NOS, S.G.P.S., S.A.

Good morning, everyone. Welcome to NOSH first quarter and 2026 results conference call. Our CFO, Luís, will guide you through a brief presentation and then we have the executive team in the room who will be happy to take your questions after the presentation. Over to you, Luís.

Thank you, Pedro. Good morning to all and welcome to NOSH first quarter conference call. We will begin, as usual, with the main highlights of this first quarter. revenue growth driven by strong IT expansion and solid audiovisuals and cinema performance, more than offsetting competitive pressure in telco. A bit of performance reflects the disciplined cost management and structurally lower capex delivering health-free cash flow generation. And the balance sheet remains strong with a 1.4x leverage ratio and a credit rating upgrade to BBB by S&P, reflecting a stable financial outlook. A quick overview on our main KPIs. In this first quarter, consolidated revenues increased by 1.9% to 460 million and EBITDA rose 3.1%. This solid EBITDA performance, along with a CAPEX reduction of 5%, led to an improved EBITDA IL-CAPEX of 84 million, a growth of 18%. Recurring free cash flow, Excluding extraordinary items grew 22% to almost $30 million, and recurring net income increased 7.9% to $60 million, reflecting a solid operational performance and our GenAI-driven efficiency program. As usual, we will discuss each of these metrics in more detail throughout the presentation. As said, NOS credit rating has been upgraded by S&P to BBB with a stable outlook. S&P Rational for the upgrade highlights three key points. NOS robust operating performance and cost optimization program. That NOS is well positioned to face increased competitive dynamics with modern and well-maintained networks. And that declining fiber and mobile CapEx supports strong free operating cash flow generation. Committed to a long-term value creation, NOS has established itself as a leader in both R&D investment and patent application in Portugal. On the research and development front, NOS has consistently ranked in the top three since 2018, while on the patent side, the company has topped the Portuguese market for the second consecutive year. Our scale program continues to scale AI across NOS, with seven execution programs and more than 140 AI use cases identified. Another key example is the workforce augmentation program, which includes our sales assistant in B2B and B2C, a virtual assistant designed to support sales consultant and maximize their productivity. This tool is already handling more than 5,000 questions per month and answering to more than 98% of the questions autonomously. The B2B Virtual Agent is effectively boosting efficiency and sales productivity through opportunity follow-up and smart recommendations. The SCALE program has also developed the B2C Sales Assistant, a virtual assistant designed to support customers throughout their resolution journey, successfully contributing to higher NPS scores and reduced call handling times. Moving now to the operational performance side, more than 6.1 million households are now covered by NOS Next Generation Fixed Network, with FTTH representing 91% of the households passed. During the quarter, NOS deployed 96,000 new fiber homes, 75% of which were rolled out over third-party networks, thereby reducing expansion capex. Despite the challenging competitive environment and typical first-quarter seasonality in mobile, NOS delivered positive operational momentum in first quarter. Total large use grew by 12,000, the strongest first quarter in three years, and a significant improvement year-on-year, driven by a solid fixed net ads of 24,000 and a return to positive mobile net ads of 3.8. In fixed, we achieved 8,000 net ads in unique fixed practices. This is a strong quarterly performance, outperforming both the previous quarter and the same period last year, and are consistent with the Predigy levels. Sharn remains at low levels, reflecting the strength of Nosh customer base and its competitive positioning, and new offers, Woo and Naked Broadband, continue controlled, but with some impact in the mix of new customers and RPs. Immobile This was the best first quarter of the last three years, with 3.8 net hats, with mobile RGUs increasing 4% year-on-year, reflecting a positive performance backed by post-pay resilience, despite the challenging competitive environment, particularly in the prepaid segment. Post-paid increased 69,000 RGUs, with a slight acceleration versus previous quarter, impacted by the low-value machine-to-machine decline, which is more volatile. mobile prepaid declined by 65,000 against the best first quarter of the last three years, despite reflecting the ongoing push to convergence and competitive pressure in the low-cost segments. In summary, a solid operational performance despite the competitive environment and the normal first quarter seasonality in mobile. Now moving to audiovisuals and cinema business, Ticket sales grew by 12%, with a very strong performance in January and February, driven by the successful launch of The Housemaid and by Avatar and Zootropolis. NOS Audiovisuals distributed two of the top three movies in the quarter. NOS Consolidated Revenues rose 1.9%, driven by a strong 16% growth in IT, a 7% increase in audiovisuals and cinema, partially offset by the resilience Telco performance. Telco revenues declined slightly by 0.2% to 390 million, mainly impacted by the wholesale unit. The B2C segment recorded a decline of 0.7%, driven by a combination of factors pressuring ARPU. The competitive pressure, the growing share of wool within NOS customer base, and the impact of storm pricing that offset the price increase that happened in mid-February. B2B revenues grew 5.5% to 81 million, maintaining the growth path of the previous periods. This acceleration in overall revenue growth reflects a higher volume of projects and resale activity. Wholesale revenues declined 11%, driven by a reduction in mass calling services and by changes in one wholesale model, which no longer record revenues and costs. IT revenues showed a strong increase of 16% to 54 million, driven by a solid 4.8% increase in IT services and by a significant 36% growth in the more volatile equipment and licensing sales. Finally, the audiovisual cinema division reported a 7% revenue increase to 25 million, driven by the strong cinema performance with ticket sales growing 12% year-on-year. NOS EBITDA grew 3.1% to 203 million with a consolidated EBITDA margin of 44.2, an improvement of 0.5 year-on-year, reflecting the solid operational performance and the Gen-AI driven efficiency program. Despite flat revenues, Telco EBITDA grew 2.8 with a margin expansion of 1.4% to 47.5. IT EBITDA increased 6.1% Below the 16% revenue increased, explained by the strong growth of resale of equipment and licenses with lower margins. And audiovisual and cinema's EBITDA grew 6.1%, in line with revenue's growth. CAPEX continues its structural declining trends. In this first quarter, total CAPEX excluding leasing dropped 5% to 86 million. Telco CapEx declined 6%, driven by a 3.8% reduction in customer-related investments. Technical CapEx fell 8%, impacted by a higher percentage of deployment rolled out over third-party networks, thereby reducing expansion CapEx. IT CapEx increased 14% to 1.5 million, explained by customer-related investments. And audiovisual and cinema capex increased 15% to 4.6 million euros, reflecting a return to a more normal spending level in movies after the lower investment in 2025 caused by the disruption of the Hollywood strikes. As a result, improved operational performance, the Gen-AI driven efficiency program and efficient capex management drove an 18% increase in EBITDA L-Capex, reaching 84 million. Recurring net income grew 7.9% to 69.7 million, driven by the positive EBITDA contribution of 6 million, a DNA reduction of 4 million, and a decline in net financial expenses. These positive impacts were partly offset by a 4.6 million reduction in joint venture results, canalized by the reversal of a sport easy provision in first quarter 25, and higher taxes driven by higher EBITDA. No recurrent items declined to 2.2 million, driven by lower refund of Anacom activity fees, resulting in a total net income increase of 4.7% to 62 million. Recurring free cash flow increased 22% to 80 million. Operating cash flow increased by 50 million year-on-year, driven by the strong operational performance and lower investments. Interest rates increased €1.4 million year-on-year, penalized by a one-off tax devolution in Q1 2025. Non-recurring items declined €6 million to €12.4 million due to lower ANACOM refund of activity fees versus Q1 last year, bringing total free cash flow to €91.8 million, a 10% increase year-on-year. At the close of the first quarter, NOS net financial debt decreased to €930 million and the financial leverage ratio improved to 1.4, well below our reference level of approximately 2 times. Additionally, NOS benefited from a lower average cost of debt, now 2.8%, a reduction of 0.5% year-on-year, reflecting the lower interest rate environment and in line with the previous quarters. As of March 31st, NOS held a total liquidity position of 347 million. 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. We'll now go to our first question. Our first question comes from the line of Molly Whitcomb from Goldman Sachs. Please go ahead. Your line is open.