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

Good morning, everyone. Welcome to NOS' third quarter results conference call. We'll follow the usual format, so our CFO, Luis, will guide you through a short presentation, and after that, we open for Q&A. Over to you, Luis.

Thank you, Pedro. Good morning to all, and welcome to NOS' third quarter conference call. We will begin, as usual, with the main highlights of this quarter. A solid revenue growth led by outstanding IT and cinema, more than offsetting a slight telco decline mainly driven by the wholesale business, EBITDA growth despite some margin compression driven by higher resale and strong energy costs, and operational cash flow leveraged by top-line growth and structurally lower capex, free cash flow significantly boosted by non-recurrent items. As usual, A quick overview on our main KPIs. During third quarter, consolidated revenues grew 5.1% to 480.6 million, and EBITDA rose 1.3% to 225.6 million. This EBITDA growth, combined with CAPEX reduction of 8.4, led to an improved EBITDA L minus CAPEX of 109 million, a growth of 12.5%. Free cash flow, excluding non-recurring items, grew 11.6% to almost 80 million. Including non-recurring items, mainly higher litigation proceeds and tax devolution, total free cash flow increased 108% to 106 million. Net income increased 35.6% to 88 million, reflecting solid operational performance and DNA positive contributions. As usual, we will discuss each of these metrics in more detail throughout the presentation. NOS mobile network has once again been recognized as the best in Portugal by DECO protests for the second consecutive year. NOS was recognized for the best overall performance and the best balance between speed and browsing quality, ranking first in both download and upload speed. This recognition further reinforces NOS's position as Portugal's leading mobile network. Our scale program continues to scale AI across NOS. This quarter's highlight is our new multi-agent conversational GenAI solution, which we have just deployed across both chat and voice channels. The GenAI chat solution in the NOS app is available 24x7 and covers a wide range of topics such as billing, balance, portfolio and PIN codes. It already handles over 50,000 interactions per month with more than 85% correct answers. The conversational GenAI voice solution replaces the IVR menu. Customers simply explain their issue in natural language. While behind the scenes, an orchestrated agent identifies their intent and hands it over to the right specialized agent, which answers autonomously. When a customer needs a human, the solution detects and transfers the call to the best team. It already handles over 20,000 calls per month with a deflection rate of over 50% and a 16% improvement in customer satisfaction. Together, these solutions mark a major step forward in NOS AI-driven transformation, with a meaningful impact on both operational efficiency and customer experience. On the operational performance side, more than 6.3 million households are now covered by NOS Next Generation 6 network, with FTTH representing almost 93% of the households passed. During the quarter, NOS added 88,000 new homes, In the Next Generation Network and 139,000 new FTTH homes maintaining strong rollout momentum. This third quarter was marked by strong net ads across all segments with a positive performance in mobile driven by summer season. Total RGU's increased by 111,000 with mobile RGU's growing almost 112,000 and fixed RGU's heading 14,000, a significant improvement versus the previous quarter. In fixed, unique accesses increased by 7,900, recovering the trend after a weakened second quarter. Despite the very competitive market dynamics, the quarter has been strong, both on TV bundles and standalone offers. Unchained remains at low levels, reflecting the strength of NOS customer base and its competitive positioning. Mobile delivered again a strong quarter with 112,000 net hats, bringing total mobile large use to almost 5.9 million. Performance was driven by both postpaid and notably prepaid supported by the summer season and strong demand from tourists. Postpaid grew by 63,000, reflecting resilience in value-added service and convergent customer momentum. Performance is broadly in line with previous quarters, though below third quarter 25, as our counteroffer strategy, which massified unlimited mobile data allowances, has reduced the summer seasonality effect on Stadalo program. Mobile prepaid increased by 49,000, a positive reversal driven by higher SIM card activations and tourist demand during the summer months. In summary, A strong operational performance driven by resilient postpaid and a positive prepaid seasonality. Moving to audiovisuals and cinema, cinema ticket sales grew 44% year-on-year reaching almost 2.8 million tickets with August setting an all-time record of 1.3 million tickets on the back of Spider-Man and Odyssey. NOS Audiovisuais distributed 2 of top 5 movies and 5 of top 10 movies in Portugal. NOS Cinemas continues to invest to provide a unique customer experience in Portugal and during the quarter obtained the Infinity Vision certification and Disney certification for sound and image quality standards. NOS consolidated revenues Increase a solid 5.1% to 481 million in this third quarter, driven by an outstanding growth in IT and audiovisuals and cinema, partially offset by a slight decline in telco. Telco revenues fell 0.3%, mainly due to a 14% decline in wholesale. As in previous quarters, this reflects a change to an wholesale model that no longer records revenues and costs. B2C revenues were stable year on year. Competitive pressure on wool growing share of NOS customer base continues to more than offset the annual price increase, although this negative impact is narrowing quarter on quarter. This third quarter, however, a strong rise in seasonal revenues, namely premium channels and tourist mobile revenues, kept B2C revenues flat. B2B revenues grew 4% to 80 million, maintaining the growth path of previous periods, reflecting a higher volume of projects and resale activity. IT revenues grew 39% to 59 million, driven by a solid 5% growth in services and an outstanding 137% increase in the volatile equipment and licenses business unit. and the audiovisuals and cinema division posted strong revenue growth of 37% to 35 million euros, driven by the exceptional cinema performance discussed above. Therefore, NOS EBITDA grew 1.3% to 226 million, while the consolidated EBITDA margin decreased 1.8% to 46.9%. Reflecting a revenue mix effect from higher resale and equipment revenues, as well as higher energy costs, which were not fully offset by efficiencies from our transformation program. Telco EBITDA declined minus 1% to R$ 203 million, with a margin reduction of 0.4%, driven by a strong increase of B2B projects and resale, with lower margins and higher energy unitary costs. IT EBITA increased 24% to 7 million, but with a margin reduction of 1.5, driven by the outstanding increase in the lower margin equipment and licenses business unit. And Audiovisuals and Cinema EBITA grew 32.5% to 16 million. Finally, Consolidated EBITIL increased 2.3% year-on-year, driven by a 4% reduction in our listings. NOS CAPEX continues its structural declining trend. In this third quarter, total CAPEX excluding leads from 58% to 84 million. Telco CAPEX declined 9.6%, driven by a 17% reduction in technical CAPEX, impacted by higher percentage of FTTH deployment rolled out over third-party networks, thereby reducing our expansion CAPEX. IT CAPEX always more volatile decreased 35% with lower customer capacity water and audiovisuals and cinema CAPEX increased 24% mainly driven by the opening of a new cinema complex. As a result, improved operational performance and lower CAPEX drove a 12% increase in EBITDA minus CAPEX reaching 109 million euros. Net income Almost 36%, 288 million, driven by an EBITDA contribution of 2.9 million, DNA improvement of 13.7, mainly reflecting structurally lower CAPEX and a negative one-off in the third quarter, 25, and also a 2.8 million improvement in net financial results, as well as a 3.6 million contribution from joint ventures. Recurring free cash flow grew 11.6% to 79 million. Operating cash flow improved by 2.3 million as the EBITDA L-CAPEX growth of 12 million was partially offset by a negative working capital impact of 9.8 million as a result of normal fluctuations in payment to providers. Interest rates contributed positively by 0.4 million, driven by lower average debt, and income taxes paid Added a part of 4 million to free cash flow, reflecting higher payments on accounts in third quarter 25. Non-recurring items improved by 47 million versus the third quarter 25, mainly due to higher non-recurring taxes paid in last year and to higher cash in from legal proceedings. and obviously also by positive impact from non-recurring taxes in this third quarter, bringing total free cash flow to 106 million, an increase of 108% year-on-year. At the close of the third quarter, Norge net financial debt declined to 975 million euros. Consequently, the financial leverage ratio improved to 1.4, comfortably below our reference level of two times. North Everest cost of debt increased to 3.1 reflecting the higher interest rate environment. And with this, we conclude our presentation and we are now ready to answer to your questions.

Thank you so much, dear participants. As a reminder, if you wish to ask a question, please press star 1, 1 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star 1 and 1 again. Please somehow compile the Q&A roster. This will take a few moments. And I will go to the first question. And it comes to the line of Molly Whitcomb from Goldman Sachs. Your line is open. Please ask your question.