Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nos Sgps SA (FRA:PMV, Financial) reported a strong quarter with revenue growth of over 6% year-on-year.
- The company achieved a 6.3% growth in EBITDA, reflecting efficient cost control.
- CapEx continues to decline, showing a 4.9% decrease, which aligns with the company's strategic goals.
- Free cash flow increased significantly, driven by operational cash flow expansion and one-off effects.
- Nos Sgps SA has achieved 99% 5G coverage across Portugal, being the first operator to reach 100% of Portuguese municipalities.
Negative Points
- There was a 1.7% negative growth in the audiovisuals and cinema segment.
- OpEx increased by 5.9%, driven by higher IT and project costs, as well as increased energy tariffs.
- Content costs rose due to premium services, impacting overall expenses.
- The number of cinema tickets sold decreased by 5.3% year-on-year, affecting revenue in that segment.
- Potential pricing pressure is expected next year due to market competition and new entrants.
Q & A Highlights
Q: Can you provide insights into your fixed footprint expansion and plans for the future? Also, how should we think about shareholder remuneration given the extraordinary effects in free cash flow?
A: Part of our footprint expansion is through third-party networks, which doesn't impact our CapEx. We will continue to expand, with a significant portion coming from third-party networks. Regarding shareholder remuneration, decisions will be made by the board in early March or late February.
Q: Given the strong EBITDA growth, how should we view the fourth quarter's performance? Also, with a new market entrant, how do you see pricing pressure affecting next year?
A: The first nine months are a good proxy for Q4 growth, with stable and positive trends. The potential new market entrant will not affect our pricing decisions, which will be made in the coming weeks.
Q: What role do second brands play in defending against new market entrants? Also, do you expect further site densification in 2025?
A: Our second brand is a digital brand, offering a fully digital customer experience, which helps counter potential new entrant strategies. Most of our site densification is complete, with only a residual number of sites expected in 2025.
Q: With expected pricing pressure next year, do you believe there is room to keep costs under control to manage margins?
A: Yes, we see significant potential for additional efficiencies, supported by AI and other initiatives, which should accelerate in 2025.
Q: Can you provide an update on the role of your second brands and the impact of Novo's infrastructure on the new entrant strategy?
A: Our second brand has a market share below 2% in mobile, but we expect growth starting in 2025. Novo has not made significant infrastructure investments recently, and we don't see it materially changing the new entrant's positioning.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
