NOS SGPS S A : Results 1st half 2023

PRESS RELEASE 1st HALF 2023

19/07/2023

HIGHLIGHTS 1st HALF 2023

• NOS' 5G network covers more than 90% of the country's population, including all the islands of Madeira and the Azores, and has once again been positively recognized by independent organizations
• NOS invested more than 195 million1 euros in Portugal in the first half of 2023
• The number of services (Retail Generating Units RGUs) increased by 356 thousand, with mobile RGUs moving up 285 thousand compared to the same period last year
• The number of convergent customers increased, now making up 68.4% of fixed base customers
• Net Profits fell by 5.7% to 80.5 million euros

"NOS presents a set of robust results for the first half of 2023, reflecting the receptivity and confidence of our customers in the products and services that we offer, based on latest generation networks that are consistently recognized by independent organizations.

At the end of the first half of 2023, the best and most extensive 5G network in Portugal was already available to more than 90% of the country's population, a result of continuous investment in technology and an emphasis on innovation and service quality. By offering the most complete communications experience, we are strengthening our clear cut commitment to accelerating the digital transition of Portugal and to improving the competitiveness of our economy.

At the same time, we are strengthening our commitment to the development of Portugal economically, socially and environmentally by working with a range of companies, organizations and city and town councils, preparing them more and more for the future."

Miguel Almeida, CEO of NOS

1 Excluding leasing contracts and other contractual rights.

Innovation and latest generation networks deliver the best communications experience

• The expansion of 5G coverage has contributed towards accelerating the digital transformation of Portugal through an investment program that to date amounts to around 420 million euros, with a further 110 million euros planned over the next few years. In the 1st half, NOS invested more than 195 million euros1.

NOS invested 195 million euros in 1H 2023

• In June of 2023, NOS had more than 4,000 5G base stations installed, covering more than 90% of the Portuguese population with 5G, compared to 81% of the population of the EU27 covered by 5G2.
• For the third time running, Ookla3 distinguished NOS' 5G network as the best in the country for download and upload speeds with a performance 36% better than the second placed operator.
• NOS has reached a further 4.8% of households with its fiber network, achieving a total of 5.424 million households covered, up 248 thousand compared to the same period of last year. Around 70% of these are connected using FttH, up 13 p.p. compared to the same period of last year.
• The number of convergent customers continues to increase, equal to 68.4% of fixed base customers at the end of the first half. The number of prepaid mobile RGUs posted an ongoing positive trend, and is already around 64% of total RGUs.
• NOS strengthened its commitment to Portugal's technological transition, launching the Test Bed 5G & Digital Transformation with the goal of developing 165 pilot projects based on 5G, driven by the NOS 5G Hub innovation eco-system.

NOS has more than 4,000 5G base statons in Portugal

NOS' 5G network once again distinguished by Ookla

NOS' fiber increases coverage for another 248 thousand households to a total of 5.4 million

68.4% of NOS' fixed base customers are convergent customers

NOS increased its innovation footprint through the Test Beds National Network

NOS committed to the social, environmental and economic development of the country

• Presentation of the results of the Link4S consortium, led by NOS, in partnership with Mobileum, Exatronic, REN, Portgás, Wyze, Beyond Vision, CEiiA, DTx - Digital Transformation CoLAB, INL and the University of the Minho, with the objective of putting forward intelligent solutions to decarbonize cities and prepare urban areas for new sustainability paradigms..
• Open Innovation Challenges, a competition promoted by NOS and the National Innovation Agency (ANI), distinguished the project of the University of Evora, which developed a 5G augmented reality platform for athletes.

Consortium led by NOS with the objective of creating solutions for the decarbonization of cities

NOS and ANI award prize to the University of Evora for their 5G project

1. Excluding leasing contracts and other contractual rights.
2. 5G Observatory Biannual Report April 2023Study on "European 5G Observatory phase III" (CNECT/2021/OP/0008). EUROPEAN COMMISSION Directorate- General for Communications Networks, Content and Technology
3. Based on analysis by Ookla® of data collected by Speedtest Intelligence® Q1-Q2 2023. Ookla brands used under license and reprinted by permission.

Net profits impacted by investment levels and the macro-economiccontext

EBITDA grew by 9.4% compared to the same period last year

4.5% growth in revenues with 3.5% in telecommunications and 15.2% in Cinema and Audiovisuals

NOS provided 10.9 million RGUs at the end of the six months

5G Health Conference brought together professionals to discuss the role of technology

First remote scans carried out using NOS' 5G

70% of NOS' debt is indexed to ESG criteria NOS signs up to

pact to increase the circularity of mobile devices

• NOS brought Owase Jeelani to Portugal, the surgeon who separated Siamese twins with the help of virtual reality, setting the theme for a debate about the role of 5G technology to modernize health services.
• NOS' 5G network enabled the first remote scans to be carried out in Portugal, in partnership with the Pedro Nunes Institute, the University of Coimbra, Sensing Future Technologies and the Luz Hospital.
• In the period, NOS consolidated the link between its financing costs and its sustainability performance, strengthening the strategic relevance of meeting ESG (Environmental, Social and Corporate Governance) key indicators by contracting
  350 million euros of sustainable financing.
• In conjunction with the GSMA - Global System for Mobile Communications
  - and 11 operators across the world, NOS commits itself to drive forward the circular economy, through the reuse, resale and recycling of mobile devices.4

Robust performance based on growth in RGUs

• In the 1st half of 2023, NOS recorded positive growth in its business activity, with a solid operational performance, with the number of RGUs increasing
  by 356 thousand to around 10.9 million.
• Group consolidated revenues grew by 4.5% to 775.2 million euros. Telecommunications revenues increased by 3.5% to 746.6 million euros, driven by the increase in the number of RGUs. A highlight was the growth of 9% in post-paid mobile RGUs. Cinema and Audiovisual revenues increased by 15.2% to 45 million euros. In Cinemas, ticket sales grew 36.8% to 3.5 million.
• Consolidated EBITDA grew 9.4%, compared to 1H 2022, to 352.6 million euros, with Telecommunications EBITDA reaching 331.3 million, up 10.1% on the previous year.
• Net profits attributable to NOS shareholders fell by 5.7% to 80.5 million euros, given the sharp increase in depreciation and amortization resulting from the continuous investment that the company has carried out, together with the impact of the increase in interest rates on the cost structure and of the current macro-economic environment.

4Commitment led by the GSMA and signed up to by 12 telecommunications operators worldwide

Summary - Highlights 1 H 2023