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1. Company Snapshot

1.a. Company Description

NOS, S.G.P.S., S.A. engages in the telecommunications, and media and entertainment business worldwide.It operates in Telco and Audiovisual segments.The company offers cable and satellite television, voice and internet access, mobile communication, IP voice, mobile virtual network, and related consulting services, as well as electronic communications services, including data and multimedia communications.


It is also involved in the negotiation, acquisition, and distribution of content rights and other multimedia products, and Pay TV and video-on-demand rights; producing films and series channels; managing the advertising space on Pay TV channels; video production and sale; and cinema exhibition and distribution.In addition, the company provides data center management and consulting services in IT; invests in and supports the development of companies that aim to commercialize technologies and products; manages investments; commercializes public events; manages social participations in other companies; and offers accounting, logistics, administrative, financial, tax, human resources, and licensing and engineering services.Further, it engages in the design, construction, management, and exploitation of electronic communications networks, and equipment and infrastructure; management of technological assets and renders related services; achievement and promotion of scientific, and research and development activities; import, distribution, editing, commercialization, and production of audiovisual products; and provides demonstration, dissemination, technology transfer, and formation services in the field of services and information systems.


Additionally, the company purchases, sales, rents, and operates property and commercial establishments; and manages real estate and financing activities.The company was founded in 1999 and is headquartered in Lisbon, Portugal.NOS, S.G.P.S., S.A. is a subsidiary of ZOPT, SGPS, S.A.

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1.b. Last Insights on NOS

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1.c. Company Highlights

2. NOS Delivers Solid Q3 with 2.7% EBITDA Growth

NOS's third-quarter revenue declined 1.2% to EUR 457 million, primarily due to a EUR 6.8 million decline in the Audiovisuals and Cinema division. However, the Telecom segment showed resilience with a 0.3% growth, driven by the enterprise sector's 4.4% increase. EBITDA grew 2.7%, significantly above revenue, reflecting the company's solid operational performance and strategic transformation program. Earnings per share (EPS) came in at EUR 0.1274, beating estimates of EUR 0.08. The company's net income increased 25% to EUR 58 million, while recurring free cash flow decreased 19%.

Publication Date: Nov -23

📋 Highlights
  • EBITDA Growth Outpaces Revenue Decline: 2.7% EBITDA growth despite 1.2% revenue contraction to EUR 457M.
  • Strong RGU Growth: 10.9 million RGUs with 131,000 net adds, highest since 2023.
  • Financial Leverage Reduced: Debt-to-EBITDA ratio falls to 1.6x, below the 2x target.
  • FTTH Expansion Plan: Targeting 300,000–350,000 new households connected by 2026.
  • Enterprise Sector Resilience: 4.4% revenue growth in telecom, driving 0.3% overall resilience.

Operational Highlights

The company's operational performance was strong, with a 2% increase to 10.9 million revenue-generating units (RGUs). The quarter saw 131,000 net adds, the highest level since 2023, driven by solid numbers in both fixed and mobile RGUs. In mobile, NOS had 111,000 net adds, with mobile RGUs increasing 3.3%. As Miguel Almeida noted, "Our competitive environment has been stable over the past few months, with no significant changes."

Network Expansion and Sustainability

NOS continues to expand its FTTH network, expecting to have around 300,000 to 350,000 new households connected in the next year. The company's commitment to sustainability is reflected in its network expansion, with over 5.9 million households now covered by NOS's gigabit fixed network. NOS proudly leads in global sustainability, recognized by Time and the Financial Times as one of the world's most sustainable companies.

Valuation and Outlook

Analysts estimate NOS's revenue growth at 1.9% for next year. With a current P/E Ratio of 8.05 and EV/EBITDA of 4.76, the stock appears reasonably valued. The Dividend Yield stands at 10.85%, making it an attractive option for income investors. The company's solid balance sheet and financial position, with leverage below the 2x reference level, provide a stable foundation for future growth.

Guidance and Risks

Miguel Almeida mentioned that the decline in RGUs is expected to worsen before it gets better, but medium-term, it will stabilize. NOS is evaluating price increases, with a decision expected by the end of November. The company's wholesale access and network development are being closely watched, with no significant changes or closed deals reported.

3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.02%)

6. Segments

Telco

Expected Growth: 2%

NOS, S.G.P.S., S.A. Telco segment growth driven by increasing demand for high-speed internet and mobile data services, fueled by rising smartphone penetration and digitalization in Portugal. Additionally, strategic investments in 5G network infrastructure and innovative services, such as IoT and cloud solutions, contribute to the 2% growth.

Audiovisuals

Expected Growth: 3%

NOS, S.G.P.S., S.A.'s 3% growth in Audiovisuals is driven by increasing demand for premium content, expansion of fiber-optic networks, and strategic partnerships with content providers. Additionally, the rise of streaming services and growing adoption of 5G technology are contributing to the segment's growth.

Eliminations

Expected Growth: 0%

No growth in Eliminations from NOS, S.G.P.S., S.A. is attributed to stagnant market conditions, lack of innovation, and intense competition, leading to flat sales and revenue. Additionally, high operating expenses and inefficient cost structures have hindered the company's ability to invest in growth initiatives.

7. Detailed Products

TV Services

NOS offers a range of TV services, including linear TV, on-demand content, and interactive services, providing customers with a comprehensive entertainment experience.

Internet Services

NOS provides high-speed internet services, including fiber-optic and ADSL connections, enabling customers to access online content, stream media, and work remotely.

Fixed Telephony Services

NOS offers fixed telephony services, allowing customers to make voice calls, send SMS, and access value-added services.

Mobile Services

NOS provides mobile services, including voice, data, and SMS, enabling customers to stay connected on-the-go.

Security Services

NOS offers security services, including antivirus software, firewall protection, and online backup solutions, to protect customers' devices and data.

Cloud Services

NOS provides cloud services, including cloud storage, cloud computing, and cloud security, enabling customers to access and manage their data online.

8. NOS, S.G.P.S., S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for NOS, S.G.P.S., S.A. is medium due to the presence of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the large number of customers and the ease of switching to alternative products and services.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the company's strong relationships with its suppliers and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants is medium due to the moderate barriers to entry and the potential for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry is high due to the large number of competitors in the market and the high level of competition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 63.70%
Debt Cost 4.42%
Equity Weight 36.30%
Equity Cost 6.83%
WACC 5.29%
Leverage 175.48%

11. Quality Control: NOS, S.G.P.S., S.A. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
NOS

A-Score: 7.5/10

Value: 7.5

Growth: 5.2

Quality: 5.8

Yield: 10.0

Momentum: 6.5

Volatility: 9.7

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Orange Belgium

A-Score: 5.3/10

Value: 5.8

Growth: 4.3

Quality: 2.7

Yield: 0.6

Momentum: 8.5

Volatility: 9.7

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Helios Towers

A-Score: 5.2/10

Value: 3.0

Growth: 8.4

Quality: 4.8

Yield: 0.0

Momentum: 9.0

Volatility: 6.0

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Gamma Communications

A-Score: 4.9/10

Value: 4.5

Growth: 7.2

Quality: 7.7

Yield: 2.5

Momentum: 0.0

Volatility: 7.3

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LINK Mobility

A-Score: 4.6/10

Value: 5.8

Growth: 8.7

Quality: 3.1

Yield: 0.0

Momentum: 7.0

Volatility: 3.0

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VEON

A-Score: 4.3/10

Value: 7.8

Growth: 2.0

Quality: 5.6

Yield: 0.0

Momentum: 6.5

Volatility: 4.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.04$

Current Price

0.04$

Potential

-0.00%

Expected Cash-Flows