Good afternoon, everyone. Welcome to our Full Year 2024 Results Conference Call. We have the executive team in the room to answer your questions after our CFO, José Ferreira, we’ll go through a brief presentation, which is on our website, highlighting the main topics of the results. Over to you, sir.

Thank you, Maria Joao. Hi, everyone. Welcome to the call, and thank you for making the time. Today, we’ll focus – we’ll do a brief presentation focusing on three key dimensions

our strategic execution, obviously, our performance throughout the year and the quarter, and also some highlights in terms of our cash flow generation and the way we view long-term value creation for our shareholders. So going into the results of the quarter and the year, firstly, I’d like to highlight our very strong market position and sustainable growth, as you’ve seen throughout our results, not only from the quarter, but the overall result of 2-24, also in that sense, an important aspect, which has been our continued increase in revenue market share in the market, which reached 31.5%. And when looking at the results, just highlighting a couple of data points, growth in revenues for the quarter of 8.1%, and the year 6.2%, EBITDA growth in the quarter 11.6%, and full year 7.1%. And then also very importantly, in terms of operational cash flow, I would highlight a growth in the quarter of roughly 43%, and the year 26% to €272 million. We’ll go into a bit more in these details in the next couple of pages. Going into the revenues themselves. As mentioned before, for the quarter, we reached €448 million, a growth of 8.1%, very strong, especially in our Telco revenues as well, €430 million in the quarter with overall growth of – year-on-year 7.2%, and for the full year, 6.3%. So very strong performance on the revenue side, which through our – as you know, our continued operational focus and efficiency capture has delivered very strong margins and EBITDA growth. So for the quarter, €182 million, roughly 11.6% growth year-on-year with 1.3 percentage points margin expansion. On the Telco side, specifically a growth of or an EBITDA of €170 million, growth of 10.5%, so very strong performance and margin expansions, which are driven in part as well through our very robust CapEx execution. As per the previous quarters, we continue a structural decrease in our CapEx expenditures, which translate, especially if we look at network expansion, in particular, a decrease of 12.4%, and accumulated for the full year, 3.9% decrease in overall CapEx. So altogether, the combination of CapEx focus, operational efficiencies, which is impacting positively our OpEx structure, we have been able to deliver a very positive performance of operational cash flows, up 43% year-on-year. And this, in a way, is driven by our focus in terms of operations, our momentum and obviously, the way we execute our strategy. Just looking at a couple of operational data points, we continue to expand our next-generation networks coverage today at roughly 83% of the households. And in the previous year, we expanded 300,000 households in terms of our gigabit fixed network. In the 5G, as also mentioned before, both coverage and investment is virtually done. We have a coverage today of virtually 100% of the population with a very strong performance in terms of the sites that we have. So, NOS is the leader, again, in the Portuguese market in terms of 5G capabilities, infrastructure and obviously, as a consequence, network quality, and customer experience. In that regard, and as the backdrop for that, our execution is materializing in very strong business and KPI momentum. So, we see positive results across all key operating metrics, across all services and as you see, very robust and healthy net adds throughout all of the service lines that we have in the market. Just a quick note regarding our Audiovisual & Cinema business, this quarter was very strong. We had a growth of 21.6% of revenues. Tickets sold year-on-year grew 19.2%. So a very strong quarter, which led to an overall performance of 2.8% growth in revenues for the business. So quite a solid performance, especially in the context of Q2, that had several issues, as you know. And just to wrap up, in terms of financials, without going into too much detail, on the net income side, very strong growth in the quarter of €16.5 million, overall for the year, €91.3 million. Regarding free cash flow, again, a year with very strong – not only due to the operational cash flow, but also some extraordinary effects, a growth of roughly €230 million in terms of free cash flow for the year to €360 million in total roughly, while still maintaining a very strong and healthy balance sheet that allows us for added strategic flexibility in the future. So at the close of the year, 1.4 times net financial debt to EBITDA after leases with roughly €912 million of debt, an average cost of debt that is slightly decreasing, so on average 3.56%, and a very solid liquidity position. Within all of these – with this backdrop and all of these elements in play, the Board has approved an ordinary dividend of €0.35, and also an extraordinary dividend of €0.05, which totals €0.40 for the year. So with that, Maria João, I think, we can go to Q&A.

Yes, over to Q&A.

Yes.

Thank you. We will conduct a Q&A Session. [Operator Instructions] One moment for the first question. Our first question comes from Roshan Ranjit from Deutsche Bank. Please go ahead.

Great, good morning everyone. Thanks for the questions. I just got a couple, please. Firstly, you highlight the strong EBITDA performance, and we saw a very good margin expansion this quarter, and I guess, as we have seen through the year. You previously highlighted that the benefits of the transformation program had kind of been realized already. So is there a new transformation program ongoing or is this kind of upside to what you had previously expected. I guess this was the second year of double-digit EBITDA growth. Can we expect something similar for 2025, please? And secondly, in terms of network expansion, you guys have obviously put a lot of money into both the fixed and the mobile side. Can I get your thoughts on potential wholesale access and really monetizing the network, which you’ve built? Now we’ve seen that your new entrant is building out quite swiftly. Is there anything which we can see you guys do here in terms of offering access? Thank you.

Hi, Roshan, thank you for your questions. Maybe breaking it down one by one. In terms of the transformation program, this is something ongoing. So I’m not sure I understood from your question if you mentioned it was over, but it is not the case. So this has started a while back for sure. It has already materialized quite significantly, and this is what we see in the numbers in the past, I would say, a couple of years. But fundamentally, this is an ongoing effort that will continue to deliver very significant savings in our view, not only on the CapEx side, as I’ve discussed as well, but essentially on the OpEx side. So this is like – our transformation program is, I would say, fundamentally focused on capturing efficiencies across the board in terms of our cost structure, okay. So on one hand. On the other hand, your question regarding double-digit growth or not, obviously, as you all know, we are in the context of uncertainty. We are positive about our performance and all the assets that we have in the market. But at this point, we don’t have specific visibility and guidance regarding the growth that we expect for the year.

Yes. In terms of offering access to our FTTH network, that is not within our plans. Actually, we don’t have any requests to do it. And we have no plans to do it, with the exception – obvious exception that we already opened the network to our joint owner. As you know, this is a shared network. So already used by not only us, but also another operator, but we don’t have any plans to further open the network to third parties.

That’s great, thank you.

Thanks for the question. Our next question comes from the line of Fernando Cordero from Banco Santander. Please go ahead.

Hello, good afternoon and thanks for taking my two questions. The first one is on the B2B segment performance during the last quarter. And I would like to understand at which extent the performance in that segment is coming mainly from new clients, is mainly coming from upselling products or services to the current clients. Just to understand the drivers. And also at which extent the recently announced Claranet acquisition would fit in terms of the product offering in the segment. And the second question is related with – you have just named it the uncertainty on 2025. Just willing to understand which kind of first impact in some KPIs, like, for example, churn or for example, gross add trends have you experienced from the recent launch of this in the market?

Hi Fernando, nice to hear from you. Thank you for your questions. On the B2B side, the growth that we’ve been experiencing, I would say it’s a very well-balanced mix of expansion in current clients and new client acquisition. So it’s fairly well balanced. Typically, on the new clients, we see, and you see that from our results, some more, if you like, IT projects, new equipment sale, so resale project revenues. On our current clients, we tend to focus more on the expansion of recurring revenue base. So overall, fairly well balanced. On the Claranet side, as you know, Claranet is, we believe it’s a very interesting asset. It has an interesting presence in Portugal as well. But fundamentally, in our perspective, will bring us not only more scale into the services that we provide, but also a bit more breadth. So assuming that everything and once we have the approval of the Competition Authority, our expectation is that through Claranet, we’ll be able exactly to continue and accelerate the rate of acquiring new clients due to the new capabilities, but also be more profitable in the way we serve these clients due to the scale effect.

On the market context, I think I didn’t fully get – got the question, but I think the question was around market dynamics in recent times given the new competitive context. I would say a few things. First of all, it’s still a little bit early days to have a final view on the dynamics of the market. We had no surprises on that front. We – what we expected is more or less what is happening. We are comfortable with the evolution in terms of ARPUs, both in our main brands and also on the digital brand. The main consequence, the only thing I believe we can say at this stage is that the mix between customer acquisitions on the main brand and customer acquisitions on the alternative, the digital brand, WOO, the mix changed somehow with the digital brands increasing its weight within the re-launch that was made last quarter. So the mix is a little bit different. But in terms of – within each of the brands, we don’t see major impact or significant material impacts until now.

Okay. Very clear. Just a follow-up on Claranet. It is clear that it’s still waiting for the approval of the regulator. But do you have any sense in kind of synergies that you can get from Claranet and not only thinking on OpEx synergies, but also on how complementary is the customer base of Claranet versus your customer base in B2B?

We expect it. We don’t have – of course, at this stage, we’re still waiting for the Competition Authority approval. So we don’t have detailed information. But our expectation is that there’s a lot of complement coming from Claranet’s customer base. In terms of the names of the customers, of course, a lot of complement in terms of the services, the products provided to the customers. So we see significant potential on both sides, both on the telecom side and on the Claranet side, significant potential to extract commercial synergies and cross-selling that will ensure that one plus one in this case is more than two.

Okay, very clear.

Thank you for the questions. Our next question comes from the line of João Pinto from JB Capital. Please go ahead.

Hi, good morning, everyone. Three questions, if I may. The first one is on margin into 2025. Can you tell us if you still see materially – material efficiency gains potential for 2025, and what level of top line growth would you need to reach a stable margin in 2025? The second one, I don’t know if you can, but on Claranet, can you give us – can you guide us through the business economics? What is the expected top line growth here and the normalized EBITDA margin? And that’s all. Thank you.

Maybe I’ll start with the Claranet question. I think it would be better to give some additional color once the operation is concluded. So likely, hopefully, I mean, next call, we will be in a position to give further details on the operation and the operation of Claranet, and the economics and all those questions, we will be better positioned then to answer all the questions. At this stage, I think it’s better if we wait to have this additional detail. But on our side, of course, we want to be fully open, and I would rather do that once we have access to all the details and we have access to Claranet, which we don’t have today, as we wait for the Competition Authority approval. On the first question around efficiency, clearly, the answer is yes. We see still a lot of room for efficiency gains in 2025, not only in 2025, but going forward. But for sure, in 2025, of course, the plans are more specific, and we are in the process of implementing those plans, and we are very optimistic in terms of efficiency gains for this year.

Thank you very much.

Thank you for the question. [Operator Instructions] Next question comes from Luigi Minerva from HSBC. Please go ahead.

Yes, good afternoon. Thanks for taking my question. It’s on shareholder remuneration. I was wondering if you can help us with a kind of framework to think about shareholder remuneration more over the medium term. So for instance, as long as your leverage ratio is at 2x, would the Board be willing to distribute all free cash flow to shareholders? And I appreciate that segmenting the dividend for this year between the ordinary and the special, essentially the message is that we shouldn’t take the €0.40 as the basis for next year. But still, I guess, if you can help us with a more medium-term framework, it can be helpful. Thank you.

Yes. Well, I think we’ll have to say what we usually say. We don’t have a dividend policy as you know, but we have a practice and that practice has been, I think, consistent over time. We don’t see – we are very comfortable with the leverage we have – actually with the 2x leverage that you mentioned, that is the reference number for us. And we are very comfortable in the cash flow that remains within that balance context. So that has been the practice in the past and most likely will be in the future, but we don’t give any guidance. So you can expect from us more or less what you can expect is consistency.

Okay. Thank you so much.

Thank you for the questions. Our next question comes from the line of António Seladas from AS Independent Research. Please go ahead.

Hi. Good afternoon. Three questions. So the first one is still in the B2B business, so that you are performing quite well. And apparently, you have been gaining market share, I would say, and traction. So my question is, should we see this kind of revenues growing double digit in 2025, or do you think that there were some specific reasons on the fourth quarter and should we see a slowdown? So that’s the first question. Second question is related with your non-recurring gains. I don’t know if you can – because they have been in the recent past. So should we assume that they are over for now or you can expect more non-recurring gains related with excess fees paid in the past? And finally, on the capital – CapEx, sorry, on CapEx figures for 2025, if you can provide a figure or a guidance? Thank you very much.

Thank you for your questions. So on the B2B side, yes, we’re very happy about our performance. As we’ve mentioned before, obviously, this is an area in which we’ve been doubling down and investing significantly. And obviously, the Claranet acquisition is part of that strategy. So I would say that we expect this performance to continue and double-digit growth to persist. So this would be our – this is our expectation. On the non-recurring gains, obviously, there’s – I would say, there’s significant uncertainty regarding that. within the whole process, we still have pending legal action that has not materialized yet, but we don’t have a certain visibility about it. So we cannot provide you any more specific information regarding what is going to happen in 2025, although we do have still outstanding legal action regarding that topic. Finally, on the CapEx side, what you can expect for 2025 is a continued decrease of the CapEx level that we have in place today. So this is – as we mentioned before, CapEx is a very strong focus in terms of execution. We are at the tail end of 5G and FTTH rollout. And we will continue to focus on CapEx reduction and OpEx reduction as well, as mentioned before.

Thank you very much. And congratulations on the results.

Thank you.

Thank you for the questions. Our next question comes from the line of Ajay Soni from JPMorgan. Please go ahead.

Hi there. Thanks for taking my questions. My first one is just around the comment you made around more digital acquisitions. So are you seeing a step-up in maybe customers spinning down to your second brand as a form of a retention offer? And then just taking that information, doesn’t that imply that you’re going to get a softer ARPU growth in 2025? You’ve got more digital brand acquisitions, no price rises in 2025. So that’s my first question. My second one was just kind of a follow-up to the CapEx one that was just asked. Obviously, you are coming towards the end of your rollout. I think it was about a €10 million to €15 million step down from 2023. So can we expect that again going forward? And then my last one, just on shareholder remuneration. Are you guys able to do a buyback? And what was your decision in going for a special dividend as opposed to a buyback? Thank you.

Thank you for your questions, Ajay. So on the first one, there was a bit of a breakup on the line, but I’ll try to answer and let me know if you need a follow-up. So as Miguel mentioned before, we have seen an uptick in our WOO [ph] brand for several reasons. But obviously, with the DG entrants, the market is also more aware and paying attention to it. An important aspect is that we separate – these are two brands. NOS is a premium brand with premium assets and service. WOO is a digital brand. We don’t do retention with the WOO brand. So each brand has its own autonomy operating model and the way they manage the base and the clients, I would say, is fairly separate. So in that sense, you should not expect us moving clients from the NOS to the WOO brand as a retention tool, absolutely. But naturally, with more awareness to digital and the market expansion in a way, we expect our mix to change throughout time and to have more weight, obviously, of WOO compared to the past. So that on the first question.

Can I add just one thing? Just an additional comment on that. The unit economics on the main brand – on the digital brand, the WOO brands are quite different. So you have to take that also into consideration. As the weight of the digital brand has increased, unit economics have declined because we are talking about unit economics that are fairly different between the services provided by one brand and the other.

Thanks, Miguel. Coming back to your CapEx question, as I mentioned before, we expect for 2025, our CapEx level to continue to decrease. As you know, we don’t provide specific guidance on the exact levels that we will reach. But the level of reduction would be in line with previous years in terms of what we believe is the sustainable pace to decrease CapEx. Finally, on the buybacks, I would say that, obviously, this policy as per dividends is a Board decision. Having said that, we don’t have any specific plans or intentions to go through a buyback program at this point in time.

That’s very helpful. Could I just have one follow-up on the unit economics? So you said they’re very different. I mean could you quantify that for us a little bit? I’m assuming you’re talking about the EBITDA margin from each brand. So any color on that would be very helpful. Thank you.

Well, yes, I understand. I provoke the curiosity. So I understand – fully understand it, but we rather not give specific numbers in terms of initial customer acquisition CapEx, they are very different in terms of commercial costs. They are very different, significantly different in terms of equipment costs, which are not the same. And once we have the customer in terms of operation costs, again, quite different. The digital brand is much more automated in terms of customer service, for example. So you have very different unit economics, but I’d rather not specify the exact numbers.

That’s very helpful. Thanks for your answers.

Thank you for the question. Our next question comes from the line of José Antonio Suarez Roig from CaixaBank. Please go ahead.

Hi. Good morning. Thank you for taking my questions. I have two, if I may. So you’ve been mentioning that, of course, that you’re not providing like guidance evolution for 2025. But I was wondering if you could provide some proxy on how could be the evolution of – I know it’s too early, but did you have any proxy on how should we see the evolution of revenues or EBITDA after leases in 2025, for example, low single digit, mid-single digit, something that could help us a little bit to see how should we foresee the 2025, even knowing that it’s a little bit early, but anything you could provide would be very, very helpful? And on the second question, I was wondering because you distribute an extraordinary dividend of around €26 million, which was much below the cash in you had from the Cellnex towers, which were €57.3 million. So why are you so prudent in the extraordinary dividend having such a robust balance sheet? I was wondering what’s the rationale between that, so are you like staying rational to see how the competition will go forward? A little bit more information on why the dividend – the extraordinary dividend was smaller than – significantly smaller than the cash in from the Cellnex Towers? Thank you.

José Antonio, thank you for your questions. On the first one, not wanting to disappoint, but as you know, we don’t provide specific guidance on the metrics that you asked, even within the single or high or double-digit range. So in that sense, we won’t be able to give you any additional specific information. On the second aspect regarding your question, and Miguel, in a way already answered beforehand. We are committed to a strong balance sheet and sustainability and long-term value creation. And in that sense, the way we structured shareholder remuneration was indexed in a way to the free cash flow generation that you mentioned. So in our minds, on one hand, the consistency that Miguel mentioned in terms of ordinary dividend was an important factor. On the other hand, obviously, provide to the shareholders some extraordinary remuneration regarding the towers. And then the third driver was precisely the Claranet’s acquisition that we’ve been discussing. So when we add up the three elements, you will see that it essentially is the free cash flow generation that we’ve had for the year. So that has been the driver of the decision and the way we structured those two components that you mentioned.

Yes. Could I go with a follow-up, please, on this topic? If I may add, regarding the – what you’ve been mentioning that you want to have like a sustainable dividend policy going forward. Now that you – now that Claranet would be in your portfolio, should we assume that the dividend evolution going forward should also be positively impacted by this contribution Claranet should have from a net income perspective, so that the payout ratio should more or less stabilize and as you increase the payout – the net income, the payout should be increasing going forward on Claranet, right? So that should be an assumption that can be – that is rational, right?

Yes, I would say that is a fair assumption. As Miguel also mentioned in one of the previous questions, we expect if everything goes according to expected time lines in the next quarter to be able to provide more transparency and more color on the structure, the potential synergies that we expect, et cetera. So in that sense, it will give you a better understanding of the potential. Having said that, obviously, Claranet within the context of the overall business has, I would say, a relative weight that might not be substantial in terms of what we are discussing.

Yes. But from the synergy part, that can be from cost side, it could also boost the net profit coming from B2B.

Absolutely. Within the context of robust balance sheet, net income and free cash flow generation, these are the three variables that in general and the practice that we have is to be guided by those three elements.

Perfect. Thank you very much.

Thanks for the questions. We have no further questions from the line. I’d like to hand the call back to the management. Please continue.

Okay. Well, thank you, everybody, for listening into the call and for your interest. As usual, the team is available for any follow-up. And in the meantime, we look forward to speaking next quarter. Bye.