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 NOS SGPS, S.A, [Link]
ISIN PTZON0AM0006, PSI20

Ticker: [Link] Market Cap.: 1.64B EUR Date: 31.12.2023

Industry: Telecommunication & Media Beta: 0.45 Recommendation: HOLD
Current Price: 3.20 EUR 52 Week Range: 2.18 – 4.40 EUR Target Price: 3.11 EUR
RECOMMENDATION: ESG-PERFORMANCE: CREDIT RATING:

Source: Refinitiv Eikon, own Calc. Source: Refinitiv Source: Fitch

Figure 1: Relative Share Price INVESTMENT SUMMARY

Performance
Shares of NOS have significantly underperformed the market, especially after Covid. Based on our 1
year target price of EUR 3.11, representing decrease of -2.8% as of 31.12.2023, we initiate a HOLD
recommendation for the NOS SGPS.

We derived our target price of EUR 3.11 from a two-stage DCF model and confirmed our result using a
Monte Carlo Simulation on Revenue Growth and a Sensitivity Analysis on terminal growth rate and
beta. Additionally, we conducted a Relative Valuation using comparable companies and PE,
EV/EBITDA and EV/Book multiples. Although the results of this method showed upside potential this
might be limited through the potential entry of a new competitor (Digi), limited growth perspectives
and rather low capacity of cash generation due to high CapEx needs.

Our HOLD recommendation is to some degree in line with the market consensus, with 6 other
analysts also recommending a HOLD, 6 analysts reaching a buy or strong buy and only 3 a sell or
Source: Refinitiv | PSI20 in Index Points; NOS in EUR
strong sell recommendation. Figure 2: Contribution of Financial
Metrics - YoY
NOS‘s Q3 23 is defined by substantial growth in the cinema segment and a healthy EBITDA increase

In Q3 2023, NOS showcased healthy operational and financial performance, marked by notable
increases in key metrics. The company reported a 5.3% year-on-year growth in consolidated revenues,
reaching 1,183.1 million euros, with Telco revenues contributing significantly, reaching 1,131.6 million
euros, showcasing a 3.9% increase.
The Audiovisual & Cinema segment experienced substantial growth, with revenues increasing by 23.5%
to 77.2 million euros, mainly driven by the blockbuster “Oppenheimer” and “Barbie”. EBITDA rose a
Source: Company Data
substantial 10.6% to 553.0 million euros. Within the Telco segment, EBITDA showed remarkable
growth, reaching 516.3 million euros, marking a 10.3% increase. The Audiovisual and Cinema segment's Figure 3: Business Segments by
EBITDA AL also increased by 22.5%, totaling 29.2 million euros. EBITDA AL increased by 9.5% to 468.7 Revenue – LTM 3Q23
million euros, demonstrating sustained cost efficiency and operational improvements.

Cashflow dynamics also reflected positive trends, with Total FCF Before Dividends, Financial 1.580,62
Investments, and Own Shares Acquisition amounting to 93.8 million euros in 9M23. This improvement
of 84.3 million euros, excluding the net impact of a tower transaction recorded the previous year, was
influenced positively by EBITDA AL performance and reduced investment requirements. Total CAPEX,
excluding leasing contracts, decreased by 19.6% year-on-year to 292.8 million euros in 9M23, as the 5G
deployment neared completion with over 91% population coverage by the end of September. Sources: Company Data | Note: Revenue in m. EUR

NOS’s continued commitment to sustainability was evident in securing 350 million euros in sustainable Figure 4: Shareholder Structure &
financing. No. of Shares

The ability to achieve growth in revenues, EBITDA, and manage cashflow while strategically investing in
infrastructure underscored its resilience and adaptability in the dynamic business landscape of Q3 2023. 515.161.380

BUSINESS DESCRIPTION
Sources: Company Data | Note: As of 3Q23

NOS SGPS SA, a prominent Lisbon-based company, has solidified its position as a key player since its creation in 2013, resulting from the
merger of ZON Multimedia Servicos de Telecomunicacoes e Multimedia SGPS SA (ZON) and Optimus - SGPS SA (OPTIMUS). Following a
rebranding in 2014 to NOS, the company has emerged as a significant presence in the Portuguese entertainment and communications
sector, offering a diverse array of services and products.
One of its notable subsidiaries, NOS Comunicações, stands out as a leading telecommunications provider, delivering advanced fixed and
mobile solutions for television, internet, voice, data, and IT across various market segments. Tailoring its offerings to Residential, Private,
Corporate, and Wholesale sectors, NOS Comunicações provides a comprehensive portfolio that includes ICT, IoT, and Cloud services. NOS
Comunicações had about 31.7% market share by total revenues in the telecommunications sector in November 2023 (ANACOM).

In the realm of cinema, NOS Cinemas holds a leading position in the national exhibition sector, pioneering the showcase of alternative
content, such as opera, and employing cutting-edge technologies like IMAX and ATMOS. NOS Cinemas had a market share of 66.2% in Q3
2023 by ticket sales in the Portuguese cinema market. Meanwhile, NOS Audiovisuais plays a major role in the audiovisual distribution
market, ensuring the distribution of films and series from independent producers and major studios across various platforms. The company
has expanded its business portfolio by collaborating with Securitas Portugal to establish "NOS Alarmes," demonstrating its commitment to
diversification and innovation.
1
 Figure 5: Annual GDP Growth
INDUSTRY OVERVIEW & COMPETITIVE POSITIONING
Portugal experiences higher GDP growth then peers, with comparably higher gross debt
NOS is predominantly operating in Portugal a nation that has demonstrated robust recovery post the
Covid-19 pandemic, witnessing annual GDP growth rebounding to 6.7% after a major downturn of -
8.3% in 2020.
Although, in general, economic prospering is expected for Portugal in the future (especially in
Source: International Monetary Fund
comparison to European Peers) it has to be mentioned that Portugal is far more in debt then other
Figure 6: General Government developed European nations. In 2022, Portugal's Gross Debt reached 113.9% of GDP, notably
Gross Debt surpassing the European average of 91%, despite the fact that the International Monetary Fund (IMF)
anticipates a gradual reduction in the coming years.

Additionally, Portugal struggles with inflationary pressures, experiencing a noteworthy percentage

change of 8.1% in 2022, with a forecasted inflation rate of 5.3% in 2023, although aligning with trends
observed in other Euro Area nations. The nation, with a population of approximately 10.3 million
residents, has a reduced unemployment rate of 6.6%, a substantial improvement from the 17.1%
recorded during the sovereign debt crisis in 2013. These multifaceted economic considerations
underscore the nuanced landscape within which NOS navigates its operational context (IMF).
Source: IMF | Note: Debt shown as % of GDP
Portugal’s Telco industry shows strong market growth and penetration compared to European peers
Figure 7: Inflation Consumer
Prices Annual Growth Rate The Portuguese telecommunications services market demonstrated robust performance in 2022,
generating total revenues of $4.4 billion. This reflects a notable CAGR of 3.4% from 2017 to 2022. In
contrast, both the Spanish and Italian markets experienced downturns, with negative CAGRs of 1.3%
and 2.5%, respectively. The market's consumption volume exhibited positive growth, achieving a
CAGR of 2.2% during the 2017–2022 period, peaking in a total of 27.6 million subscriptions in 2022
and 27.9 million expected in 2023 (MarketLine). Projections indicate a continued upward trajectory,
with the market's volume anticipated to reach 28.8 million subscriptions by the conclusion of 2027,
translating to a CAGR of 0.8% over the 2022–27 interval. Within the market, the wireless segment
Source: International Monetary Fund emerged as the dominant contributor in 2022, with total revenues of $2.5 billion, equivalent to 56.3%
Figure 8: PT Telco Market Growth of the market's overall value. Furthermore, a noteworthy trend observed in the industry pertains to
& Market Value the rapid increase of mobile phone penetration (MarketLine). Portugal can be considered a mature
market in the telecommunications business, with a very high market penetration ranging from 130
per 100 Inhabitants in the mobile sector (for comparison 90 in Europe 2022 with 92 expected in 2030,
Statista) to 93 per 100 private households in the fixed broadband segment (KPMG Portugal).
Portugal’s substantial Pay TV penetration is particularly notable, driven by the poor value propositions
of the free TV service and in demand non-linear TV (NOS Presentation).
The Portuguese cinema market had a great Covid recovery and is expected to continue that path

The Portuguese cinema market penetration is anticipated to exhibit a CAGR of 2.9% between 2023
Source: MarketLine | Market Value in bn. EUR and 2027, reaching 21.8%. This signifies a notable rebound from the 5.9% observed during the peak of
the Covid pandemic. Despite the anticipated revenue growth, the Average Revenue per Viewer
Figure 9: PT Cinema Revenue in (ARPV) has encountered substantial headwinds due to the recent surge in inflation (Statista).
m. EUR & ARPV According to NOS the market's revenue trajectory seems to be largely influenced by major
blockbuster releases, which usually appear first exclusively in cinemas (Deloitte).
Due to NOWO’s acquisition, MEO and Vodafone are the remaining direct peers

The peer group analysis uses a two-segment classification, using a broader and a more focused set of
industry counterparts. The larger peer group comprises telecommunications companies across Europe
exhibiting similar growth rates and profitability metrics. This categorization is underpinned by the
shared regulatory environment and interconnected supply chains prevalent in the European
telecommunications sector (Appendix 19). In contrast, the narrower peer group, directly influencing
Source: Statista | Note: *in EUR; Base year 2015
NOS's competitive dynamics, is exclusive to telecommunications entities operating in Portugal. This
Figure 10: Market Shares subset, featuring MEO (Altice Portugal), Vodafone Portugal, and NOWO, gains distinction due to
identical regulatory frameworks. It is noteworthy that NOWO, despite its relatively modest market
share, has recently undergone acquisition by Vodafone. All market shares appear to be stable over
time with marginal changes. This consolidated peer group serves as the primary competitive cohort
within the Portuguese telecommunications market.

The competitive climate consists of high rivalry, moderate value chain forces and high entry barriers

Source: ANACOM | Note: Data as of 3Q23 In the Portuguese telecommunications market, competition is intense due to large players benefiting
from economies of scale. Providers compete for customers through quality, brand awareness,
Figure 11: Porters Five Forces functionality, and value pricing, with diversification efforts into bundled packages. Mergers and
acquisitions shape the market, and 5G deployment intensifies competition. Supplier power is
moderate, with major telecom providers controlling vital infrastructure, though recent shifts in the
industry have impacted this (like the tower acquisition by Cellnex). Buyer power is moderate, with a
vast consumer base, inelastic demand, and moderate switching costs. The threat of new entrants is
low due to high capital investment requirements and government regulations. Substitutes are
currently low, with limited alternatives to fixed-line and wireless services, and potential substitutes
facing challenges in offering competitive prices (for more details see Appendix 1).

Source: Team Estimates

2
 Pricing Dynamics, Quality Leadership, Subscribers and Brand Dominance are the main Revenue
Figure 12: Cheapest Offering per
Drivers in the Portuguese Telco market
Competitor by Segment in EUR
Pricing | The primary driver for expansion in the telecommunications industry is pricing (Oliver
Television Wyman). Telecommunication companies, such as NOS, are aware of this and have collectively risen
prices in accordance with inflation post-COVID, to not engage in pricing wars as in the 2010s (NOS –
Presentation). NOWO usually has the cheapest Offerings, but doesn’t offer all services. The potential
entry of Digi as a new low-cost player, facilitated by the acquisition of 5G licenses, introduces
uncertainty regarding future market dynamics, including the possibility of negative price adjustments
in a bid to sustain competitiveness.

Fixed Broadband Quality | In the telecommunications sector, consumer preferences emphasize key factors beyond
value pricing, notably speed, reliability, and customer service, collectively falling under the umbrella
of quality attributes (Oliver Wyman). According to Open Signal, NOS demonstrates leadership in
overall user experience and upload speed, whereas MEO excels in 5G download speed. NOS users
consistently enjoy the highest quality experience, earning them the Consistent Quality award.
Furthermore, NOS outperforms competitors in 5G availability and reach. In summary, NOS and MEO
establish dominance in the quality segment, while Vodafone consistently holds the third position.
Fixed Telephone According to Portal da Queixa NOS holds the highest score among telcos with 87.8, which is better
then the second place (MEO with 86.2) and third place (NOWO with 75.6) and can be interpreted as a
low complaints rate.
Subscribers & Churn Rate | Beyond pricing, NOS relies significantly on the volume of subscribers
across its diverse product/service offerings as a crucial revenue driver. Although anticipating a modest
Compound Annual Growth Rate (CAGR) of 0.8% in total subscriptions from 2023 to 2027 (MarketLine),
Mobile Broadband the emphasis on pricing is more relevant for revenue generation. Given that 44% of European telco
customers exhibit a high likelihood of switching between operators (Oliver Wyman), the churn rate
emerges as a factor of equal or potentially greater importance than acquiring new subscribers for
NOS.

The frequency of appearance of convergence bundles in Portugal, with 93 out of 100 households
subscribing to bundled services (ANACOM), acts as a mitigating factor against customer churn and
enhances pricing flexibility (Fitch). As of the third quarter of 2023, Portugal exhibited a 2.6% YoY
growth in service bundle subscribers, totalling 4.6 million, predominantly driven by
Sources: ANACOM quadruple/quintuple-play offers (ANACOM). In terms of bundled services market share, MEO led with
Figure 13: Assessment of Quality 41.4%, followed by NOS (35.2%), Vodafone (20.5%), and NOWO (2.8%) (ANACOM). MEO also
Metrics commanded the highest share in revenues from bundled services at 41.2% (ANACOM).
Quality Metric Unit MEO NOS Vodafone
To reduce impact from churn further market constituents began increasing the length of contracts
VoIP Experience Points 0-100 77,5 79,4 79,2 from the usual 12 months to up to 24 months (MarketLine).
Download Speed Mbps 49,1 55,7 34,8
Upload Speed Mbps 11,1 13,8 11,4
5G VoIP Experience Points 0-100 82,6 82,3 81,7 Brand awareness | Brand Finance ranks NOS as the most robust Portuguese brand, having a Brand
5G Download Speed
5G Upload Speed
Mbps
Mbps
306,4
27,4
291,6
31,6
139,3
27,3
Strength Index (BSI) of 83.9, closely followed by MEO at 83.6. The primary determinants influencing
Availability
5G Availability
% of time
% of time
96,6
11,2
98,4
19,4
98,3
14,4
this ranking are awareness and familiarity. While brand awareness holds significance, the competitive
5G Reach Points 0-10 4,5 6 5,1 landscape in the Portuguese market is characterized by well-established players. Consequently, end-
Consistency % of test 77,1
Sources: Opensignal
77,9 76,3
user buyers prioritize factors such as value pricing and customer service over brand considerations
(MarketLine).
Figure 14: Total Number of
Subscriptions in Portugal Mitigating inflationary pressures is the major expense driver

Against the backdrop of recent macroeconomic events, the increase of raw material prices post-2021,
particularly driven by heightened energy costs amid the Russia-Ukraine conflict, has caused
inflationary pressures. NOS has fixed electricity costs for around one-third of its consumption through
a long-term power purchase agreement established in 2021 before price accelerations. Other crucial
supply areas include the acquisition of spectrum licenses and equipment for 5G technology,
interconnection costs, as well as investments in equipment and IT services (NOS). Although a
normalization of producer prices is expected in the coming years, decreasing them stays a crucial
Source: MarketLine
driver. Additionally, network operators, aiming for economies of scale, foster partnerships, like
Vodafone collaborating with NOS to share their mobile network and Altice (MEO) and Vodafone
Figure 15: Brand Rating forming alliances with Huawei and Ericsson, respectively, for the development of their 5G networks
(MarketLine). The main expense driver for the audiovisuals & cinema segment are royalty fees for the
AAA- 1.
content distributed/shown (NOS).
AAA- 2.
NOS should explore opportunities in Edge Computing, IoT, Cyber Security, and Sustainability to stay
AA 3. cutting edge
Source: Brand Finance | Note: Ranking based on BSI
Edge Computing & IoT | The demand for connectivity increases, with the total number of connected
Figure 16: Producer Price Index devices expected to grow from 43 billion in 2020 to 51.9 billion in 2025 (McKinsey). This is amplified
Development by the rise of new applications like remote patient monitoring, to fulfill these demands the usage of
edge computing and IoT appear as the main solutions. Edge Computing, characterized by processing
data near the source of data generation rather than relying on a centralized cloud server, is growing
20% annually (Deloitte). It promises to reduce latency, with telcos actively embracing it to boost
network efficiency and introduce new use cases in combination with IoT usage, such as autonomous
driving (McKinsey).

Sources: OECD & IMF | Regression based FC after ‘22

3
Figure 17: IoT Revenue Portugal
IoT Devices, which refers to a network of interconnected physical devices, are expected to grow with
in bn. EUR
a CAGR of 16.7 % over the next five years (PwC), with the average use of IoT Devices for personal use
in Portugal being about the EU27 average (ANACOM). The main task for telco companies will be to
deliver access and local area networks (Deloitte).
Cyber Security | As 75% of CEOs see Cyber Security as the major driver behind strengthening trust
among stakeholders and 79% even believe, that cyber security can be a competitive advantage
(KPMG), cyber security becomes a major concern for telecommunication companies. McKinsey
proposes to introduce new offerings by building digital identity services on next-generation networks
and technologies to gain a competitive edge by establishing stakeholders’ trust.
Source: Statista
Sustainability | The telecommunications industry is increasingly prioritizing net-zero emissions, with
Figure 18: NOS’s CO2 Emissions TMT leaders expressing higher concern about climate change than counterparts in other sectors
(Deloitte). The key focus is the adoption of renewable energy and energy-efficient equipment. While
2022
progress has been made in reducing "Scope 1" and "Scope 2" emissions directly and indirectly linked
to operations, addressing the "Scope 3" emissions, usually accounting for 60% of telecommunications
companies’ carbon footprints (96.5% for NOS), remains a challenge due to data reliability and
standardization issues (Deloitte).
450.499

ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG)

Sources: Company Data | Note: Total in tCO2 e

Next to traditional financial metrics and with rising social and regulatory pressure, ESG factors
became a highly relevant matter both for the telecommunications industry and investors altogether.
As a founding member of European green digital coalition and a participant in numerous initiatives
Figure 19: ESG Scoreboard
like the United Nations Global Compact or the global e-sustainability initiative, which is committed to
achieve objectives of the Paris agreement and 2030 development goals, NOS is at the forefront of the
fight against the climate crisis. Thus, it is a leading company in terms of environmental and social
aspects, however, a laggard with respect to governance practices (see Figure 19). This exceptional
engagement is recognized by numerous rating institutions. Notably, Moody’s ranks NOS fourth
among European telecommunication companies regarding ESG practices and CDP ranks NOS fourth
among Portuguese companies regarding their fight against climate change.

Environment | On Behalf of the Planet

Source: Refinitiv, Moody‘s, FactSet, Morningstar, CDP

In its climate strategy, NOS pursues two primary commitments, which are translated into quantified
Figure 20: ESG Score targets and formally integrated into the NOS Sustainability-Linked Financing Framework (SLFF). This
Development framework is the subject of a second-party opinion by S&P and aligns with sustainability-linked Bond
and Loan principles, which conveys a great degree of accountability. It provides comprehensive
insight into NOS’ strategic ambitions for a low-carbon business model by disclosing its targets to
reduce greenhouse gas (GHG) emissions through key performance indicators (KPIs) and sustainability
performance targets (SPTs). These targets are largely assessed as advanced. Namely, NOS’ objective
is to reduce scope 1 and 2 emission by 80% by 2025 and 90% by 2030, as well as scope 3 emissions by
30% by 2030, compared to 2019 levels (see Figure 21). Notably, NOS belongs to the 44% of global
mobile network operators that provide reliable scope 3 data and reduction plans. In 2023, NOS
secured €350 million in sustainable financing lines supported by its SLFF and linked to its STPs, thus
strengthening the link between its financing costs and sustainability performance.
Source: Refinitiv
Energy and Carbon Efficiency of Operations and Value Chain | Figure 22 offers insight into the
development and the composition of NOS’ energy consumption. Despite being more efficient, the
Figure 21: Total Group GHG necessary acquisition of new equipment for the transition towards 5G increased absolute energy
Emissions (in t CO2) consumption by 39%. Figure 23 depicts the development of NOS’ telecommunication services energy
efficiency. NOS commitment is to achieve efficiency gains of 70% by 2025 and 80% by 2030. To
accomplish this, it plans to implement various programs and continually promote sustainable
innovation, leveraging their primary technology enablers: 5G, IoT, and advanced analytics. The
implementation of the mobile network infrastructure sharing program was completed by the end of
2023, which rationalizes the use of resources, allowing for energy savings of 30-40%. Additionally,
ongoing efforts include activating power-saving features like peak energy control and optimizing
energy consumption during low-traffic conditions. These advancements are made possible through
state-of-the-art lithium batteries, 5G equipment, and machine learning. This contributes to a more
efficient management of electrical networks, a critical problem identified in Europe’s energy crisis.
Source: Company Data

NOS' ongoing reduction in emissions from its own operations stems from an increased consumption
Figure 22: Total Group Energy of electricity with renewable origin certification. This consumption, constituting a fundamental part
Consumption (in MWh) of its decarbonization strategy, accounted for 81% of the total energy consumption in 2022. To meet
the rapidly increasing operation’s energy needs caused by the growing adoption of digital solutions
(134% increase in data traffic between 2019 and 2022), NOS signed long-term Power Purchase
Agreements with EDP, ensuring annual supply of 66GWh, corresponding to approximately a third of
total electricity consumption. NOS also installs photovoltaic plants to significantly reduce electricity
consumption of its Data Centre in Lisbon and plans the electrification of its entire fleet until 2030.

To reduce its scope 3 emission, NOS developed a dedicated suppliers and business partners ESG
performance evaluation and requirements aligned with United Nations global compact initiative to
promote adoption of sustainability practices in their operations.
Source: Company Data

4
Figure 23: Energy Consumption of Contribute to Climate Transition of Economy through innovative Products and Services | With the
Telco. Services per data traffic introduction of its Eco-Rating system in 2023, NOS encourages its suppliers to develop more
(in kWh) sustainable products by evaluating environmental performance throughout a product’s life cycle.
This promotes the circular economy of products and reduces e-waste, the world’s fastest growing
waste stream. Further, NOS plans to make the first application of a methodology to measure
emissions reduction resulting from the use of its products.

Social | For a Digital Future

Facilitating Portugal’s Digital Transformation | As a deeply integrated part of the Portuguese society,
achieved by an accelerated and extensive deployment of its fiber network and 5G technology,
extended further into underserved communities, NOS is helping to narrow Portugal’s digital divide.
This fulfills the broader economic imperative of connectivity: enabling greater access to education,
employment, health care and opportunity, which positively impacts its social ratings.
Source: Company Data
Based on the 5G technology, the smart cities initiative is a strategic bet to support the smart
modernization of Portuguese cities. With a focus on the collaboration with the municipalities of
Barreiro and Pombal, the innovative technological solutions strengthen the connection between
municipalities and citizens, optimize the management of water, energy and waste, and enable smart
and sustainable mobility solutions. This enabled NOS to successfully respond to shifting consumer
demand towards innovative services.

Figure 24: Board Renumeration Focusing on the Promotion of its Human Capital | NOS distinguishes itself by actively promoting
Peer Comparison talent, health and well-being through the NOS VITA Program, the current well-being program
implemented in 2022, their Occupational Health and Safety Management System and other
programs, achieving a General Satisfaction Index score of 83% and a Leadership Trust Index score of
88%. Further, it fosters inclusion and diversity through various partnerships that promote young
women’s interest in STEM fields, the professional role of women in the labour market and better
employment opportunities for the youth. This effort is recognized by the Bloomberg Gender-Equality
Index Score, where NOS achieved an above average result compared to sector and Portuguese peers.
Given the sector's large and ethnically diverse customer base, NOS’ community relationships and
sensitivity present important social cohesion risk mitigation.
Source: Company Data, Refinitiv
Governance | A Shade of Grey
NOS mostly adopts the governance recommendations and guidelines proposed by the Corporate
Governance Code of the Instituto Portuguese de Corporate Governance (IPCG), thereby fulfilling the
requirements for a sophisticated governance structure. The company follows a unitary board
structure, allowing for high decision-making speed and efficient information sharing. A statutory
supervisory structure consisting of the Statutory Independent Audit Board and the Statutory Auditor
Figure 25: Female Share of Seats ensures the necessary supervision.
on Board of Directors Board of Directors (BoD) | NOS’ staggered BoD is appointed by the General Meeting for a three-year
term and consists of 15 members (max. 23). With the resignation of the CFO Jose Pedro da Costa in
December 2023, the board loses its longest serving member (17 years). Six of the current members
have a tenure less than four years, while the remaining nine have an average tenure of 8.1 years. All
members record a 100% attendance rate of the seven board meetings held in 2022. The board faces
substantial exposure to business relationships of its members with major shareholders of the
company, as three of its members, including the chairman of the board, are also executive members
of NOS’ largest shareholder Sonae SGPS, S.A.. This has a significant impact on the independence of
the BoD.
Source: Company Data, OECD Remuneration | NOS’ executive remuneration plan applies benchmarking against comparable
companies in the global market to guarantee alignment with market recommendations and best
practices. It consists of 50% fixed renumeration, 25% short-term (1-year) and 25% medium-term (3-
year) variable renumeration. The variable renumeration is calculated using an individual
performance qualifier indicator and company KPIs (EBITDA, Consolidated operational Free Cash Flow,
Consolidated business volume and Net Promoter Score), ensuring alignment of executive incentives
with a sustainable strategy considering interests of the company and those of all its stakeholders.
Figure 26: Female Share of NOS’ renumeration policy does not include long-term incentives, thus, its compensation structure
Management Positions fails to incentivize long-term growth and shareholder value, which contributes to its poor
Governance performance.
Shareholder Structure | NOS’ capital structure is composed of three major entities plus free float
(see Figure 27). A substantial improvement in its shareholders score was achieved during 2022 when
Sonae, which previously held more than 50% of NOS’ shares, ceased to be a shareholder of ZOPT,
resulting in the loss of its veto power. Further, NOS does not follow the one share one vote principle,
as one vote is allocated for every 100 shares.

Source: Company Data, OECD

5
 INVESTMENT RISKS
Figure 27: Shareholder Structure
& No. of Shares Product risk (PR) | Lame duck, or the opposite

The telecommunication sector is shifting towards more intense competition, potentially reducing
515.161.380 market shares and/or customer base due to difficulties in attracting and retaining customers in a
telecom service shift (IoT, smart home, edge computing etc.). NOS therefore must find the proper
time to upgrade, and when doing so, decide whether to upgrade gradually or at maximum. Timing
plays a major role - whether to move directly or wait and see how demand evolves. Fast changing
technology and demand create a tough environment to take advantage of investments or monetize
Sources: Company Data | Note: As of 3Q23 technological advances to achieve a competitive advantage (e.g. 5G deployment, 5G use cases, cloud
services, managed services). And when NOS introduces new products & services, the risk of not
meeting customer expectations, resulting in complaints as communication services are delivered
with lower quality than desired (e.g., network coverage and quality, service execution/delivery
speed, unsuitable equipment), also effects the decision in the first place.

Social risk (SR) | Safety first

Figure 28: Key Investment Risks Consumer behaviour shifts demand toward innovative services such as broadband-based and over-
the-top products. That shift in demand might create significant capital allocation challenges and
affect return on capital given the sector's long-life assets. Given the vast reach and visibility of the
telco sector, its systems stability and consumer confidence in terms of protect information and
privacy require protection mechanisms as breaches of that confidence are non-reparable. While an
ongoing debate over the impact of social media and effects of misinformation could change usage
patterns. The large and diverse customer base has a sensitivity of social cohesion risks.

Credit risk (CR) | Investment grade rating at risk

Source: Team Estimates

In the current environment, NOS must finance new investments and prolong credits with significant
higher interest rates (Figure 29). These elevated rates make it even riskier for the uncertainty of
investments, having in mind that higher interest expenses cannot be forwarded to customers as
switching costs for customers are low, pressuring prices downwards. The possibility to not being able
to meet financial operational obligations becomes significantly higher, taking into account that NOS´s
credit rating of BBB is already at the threshold of the investment grade rating, therefore risking
future capital inflow in a downgrade scenario. Especially in the telco sector, where significant capital
Figure 29: ECB Main Refinancing investments for maintaining infrastructure plus additional investments in new technology are crucial
Operations Rate and needed, would a downgrade to junk bond rating inflict severe consequences.

Environmental risk (ER) | Bad weather

Due to environmental changes, the infrastructure faces more extreme weather events, which may
force technological resources to shut down. The infrastructure has to have resilience capabilities to
withstand such events to hold up data flow. NOS must be able to maintain business of critical
technical-operational facilities (e.g., systems, network platforms, physical infrastructure, other
Sources: FRED assets). Damages of infrastructure would not only induce tangible damages, leading to high repair
and reconstruction costs, but also intangible damages that might even inflict higher costs.
Additionally, chronic risks of long-term changes in weather patterns also increase maintaining costs,
such as cooling needs directly connected to higher energy costs.

Regulatory risk (RR1) | Geopolitical tension

Figure 30: Number of Hot Days The rapid evolving digital landscape requires regulations that address emerging challenges. Net
(Tmax > 30°C) in Portugal neutrality, consumer data protection and fair practices are main challenges, which arise typically
during such technology transition phases. Regulatory requirements compel NOS to take precautions
to protect sensitive data, regularly addressed by regulatory bodies. How unpredictable and fast
regulatory can affect telcos operation is emphasized by the recent example of the 5G network
decision, beginning as a political discussion and ending up in a regulatory requirement, banning
Chinese supply without compensation for replacing equipment.

Regulatory risk (RR2) | European price war

Sources: Forecast by World Bank CKP

To preserve competition in European markets, regulatory bodies debate since years the contractual
terms firms can establish to retain customers and set prices for a foreseen future. Especially telco
companies would severely suffer in their pricing mechanisms when minimum contract terms
(typically 24 months) will be restricted. In 2022, the ECL set new rules to grant early termination of
contracts for customers, emphasizing the focus and the potential pricing risk in the future.

6
 FINANCIAL ANALYSIS
Figure 31: Revenue Growth
Stable Growth | NOS, revenues wise, has been steadily growing faster than the Portuguese Economy
presenting itself with a CAGR 12-22 of 5%. This has been driven by a gain in market share and the
successful deployment of the 4G technology through this cycle. In this direction, the number of RGU
has also been growing in this period. NOS showed resilience in 2020 by having a lower-than-expected
decrease in sales. However, their audiovisuals segment, as expected, had a great impact but has
already recovered due to 1) people willingness to recover past actions; 2) the movies that are being
displayed such as Oppenheimer and Barbie.

High and Stable Profitability | Not only has NOS been growing in high level revenues but it has been
Source: Company Data
holding a stable and very high profitability, presenting itself with an average 36% EBITDA Margin
throughout the last 10 years. Its Gross Margin was ~70% in 2012 after that it decreased until level of
~63% but after 2020 it has recovered to historical levels of around ~68%. SG&A costs, which also
include advertising expenses, decreased throughout the last 10 years mainly driven by efficiency
gains on the activities developed by NOS. At the same time, Personnel Expenses decreased slightly,
currently only accounting for 6% of the total revenues. Due to inflationary pressure impacting labour-
Figure 32: Margins Evolution intensive costs, personnel expenses are anticipated to increase in the short-term but are expected to
decrease in the long-term. This reduction is driven by operational gains and headcount reductions
facilitated by advanced technology like Artificial Intelligence. Lastly, other expenses that are arising in
the last 5 years have the consequence of hiding the gains in the other areas as the figure of other
expenses has been increasing substantially.

Modest Cash Flow Generation | While NOS maintains a high level of profitability, it faces significant
CapEx requirements, encompassing both technical and consumer CapEx. Historically, CapEx has
averaged around ~436 million per year, corresponding to an average of 36% of the revenues.
Therefore, on average, the EBITDA margin has been consumed entirely by the CapEx needs of the
Source: Company Data business, therefore burning all the cash of the firm. Additional details on CapEx will be provided later
in this segment. Furthermore, NOS has historically maintained an average negative 6% of Working
Capital, which has remained at relatively stable levels. The impact of changes in Net Working Capital
is typically considered residual when compared to the significance of CapEx. Therefore, summing the
FCFF of the last 10 years, the company has generated only €400m, which corresponds to an average
Figure 33: Capex & of €40m/year.
Capex/Revenues
Accounts Receivables | A mention should be given to the Accounts Receivable in a business such as
the one from NOS that relies on contracts and stable payments of individuals to the company.
Further, it is also dependent on payments from companies. Given the environment of high interest
rates and an increasing number of bankruptcies around Europe this is a figure of increased
importance. For the last 10 years, AR Net have been around ~25% of revenues of the correspondent
year. However, AR Gross, since 2016, has been increasing from around ~33% to ~40%. This is the
result of a decreasing provision for doubtful accounts. For the upcoming years, it is expected that this
provision will increase its value due to the unstable macroeconomic conditions further negatively
Source: Company Data impacting the EBITDA margin of NOS. For the last 3 years, a deeper analysis was performed in the AR
account finding that NOS has already expected a bigger credit loss in 2022, namely on the accounts
receivables due from 90 to 180 days which is already a sign of the increase in the provision for
doubtful accounts.

Figure 34: Accounts Receivables ROE and ROIC | Although NOS has been investing a lot of cash into CapEx their Return on Invested
Capital taking a last 5y average is 6.70%. This value is higher than their Cost of Capital which means
Ageing
that NOS has been generating value through their network development investments and other
projects to enhance their operational efficiency. Therefore, the situation of being highly levered is
not that concerning as long as their projects remain generating value. Again, looking at a 5y average
of the ratios, by performing a DuPont Analysis, the ROA is 4.62% but with an average Assets/Equity of
3.15, the ROE is, on average, 14.61%. This figure is slightly higher than the industry median of 13.6%.

CapEx | Conducting a thorough analysis of the historical CapEx Investments performed by NOS, we
found a clear pattern that relates with the deployment of new technologies (3G, 4G and 5G). By
looking both into absolute values and CapEx to Revenues, we find that right before the deployment
Source: Company Data
of the technology, in the 3 years prior to it, the CapEx levels increase largely followed by a huge
decrease right after the deployment. After that, it stabilizes until a new cycle comes into play. In this
case the 6G cycle, which is expected to be deployed in around 10 years' time.

Financial Position | Ever since 2013 NOS has been carrying a very low level of cash in its Balance
Sheet, opting to invest its cash and not holding excess cash. In 2022, it holds a Net Debt Position of
€1600m which corresponds to 2.91x EBITDA. This is a rather high number but still inside industry
Figure 35: ROE and ROIC average levels and in line with its peers. The industry itself is known for being very high levered for
the last 10 years.

Using 5y average ratios, NOS has a Current Ratio of 0.65 and a Quick Ratio of 0.58 which are rather
low figures but again in line with the industry. Moreover, EBITDA-Capex/Interest Expense shows a
value of 4.25 further demonstrating NOS’s capacity to fulfil its debt obligations. There were concerns
in the market about NOS capacity to maintain its dividend policy which were proven to be not
realistic as NOS has been paying its own dividends. Lastly, as in the following years it is expected that
the CapEx figures decrease by a large amount, NOS will increase its financial position possibly
bringing its Net Debt/EBITDA figures to around ~2x.
Source: Team Calculations

7
 VALUATION
Figure 36: Liquidity Analysis In the assessment of NOS's intrinsic value, a two-stage Discounted Cash Flow Analysis (DCF) was
utilized. This approach was used due to its capacity to encompass all firm and industry-specific
variables. The initial stage involved forecasting based on firm and industry-specific assumptions,
while the subsequent stage entailed projecting with a constant growth rate. The forecast was done
for a period of 10 years (approximately the duration of each G - 4G, 5G, 6G – cycle). Currently, NOS is
finishing its 5G cycle which can be seen by the CapEx decrease. For that reason, we do the valuation
taking into account all the CapEx needs for the next cycle that is starting in 2023 – 6G cycle. The
Terminal Value of the DCF Model was computed by taking the average of the cycle in terms of NOPAT
and Reinvestment Rate because we predict that for the following years the cycles will be repeated,
and it is likely that they behave similarly.
Source: Company Data

Revenue forecasting consists of a dual RGU approach, CPI and segment analysis
RGU Forecast | Two forecasting methods were employed for RGUs. Initially, a regression utilizing
historical GDP per Capita and NOS’s RGUs was conducted, assuming a correlation between wealth
growth and the number of subscribed services (R2: 0.87). A GDP per Capita forecast by the
International Monetary Fund, along with the determined regression, was then employed for future
RGU projections. Post-2028, a 2% growth in 2033 was approximated, with the growth from 2029 to
2032 gradually approaching this figure through a calculated Compound Annual Growth Rate (CAGR)
Figure 37: RGU Development by based on 2028 and 2033 data. This approach was deemed viable as also a 2% inflation was estimated
Contribution per FC Method & in these years (based on ECB targets) and assumed Portugal would not have material real growth (per
Total Revenue Growth Telco Capita), as the populations is quite slightly decreasing, offsetting the (real) GDP growth.
Another regression, using MarketLine Market Volume Forecasts and NOS’s RGUs (R2: 0.88), was
conducted. A weighted average of both approaches was adopted, with early years prioritizing the
GDP per Capita approach, as historical economic developments were deemed better to explain the
growth in the first years (as not much times has past since the regression) and later years favouring
the more conservative MarketLine method, as the market Penetration increases and there are less
potential customers to expand to. As both approaches are based on the whole market, it was
assumed that (at least for the Base and Bull Case) market shares stay somewhat constant, which they
have in recent years.
Source: IMF; MarketLine; Team Calculations
Pricing Forecast | For Pricing the best indicator is the Consumer Price index, as all market
constituents have mentioned recently that they will increase prices based on Inflation (on the CPI).
But as historically the Revenue per RGU has decreased, while prices for products (incl. bundles), have
increased it was noted that this effect comes through the increasing popularity of convergent
bundles. As Number of RGUs per Subscriber increase, through the popularity of higher play
convergent bundles, while prices don’t increase that much. This results in decreasing Revenue per
RGU. To counter this effect, a Multiple regression of Revenue per RGU with the Consumer Price Index
and Convergent Bundles in Portugal (by ANACOM) as the Regressors was done (R2: 0.92). As there is
no forecast for future Convergent Bundles in Portugal, the future number of Bundles in Portugal were
forecasted based on a regression with the historical market penetration of convergent Bundles (R2:
Figure 38: RGU Regressions 0.99), and an approximated change in Market penetration by the double declining decrease in
increase of market penetration, while keeping a 0.7% increase after 2030 constant. This regression
was then used to forecast total convergent bundles in Portugal. This was then used for the multiple
regression, together with an CPI forecast by the IMF and assuming a 2% Inflation rate after 2028, in
accordance with ECB targets.

A bear case adjustment considered Digi's entry as a low-cost competitor. Revenue projections for the
Sources: Team Calculations | See Appendix for Details
Audiovisuals & Cinema segment were based on the Cinema segment, incorporating ticket forecasts
using viewership data and pricing regression. A ratio analysis of the Telco + Cinema & Audiovisual
Segments was conducted to forecast Others & Eliminations, assuming a gradual convergence to the
historical average ratio, completing the overall revenue forecast (for details see Appendix).

OpEx forecasting is driven by ongoing cost transformation program and inflationary pressure

Operating expenses primarily consist of energy and utility costs, network infrastructure
expenditures, and labour force expenses. In alignment with statements from NOS’ management
report, we anticipate a continual optimization of NOS’ cost structure driven by efficiency measures,
Figure 39: Total Revenue Forecast with a focus on the technological transformation of its telecommunication network. This strategy
helps mitigate the adverse impact of inflationary pressure on its core operations.
The cost program involves the implementation of software algorithms and automated processes,
primarily targeting headcount reductions in support services. Furthermore, it includes projected
annual energy efficiency gains within NOS’ telecommunication services of 21% until 2025 and 13%
until 2030, as forecasted by NOS. This improvement is facilitated by advanced technology and
analytics, ultimately leading to a reduction in total energy consumption.

In line with company projections and supported by 1H FY23 financials, we anticipate a modest
Sources: Company Data; Team Calculations
growth in EBITDA margins for 2023. However, due to inflationary pressure and the expiration of
power purchase agreements for certain portions of NOS’ energy demands, we predict a slight dip in
EBITDA margins for 2024, followed by a recovery in subsequent years driven by the ongoing cost
reduction program.
.

8
Figure 40: OpEx & EBITDA Margin Current Assets and Capex Forecasting Assumptions as based on historical data
Development
Working Capital is forecasted on DSO, DPO, DIO with the assumption usually being a slow
convergence to historical averages. The same is also true for most other current assets and liabilities.

The main underlying assumption for Capex is, that the changes from the 5G Cycle behave similar to
the changes from the 4G to the 5G cycle. This can be deemed appropriate as there were new
Infrastructure investments which is different in comparison to the change from the 3G to 4G cycle and
as the 5G has just started and no proper statements about the needs of the 6G cycle can be made.
This thus seems not only reasonable but rather conservative. The spike in Capex due to the
Source: Company fillings, Team Calculations
implementation of 6G can be seen in Figure 40. Our DCF 1st stage goes until 2033 to capture all the
Figure 41: Capex Forecast cycle. For the Terminal Value we take the average NOPAT and Reinvestment Rate to capture it

Affiliated Companies are valued high level due to data availability and materiality

Affiliated Companies are valued using industry multiples either EV/Sales or P/E depending on
whether the Net Income is positive (favouring the P/E approach). For EV to Equity a simplifying
assumption was that all Non-current Liabilities are Debt, it was not adjusted for Cash. This is a very
high level approach, but it still was used as there is no further data available as all companies are
private entities and the overall adjustment is not material (see Appendix 17 for details).
Sources: Company Data; Team Calculations

Figure 42: Beta Peer Analysis Dynamic Weighted Average Cost of Capital

Cost of Equity | In conjuncture with the CAPM pricing model we estimated the equity cost of capital
for each annual forecasted cash flow. We applied the corresponding German government bond rate
to the annual cash flow as the risk-free rate, resulting in a different Cost of Equity for each year in a
range between 6.02% and 4.83% due to the yield-curve structure and a constant beta of 0.45.
Portugal´s country risk premium of 1.75% (Damoderan, 2024) was used as market risk premium as
NOS' exposure to country risk is similar to its exposure to residual market risk, which we have seen
and can justify by the strong correlation of GDP per capita and Portugal inflation to the Revenue of
NOS. To retrieve the levered beta of 0.45 two approaches were applied. We estimated a regression
coefficient of the excess returns of NOS with the Market risk premium (Euro Stoxx 600) by using
weekly data of the past 2 years (refer to the appendix). The other one was based on the levered betas
Source: Refinitiv, Team Calculations and capital structures from a set of 13 peers that we chose from a long list of 47 European telcos,
Figure 43: Cost of Debt, Beta and reduced to a similar range in terms of profitability and growth. While the pure peer approach might
assume homogeneity risk of the telco sector in all European countries is the regression balancing that
D/E Comparison
risk accordingly as the sector and its risk is properly weighted in the Euro Stoxx index, this approach
was thus used.
Cost of Debt | Given the lack of publicly traded bonds, we based the calculation on the company’s
credit rating assigned by the major credit agencies Fitch, Moody’s and S&P, which is applied to
Damodaran's synthetic ICR-based spread (Damodaran, 2024) to assign a default spread that is added
to the risk-free rate to compute NOS’ projected cost of debt.
Tax rate | We used the statutory tax rate of 21% to compute the WACC as it better reflects the
opportunity cost of capital inherent to this rate.

Source: Refinitiv, Team Calculations

Figure 44: NOS’ Credit Rating and

Implied Spread

Source: S&P, Moody‘s, Fitch

Comparable Companies Analysis

Figure 45: Comparable
Companies Multiple Valuation The comparable valuation was performed for European companies that present similar growth and
EV/EBITDA PE RATIO EV/BOOK
profitability rates. Following companies match the characteristics we were looking for: Vodafone
Share Price 3,78 6,11 18,39 Group PLC, Telekom Austria, Telefonica Deutsch Telecom, Italia Deutsche Telecom AG, Orange SA, BT
Average 9,43 Group PLC, Swisscom, Tele2 AB, Elisa Corp, Telia Company AB, Hrvatski Telekom, Go PLC.
Sources: Refinitiv; Team Calculation To evaluate the comparison, we chose EV/EBITDA, the P/E ratio and EV/book value, from which we
Figure 46: Dividends in derived share prices in a wide price range between 3.78€ and 18.39€ per share. Starting with the
EV/EBITDA ratio and a price of 3.78€, getting figures before depreciation and amortization makes in
Comparison
the telco sector total sense as they are capital intense and therefore affected significantly by D&A. In
contrast to that, book and earnings ratios are already affected by that non-cashflow adjustments so
that volatile multiples in the sector lead to correspondingly figures. Overpriced share prices of P/E
143.2
ratio 6.11€ or even the 18.39€ are consequently the result and therefore not surprising. As the
valuation method in general is simply based on past data, not considering future developments as the
entrance of Digi for example, we will rather use the cash flow methods which not only adjust for
future expectations but also is not affected by accounting methods.

Source: Company Data, Team Calculations

9
 Figure 47: ROE & Payout Ratio Dividend Discount Model (DDM)
Development
Nos possess a long dividend history with a recent 4-year stable payment history. Besides the extra
dividend payment of 0.15€ per share in 2022 due to additional income through the tower deal, NOS
paid over the last 4 years constantly 0.28€ per share, after falling from a high of 0.35€ in 2018.
As the nature of industry, NOS has high PPE and thus depreciation, reducing earnings significantly,
which therefore explains the high pay-out ratios around 100%, and often above. To receive the
terminal growth rate for the Gordon Growth model, we computed the pay-out ratio via FCFE
(92.75%), which is the more reliant figure given the reasoning above, so that we arrived at a growth
Sources: Company Data; Team Calculations
rate of 0.92% when taking the stable ROE additionally into account. Given the industry terminal
growth rate of 1% and the new entrants of DIGI, plus the fact that company´s recent past dividend
Figure 48: Precedent Transactions payments barely moved, NOS future growth rate slightly below the industry terminal growth rate
Multiple Valuation seems reasonable. NOS has reliably paid dividends in its long history, making the model somehow
meaningful to use, although resulting in a high share price of 5.53€. The key factor why we do not
EV/EBITDA EV/Sales Average take DDM into consideration is that the model assumes dividends will be paid at rising rates, which
Multiple
Enterprise value
6,15
3612
2,95
4682 4147
NOS did not do in the last 4 years (see Figure 47) also due to the fact that pay-out ratios are already at
Share price 3,82 5,91 4,87 significant high levels

Source: Deal Screener; Team Calculations Precedent Transaction Analysis

Since 1995, there have been 49 M&A Deals in the European telco market. It is visible that the factor of
time does not affect strongly the deal valuation that is why we only adjusted the two extremes on
Figure 49: Sensitivity DCF both sides. The Deals of T-Mobile Austria GmbH buying Upc Austria GmbH in 2017 with an EV/EBITDA
of 632.95 and of BT Hawthorn Ltd buying Esat Telecom Group PLC in 2000 with an EV/EBITDA of -
Scenario Analysis of EV Price/share
57.49, leaving a max of 73.77 and a min of -49.19. Without these two outliers we get an average
Bull Case 4,40
Base Case 3,11
EV/EBITDA of 6.15 and EV/Sales of 2.95. Taking EBITDA and Revenue of 2023 into account, we get an
Bear Case 2,18 Enterprise Value range between 3.61bn and 4.68bn, the equivalent share prices of 3.81€ and 5.91€.
Looking at the distribution, as expected, deals in the dotcom bubble around 2000 were made on
Source: Team Calculations higher levels, which leads us to the lower end of the range, emphasizing the price received with the
DCF.
Figure 50: Base Case Monte Carlo Sensitivity Analysis
Simulation
We conducted a two-way sensitivity analysis on the Terminal Growth Rate (TGR) and NOS’ Beta, the
primary drivers of our DCF, to evaluate the robustness of our assumptions and their impact on NOS’
final share price (see Figure 50). The company’s Beta was selected as the company’s risk indicator
since our WACC estimate undergoes annual changes, rendering it unfeasible for inclusion in the
sensitivity analysis. The +/- 0.02 increments reflect possible changes in NOS’ risk exposure. Our TGR
baseline of 0.92% is based on the projected industry growth rate of the Portuguese
telecommunications industry. The +/- 0.2% increments in our sensitivity reflect possible fluctuations
in economic conditions.
Furthermore, we performed a Monte Carlo simulation with 10,000 iterations based on changes in our
key line item, total revenue growth, yielding a price range of 2.82€ to 3.38€, 1.93€ to 2.43€ and 4.14€
to 4.70€ for base, bear and bull case, respectively. (see Figure 50 and Appendix 27)
Scenario Analysis

Next, we conducted a bear and bull FCFF DCF scenario analyses based on revenue development
assumptions described earlier and variations in key line item values (see Appendix 3). With a 12-
Source: Team Calculations
month target price of 4.40€ the bull case presents a 37.5% upside potential, whereas the bear case’s
2.18€ 12-month target price provides a 46.8% downside potential (see Figure 49).
Figure 51: Enterprise Value to
Conclusion Valuation
Equity - End of 2024
Through the various methodologies applied to value NOS (Dynamic DCF with a complete revenue
forecast, trading multiples, precedent transactions and DDM) we derive a target price of 3.11€. In a
bear case, where the new competitor conquers aggressively market share the price falls to 2.18€.
Moreover, in a case in which not only the new competitor struggles to gain market share due to low
churn in main players and lack of bundling offer from the competitor, but also where NOS succeeds in
their cost cutting plans the target price rises to 4.40€. The scenario in which there is more confidence
is one where the new competitor gains some market share and the costs remain rather constant. We
Sources: Company Data; Team Calculations find that, for the many uncertainties (entrance of new competitor and CapEx needs) and lack of
growth opportunities in the sector, the current price at which NOS is trading is somewhat above our
target price.
Figure 52: Comparison Valuation
Methods Figure 53: Terminal Growth Rate & Beta Sensitivity Matrix
Terminal Growth Rate
0,32% 0,52% 0,72% 0,92% 1,12% 1,32% 1,52%
0,39 2,70 2,94 3,19 3,49 3,82 4,20 4,63
0,41 2,61 2,83 3,08 3,36 3,67 4,03 4,45
0,43 2,51 2,72 2,96 3,23 3,53 3,88 4,27
Beta

0,45 2,42 2,62 2,85 3,11 3,40 3,73 4,10

0,47 2,33 2,53 2,75 2,99 3,27 3,58 3,94
0,49 2,24 2,43 2,65 2,88 3,15 3,44 3,78
Sources: Own Calculations
0,51 2,16 2,34 2,55 2,77 3,03 3,31 3,64

10
APPENDIX

Appendix 1: Porter Five Forces

Competition - High
The Portuguese telecommunication services market experiences strong, driven by large players benefiting from economies of scale. Intense
competition comes from low differentiation in core services, forcing providers fight for customers through quality, brand awareness,
functionality, and value pricing. Low-cost switching and extended contract terms contribute to rivalry, while diversification efforts into
double-play, triple-play, or quad-play packages aim to shield against saturation. Mergers and acquisitions, such as Cyient's acquisition of
Celfinet, shape the market, while 5G deployment intensifies competition in wireless data services. Furthermore, Economic uncertainties
post-COVID-19 contribute to a strong rivalry as consumers become more price-sensitive.

Supplier Power – Medium

Major telecom providers control vital network infrastructure, although there has been a shift recently (e.g. the sale of cell towers by NOS).
Equipment providers (like Ericsson) play a major role in wireless network development, semiconductor giants (like Intel) contribute crucial
hardware to 5G networks, established mobile manufacturers (like Apple) supply end user devices and Software providers (like Oracle)
enhance network quality. Supplier power is strengthened by established brands and high switching costs, although specialized suppliers'
reliance on telecom market income moderates this.

Buyer Power – Medium

The telecommunication services industry in Portugal has few major players and numerous buyers, including individual consumers and
businesses. The vast consumer base weakens buyer power, as the loss of a single customer has a limited impact on market players.
Although retail customers have weak financial influence, bundling services increases revenue stream loss with each customer departure.
Inelastic demand weakens buyer power, while standardized services strengthen buyer power. Price-driven buyers, low loyalty, and
moderate switching costs further enhance buyer power. In Portugal, the relatively low cost of essential services (fixed-broadband, mobile
internet, and voice services package), equivalent to 1.48% of Gross National Income per capita, indicates strong bargaining power for buyers
in this market (MarketLine).

Threat of New Entrants – Low

Entering the telecommunications market as a facilities-based provider (like NOS) requires a substantial capital investment for infrastructure
development, offering economies of scale and making it challenging for new competitors to compete on pricing. Alternatively, operating as
a Mobile Virtual Network Operator poses a lower-cost entry but faces challenges of suppressed profitability due to high fixed costs and the
importance of brand recognition. Government regulations, overseen by ANACOM, impose barriers through rules on distribution channels
and infrastructure access. Spectrum auctions, such as Portugal's 5G auctions, are critical for new entrants, with mergers or acquisitions seen
as a favorable approach in a market dominated by a few large companies. However, it has to be mentioned, that Digi secured a portfolio of
5G spectrum and will most likely launch operations in the near future (Fitch).
Portugal's telecom market (ranked 29th in the Network Readiness Index 2022) faces limited growth potential for new entrants due to high
investment requirements, operating leverage, and the rapid cycle of network upgrades in the wireless sector.

Substitutes – Low

Fixed-line and wireless segments, though currently limited substitutes, may shift as mobile broadband improves. Internet-based
communication, including email and VoIP services, serves as the primary substitute, offering cost-effective alternatives. However, quality
depends on internet speed, and user dependency on traditional operators for access to these services persists. Other potential substitutes
like satellite-based internet (e.g. Starlink) are not likely to offer competitive prices in the near future.
Appendix 2: Further Revenue Forecast Assumptions

Revenue forecasting involves a full examination of Revenue Generating Units (RGUs) and Pricing. RGUs, considered a superior metric to
Subscribers, account for various services subscribed by a single customer.

Bear Case Adjustment

Considering the entry of Digi as a low-cost competitor, a bear case adjustment was applied. A gradual RGU decrease from 1% in the first
year to 6% by 2033 was assumed based on Digi's market entry in Spain, although there are some major differences (e.g. Digi also entered
the fixed telephony market in Spain and won’t do that according to their own statement in Portugal). It was assumed, that the market share
will increase, as costumers are currently bounded in contracts but after some time will be free to switch. For Pricing, a negative 2%
adjustment was made, particularly materializing in the low-cost segments of NOS (WOO), anticipating necessary adjustments due to
increased competition.

Audiovisuals & Cinema Segment

To determine Revenues for the Audiovisuals & Cinema segment the forecast is mainly based on the Cinema segment as high ticket sales and
Revenues in this segment are highly correlated to with high Revenues in the Audiovisuals segment, as popular movies (cinema wise) relate
to high Revenue from distribution. It must be mentioned that although the following forecast was made with the best knowledge possible
Revenues in this segment are highly dependent on the quality of films in that time (perfectly seen in 2023 though the “Barbenheimer”
phenomenon). Thus, Revenues in this segment in the future might be volatile.

11
Ticket Forecast

Using data for Viewers by Statista and Total Tickets sold by Instituto do Cinema e do Audiovisual the average ticket per Viewer was
determined. The Average ticket per viewer to was estimated to be the historical average. Next total Viewers were forecasted based on the
CAGR from 2013-2022. Then both the Average ticket per Viewer and the total Viewers were used to forecast Total Tickets in Portugal. Using
NOS’s number of tickets sold, and total Tickets sold the historical market shares of NOS were calculated and forecasted to converge to the
historical average. The forecasted total tickets and NOS’s forecasted market share were then used to estimate NOS’S future ticket sales.

Ticket Pricing
A regression based on CPI and Revenue per Ticket of NOS (R2: 0.89) was conducted to estimate ticket pricing, applying the same
assumptions and market forecast for CPI as in the Telco Pricing.

Audiovisuals Segment

Using the Ticket Forecast and the Ticket Pricing Forecast the Revenue for the Cinema Segment was determined. The Revenue for the total
Audiovisuals & Cinema segment was then calculated using a ratio analysis of historical data of the Cinema and Audiovisuals & Cinema
Revenues, assuming a converge to historical averages (excluding 2020 and 2021 due to Covid). This in cooperation with the Cinema Revenue
forecast was then used to forecast the total Revenue for the Audiovisuals & Cinema Segment.
Others & Eliminations

A ratio analysis of the Telco + Cinema & Audiovisual Segments was conducted to forecast Others & Eliminations, assuming a gradual
convergence to the historical average ratio, thus completing the Revenue Forecast.

Appendix 3: Forecasting Assumptions

Sales Growth 2018 2019 2020 2021 2022 LTM 2023* 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E

Telco Division
Bull Case 0% 2% -12% 4% 5% 2% 0% 3.9% 5.5% 1.8% 1.3% 1.0% 0.9% 0.8% 0.8% 0.8% 0.8% 0.9%
Base Case 0% 2% -12% 4% 5% 2% 0% 3.9% 4.8% 1.7% 1.4% 1.1% 1.0% 0.9% 1.0% 0.9% 0.9% 0.9%
Bear Case 0% 2% -12% 4% 5% 2% 0% 0.8% 4.6% 1.5% 1.1% 0.8% 0.6% 0.4% 0.4% 0.2% 0.0% -0.1%

Chosen Scenario 0% 2% -12% 4% 5% 2% 0% 4% 5% 2% 1% 1% 1% 1% 1% 1% 1% 1%

Audiovisuals Division
Bull Case 0% 7% -55% 25% 34% -11% 0% 15.0% 14.0% 4.5% 3.0% 3.0% 2.8% 3.3% 3.3% 3.3% 3.3% 3.3%
Base Case 0% 7% -55% 25% 34% -11% 0% 12.4% 20.2% 6.3% 4.5% 4.7% 4.1% 4.7% 4.7% 4.7% 4.7% 4.7%
Bear Case 0% 7% -55% 25% 34% -11% 0% 11.0% 11.0% 3.0% 2.0% 2.2% 2.0% 2.3% 2.3% 2.3% 2.3% 2.3%

Chosen Scenario 0% 7% -55% 25% 34% -11% 0% 12% 20% 6% 4% 5% 4% 5% 5% 5% 5% 5%

Operating Items 2018 2019 2020 2021 2022 LTM 2023* 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E

Cost of Goods Sold % Sales

Bull Case 37% 37% 31% 33% 30% 29% 27% 28% 28% 28% 27% 27% 27% 27% 27% 27% 27% 27%
Base Case 37% 37% 31% 33% 30% 29% 27% 29% 28% 28% 28% 27% 27% 27% 27% 27% 27% 27%
Bear Case 37% 37% 31% 33% 30% 29% 27% 29% 29% 28% 28% 27% 27% 27% 27% 27% 27% 27%

Chosen Scenario 37% 37% 31% 33% 30% 29% 27% 29% 28% 28% 28% 27% 27% 27% 27% 27% 27% 27%

SG&A % Sales
Bull Case 28% 24% 26% 25% 28% 27% 26% 28% 29% 28% 28% 28% 27% 27% 27% 27% 27% 27%
Base Case 28% 24% 26% 25% 28% 27% 26% 29% 29% 29% 28% 28% 28% 27% 27% 27% 27% 27%
Bear Case 28% 24% 26% 25% 28% 27% 26% 29% 29% 29% 29% 28% 28% 27% 27% 27% 27% 27%

Chosen Scenario 28% 24% 26% 25% 28% 27% 26% 29% 29% 29% 28% 28% 28% 27% 27% 27% 27% 27%

Labour Expenses % Sales

Bull Case 5.2% 5.3% 6.2% 5.7% 5.6% 5.8% 5.8% 5.5% 6.5% 6.3% 6.1% 5.9% 5.5% 5.1% 5.1% 5.1% 5.1% 5.1%
Base Case 5.2% 5.3% 6.2% 5.7% 5.6% 5.8% 5.8% 6.0% 7.0% 6.8% 6.6% 6.4% 6.0% 5.6% 5.6% 5.6% 5.6% 5.6%
Bear Case 5.2% 5.3% 6.2% 5.7% 5.6% 5.8% 5.8% 6.5% 7.5% 7.3% 7.1% 6.9% 6.5% 6.1% 6.1% 6.1% 6.1% 6.1%

Chosen Scenario 5% 5% 6% 6% 6% 6% 6% 6% 7% 7% 7% 6% 6% 6% 6% 6% 6% 6%

Depreciation % of PPE
Bull Case 18% 18% 18% 18% 20% 20% 14% 18% 18% 18% 18% 18% 18% 18% 18% 18% 18% 18%
Base Case 18% 18% 18% 18% 20% 20% 14% 18% 18% 18% 18% 18% 18% 18% 18% 18% 18% 18%
Bear Case 18% 18% 18% 18% 20% 20% 14% 18% 18% 18% 18% 18% 18% 18% 18% 18% 18% 18%

Chosen Scenario 18% 18% 18% 18% 20% 20% 14% 18% 18% 18% 18% 18% 18% 18% 18% 18% 18% 18%

Amortization % of Intangibles
Bull Case 23% 24% 22% 15% 18% 19% 15% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%
Base Case 23% 24% 22% 15% 18% 19% 15% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%
Bear Case 23% 24% 22% 15% 18% 19% 15% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%

Chosen Scenario 23% 24% 22% 15% 18% 19% 15% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%

12
Cash Flow Items 2018 2019 2020 2021 2022 LTM 2023* 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E

Capex as % Sales
Bull Case 27% 28% 35% 43% 41% 30% 36% 25% 27% 27% 28% 26% 24% 27% 28% 35% 43% 41%
Base Case 27% 28% 35% 43% 41% 30% 36% 25% 27% 27% 28% 26% 24% 27% 28% 35% 43% 41%
Bear Case 27% 28% 35% 43% 41% 30% 36% 25% 27% 27% 28% 26% 24% 27% 28% 35% 43% 41%

Chosen Scenario 27% 28% 35% 43% 41% 30% 36% 25% 27% 27% 28% 26% 24% 27% 28% 35% 43% 41%

Net Working Capital Drivers 2018 2019 2020 2021 2022 LTM 2023* 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E

Inventory, DIO
Bull Case 25 21 38 34 54 54 77 52 49 47 45 43 41 39 37 35 34 32
Base Case 25 21 38 34 54 54 77 54 51 49 47 45 43 41 39 37 36 34
Bear Case 25 21 38 34 54 54 77 55 52 50 48 46 44 42 40 38 37 35

Chosen Scenario 25 21 38 34 54 54 77 54 51 49 47 45 43 41 39 37 36 34

Accounts Receivable, DSO

Bull Case 102 98 94 98 91 88 117 93 93 93 93 93 93 93 93 93 93 93
Base Case 102 98 94 98 91 88 117 97 97 97 97 97 97 97 97 97 97 97
Bear Case 102 98 94 98 91 88 117 99 99 99 99 99 99 99 99 99 99 99

Chosen Scenario 102 98 94 98 91 88 117 97 97 97 97 97 97 97 97 97 97 97

Other Receivables, % of Sales

Bull Case 1% 2% 2% 1% 2% 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%
Base Case 1% 2% 2% 1% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%
Bear Case 1% 2% 2% 1% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%

Chosen Scenario 1% 2% 2% 1% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%

Prepaid Expenses & Other Current Assets

in % of OPEX
Bull Case 4% 4% 4% 5% 5% 6% 9% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4%
Base Case 4% 4% 4% 5% 5% 6% 9% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4%
Bear Case 4% 4% 4% 5% 5% 6% 9% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%

Chosen Scenario 4% 4% 4% 5% 5% 6% 9% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4%

Accounts Payable, DPO

Bull Case 161 162 219 217 202 204 289 231 226 222 218 213 209 205 201 197 194 190
Base Case 161 162 219 217 202 204 289 202 197 193 189 184 180 176 172 168 165 161
Bear Case 161 162 219 217 202 204 289 188 183 179 174 170 166 162 158 154 150 146

Chosen Scenario 161 162 219 217 202 204 289 202 197 193 189 184 180 176 172 168 165 161

Accrued Expenses in % of OPEX

Bull Case 20% 22% 22% 21% 25% 25% 36% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%
Base Case 20% 22% 22% 21% 25% 25% 36% 22% 22% 22% 22% 22% 22% 22% 22% 22% 22% 22%
Bear Case 20% 22% 22% 21% 25% 25% 36% 24% 24% 24% 24% 24% 24% 24% 24% 24% 24% 24%

Chosen Scenario 20% 22% 22% 21% 25% 25% 36% 22% 22% 22% 22% 22% 22% 22% 22% 22% 22% 22%

Other Current Liabilities in % of Sales

Bull Case 5% 7% 9% 8% 7% 6% 7% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6%
Base Case 5% 7% 9% 8% 7% 6% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
Bear Case 5% 7% 9% 8% 7% 6% 7% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9% 9%

Chosen Scenario 5% 7% 9% 8% 7% 6% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%

Appendix 4: DCF Valuation

DCF 2018 2019 2020 2021 2022 LTM 2023 YTD 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
EBIT 189.0 218.1 195.1 202.9 171.9 210.9 194.8 300.9 282.1 278.7 280.6 293.2 307.0 313.5 305.0 273.7 222.2 185.7
- Tax -29.3 -32.6 -16.3 -11.8 -32.7 -23.5 -21.9 -40.8 -38.0 -37.5 -37.8 -39.7 -41.8 -42.7 -41.5 -36.7 -29.0 -23.5
NOPAT 159.7 185.5 178.8 191.1 139.2 187.4 173.0 260.1 244.1 241.2 242.8 253.5 265.3 270.8 263.6 236.9 193.2 162.1
+ Depreciation 286.9 319.0 310.5 321.0 382.9 397.2 286.3 286.2 317.7 344.6 371.8 387.5 396.4 413.0 430.6 471.1 531.8 578.0
- CapEx -423.7 -444.2 -479.445 -609.8 -625.8 -571.1 -358.9 -396.7 -456.6 -463.3 -491.8 -457.2 -435.6 -485.9 -508.4 -649.5 -799.8 -781.8
- ∆ Working Capital -29.3 -28.1 -41.4 6.5 18.8 -23.0 5.8 24.3 -0.6 6.0 9.3 9.5 5.3 5.4 3.0 3.1 3.2 -16.9
FCFF -6.4 32.2 -31.6 -91.2 -84.9 -9.5 106.1 173.9 104.5 128.5 132.1 193.4 231.5 203.3 188.8 61.6 -71.7 -58.5
WACC 4.96% 4.28% 4.17% 3.95% 3.96% 3.96% 3.99% 3.95% 3.99% 3.89% 4.31%
Discount Factor 1.04 1.08 1.12 1.17 1.22 1.26 1.32 1.36 1.46
Discounted FCFF 123.3 122.2 172.1 198.1 167.2 149.6 46.8 -52.8 -40.0

Sum PV FCFF 886.6

Average NOPAT 239.4
Average Reinvestment Needs -122.4
PV Terminal Value 2359.7
Enterprise Value 3246.3
Net Debt -1844.4
Affiliated Companies 192.7
Market Cap 1594.6
Shares Outstanding 512.6
Price/share 3.11

13
Appendix 5: Income Statement
Income Statement 2018 2019 2020 2021 2022 LTM 2023* 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E

Telco Division 1497.6 1522.3 1345.7 1401.5 1469.2 1500.6 1131.6 1526.5 1599.6 1627.5 1649.7 1668.2 1684.8 1700.8 1717.0 1732.7 1748.5 1765.1
Revenue Growth % 2% -12% 4% 5% 2% 4% 5% 2% 1% 1% 1% 1% 1% 1% 1% 1%

Audiovisuals 111.5 118.8 53.8 67 89.6 80.0 51.5 100.7 121.0 128.7 134.4 140.7 146.5 153.4 160.6 168.2 176.0 184.2
Revenue Growth % 7% -55% 25% 34% -11% 12% 20% 6% 4% 5% 4% 5% 5% 5% 5% 5%

Others & Eliminations -33.0 -41.8 -31.6 -38.2 -37.8 -40.5 -42.9 -43.8 -44.6 -45.3 -45.9 -46.5 -47.2 -47.8 -48.5 -49.2
Revenue Growth % 27% -24% 21% -1% 5% 9% 4% 4% 4% 4% 4% 4% 4% 3% 3%

Revenue 1576.1 1599.3 1367.9 1430.3 1521 1580.6 1183.1 1586.7 1677.7 1712.3 1739.6 1763.6 1785.4 1807.7 1830.4 1853.0 1876.1 1900.2
Revenue Growth % 1% -14% 5% 6% 4% 6% 2% 2% 1% 1% 1% 1% 1% 1% 1%

Cost of Goods Sold 578.3 585.9 421.4 470.2 457.8 454.7 321.5 452.2 473.9 479.4 478.4 476.2 482.1 488.1 494.2 500.3 506.5 513.0
COGS % Sales 37% 37% 31% 33% 30% 29% 27% 29% 28% 28% 28% 27% 27% 27% 27% 27% 27% 27%

Gross Profit 997.8 1013.4 946.5 960.1 1063.2 1125.9 861.6 1134.5 1203.7 1232.9 1261.2 1287.5 1303.4 1319.6 1336.2 1352.7 1369.5 1387.1
Gross Margin % 63% 63% 69% 67% 70% 71% 73% 72% 72% 72% 73% 73% 73% 73% 73% 73% 73% 73%

Selling General and Administrative 439.2 391.1 355.6 354.2 422.5 426.1 311.7 452.2 486.5 493.1 494.0 493.8 492.8 491.2 497.4 503.5 509.8 516.3
% of Sales 28% 24% 26% 25% 28% 27% 26% 29% 29% 29% 28% 28% 28% 27% 27% 27% 27% 27%

Labour Expenses 82.7 85.2 85.3 82 85.9 91.7 68.8 95.2 117.4 116.4 114.8 112.9 107.1 101.9 103.2 104.5 105.8 107.1
% of Sales 5% 5% 6% 6% 6% 6% 6% 6% 7% 7% 7% 6% 6% 6% 6% 6% 6% 6%

EBITDA 475.9 537.1 505.6 523.9 554.8 608.1 481.1 587.1 599.8 623.3 652.3 680.8 703.5 726.5 735.7 744.7 754.0 763.7
EBITDA Margin % 30% 34% 37% 37% 36% 38% 41% 37% 36% 36% 38% 39% 39% 40% 40% 40% 40% 40%

Depreciation 189.6 229.3 223 236.1 278.4 287.9 204 286.2 317.7 344.6 371.8 387.5 396.4 413.0 430.6 471.1 531.8 578.0
% PPE 18% 18% 18% 18% 20% 20% 14% 18% 18% 18% 18% 18% 18% 18% 18% 18% 18% 18%

Amortization 97.3 89.7 87.5 84.9 104.5 109.3 82.3 0 0 0 0 0 0 0 0 0 0 0

% Intangibles 23% 24% 22% 15% 18% 19% 15% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%

Operating Income (EBIT) 189.0 218.1 195.1 202.9 171.9 210.9 194.8 300.9 282.1 278.7 280.6 293.2 307.0 313.5 305.0 273.7 222.2 185.7
Operating Margin % 12% 14% 14% 14% 11% 13% 16% 19% 17% 16% 16% 17% 17% 17% 17% 15% 12% 10%

Net Financial Expense 24.4 24.5 26.0 37.2 34.9 57.2 48.3 29.4 29.4 29.4 29.4 29.4 29.4 29.4 29.4 29.4 29.4 29.4

Pre-Tax Income 164.6 193.6 169.1 165.7 137.0 153.8 146.5 271.5 252.7 249.3 251.1 263.8 277.6 284.1 275.6 244.2 192.7 156.2
Pre-Tax Income % 10% 12% 12% 12% 9% 10% 12% 17% 15% 15% 14% 15% 16% 16% 15% 13% 10% 8%

Income Tax Expense 29.3 32.6 16.3 11.8 32.7 23.5 21.9 40.8 38.0 37.5 37.8 39.7 41.8 42.7 41.5 36.7 29.0 23.5
Income Tax % of Pre-Tax Income 18% 17% 10% 7% 24% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%

Net Income 135.3 161.1 152.7 153.9 104.3 130.2 124.6 230.6 214.7 211.8 213.4 224.1 235.9 241.4 234.2 207.5 163.7 132.7
Net Income Margin % 9% 10% 11% 11% 7% 8% 11% 15% 13% 12% 12% 13% 13% 13% 13% 11% 9% 7%

Non-Recurring Expenses (income) -6.1 17.6 60.7 9.7 -120.3 -29.4 -1.7

Net Income including Non-Recurring 141.4 143.5 92 144.2 224.6 159.6 126.3

Shares Outstanding 513.1 513.2 512.5 512.1 511.5 512.3 512.6 512.4 512.4 512.4 512.4 512.4 512.4 512.4 512.4 512.4 512.4 512.4

Earnings Per Share 0.26 0.31 0.30 0.30 0.20 0.25 0.24 0.45 0.42 0.41 0.42 0.44 0.46 0.47 0.46 0.40 0.32 0.26
EPS Growth % 19% -5% 1% -32% 121% -7% -1% 1% 5% 5% 2% -3% -11% -21% -19%

Appendix 6: Cash Flow Statement

Cash Flow Items 2018 2019 2020 2021 2022 LTM 2023* 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E

Net Income 135.3 161.1 152.7 153.9 104.3 130.2 124.6 230.6 214.7 211.8 213.4 224.1 235.9 241.4 234.2 207.5 163.7 132.7
D&A 286.9 319 310.5 321 382.9 397.2 286.3 286.2 317.7 344.6 371.8 387.5 396.4 413.0 430.6 471.1 531.8 578.0
Other Items 265.7 214.6 258.4 224.7 136.4 144.8 115.0
Other Items % Revenue 17% 13% 19% 16% 9% 9% 10% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13%
Cash Flow from Operations 687.9 694.7 721.6 699.6 623.6 672.2 525.9
∆ Working Capital -29.3 -28.1 -41.4 6.5 18.8 -23 5.8 24.3 -0.6 6.0 9.3 9.5 5.3 5.4 3.0 3.1 3.2 -16.9
Net Cash Flow from Operating
Activities 658.6 666.6 680.2 706.1 642.4 649.2 531.7

Capital Expenditures -423.7 -444.2 -479.445 -609.8 -625.8 -571.1 -358.9 -396.7 -456.6 -463.3 -491.8 -457.2 -435.6 -485.9 -508.4 -649.5 -799.8 -781.8
Capex % of PPE 40% 35% 38% 48% 45% 40% 25% 26% 27% 25% 24% 22% 20% 22% 22% 25% 28% 25%
Net Acquisitions -21.5 11.2 383.1 -62.2 295.0 156.8 30.4
Other Investing Cash Flow 0 0 0 0 0 0 0
Cash Flow from Investing Activities -445.2 -433 -96.3 -672 -330.8 -414.3 -328.5

Dividends -153.9 -179.6 -142.5 -142.4 -142.4 0 0

Net Change in Equity -3.1 -6.7 -5.7 -2.1 -7.1 -5.1 -5.1
Net Change in Debt 13.3 70.2 -146.3 88.2 -41.8 45.7 127.5
Other Financing Cash Flows -48.7 -96.5 -96.5 -118.8 -122.4 -352.7 -330.4
Cash Flows from Financing Activities -192.4 -212.6 -391 -175.1 -313.7 -312.1 -208

14
Appendix 7: Balance Sheet
Balance Sheet 2018 2019 2020 2021 2022 LTM 2023*

Operating
Financial

ASSETS
Cash And Equivalents 2.1 12.9 153.3 10.9 15.2 15.3 15.3
Short Term Investments -- -- -- -- --
Total Cash & ST Investments 2.1 12.9 153.3 10.9 15.2 15.3 15.3

Accounts Receivable 439.1 429.8 352.3 385.7 379.5 380.3 380.5

Other Receivables 10.7 32.8 31.5 20.9 23.5 26.9 28.0
Total Receivables 449.8 462.6 383.8 406.6 403 407.2 408.5

Inventory 38.9 34.1 43.6 44 67.2 67.9 68.1

Other Current Assets 39.6 44.2 34.5 45 52.3 58.4 60.5
Total Current Assets 530.4 553.8 615.2 506.5 537.7 548.7 552.4

Gross Property, Plant & Equipment 3042.8 3745.1 3786.6 4007 4277.3 4353.8 4379.3
Accumulated Depreciation -1989.1 -2491.9 -2534.9 -2729.8 -2872.6 -2943.1 -2966.6
Net Property, Plant & Equipment 1053.7 1253.2 1251.7 1277.2 1404.7 1410.7 1412.7
% of Sales 67% 78% 92% 89% 92% 89% 119%

Long-term Investments 20.4 19.3 12.1 20.8 44.7 40.8 39.4

Goodwill 641.4 641.4 641.4 641.4 641.4 641.4 641.4
Other Intangibles 423.5 372.7 399.7 563.6 568.2 567.1 566.7
Deferred Tax Assets, LT 85.6 80.4 82.8 81.4 89.6 89.6 89.6
Deferred Charges, LT 162.9 163.1 162.1 162.1 160.6 160.4 160.3
Notes Receivables 7.5 4.2 7.7 6.1 5.1 4.9 4.9
Other Long-Term Assets 0.1 0.1 -0.1 0.3 11.3 11.6 11.7
Total Assets 2925.5 3088.2 3172.6 3259.4 3463.3 3475.1 3479.1

LIABILITIES
Accounts Payable 255 259.5 252.6 280 253.4 254.1 254.4
Accrued Exp. 219.5 228.5 185.6 192.4 238.2 246.5 249.3
Short-term Borrowings 19.9 9.5 2.3 0.7 7.1 3.4 2.2
Curr. Port. of LT Debt/Leases 224.2 133.8 164.9 300.3 420.3 319.2 285.4
Curr. Income Taxes Payable 11.3 43.4 42.2 44.9 13.1 10.0 9.0
Unearned Revenue, Current 32.8 33.9 33.4 35.8 38.4 38.4 38.4
Other Current Liabilities 39.3 33.9 47.6 35.9 54 41.6 37.4
Total Current Liabilities 802 742.5 728.6 890 1024.5 913.2 876.1

Long-Term Debt 888.9 1216.8 1363.5 1275.5 1210.2 1391.1 1451.3

Other Non-Current Liabilities 158.1 123.6 131 137.3 182.5 182.0 181.8
Total Liabilities 1849 2082.9 2223.1 2302.8 2417.2 2486.2 2509.2

Common Stock 5.2 5.2 5.2 5.2 855.2 855.2 855.2

Additional Paid In Capital 854.2 854.2 854.2 854.2 4.2 4.2 4.2
Retained Earnings 229.3 160.6 105 109.6 202.7 144.7 125.4
Treasury Stock -12.1 -14.7 -14.9 -12.4 -16 -15.2 -14.9
Total Equity 1076.6 1005.3 949.5 956.6 1046.1 989.0 969.9

Total Liabilities And Equity 2925.5 3088.2 3172.6 3259.4 3463.3 3475.1 3479.1

Appendix 8: Market Value Net Debt

Market Value Net Debt 9M 2023 Debt to Value 9M 2023
Cash & Short Term Investments 11,90 Outstanding 511,42
Book Value Debt 1141,40 Price as of 29.09.23 3,48
Leases 633,80 Market Cap 1780,78
Total Debt 1775,20 D/V 0,50
Average Cost of Debt 0,03
Average Maturity Debt in Years 2,80
Borrowing 24,98
Leasing 23,01
Derivatives 0,05
Other 2,75
Total Interest Expenses 50,79
Market Value Gross Debt 1759,32
Cash & Short Term Investments 11,90
Market Value Net Debt 1747,42

Market Value Net Debt End 2023 1768,69

Market Value Net Debt End 2024 1844,42

Note: End of Year Values based on 9M 23 Data adjusted

for Time Value
Appendix 9: German Bond Yields

Source: Refinitiv

15
Appendix 10: Net Working Capital Analysis
2017 2018 2019 2020 2021 2022 LTM 2023* 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
Inventory 32 38.9 34.1 43.6 44 67.2 67.9 68.1 66.4 66.5 64.4 61.4 58.4 56.6 54.8 53.0 51.4 49.7
Days inventory in hand 25 21 38 34 54 54 77 54 51 49 47 45 43 41 39 37 36

Accounts Receivable 406.9 439.1 429.8 352.3 385.7 379.5 380.3 380.5 420.2 444.3 453.4 460.7 467.0 472.8 478.7 484.7 490.7 496.8
Days Accounts Recevable in hand 102 98 94 98 91 88 117 97 97 97 97 97 97 97 97 97 97

Other receivable 25.3 10.7 32.8 31.5 20.9 23.5 26.9 28.0 25.5 27.0 27.5 28.0 28.4 28.7 29.1 29.4 29.8 30.2
In % of Revenue 1% 2% 2% 1% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%

Prepaid expenses & other Current 77.7 38.8 44 34.1 44.9 52.2 58.3 60.3 43.9 47.4 47.9 47.8 47.6 47.6 47.5 48.1 48.7 49.3
In % of OPEX 4% 4% 4% 5% 5% 6% 9% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4%

Working Capital Assets 541.9 527.5 540.7 461.5 495.5 522.4 533.3 536.9 556.0 585.2 593.2 597.8 601.4 605.7 610.1 615.3 620.6 626.0

Accounts Payable 224.9 255 259.5 252.6 280 253.4 254.1 254.4 250.3 256.4 253.6 247.3 240.7 238.2 235.7 233.3 230.9 228.5
Days accounts Payable in hand 161 162 219 217 202 204 289 202 197 193 189 184 180 176 172 168 165

Accrued Expenses 213.6 219.5 228.5 185.6 192.4 238.2 246.5 249.3 217.6 234.7 237.1 236.7 235.8 235.6 235.4 238.4 241.3 244.3
In % of OPEX 20% 22% 22% 21% 25% 25% 36% 22% 22% 22% 22% 22% 22% 22% 22% 22% 22%

Other Current Liabilities 104.5 83.4 111.2 123.2 116.5 105.4 89.975 84.8 115.3 121.9 124.4 126.4 128.1 129.7 131.3 133.0 134.6 136.3
In % of Revenue 5% 7% 9% 8% 7% 6% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7%

Working Capital Liabilities 543 557.9 599.2 561.4 588.9 597 590.6 588.5 583.2 613.0 615.1 610.4 604.6 603.5 602.4 604.7 606.8 609.1

Net Working Capital -1.1 -30.4 -58.5 -99.9 -93.4 -74.6 -57.3 -51.5 -27.2 -27.9 -21.9 -12.6 -3.1 2.2 7.6 10.7 13.8 16.9

Appendix 11: Ratios

Industry Median 2018 2019 2020 2021 2022
Profitability
Gross Margin 62.8% 63.70% 69.40% 69.20% 67.10% 69.90%
EBITDA Margin 39.2% 32.30% 36.70% 37.00% 36.60% 36.50%
Operating Margin 16.4% 12.80% 13.80% 10.00% 13.20% 17.80%
Pretax Margin 12.0% 10.50% 12.00% 7.40% 10.90% 16.90%
Effective Tax Rate 17.9% 16.70% 18.60% 16.10% 7.60% 12.70%
Net Margin 10.2% 8.70% 9.80% 6.20% 10.10% 14.80%
DuPont/Earning Power
Asset Turnover 0.42 0.52 0.47 0.44 0.44 0.45
x Pretax Margin 12.0% 10.50% 12.00% 7.40% 10.90% 16.90%
Pretax ROA 4.4% 5.40% 5.70% 3.20% 4.80% 7.60%
x Leverage (Assets/Equity) 2.94 2.92 3.07 3.34 3.41 3.31
Pretax ROE 16.2% 15.40% 17.10% 10.40% 16.30% 25.70%
x Tax Complement 0.82 0.84 0.82 0.91 0.93 0.87
ROE 13.6% 12.80% 13.90% 8.80% 15.10% 22.40%
x Earnings Retention 0.56 -0.31 0 -0.67 0.01 0.36
Reinvestment Rate 4.2% -4.00% -0.10% -5.90% 0.10% 8.10%
Liquidity
Quick Ratio 0.80 0.58 0.7 0.78 0.52 0.46
Current Ratio 0.84 0.63 0.75 0.84 0.57 0.52
Times Interest Earned 7.4 7.1 10.1 8.7 5.7 4.7
Cash Cycle (Days) (71.1) -23.5 -66.4 -75.4 -72.1 -71.3
Leverage
Assets/Equity 2.94 2.92 3.07 3.34 3.41 3.31
Debt/Equity 0.87 1.24 1.35 1.61 1.65 1.57
% LT Debt to Total Capital 34.7% 43.10% 51.30% 54.80% 50.20% 45.00%
(Total Debt - Cash) / EBITDA 2.42 2.42 2.47 2.69 2.81 2.87
Operating
A/R Turnover 4.6 3.4 3.2 3.2 3.6 3.8
Avg. A/R Days 77.7 107.2 114.4 113.2 101.1 97.4
Inv Turnover 16.1 16.1 12.2 10.8 10.7 8.2
Avg. Inventory Days 22.8 22.7 29.9 33.7 34.1 44.5
Avg. A/P Days 193.3 153.4 210.7 222.4 207.3 213.2
Fixed Asset Turnover 0.94 1.39 1.18 1.09 1.13 1.13
WC / Sales Growth (4.8%) -2.40% -1.00% 6.10% -6.30% -11.20%
Bad Debt Allowance (% of A/R) 4.6% 31.10% 33.30% 50.90% 48.60% 53.20%
ROIC - 6.20% 6.30% 3.60% 6.00% 9.40%
Appendix 12: Capex Analysis
Based on Reported Data 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2022 4Q 2023 1Q 2023 2Q 2023 3Q 2023 YTD LTM
Capex excluding Leasing 123.10 269.50 374.40 408.30 392.70 381.00 373.80 374.40 386.00 422.30 495.90 131.70 97.00 98.10 97.70 292.80 424.50
Baseline Capex 123.1 261.4 275.8 297.3
Non recurring Capex 0 8.1 98.6 111
AV & Cinema 32 38.8 36.4 34 28.2 29.9 21 16.7 22.9 6 4.4 4.5 5.2 14.1 20.1
Telco Capex 243.8 258.5 356.3 347 345.6 344.5 365 405.6 473 125.7 92.6 93.6 92.5 278.7 404.4
Customer 149.2 136.1 184.7 153 146.1 141.4 150 150.1 148 38.6 39.2 34.3 33.6 107.1 145.7
Technical 94.6 122.4 171.8 194 199.5 203.1 215 255.5 325 87.1 53.4 59.3 58.9 171.6 258.7
Baseline Telco 123 121 123 118.7 136 140 143 161 42.6 31.6 37.7 37.2 106.5 149.1
NW Expansion 50 50.8 71 80.8 67.1 75 113 164 44.5 21.8 21.6 21.7 65.1 109.6
Leasings 0 0 0 0 49.9 69.8 93.45 187.5 129.9 80.5 29.1 26.6 10.4 66.1 146.6
Total Capex 123.1 269.5 374.40 408.30 392.70 381.00 423.70 444.20 479.445 609.80 625.80 212.20 126.10 124.70 108.10 358.90 571.10
Revenues 858.6 990.3 1383.9 1444.3 1515 1561.8 1576.2 1599.2 1367.9 1430.3 1521 397.5 381.4 393.8 407.9 1183.1 1580.6
Capex exc. Leasings/Revenues 14% 27% 27% 28% 26% 24% 24% 23% 28% 30% 33% 33% 25% 25% 24% 25% 27%
Capex/Revenues 14% 27% 27% 28% 26% 24% 27% 28% 35% 43% 41% 53% 33% 32% 27% 30% 36%

16
Appendix 13: Leases Analysis
Leases 2020 2021 2022
Telecommunications towers and rooftops 395.3 378.8 483.6
Movie Theaters 39.6 32.7 29.4
Transponders 39.0 32.0 28.7
Equipments 43.5 39.3 39.1
Buildings 26.7 22.1 26.8
Fiber optic rental 10.4 7.3 4.6
Stores 6.5 5.7 5.3
Others 14.5 16.2 12.9
Total 575.3 534.0 630.2

Appendix 14: Debt Analysis

2020 2021 2022
Debt Current Non-Current Current Non-Current Current Non-Current
Loans - Nominal Value 98.1 855.8 233.1 807.5 350.1 655.0
Debenture Loan 0.0 575.0 150.0 440.0 300.0 290.0
Commercial paper 77.5 262.5 64.0 367.5 43.0 365.0
Foreign loans 18.3 18.3 18.3 0.0 0.0 0.0
Bank overdrafts 2.3 0.0 0.7 0.0 7.1 0.0
Loans - Accruals and
2.7 -1.3 2.7 -0.6 2.8 -0.5
Deferrals
Loans - Amortised Cost 100.8 854.5 235.7 806.9 353.0 654.5
Leases 66.3 509.0 65.3 468.7 74.5 555.7
167.1 1363.5 301.1 1275.5 427.5 1210.2
Appendix 15: PPE Analysis
NOS 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Property/Plant/Equipment, Total - Gross 1694.6 2807.1 3043.7 3222.8 3266.3 3364.9 3042.8 3745.1 3786.6 4007 4277.3
Buildings - Gross 55.5 289.6 301.3 325.2 368.2 378.9 388.2 404.4 264 276.3 264.3
Land/Improvements - Gross 1.8 1.2 0.9 0.9 0.9 1 0.8 0.8 0.8 0.8 0.5
Machinery/Equipment - Gross 1428 2157.4 2297.4 2482.2 2548.4 2593.3 2366.9 2458.1 2601.6 2767.3 2911.3
Construction in Progress - Gross 30 29.2 93.2 43.3 32.1 62.7 55.2 39.6 39.3 41.2 53.4
Other Property/Plant/Equipment - Gross 179.3 329.7 350.9 371.3 316.7 329 231.6 842.1 880.9 921.4 1047.8
Property/Plant/Equipment, Total - Net 632 1096.8 1141.8 1167.5 1158.2 1137.2 1053.7 1253.2 1251.7 1277.2 1404.8
Accumulated Depreciation, Total -1062.6 -1710.3 -1901.9 -2055.3 -2108.1 -2227.7 -1989.1 -2491.9 -2534.9 -2729.8 -2872.6
Goodwill, Net 175.5 579.9 641.6 641.6 641.6 641.4 641.4 641.4 641.4 641.4 641.4
Goodwill - Gross 175.5 579.9 641.6 641.6 641.6 641.4 641.4 641.4 641.4 641.4 641.4
Accumulated Goodwill Amortization -- -- -- -- -- -- -- -- -- -- --
Intangibles, Net 143.7 531.2 522.6 537 517.2 499.7 423.5 372.7 399.7 563.6 568.2
Intangibles - Gross 428.3 1382.9 1456 1520.6 1730.4 1891.6 1684.8 1657.2 1772.7 2021.8 2130.4
Accumulated Intangible Amortization -284.6 -851.7 -933.4 -983.6 -1213.2 -1391.9 -1261.3 -1284.6 -1373.1 -1458.2 -1562.2
Appendix 16: Accounts Receivables Analysis
NOS 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Revenues 858.6 990.3 1383.9 1444.3 1515 1561.8 1576.2 1599.2 1367.9 1430.3 1521
Accounts Receivable - Trade, Net 130.5 276.6 331.5 347.8 348.9 406.9 439.1 429.8 352.3 385.7 379.5
Accounts Receivable - Trade, Gross 262.8 457 507.3 542.3 506.7 546.4 578.9 583.9 547.4 583.3 594.1
Provision for Doubtful Accounts -132.2 -180.4 -175.8 -194.5 -157.8 -139.5 -139.8 -154.1 -195.2 -197.6 -214.6
AR, Net (% of Revenues) 15% 28% 24% 24% 23% 26% 28% 27% 26% 27% 25%
AR, Gross (% of Revenues) 31% 46% 37% 38% 33% 35% 37% 37% 40% 41% 39%
Provision (% of AR Gross) 50% 39% 35% 36% 31% 26% 24% 26% 36% 34% 36%
Appendix 17: Affiliated Companies
9M 2023 2023E Multiple Applied
Entity Revenue Net Income Revenue Net Income EV/Sales P/E EV Non - Current Liabilities Total Equity % Held MV Stake NOS
Sport TV 133.213 -840 177.617 -1.120 1,8 319.711 48 319.663 25% 79.916
Dreamia 12.888 -489 17.184 -652 1,8 30.931 7.090 23.841 50% 11.921
Finstar 173.866 7.928 231.821 10.571 16,6 175.473 30% 52.642
Mstar 20.086 4.319 26.781 5.759 16,6 95.594 30% 28.678
Upstar 14.975 1.518 19.967 2.024 16,6 33.598 30% 10.080
Dualgrid 431 7 575 9 16,6 155 50% 77
Dreamia S.L. 1.712 25 2.283 33 22,0 733 50% 367
Bright City 974 -426 1.299 -568 1,9 2.467 256 2.211 50% 1.106
NOS Equity at MV 184.786

Note: all in k EUR; Simplifying Assumptions: Book Value Non-Current Liabilites = Market Value Debt; no cash adjustment; (Q1+ Q2 + Q3) / 0,75 = Full Year FV End 2024 192.699
Value 2024 just adjusted for Time Value using WACC 2024, all other Options would introduce to much uncertainty
Source Multiples: Kroll

17
Appendix 18: Long List of Peers Profitability Growth
Peer N° Company Origin Suitable Peer Excluded* Revenue EBITDA Margin Revenue 2021 Revenue 2022 Growth Source Comment
1 eircom Holdings (Ireland) Limited Ireland no 1234 640 51,9% 1826 1234 -32,4% Company Report
2 Iliad SA France yes 8369 2953 35,3% 7587 8369 10,3% Refinitiv
3 Vodafone Group PLC United Kingdom yes 45706 18941 41,4% 43809 45706 4,3% Refinitv
4 VMED O2 UK Limited United Kingdom no 10360 3952,1 38,1% 6158,2 10360 68,2% Refinitv
5 Telefonica SA Spain no 39993 12434 31,1% 39277 39993 1,8% Refinitv
6 UPC Holding BV Netherlands no yes 2269,9 704,6 31,0% 2120,2 2269,9 7,1% Company Report Exclude? as parent company (Liberty Global) is also parent of vodafon, check again if suitable
7 Telekom Austria AG Austria yes 4916 1886 38,4% 4666 4916 5,4% Refinitiv
8 Virgin Media Ireland Limited Ireland no yes 0 Also Liberty Global, maybe excluded due to worldwide reach
9 PPF Telecom Group B.V. Netherlands no 3336 785 23,5% 3159 3336 5,6% Refinitiv 2021 and 2020 data, and EBIT instead of EBITDA
10 VodafoneZiggo Group B.V. Netherlands no yes 0 Also Liberty Global, maybe excluded due to worldwide reach
11 CETIN Group N.V. Netherlands no yes 1036 285 27,5% 1036 1036 0,0% Refinitiv All 2021, Ebit not EBITDA, Holding company is PPF Telcom
12 Telefonica Deutschland Holding AG Germany yes 8224 2662 32,4% 7765 8224 5,9% Refinitiv
13 Tele Columbus AG Germany no 446,6 180 40,3% 462,8 446,6 -3,5% Refinitiv
14 Telecom Italia SpA Italy yes 15788 5679 36,0% 15316 15788 3,1% Refinitiv
15 TDC NET A/S Denmark no 6318 4364 69,1% 6335 6318 -0,3% Refinitiv
16 Deutsche Telekom AG Germany yes 114197 45702 40,0% 107610 114197 6,1% Refinitiv
17 Orange SA France yes 43471 14374 33,1% 42522 43471 2,2% Refinitiv
18 BT Group PLC United Kingdom yes 20845 7577 36,3% 21370 20845 -2,5% Refinitiv Different Reporting Period, numbers in Pound Sterling
19 Matterhorn Telecom Holding S.A. Switzerland no yes Apparently no proper operating entity anymore -> Salt Mobile SA
20 Iliad Holding S.A.S. France no yes holding entity of illiad SA
21 Telenet Group Holding N.V. Belgium no 2812,7 1385 49,2% 2629,8 2812,7 7,0% Company Report adjusted EBITDA
22 Koninklijke KPN NV Netherlands no 5324 2534 47,6% 5256 5324 1,3% Refinitiv
23 CETIN a.s. Czech Republic no 18882 9229 48,9% 18430 18882 2,5% Refinitiv Data in Czek Koruna
24 Lorca Holdco Limited United Kingdom no yes No Reported Revenues
25 TalkTalk Telecom Group Ltd United Kingdom no 1457 285 19,6% 1455 1457 0,1% Refinitv Different fiscal year, data in GBP
26 Telefonica UK Limited (O2) United Kingdom no yes Operating Entity of VMED O2 UK Limited
27 Swisscom AG Switzerland yes 11112 4547 40,9% 11183 11112 -0,6% Refinitiv Data in swiss francs
28 Tele2 AB Sweden yes 28102 11239 40,0% 28789 28102 -2,4% Refinitiv Data in swedish crowns
29 Proximus Group Belgium no 5914 1826 30,9% 5579 5914 6,0% Company Report
30 Elisa Corporation Finland yes 2129,5 735 34,5% 1997,9 2129,5 6,6% Refinitiv
31 Telia Company AB Sweden yes 90827 36701 40,4% 88343 90827 2,8% Refinitiv Data in swedish crowns
32 Three (Hutchison 3G) Various European countries no 2380 628 26,4% 2311 2380 3,0% Company data (UK Gov) Data in GBP
33 Wind Tre S.p.A. Italy no 4246 1899 44,7% 4498 4246 -5,6% Refinitiv
34 Cyta (Cyprus Telecommunications Authority)Cyprus yes 400 137,697 34,4% 375,4 400 6,6% Company Report EBITDA self calculated
35 Hrvatski Telekom (Croatia Telecom) Croatia yes 983,5 409 41,6% 981,2 983,5 0,2% Refinitiv
36 Altice International S.à r.l. Luxembourg yes 5029,9 1790,4 35,6% 4375,1 5029,9 15,0% Company data EBITDA adjusted
36.1 Altice International S.à r.l. (Portugal) Portugal yes 2629,5 906,5 34,5% 2313,6 2629,5 13,7% EBITDA adjusted
37 Telenor ASA Norway no 98953 42425 42,9% 97153 98953 1,9% Refinitv Data in Norwegian crowns
38 Elisa Oyj Finland no yes Refinitiv doubled
39 freenet AG Germany no 2556,7 500 19,6% 2556,3 2556,7 0,0% Refinitiv
40 Millicom International Cellular SA Luxembourg no 5624 2245 39,9% 4261 5624 32,0% Refinitiv Data in USD
41 Gamma Communications United Kingdom no 484,6 105 21,7% 447,7 484,6 8,2% Refinitv Data in GBP
42 Orange Belgium Belgium no 1391,2 430 30,9% 1363,5 1391,2 2,0%
43 Proximus Belgium no yes doubled
44 Bahnhof AB Sweden no 1730,3 293 16,9% 1604,2 1730,3 7,9% Refinitiv Data in swedish crowns
45 GO Malta yes 214,6 81 37,7% 193,7 214,6 10,8% Refinitv
46 Tessellis Spa Italy no 100,1 10 10,0% 144,2 100,1 -30,6%
47 Salt Mobile SA Switzerland no 1073,3 546,9 51,0% 1043,6 1073,3 2,8%
NOS NOS, S.G.P.S., S.A. Portugal yes 1521 555 36,5% 1430 1521 6% Refinitiv

*see Comment for reason Statistics Profitability Statistics Growth

Average 35,7% Average 4,3%
Median 36,2% Median 2,9%
STD 10,7% STD 14,7%
Skew 0,194422 Skew 1,69424
Kurtosis 1,535139 Kurtosis 10,8121

Appendix 19: Short List of Peers 31,1%

Range
41,8% -3,4%
Range
16,1%

Profitability Growth
Peer N° Company Origin Revenue EBITDA Margin Revenue 2021 Revenue 2022 Growth Source Comment
1 Iliad SA France 8369 2953 35,3% 7587 8369 10,3% Refinitiv
2 Vodafone Group PLC United Kingdom 45706 18941 41,4% 43809 45706 4,3% Refinitv
3 Telekom Austria AG Austria 4916 1886 38,4% 4666 4916 5,4% Refinitiv
4 Telefonica Deutschland Holding AG Germany 8224 2662 32,4% 7765 8224 5,9% Refinitiv
5 Telecom Italia SpA Italy 15788 5679 36,0% 15316 15788 3,1% Refinitiv
6 Deutsche Telekom AG Germany 114197 45702 40,0% 107610 114197 6,1% Refinitiv
7 Orange SA France 43471 14374 33,1% 42522 43471 2,2% Refinitiv
8 BT Group PLC United Kingdom 20845 7577 36,3% 21370 20845 -2,5% Refinitiv Different Reporting Period, numbers in Pound Sterling
9 Swisscom AG Switzerland 11112 4547 40,9% 11183 11112 -0,6% Refinitiv Data in swiss francs
10 Tele2 B Sweden 28102 11239 40,0% 28789 28102 -2,4% Refinitiv Data in swedish crowns
11 Elisa Corporation Finland 2129,5 735 34,5% 1997,9 2129,5 6,6% Refinitiv
12 Telia Company AB Sweden 90827 36701 40,4% 88343 90827 2,8% Refinitiv Data in swedish crowns
13 Cyta (Cyprus Telecommunications Authority) Cyprus 400 137,697 34,4% 375,4 400 6,6% Company Report EBITDA self calculated
14 Hrvatski Telekom (Croatia Telecom) Croatia 983,5 409 41,6% 981,2 983,5 0,2% Refinitiv
15 Altice International S.à r.l. Luxembourg 5029,9 1790,4 35,6% 4375,1 5029,9 15,0% Company Report EBITDA adjusted
16 Altice International S.à r.l. (Portugal) Portugal 2629,5 906,5 34,5% 2313,6 2629,5 13,7% Company Report EBITDA adjusted
17 GO Malta 214,6 81 37,7% 193,7 214,6 10,8% Refinitv
NOS NOS, S.G.P.S., S.A. Portugal 1521 555 36,5% 1430 1521 6% Refinitiv

Appendix 20: RGU Forecast - GDP per capita

GDP per Capita Approach 2015 2016 2017 2018 2019 2020 2021 2022 2023E* 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E Regression - Linest
GDP per Capita 17350 18061 19023 19952 20841 19473 20873 23286 24698 25709,2 26908,2 28087,0 29242,2 30443,2 0,40415351 1338,72486
Average RGUs per Year in k 8465 9077 9412 9467 9581 9808 10088 10591 10912 11729,2 12213,7 12690,2 13157,1 13642,4 14087,7 14494,6 14864,9 15200,9 15505,0 0,05270912 1045,91639
Change in RGU per Year 11,2% 7,2% 3,7% 0,6% 1,2% 2,4% 2,9% 5,0% 3,0% 7,5% 4,1% 3,9% 3,7% 3,7% 3,3% 2,9% 2,6% 2,3% 2,0% 0,86724175 441,623216
58,7923968 9
Note: Bold Numbers are Forecasted 11466343,7 1755279,58
* (Q1 + Q2 + Q3) /0,75 * Average Saisonal Adjustment last 5 Years (1,2%)

Appendix 21: RGU Forecast – MarketLine

MarketLine Approach 2015 2016 2017 2018 2019 2020 2021 2022 2023E* 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E Regression - Linest
Average RGUs per Year in k 9412 9467 9581 9808 10088 10591 10912 10827,1 10925,1 11023,1 11121,2 11199,0 11277,4 11356,3 11435,8 11515,9 11596,5 490,087745 -2993,3728
Total Subscriptions in m. 24,8 25,7 26,2 26,0 27,1 27,6 27,9 28,2 28,4 28,6 28,8 82,6338382 2189,08385
Growth 3,7% 1,7% -6,0% 4,1% 1,9% 1,2% 0,9% 0,7% 0,6% 0,7% 0,7% 0,7% 0,7% 0,7% 0,7% 0,7% 0,87554392 224,701535
35,1748161 5
Note: Bold Numbers are forecasted 1776003,89 252453,899
* (Q1 + Q2 + Q3) /0,75 * Average Saisonal Adjustment last 5 Years (1,2%)

Appendix 22: Pricing Forecast

Pricing 2015 2016 2017 2018 2019 2020 2021 2022 2023E* 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E Regressions - Linest
Revenue - Telco k€ 1372300 1442500 1487200 1370423 1381450 1345725 1401456 1469223 1526480 0,7 -0,0262339 175,2675451
Average RGUs per Year in k 8465 9077 9412 9467 9581 9808 10088 10591 10912 0,31117591 0,00400355 21,94620028
Convergent Bundles (ANACOM) 3181 3403,0 3648,5 3824,0 4003,0 4180,3 4336,8 4487,8 4599,7 4663,6 4739,4 4805,4 4862,8 4912,5 4955,6 4992,8 5030,3 5068,1 5106,2 0,92168899 3,20161679 #N/A
Consumer Price Index 100,00 100,64 102,20 103,40 103,71 103,58 104,55 113,03 119,02 123,1 126,0 128,7 131,3 133,9 136,6 139,3 142,1 144,9 147,8 35,3087919 6 #N/A
Bundle Penetration 30,6 32,9 35,3 37,0 38,7 40,3 41,8 43,0 43,9 44,8 45,5 46,1 46,6 47,1 47,5 47,9 48,2 48,6 48,9 723,854955 61,5021004 #N/A
Change in Bundle Penetration 7,2% 7,3% 4,9% 4,6% 4,1% 3,9% 2,9% 2,2% 1,9% 1,6% 1,4% 1,2% 1,0% 0,9% 0,7% 0,7% 0,7% 0,7%
Revenue per RGU € 162,1 158,9 158,0 144,8 144,2 137,2 138,9 138,7 139,9 141,1 141,2 141,5 141,8 142,3 143,1 144,1 145,1 146,2 147,2 106,212686 -89,522978
1,16022605 44,5499821
Convergent Bundle Penetration decrease in increase -14,28% 0,99916542 15,0989253
Inflation after '28 2,00% 8380,45429 7
1910555,39 1595,84281
Note: Bold Numbers are forecasted
* (Q1 + Q2 + Q3) /0,75 * Average Saisonal Adjustment last 5 Years (1,2%)

Appendix 23: Revenue Forecast – Telco Base Case

Weight 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
GDP 68% 56% 46% 38% 32% 26% 22% 18% 15% 12% 10%
Marketline 32% 44% 54% 62% 68% 74% 78% 82% 85% 88% 90%

RGUs 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
GDP per Capita 7420 6585 5661 4855 4156 3558 3033 2576 2181 1841 1550
MarketLine 3492 4749 5862 6806 7608 8279 8850 9338 9758 10121 10437
RGU total 10912 11334 11522 11661 11764 11836 11882 11914 11939 11962 11987

Pricing 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
Revenue per RGU 139,9 141,1 141,2 141,5 141,8 142,3 143,1 144,1 145,1 146,2 147,2

Telco - Base 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
Revenue - Telco 1469223 1526480 1599557 1627495 1649736 1668209 1684815 1700771 1716986 1732658 1748539 1765134
Change 3,9% 4,8% 1,7% 1,4% 1,1% 1,0% 0,9% 1,0% 0,9% 0,9% 0,95%

18
Appendix 24: Revenue Forecast – Telco Bull Case
Weight 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
GDP 80% 65% 53% 43% 35% 28% 23% 19% 15% 12% 10%
Marketline 20% 35% 47% 57% 65% 72% 77% 81% 85% 88% 90%

RGUs 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
GDP per Capita 8730 7626 6454 5450 4593 3870 3248 2716 2264 1882 1560
MarketLine 2182 3787 5152 6289 7239 8022 8677 9228 9694 10090 10437
RGU total 10912 11414 11606 11739 11832 11892 11925 11944 11958 11972 11997

Pricing 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
Revenue per RGU 139,9 141,1 141,2 141,5 141,8 142,3 143,1 144,1 145,1 146,2 147,2

Telco - Bull 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
Revenue - Telco 1469223 1526480 1610864 1639322 1660790 1677789 1692787 1706920 1721356 1735432 1749966 1766504
Change 3,9% 5,5% 1,8% 1,3% 1,0% 0,9% 0,8% 0,8% 0,8% 0,8% 0,95%

Appendix 25: Revenue Forecast – Telco Bear Case

Wight 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
GDP 68% 56% 46% 38% 32% 26% 22% 18% 15% 12% 10%
Marketline 32% 44% 54% 62% 68% 74% 78% 82% 85% 88% 90%

RGUs 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
GDP per Capita 7420 6585 5661 4855 4156 3558 3033 2576 2181 1841 1550
MarketLine 3492 4749 5862 6806 7608 8279 8850 9338 9758 10121 10437
RGU total 10912 11334 11522 11661 11764 11836 11882 11914 11939 11962 11987
Loss through Digi 1,0% 1,2% 1,4% 1,7% 2,0% 2,4% 2,9% 3,5% 4,2% 5,0% 6%
RGU total new 10803 11198 11357 11461 11523 11546 11534 11496 11438 11362 11268

Pricing 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
Pricing 139,9 141,1 141,2 141,5 141,8 142,3 143,1 144,1 145,1 146,2 147,2
Pricing Adjustment Digi 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%
Pricing new 137,1 138,3 138,4 138,6 139,0 139,5 140,3 141,2 142,2 143,2 144,3

Telco - Bear 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
Revenue - Telco 1469223 1480991 1548814 1572122 1589067 1601368 1610674 1617917 1623667 1626808 1627620 1626041
Change 0,8% 4,6% 1,5% 1,1% 0,8% 0,6% 0,4% 0,4% 0,2% 0,0% -0,10%

Appendix 26: Cinema Ticket Sales Forecast

Ticket Sales 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q32023 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
Viewer - Statista, in k. 2750 2630 2520 600 800 1620 1960,0 2050,0 2110,0 2140,0 2180,0 2210,0 2251,9 2294,6 2338,1 2382,5 2427,7
Tickets per Viewer 5,7 5,6 6,2 6,3 6,9 5,9 5,1 5,5 5,5 5,5 5,5 5,5 5,5 5,5 5,5 5,5 5,5
NOS - Market Share 63% 60% 61% 61% 61% 60% 60% 61% 63% 65% 66% 66% 66% 65% 65% 64% 64% 64% 63% 63% 62% 62%
Portuguese Market - ICA - Total in k 12547 12091 14566 14924 15610 14777 15541 3803 5480 9614 9589 9997,4 11311,1 11642,2 11807,7 12028,4 12193,9 12425,2 12660,8 12901,0 13145,6 13395,0
Tickets sold - NOS in k 7905 7278 8852 9097 9451 8889 9270 2311 3451 6262 6346 6616,3 7435,2 7601,2 7657,2 7747,7 7801,4 7895,7 7991,1 8087,7 8185,5 8284,5

Average Tickets per Viewer - post Covid 5,52

Viewer CAGR 2013 - 2022 1,9%
Average Market Share 2013 - Q3 23 62%

Note: Bold numbers are forecasted

Appendix 27: Cinema Ticket Pricing Forecast

Ticket Pricing 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
CPI 99,7 99,5 100,0 100,6 102,2 103,4 103,7 103,6 104,6 113,0 119,0 123,1 126,0 128,7 131,3 133,9 136,6 139,3 142,1 144,9 147,8
Revenue per Ticket in EUR 4,7 4,7 4,7 4,7 4,8 4,9 5,2 5,2 5,3 5,6 5,9 6,2 6,4 6,6 6,8 6,9 7,1 7,3 7,5 7,6 7,8

Inflation after 2028 2% Regression - Linest

0,0637018 -1,5918711
0,0073478 0,7688928
Note: 2020 - 2023 only Q3 due to data availability; Bold numbers are forecasted 0,8930607 0,1423533
75,1598924 9
1,5230744 0,1823801

Appendix 28: Audiovisuals & Cinema Revenue Forecast

Revenue Audiovisuals & Cinema 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
Cinema 37152 34204 41606 42755 45363 43556 48203 12017 18290 35067 39036,3 46460,7 48917,1 50611,9 52472,5 54115,8 56116,9 58185,6 60324,4 62535,4 64821,1
Total 113500 107500 129700 131800 135100 111481 118761 53772 67020 89604 100717,2 121039,7 128679,5 134433,7 140732,4 146552,6 153450,9 160656,6 168183,1 176044,4 184254,9
Ratio 32,7% 31,8% 32,1% 32,4% 33,6% 39,1% 40,6% 22,3% 27,3% 39,1% 38,8% 38,4% 38,0% 37,6% 37,3% 36,9% 36,6% 36,2% 35,9% 35,5% 35,2%
Chanage -5,3% 20,7% 1,6% 2,5% -17,5% 6,5% -54,7% 24,6% 33,7% 12,4% 20,2% 6,3% 4,5% 4,7% 4,1% 4,7% 4,7% 4,7% 4,7% 4,7%

Appendix 29: Others & Eliminations / Revenue - Forecast

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E
Revenue 1426800 1383900 1444300 1515000 1561800 1440641 1458404 1367886 1430299 1521007
Others & Eliminations -45400 -45300 -57700 -59300 -60500 -32952 -41807 -31611 -38178 -37821
Ratio - Independent of Case -3,2% -3,3% -4,0% -3,9% -3,9% -2,3% -2,9% -2,3% -2,7% -2,5% -2,5% -2,5% -2,5% -2,5% -2,5% -2,5% -2,5% -2,5% -2,5% -2,5% -2,5%

Converge to last 5 year average

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Appendix 25: Beta – Regression – 2 Year Weekly Data

SUMMARY OUTPUT

Regression Statistics
Multiple R 0,3968117
R Square 0,1574595
Adjusted R Square 0,1493581
Standard Error 0,0225055
Observations 106

ANOVA
df SS MS F Significance F
Regression 1 0,0098443 0,0098443 19,436202 2,54E-05
Residual 104 0,0526755 0,0005065
Total 105 0,0625199

0,44875 Standard Error t Stat P-value Lower 95% Upper 95% Lower 95,0% Upper 95,0%
Intercept 0,001627 0,0021886 0,7433952 0,4589186 -0,002713 0,005967 -0,002713 0,005967
X Variable 1 0,44875 0,1017887 4,4086508 2,54E-05 0,2468999 0,6506014 0,2468999 0,6506014

Appendix 26: Monte Carlo Simulation Bear and Bull Case

Appendix 27: Precedent Transactions Time Series Appendix 28: Unemployment

Rate in Portugal
MEAN TIME SERIES(without outlier) EV/EBITDA EV/SALES
1995 1.84 0.67
1996 #NA #NA
1997 1.63 0.58
1998 0.18 0.06
1999 -8.38 19.84
2000 19.92 17.41
2001 1.08 0.34
2002 11.04 2.95 Sources: International Monetary Fund
2003 0.48 0.19
2004 1.37 0.60
2005 5.35 2.01
2006 0.63 0.22
2007 2.76 0.64
2008 3.17 1.04
2009 0.37 0.18
2010 0.49 0.16
2011 10.20 1.55
2012 #NA #NA
2013 1.73 0.55
2014 12.22 2.46
2015 4.02 1.14
2016 #NA #NA
2017 #NA #NA
2018 2.41 1.12
2019 #NA #NA
2020 #NA #NA
2021 #NA #NA
2022 #NA #NA
2023 0.16 0.05

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Appendix 29: Precedent Transactions

Net Sales 1 Year

Date Announced Target Full Name Acquiror Full Name Deal Value EBITDA Last 12 Months Prior EV/EBITDA EV/SALES

14/12/1995Belgacom SA ADSB Telecommunications BV 2481.80 1347.43 3681.35 1.84x 0.67x

09/09/1997TDC AS TeleDanmark AS 1451.84 1417.78 3954.52 1.02x 0.37x

27/10/1997TDC AS Ameritech Corp 3162.76 1417.78 3954.52 2.23x 0.80x

20/07/1998France Telecom SA Deutsche Telekom AG 1688.61 9369.09 26022.08 0.18x 0.06x

18/04/1999Telecom Italia SpA Deutsche Telekom AG 81494.17 11623.47 27531.19 7.01x 2.96x

09/07/1999debitel AG Swisscom AG 1687.66 99.14 1724.45 17.02x 0.98x

01/12/1999Esat Telecom Group PLC Newtel Ireland AB 1843.46 -37.48 33.16 -49.19x 55.59x

11/01/2000Esat Telecom Group PLC BT Hawthorn Ltd 2154.59 -37.48 33.16 -57.49x 64.98x

18/03/2000MobilCom AG France Telecom SA 3635.27 61.97 1254.15 58.66x 2.90x

30/05/2000Orange PLC France Telecom SA 46474.46 629.97 2006.19 73.77x 23.17x

Appendix 25: Revenue Forecast – Telco Bear Case

23/06/2000NetCom ASA Telia AB 1320.41 64.25 272.98 20.55x 4.84x

24/07/2000Societe Europeenne de Communication SA(Millicom Intl,1 Oth) NetCom AB 1790.39 -159.76 312.51 -11.21x 5.73x

20/11/2000Equant NV France Telecom SA 2835.74 80.56 999.44 35.20x 2.84x

28/02/2001France Telecom SA France Telecom SA 10666.61 9837.47 31727.52 1.08x 0.34x

12/02/2002Swisscom AG Swisscom AG 2530.04 2688.92 8541.64 0.94x 0.30x

24/03/2002Sonera Oyj Telia AB 6329.90 299.53 1128.23 21.13x 5.61x

01/09/2003Orange SA France Telecom SA 7085.13 20936.46 48943.05 0.34x 0.14x

02/10/2003Belgacom SA Belgacom SA 1490.48 2063.09 5479.42 0.72x 0.27x

10/10/2003Telefonica SA Telefonica SA 4959.79 13392.07 33121.90 0.37x 0.15x

24/03/2004Swisscom AG Swisscom AG 1567.03 3712.60 11757.92 0.42x 0.13x

19/08/2004OAO "Vympel-Kommunikatsii" {Vimpelkom} Alfa Telecom Ltd 1430.01 617.74 1345.42 2.31x 1.06x

07/04/2005France Telecom SA France Telecom SA 7230.36 25097.28 63935.63 0.29x 0.11x

12/04/2005Cesky Telecom AS Telefonica SA 3566.32 1192.82 2646.45 2.99x 1.35x

03/10/2005Telewest Global Inc NTL Inc 5955.56 1043.20 1220.95 5.71x 4.88x
Appendix 26: Cinema Ticket Sales Forecast
31/10/2005O2 PLC Telefonica SA 31628.98 3355.76 12627.54 9.43x 2.50x

30/11/2005TDC A/S Nordic Telephone Co Holding ApS 10624.95 2244.01 7025.83 4.73x 1.51x

05/12/2005Virgin Mobile Holdings(UK)PLC NTL Inc 1699.46 189.48 984.99 8.97x 1.73x

16/03/2006Telefonica Moviles SA Telefonica SA 4215.10 6729.49 19552.09 0.63x 0.22x

21/02/2007Portugal Telecom SGPS SA(OLD,DNU>04/JUN/2015) Portugal Telecom SGPS SA(OLD,DNU>04/JUN/2015) 2515.62 2938.54 8240.56 0.86x 0.31x

21/05/2007France Telecom SA France Telecom SA 7698.28 23355.46 68225.54 0.33x 0.11x

Appendix 27: Cinema

03/07/2007Cosmote Ticket Pricing
Mobile Telecommunications SA Forecast Hellenic Telecommunications Organization SA{OTE SA} 4148.33 718.31 3399.86 5.78x 1.22x

20/12/2007Neuf Cegetel SA Societe Francaise du Radiotelephone SA 3818.40 1222.33 4884.62 3.12x 0.78x

20/12/2007Neuf Cegetel SA Societe Francaise du Radiotelephone SA 2969.63 801.91 3823.07 3.70x 0.78x

22/02/2008Koninklijke KPN NV Koninklijke KPN NV 1483.00 6985.19 18179.30 0.21x 0.08x

Appendix 28: Audiovisuals

17/03/2008Hellenic & Cinema
Telecommunications Organization Revenue Forecast
SA{OTE SA} Deutsche Telekom AG 4008.31 3236.85 9219.93 1.24x 0.43x

05/06/2008TeliaSonera AB France Telecom SA 42279.44 5246.63 16213.80 8.06x 2.61x

07/04/2009Koninklijke KPN NV Koninklijke KPN NV 1326.70 7429.99 19256.43 0.18x 0.07x

29/04/2009France Telecom Espana SA France Telecom SA 1822.33 3304.43 6178.90 0.55x 0.29x
Appendix 29: Others & Eliminations / Revenue - Forecast
13/04/2010Koninklijke KPN NV Koninklijke KPN NV 1360.43 7226.27 17823.56 0.19x 0.08x

25/11/2010TDC A/S TDC A/S 1611.95 2049.18 6574.89 0.79x 0.25x

18/02/2011VAT "Ukrtelekom" ESU TOV 1329.70 130.30 859.22 10.20x 1.55x

02/10/2013Portugal Telecom SGPS SA(OLD,DNU>04/JUN/2015) Oi SA 4873.69 2811.88 8924.18 1.73x 0.55x

15/09/2014Jazztel Plc Orange SA 4314.02 277.00 1377.87 15.57x 3.13x

15/12/2014EE Ltd BT Group PLC 19282.94 2173.81 10731.61 8.87x 1.80x

16/03/2015Turkcell Iletisim Hizmetleri AS Alfa Telecom Turkey Ltd 2800.21 1559.92 5172.61 1.80x 0.54x

20/04/2015Base Company NV Telenet Group Holding NV 1422.51 227.65 822.12 6.25x 1.73x

21/12/2017Upc Austria Gmbh T-Mobile Austria GmbH 2255.11 3.56 30.28 632.95x 74.47x

25/06/2018Telenet Group Holding NV Telenet Group Holding NV 3497.67 1453.27 3114.87 2.41x 1.12x

05/09/2023Telefonica SA Saudi Telecom Co SJSC 2266.74 13769.52 43632.38 0.16x 0.05x

21
Appendix 30: Trading Multiples Analysis
Average Median
YEAR EV/EBITDA PE RATIO EV/BOOK EV/EBITDA PE RATIO EV/BOOK
2017 7.10x 20.98x 3.22x 6.59x 20.98x 3.38x
2018 7.45x 18.26x 2.99x 6.66x 18.26x 2.91x
2019 7.42x 29.15x 3.40x 5.92x 29.15x 3.34x
2020 8.61x 20.12x 3.13x 5.14x 22.00x 2.59x
2021 8.56x 29.74x 3.35x 6.01x 25.44x 2.81x
2022 6.47x 22.63 3.20x 5.71x 21.97 2.62x

Appendix 31: Beta Calculation taking Peers Approach

Marg. Corp. Tax
Company Name Ticker D/E lev. Beta unlev. Beta
Rate

Vodafone Group PLC UK:VOD 105% 1 0.56 25%

Telekom Austria AG A:TEL 71% 0.29 0.19 23%
Telefonica Deutschland AG D:TEF 84% 0.89 0.56 30%
Telecom Italia SpA I:TL 210% 1.14 0.44 24%
Deutsche Telekom AG D:TE 303% 0.72 0.23 30%
Orange SA F:ORAN 151% 0.26 0.12 25%
BT Group PLC UK:BT 165% 1.13 0.51 25%
Swisscom AG CH:SC 65% 0.34 0.22 21%
Tele2 AB SE:TEL2 137% 0.36 0.17 20.6%
Elisa Corporation FI:ELISA 109% 0.26 0.14 20%
Telia Company AB SE:TELIA 146% 0.23 0.11 20.6%
Hrvatski Telekom HR:HAT 4% 0.45 0.43 18%
Go PLC MT:GO 199% 0.64 0.28 35.0%

Equally Weighted Average 0.30

Relevered Beta of NOS PT:NOS 99% 0.54 21%

Appendix 32: Sources

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