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Hello everyone, good morning. Welcome to NOS third quarter 2025 conference call. I'll hand you over to our TFO, Luís. We'll deliver a short presentation and then we'll open for Q&A as usual.

Well, good morning and welcome to NOS third quarter conference call. We will begin as usual with the main highlights of this third quarter. A strong operational performance with the RGU trend significantly improving versus previous quarters. A consolidated revenue of 457 million strongly impacted by ANC decline despite resilient performance from Telco. An efficient cost management that is driving EBITDA growth and sustainable operational cash flow generation and a solid balance sheet and financial position with leverage below reference level of two times. So a quick overview of our main KPIs. This quarter, revenues declined 1.2% to 457 million, but EBITDA rose 2.7. This positive EBITDA performance, along with a CapEx reduction of 2%, led to improved EBITDA CapEx of almost 10%. Recurring free cash flow, excluding extraordinary effects, decreased 19%, and net income increased 25% reflecting the solid operational performance and our strategic transformation program. NOS proudly leads in global sustainability, having been recognized by both Time and Financial Times in their international benchmarking rankings as one of the world's most sustainable companies. This impressive achievement places NOS as one of only five Portuguese companies in both lists, and the only one from the telco sector. This highlights NOS' strong commitment and significant progress towards a sustainable future. Furthermore, NOS has received recognition from DECO Protest, the leading Portuguese consumer rights association magazine, being named best in test for its mobile internet, Wi-Fi and TV services. It's the first time any operator has secured ultra-record distinctions, underscoring NOS' strong commitment and investment in superior networks and quality of service. On the operational performance side, this was another strong quarter of Fibre2D Home expansion. More than 5.9 million households are now covered by NOS' Gigabit Fixed Network, with FTTH representing almost 88% of households' paths. This is a significant increase of 78,000 households quarter on quarter and almost 300,000 year on year. But despite the challenging competitive market, Nordstrom offers and commercial capabilities delivered a very strong third quarter with a 2% increase to 10.9 million RGU's. With 131,000 net ads, this quarter posted the highest level of net ads since 2023, driven by solid numbers in both fixed and mobile large use. With 12,000 net heads of unique accesses, this third quarter saw an acceleration of the operational momentum, driven by high levels of fiber deployment, low levels of churn, and competitive offers, particularly from Woo Brand and Naked Broadband, that are changing the mix of new customers. In mobile, we do... With 111,000 Net Hats in the quarter, mobile large use increased 3.3%, reflecting a stronger performance both in post-paid and prepaid. Post-paid had 160 Net Hats, posting very strong results driven by woo and non-competitiveness on convergent cross-sell. Prepaid net additions continued to improve since first quarter and just decreased 5,000 in the quarter, a clear improvement from Q2 seasonality despite competitive pressure. In summary, a solid operational performance and a strong improvement versus the previous quarters. Now moving to outdoor visuals and cinema business. The number of tickets sold declined by 28%. driven by the lack of blockbusters line-up this quarter, in contrast with Third Quarter 24, which featured several box office seats, including Inside Out 2, the most watched film ever in Portugal. The audiovisual segment was dragged down by cinema distribution, reflecting the lack of successful movies line-ups in this third quarter, as opposed to Third Quarter 24, where noise distributed Inside Out 2. Only three NOS audiovisual films ranked in the top 10 this quarter, harming NOS performance. Now on the financial performance side, NOS consolidated revenues decreased 1.2%, a reduction of 5.5 million, driven by a 6.8 million decline in the audiovisual and cinema division, and despite the resilient performance of the telecom segment. Telco revenues show a resilient 0.3% growth, primarily due to the performance of the enterprise sector, which posted a 4.4% increase driven by the corporate segment. The B2C segment experienced a decline of 1.2% due to increased competition impacting quite stronger operational activity. The new IT business showed a small decline of 0.4%, mainly driven by a reduction in the volatile resale of equipment and licenses. However, this was almost fully offset by a solid 8.4% growth in IT services. As previously explained, the audiovisuals and cinema division reported a 21% decline, driven by the 28% reduction in cinema attendance. So, North's operational performance and the solid results of North's transformation program, supported on GenAI-driven efficiency program, continue to deliver a solid 2.7 EBIT increase significantly above revenue, with a robust contribution from telco and IT, which recorded increases of 4.3% and 10.4%, and despite media segment decline of 21%. This quarter, NOS achieved a 4.6% OPEX decline, largely due to proactive cost management and GenAI-supported transformation program that continues to boost structural efficiencies organization-wise. Two significant examples of AI impact this quarter include the automation of call center and customer care service through LLM-powered voice virtual assistants and GenAI-based chatbots, which drove a 19% reduction in customer care costs. Furthermore, a 14% reduction in maintenance and repair costs was achieved by decreasing call times and intervention orders, also driven by AI. NOS CAPEX continues the structural declining trend, and this quarter dropped 2% to 91.5 million, mainly supported by the Telco CAPEX decline of 2%. In Telco, we saw a 2.4% reduction in customer-related investments and a 3.7% decrease in base CAPEX. Expansion CAPEX, however, saw an exceptional increase of 1.8% this quarter, driven by a temporary peak in NOS FTTH projects. IT CapEx increased by 300,000 to 1.9 million, driven by customer-related investment to support business growth, and audiovisuals and cinema CapEx declined 7% to 4.6 million, reflecting a return to a more normal spending level. As a result, improved operational performance and efficient CapEx management drove a 9.6% increase in EBITDA IL-CapEx. North saw the consolidated net income rise 25% to 65 million, a strong EBITDA growth supported by a solid operational performance and non-proactive cost management were key drivers, complemented by reduced financial costs and a 5 million contribution from tax incentives. Free cash flow declined by 56% to 51 million, primarily due to a reduction of almost 50 million in extraordinary effects. mainly related to tower sales to sell next and the tax receivable paid in advance in 2023, which positively impacted third quarter by 30 million. However, this quarter, we have a negative impact of 90 million in taxes from extraordinary gains in 2024 from tower sales and refund of activity fees. Without extraordinary items, recurring cash flow dropped 19%, driven by a 39 million increase in taxes that totally offset the positive impact of the strong operational performance, lower investments, a reduction in working capital, and lower interest rates. To finalize, this quarter, NOS debt decreased to 1,093 million, and the financial leverage ratio dropped to 1.6, well below the reference threshold of two times. Additionally, Norse benefits from a lower average cost of debt, now below 2.8%, representing a decrease of 0.2% quarter-on-quarter and 1.2% year-on-year. As of March, the company held $343 million in cash and liquidity. So with this, we conclude our presentation and we are now ready to answer to your questions.

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A queue. Our first question comes from the line of Molly Whitcomb from Goldman Sachs.

Please go ahead, your line is open. Hi, good morning. I have two questions, please. Firstly, on the competitive environment, if you could give us a little bit more colour on how that is progressing versus previous quarters, specifically in the budget segment. It would be really good to understand as well the uptick in the ads that you've seen. Is it mainly driven by Woo and the budget segment or elsewhere? And then my second question is on upside from cost efficiencies. Obviously, you've set out your transformation plan. To what extent are these savings already make up part of guidance? And to what extent do you think there's potential for further upside from cost efficiencies driven by AI savings? Thank you.

Thank you very much for your questions. In terms of competitive environment, to be completely honest and transparent, these last few months, I don't think there's any news, anything relevant that is different from the previous months. So the dynamics since last November has been more or less the same. In our case, there is already some weight in terms of gross ads coming from the discount branch. But that number is still not even double digit. But still, it's more or less stable in terms of weight of gross ads. So to be honest, we don't see anything changing significantly from what we have seen in the first half of the year.

On the cost-efficient side, I would say that cost-efficiencies are the main driver behind the operating cost decline of 2.6% in telco. Almost all of it are coming from efficiencies, as I said, from customer-related and from operating-related cost decrease. We believe they are sustainable as the GenAI initiatives are still far from explored. It's a long-term program, so we believe that we will have efficiencies for a long period.

Okay. Thank you very much. Thank you. We'll now move on to our next question. Our next question comes from the line of Antonio Celadas from AS Independent Research. Please go ahead. Your line is open.

Hi. Good morning. Thank you for the presentation. Thank you for taking my question. It's just one. It's related with the place that your retail customers are renunciating their packages. So taking into consideration that this new environment is now about one year old and at some time your loyalty programs are for two years, is it fair to assume that 50% of your retail customers already renunciate their packages? Or do you think this is too optimistic? Thank you very much.

Look, first of all, thank you for your question, Antonio. Since in this new competitive environment, so again, last 12 months, the pressure on our retention lines, so customers trying to renegotiate contracts, has not increased. It has been more or less stable. We haven't seen, mainly on these last few months, we haven't seen any pick up on customers trying to negotiate contracts. So on that front, I would say also, like in the competitive environment, things are pretty much stable.

Nevertheless, your R2, your blended price in retail is coming down 1% year-on-year on the second, and now about 2%. Is this kind of performance that we should expect for the coming quarter?

Look, that decline has a number of effects built into it. First of all, you have the mobile data revenues that we had a one-shot decline last December or November. That's a one-off effect that will not continue for the future. And then you have, as I mentioned, we already have since Last November, some growth stats coming from the Wu brand, the discount brand, which has a much lower output than the NOS brand. So in terms of – and that's progressively has an impact. And on top of that, I would recall that we didn't have the price increase beginning of this year. So you have to add up all these effects to explain that decline.

Okay. Thank you very much.

Thank you. We'll now move on to our next question. Our next question comes from the line of Fernando Cordero Barrera from Banco Santander. Please go ahead. Your line is open.

Hello, good morning, and good afternoon already. A quick question from my side, if I may. The first question is, as a follow-up on the strategy transformation plan, you have already highlighted the impacts on the customer care and in maintenance and repair costs. Are you foreseeing any other area in the operational side where the AI-driven efficiencies could be as relevant as in these two? The second question is related with the network expansion. You have already commented in the presentation that you have already added 300,000 new homes to your network. I would like to understand which is the still potential expansion of your network. What would be, let's say, the number of households that could be could be deployed in the future to understand which is also the impact on your potential top-line growth. And the last question is, looking to your KPIs where the sound performance in volumes has been offset by the trends in ARPA, as you have already highlighted, I would like to understand, or I understand that you are prioritizing volumes versus customer value versus ARPA. Can you help us to understand why have you opted by this scenario instead of prioritizing output versus volumes, just to understand what has been your way of thinking to end in the current strategy? Thank you.

Thank you, Fernando. I would like to start with the last question, which I think is very interesting. Well, I don't think it's fair to say that we are prioritizing volume against price. Of course, we don't want to give too much space to the discount brands or the discount players. And we launched, as you know, a discount brand. And obviously, that has an impact because progressively we have more customers within this brand with lower ARPUs, much lower ARPUs. And when you see the combined ARPU, that has an effect. But that's it. I don't think it's fair to say that we are prioritizing volume versus price. We are not going to give too much space to the new entrants, that's for sure. But we are trying to manage value. I don't think your comment is very fair, to be honest. I understand it. Don't take me wrong. I understand it. But this is a result of a number of things. Our strategy is not to prioritize volume against price. It's to find the right mix.

So on the transformation program, the Gen AI is part of our program, and the idea is to massify Gen AI across the entire organization. We have around 135 different use cases, and we have just started with around 25% of them. So there's a lot of room to massify Gen-AI across NASH. On the expansion, we are expanding FTTH, our own FTTH, and we will do it until the end of the first half of 2026. But we will have houses from third parties. So we expected to have around 300,000, 350,000 houses for the next year, but significant part of them from third parties. So our CapEx expansion, CapEx, will continue to decline in 2026.

Okay, many thanks for all the answers. Just a follow-up on the network expansion side. Not only I'm, let's say, looking to understand what could be the CAPES trend for next year, also to understand, given that you are increasing your footprint by close to 5% and your customer base in terms of fixed assets by around 2%, I just would like to understand which would be the network expansion that you are expected for 26, 27, not just on the impact of cafes, but particularly in the impact of new addressable areas for your marketing activities.

I would share two comments on that. First of all, there is a time to take up. So one thing is to have the expansion. Another thing is to acquire customers. It takes time. So you cannot expect... If you increase by 5% the number of households, you cannot expect to increase the number of customers by 5% day one. It takes time. And it takes a lot of time, obviously. So the take-up is going according to our expectations, but there's obviously a delay. On the CapEx side, you can expect, as we have been saying for quite some time now, is CapEx going down. Part of this expansion, private expansion, is on third-party networks. So what you can expect for next year in terms of CAPEX is a reduction.

Thank you. We'll now move on to our next question. Our next question comes from the line of Jose Cabezon from CaixaBank. Please go ahead. Your line is open.

Hi. Do you hear me? Yes. Good morning. Yeah. Good morning, gentlemen. Thank you for your time. One question regarding the efficiency plan. You have mentioned that you have a 135 areas of where you can extract more efficiencies. Could you tell us the percentage of potential states that have been already considered and the amount that will emerge in the coming quarter?

Well, to give you the percentage of efficiency that we have, it's a form of guidance, so we are not sharing this number.

Okay, thank you. And a second question is regarding the comparison basis for us from this quarter. Are you expecting that the The decline in RPUs and the changes that we are seeing every year are going to soften in the coming quarters?

Well, let's say our expectation is that it can get a little bit worse before it gets better. Thank you. Long term. Long term. Sorry. Just to add to that. So you're talking about the next quarter?

No, I am referring to basically the next quarter, what we are going to see, especially in the first quarter of next year and the following ones.

Our expectation is that short-term, probably it will decline a little bit more, but medium-term, so looking six months, nine months ahead, it will stabilize.

All right. Thank you very much.

Thank you. We'll now move on to our next question. Our next question comes from the line of Roshan Ranjit from Deutsche Bank. Please go ahead. Your line is open.

Good morning, everyone. Thanks for the questions. I've got two, please, many follow-ups. Just on the competitive dynamic, and I guess having had quite a strong start to the other new entrants, momentum has perhaps stalled. I don't know if that's fair to say. How should we then be thinking about the scope for price increases Because I think typically it's around this time where you do inform your customer base around the kind of inflationary pricing taxation that we see. And I think this year we didn't have anything. And secondly, it's around the network dynamics. Have you changed your stance, or have you seen kind of incremental approaches for wholesale access, anything that has changed on that front? Again, you know, the new entry has been pushing hard to increase their coverage. Any thoughts around that, if there's been any change, or is it still the same? Thank you.

Well, thank you for your questions. you're right it's more or less around this time of the year that we have to inform customers but it's still closer to the end of November beginning of December and the fact is that as of today we have no decision but I can tell you that we are evaluating the option and we have no conclusion yet but we are looking into it seriously and will inform the market of our decision or not by the end of November. In terms of network development and wholesale access, namely from the new entrants, we don't know if with us there's no discussions whatsoever. With the others, we don't know if there are any discussions, but in terms of closed deals, there's nothing new.

That's great. Thank you.

Thank you. We'll now move on to our next question. We have a follow-up question from the line of Fernando Cordero Barrera from Banco Santander. Please go ahead.

Thank you again for the question. It's only one. I just would like to understand if there is any news regarding the legal situation of one of your major holders, the 26% stake for Isabel dos Santos. Just understand if there has been any update or you have any update on that situation.

Well, that's the easiest question of all. No developments whatsoever. Nothing new. Everything is as it was one year ago, two years ago, three years ago.

Okay, many thanks.

Thank you. There are no further questions at this time, so I'll hand the call back to Pedro Diaz for closing remarks.

Okay, so thanks very much for tuning in, and we hope to see you back in the fourth quarter