7%

Fixed Voice (4) 4,603,101 90.4%

Mobile incl BB and Voice(4) 17,267,726 168.0%

Mobile Broadband (4) 8,095,113 78.8%

Smartphone Penetration (5) 75% -

PC Penetration (1) 71.5% -

NOS Fixed Access Homes Passed: 4,646,123

Eurodocsis 3.0 Brand (MHz)

Upstream 5 to 65

Downstream110 to 750/860 (40% coverage)

Technology Frequency Mhz Allocated Type Renewal

2G-GSM 900 (GSM-P) 15,6 FDD 2027

3G-UMTS 2,100 30 FDD 2033

4G-LTE 800 20 FDD 2027

4G-LTE 1,800 28 FDD 2027

4G-LTE 2,600 40 FDD 2027

(1) Source: INE (2) Source: IMF (3) Source: Bank of Portugal (4) Source: ANACOM. Pay TV, Broadband and Fixed Voice: residential penetration (5) Source: Marktest.


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7272

HFC network starting point >1,000 homes

=

32-128 homes

100 – 1,000 homes

Capacity is managed inan efficient “need to” basis

Docsis 3.1 is the current norm

Removes active elementsfrom the network (less opex)

Is a step function deployment strategy

Evolution to Remote Phy / Mac Phy in order to move fibre deeper into the network as needed

10-100 homes


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7373

Standalone Shared (with VDF)

Penetration

Market Share

CAPEX

HH Density

FttH Cost Per Home Passed

≈100-250€2014-2017

≈100€

>15%>25%4P

40%

3P

60%35 – 40 €

AVERAGE SAC

CPE

350 – 400 €

Sales commissions

Installation + Other

Peak funding reached in first 2 years – network CAPEX and SAC

3-4 years to reach target penetration

Target IRR 18%

AVERAGE ARPU AND CUSTOMER PROFILES


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7474

By the end of the project, we will have the most advanced network in Portugal with a significant advantage in terms of future CAPEX requirements

Best user experience

Significant reinforcement of capacity and coverage, in line with traffic and customer growth

Focus on 4G technology

Compact and multi-technology architecture

2G/3G/4G Equipment enabling more efficient network resource management, reduced energy consumption and operating costs

3G to 4G network reconversion

3G network convertedto 4G, keeping pacewith handset migration

Quick responseand less investment

Gbps ready network, IoT and 5G evolutionary

Layers of 4G capacity and new funcionalities enable evolution to Gbps IoT HW ready for NB IoT

5G evolutionary network


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7575Source NOS estimates, Company reports and ANACOM. As from 1Q18, ANACOM have changed criteria and therefore previous periods may not be directly comparable.


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7676

Total Market Net Adds [Thousands] PT Vodafone Nowo

Source: Anacom. As from 1Q18, ANACOM have changed criteria and therefore previous periods may not be directly comparable.


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7777Source: Anacom. As from 1Q18, ANACOM have changed criteria and therefore previous periods may not be directly comparable.

PT Vodafone Nowo


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Total Market Net Adds [Thousands]

7878

PT Vodafone Nowo



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7979

PT Vodafone Others


Source: Anacom. As from 1Q18, ANACOM have changed criteria and therefore previous periods may not be directly comparable. Market Shares of Active Accesses with Usage Excl M2M and PC/Tablet/Pen/Router.

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8080

50

1,050

2,050

3,050

4,050

5,050

6,050


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Total Portuguese Telecom Market Revenues [€millions]

Source: Anacom.

8181

PT Vodafone Nowo


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8282

Shareholders (Last Update: 15 May 2020)

Nr ofShares

% ShareCapital

ZOPT, SGPS, SA 268,644,537 52.15%

Banco BPI, S.A. 25,803,574 5.01%

MFS Investment Management 11,049,477 2.14%

Norges Bank 10,891,068 2.11%

Others 198,772,724 38.58%

0,8%

10,8%

6,7%3,2%

4,6%

0,3%0,2%

1,1%

3,6%

0,5%0,5%

0,8%

1,5%

0,6%

Portugal US UKNorway Spain LuxembourgSwitzerland Belgium FranceSweden Italy GermanyRest of Europe Rest of World

DECEMBER 2019

(NASDAQ BI-ANNUALSHAREHOLDER ID,

% OF SHARE CAPITAL)

FREE FLOATZOPT SGPS, SA


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8383

Ângelo Paupério

Miguel Almeida

José Pedro Pereira da Costa

Ana Paula Marques

Jorge Graça

Luís Nascimento

Manuel Ramalho Eanes

Ana Rita Ferreira Rodrigues Cernadas

António Domingues

António Lobão Teles

António Lobo Xavier

Catarina Tavira Van-Dúnem

Cristina Maria de Jesus Marques

João Torres Dolores

Joaquim Oliveira

José Carvalho de Freitas

Maria Cláudia Azevedo

Remuneration Committee

Statutory Auditor

Company Secretary

Ethics Committee

Board of Directors Fiscal Board

Executive Commitee

Audit and Finance Commission

Corporate Governance Commission

Appointment and Evaluation Commitee


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8484

Miguel Almeida

CEO

Executive members of the Board

José Pedro Pereira da Costa

Vice-President – CFO

Ana Paula Marques

Vice-PresidentExecutive board member

Luís Nascimento

Executive board member

Manuel Ramalho Eanes


Jorge Graça



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8585

[+2€ = 3GB; +5 € = 5GB; +9€ = 10 GB]


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recording

recording

8686


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Source: Apritel, Portuguese Telecom Operators Association. VAT and PPP applied. Analysis as of July 2019.

8787

Rua Ator António Silva, 91600-404 Lisboa, Portugal

INVESTOR RELATIONS TEAM

Maria João Carrapato

Henrique Rosado

Clara Teixeira

[email protected]

[email protected]

[email protected]

+351 21 782 47 25

+351 21 782 47 35

[email protected]


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mailto:[email protected]




8888

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