Highlights of 1Q11 Results 1Q10 1Q11 1Q11 / 1Q10

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2 1. 1Q11 HIGHLIGHTS Table 1. Highlights of 1Q11 Results 1Q10 1Q11 1Q11 / 1Q10 Operational ('000) Triple Play Customers % Triple Play Penetration (%) 45.6% 57.6% 12.0pp RGUs (1) 2, , % Blended ARPU (Euros) % Financial (Millions of Euros) Operating Revenues % Pay TV, Broadband and Voice % EBITDA % EBITDA Margin 34.3% 37.1% 2.8pp Net Income % (1) Total RGUs reported reflect the sum of Pay TV, Broadband, Fixed Voice and Mobile subscribers. CONTINUED LEADERSHIP IN TRIPLE PLAY o RGU growth of 7.8% yoy to million services with RGUs per cable subscriber growing by 10% to 2.29; o 666 thousand cable subscribers subscribe to Triple Play bundles, 57.6% of the cable base; o Continued strong growth in Broadband to thousand customers, representing growth of 10.9% yoy; o thousand customers now take Fixed Voice services, 68.2% of the cable base, an increase of 25% yoy; o Continued strength of NGN bandwidth services representing over 23% of broadband customers; o Strong sequential ARPU growth reaching 35.8 euros in 1Q11 led by continued Triple Play uptake. STRONG OPERATING FCF IMPROVEMENT ON THE BACK OF STRONG COST CONTROL AND LOWER CAPEX o Growth in core Triple Play Revenues of 1,5% yoy to million euros and a marginal increase in consolidated revenues of 0.3% yoy; o EBITDA up by 8,5% to 79.5 million euros; o Total CAPEX down by 28% to 38.8 million euros, compared with 53.9 million euros in 1Q Q11 Earnings Announcement

3 2. OPERATING REVIEW 1Q11 Table 2. Business Indicators ('000) 1Q10 1Q11 1Q10 / 1Q11 Pay TV, Broadband and Voice Homes Passed 3, , % RGUs (1) 2, , % Cable RGUs per Subscriber (units) (2) % Basic Subscribers (3) 1, ,554.4 (2.1%) o.w. Cable Subscribers 1, ,155.5 (1.8%) Triple Play Customers % % Triple Play Cable Customers 45.6% 57.6% 12.0pp o.w. DTH Subscribers (3.2%) Broadband Subscribers % Fixed Voice Subscribers % Mobile Subscribers % Blended ARPU ( Euros ) % Cinema Revenue per Ticket (Euros) % Tickets Sold 2, ,016.5 (18.4%) Screens (units) % (1) Total RGUs reported reflect the sum of Pay TV, Broadband, Fixed Voice and Mobile subscribers. (2) Cable RGUs per Subscriber correspond to the sum of Cable Pay TV, Broadband and Voice Subscribers, divided by the number of Cable Pay TV Customers. (3) These figures are related to the total number of Pay TV basic customers, including the cable and satellite platforms. ZON Multimedia offers several basic services, based on different technologies, directed to different market segments (residential, real estate and corporate), with a distinct geographical scope (mainland Portugal and the Azores and Madeira islands) and with a variable number of channels. ZON was able to deliver still positive growth in its core Triple Play business, both in RGUs and in Revenues, despite the very challenging economic environment and its inevitable negative impact on consumer sentiment. Triple Play penetration now at over 57.6% The number of customers taking Triple Play bundles continues to grow reaching penetration of 57.6% of the cable base by the end of 1Q11, up 12 p.p. in comparison with 1Q10 ZON is the leading Triple Play operator in Portugal and still one of the leading Triple Play operators in its peer group in Europe in terms of Triple Play penetration. Each customer subscribes to 2.29 services on average compared with 2.08 services in 1Q10 and the total number of services subscribed, RGUs, increased by 7.8% to million services in 1Q11. In January, ZON started to sell its new high-end Triple Play bundles, IRIS a service based on a new pay TV user interface developed by NDS and only sold to customers that subscribe to ZON Fibra 1Q11 Earnings Announcement 2

4 broadband offers ie customers that subscribe to broadband speeds of 30 Mbps or over. IRIS is positioned as a completely new, premium Triple Play offer, providing a revolutionary TV viewing experience. The new user interface was developed by NDS based on their award winning design Snowflake software and was premiered worldwide on the ZON platform. The new interface has several functions that set it apart from other systems, amongst which advanced management of recordings, cross searching and intelligent searching, access to the best of the Internet through the TV, recommendations based on preferences and customization of additional services, amongst others. The launch of the new IRIS TV user interface together with the upgrades made to the existing user interface is helping stimulate take-up of new video functionalities such as VoD. In 1Q11, the number of videos rented through the ZON video-club including subscription VoD increased by 160% and VoD revenues increased to almost 0.8% of total Triple Play revenues in the quarter. The proportion of customers receiving digital services continues to grow and now stands at 85% compared with 76% at the end of 1Q10 and the number of next generation ZON HD Boxes installed at the end of 1Q11 stood at 910 thousand. The pace of net growth in ZON boxes installed declined in the quarter to 25.6 thousand from 72.8 thousand in 3Q10 and 69.1 thousand in 4Q10, reflecting the already very high penetration of the digital subscriber base. However weakness was felt in the penetration of premium channel services, which fell to 44.1% at the end of 1Q11, a decline which is likely related with the challenging economic environment in Portugal and more cautious consumer behavior from certain segments of the customer base. Basic subscribers registered a reduction of 17.1 thousand in 1Q11, to 1,554.4 thousand compared with 1,588.4 thousand at the end of 1Q10, a decline which affected mainly Single Play cable and DTH customers with lower than average ARPU. The decline was felt primarily in January and less in February, with a gradual improvement in trend being felt as the quarter progressed. The headline price increase implemented in January on top of the VAT increase from 21% to 23% explains much of the negative impact in January and February. Sequential recovery in ARPU ARPU posted an increase of 1.7% compared with 1Q10 and a sequential recovery of 2% in 1Q11 to 35.8 euros, compared with 35.1 euros in 4Q10, which had been affected by aggressive promotional activity. These promotional campaigns were withdrawn towards the end of 4Q10 albeit some spill over effect was still felt in the start of 1Q11. The ARPU recovery was also influenced by the aforementioned price adjustment made at the beginning of the year. Over 700 thousand Broadband customers with strong take-up of NGN services The number of Broadband subscribers continued to grow in 1Q11, posting net adds of 14.4 thousand to thousand, an increase of 10.9% compared with 1Q10, bringing the penetration in ZON s cable base to 61% compared with 54% at the end of 1Q10. The proportion of customers subscribing to top tier ZON Fibra offers continued to grow by a further 3.5 p.p to over 23%, reflecting sustained enthusiasm with the superior quality and features of ZON s NGN broadband offers. ZON s share of customers connected with NGN speeds, according to data published by ANACOM, stands at 74%, and repeated consumer surveys reflect that ZON is the operator to deliver the closest to maximum rated speeds. 3 1Q11 Earnings Announcement

5 This leading position in NGN services is possible due to ZON s focus on upgrading its entire cable footprint to Eurodocsis 3.0 and continued cell-splitting in order to ensure both very high bandwidth to all customers on its footprint and assure continuous quality and consistency of service. The major investments to upgrade the network have already been completed and from now on, cell-splitting will continue to be done on a more selective basis and driven by the success of customer take-up and usage patterns in particular geographies. Over 800 thousand Fixed Voice customers In 1Q11, ZON surpassed another milestone in terms of Fixed Voice customers reaching thousand subscribers, 68.2% of the cable base, having registered net adds of 29.9 thousand subscribers in the quarter. ZON S Fixed Voice offers are by far some of the most attractive in the market, given the cost of calls placed to fixed networks in Portugal and to 50 other international destinations in 4 continents, and the unlimited traffic incorporated in higher-end Triple Play bundles. ZON Mobile continues to grow The mobile subscriber base posted net growth of 6.8 thousand subscribers to thousand customers at the end of 1Q11, representing an increase of 42.5% compared with 1Q10. ZON s mobile offer is one of the most attractive mobile voice and data propositions in the Portuguese market and is recognized as an attractive complement for ZON Triple Play customers. End of accelerated investment cycle - forecast decline in quarterly CAPEX In 2010, ZON concluded a period of accelerated CAPEX dedicated to rolling out it its next generation HFC network with deployment of Eurodocsis 3.0 to almost all the cable footprint, ongoing cell-splitting and deployment of its own primary network, therefore replacing previously rented infrastructure from the incumbent with own equipment. ZON has therefore almost completed the necessary investment in an upgraded, GPON-ready, and independent infrastructure covering around 80% of first homes in Portugal and with more than enough capacity and scalability to accommodate the continuing broadband growth requirements of the foreseeable future. The level of quarterly investment in terminal equipment was almost halved to 15.1 million euros in 1Q11 due to the fact that ZON has already reached a relatively high level of penetration of Next Generation HD set top boxes in its customer base, the fact that the pace of RGU growth is also beginning to slowdown, and to the successful refurbishment of terminal equipment and its reinjection into the distribution chain, subsequently translating, as expected, into a need for lower customer related CAPEX. Audiovisuals and Cinemas The number of tickets sold in ZON s cinemas posted a significant decline of 18.4% in 1Q11 to million tickets and a sequential decline of 10% compared with 4Q10. This reduction is explained primarily by the fact that 2010 was an exceptionally strong year for the movies business due to the large number of blockbuster movies exhibited, particularly in 1Q10, a number of which in 3D format such as Avatar and Alice in Wonderland. In 1Q11, the quantity of box-office hits shown in movie theatres was significantly less. Stepping back to reflect on more longer-term trends, namely comparing with 2009, ticket sales in 1Q11 were actually 3.4% higher than in 1Q09 and total revenues were 8.1% higher, thus reinforcing the fact that 2010 was an extraordinary year in terms of movie content. Partially offsetting the decline in ticket sales in 1Q11, the average level of revenue generated per ticket sale increased 2.8% to 4.7 euros compared with 4.6 euros in 1Q10. Total cinema revenues fell by 13.1% yoy in 1Q11 to 13.6 million euros. 1Q11 Earnings Announcement 4

6 The material slowdown in ticket sales in 1Q11 was felt in the market as a whole, with ZON actually posting a better relative performance than the rest of the market, explained by its strong focus on innovation and the improvement of the quality of its cinema network which is now fully digitalized and already has 3D projection technology in 83 screens, more than 2 screens per multiplexer. In fact, the total number of spectators in the market went down by 21.3% in 1Q11, according to ICA (Portuguese Institute For Cinema and Audiovisuals) and total market gross revenues went down by 20.2%. This trend is in line with other international movie markets namely the USA, which according to public data presented a decline in gross box office revenues of around 20% year-to-date. The most successful films of 1Q11 were The Tourist, The King s Speech and Black Swan. The Audiovisuals business posted an improvement in revenues of 9.8% to 17.1 million euros in 1Q11, which was explained primarily by the consolidation in 2Q10 of 50% of Dreamia. ZON s audiovisuals unit is the leading distributor of movies for cinema exhibition, VoD viewing and sale of DVD content in Portugal. Of the top 10 films shown in cinemas in 1Q11, ZON Lusomundo distributed 6 of them, the most successful films being The King s Speech, No Strings Attached, Rango, Tangled, Little Fockers and True Grit. 5 1Q11 Earnings Announcement

7 3. CONSOLIDATED INCOME STATEMENT Table 3. Profit and Loss Statement (Millions of Euros) 1Q10 1Q11 1Q11 / 1Q10 Operating Revenues % Pay TV, Broadband and Voice % Audiovisuals % Cinema (13.1%) Others and Eliminations (10.4) (12.1) 16.6% Operating Costs Excluding D&A (4.0%) W&S % Direct Costs (0.8%) Commercial Costs (1) (8.9%) Other Operating Costs (8.3%) EBITDA (2) % EBITDA Margin 34.3% 37.1% 2.8pp Depreciation and Amortization % Income From Operations (3) % Other Expenses / (Income) 0.0 (0.3) n.a. Operating Profit (EBIT) (4) % Financial Expenses (Income) % Income Before Income Taxes % Income Taxes (2.4) (3.6) 48.8% Income From Continued Operations % o.w. Attributable to Minority Shareholders (0.4) (0.2) (46.7%) Net Income % (1) Commercial costs include commissions, marketing and publicity expenses and costs of equipment sold; (2) EBITDA = Income From Operations + Depreciation and Amortization; (3) Income From Operations = Income Before Financials and Income Taxes + work force reduction programme costs + impairment of goodwill + Losses/Gains on disposal of fixed assets + Other costs/income. (4) EBIT = Income Before Financials and Income Taxes 3.1 Operating Revenues Operating Revenues grew by 0.3% in 1Q11 to million euros compared with 1Q10 representing a clear slowdown in comparison with previous quarters, due to the negative performance of the smaller, less core business units which together had a decline of 11% yoy. Still, the core Pay TV, Broadband and Voice unit grew by 1.5% to million euros, helped by the ARPU recovery which more than compensated the lower subscriber base. 1Q11 Earnings Announcement 6

8 Core Triple Play revenues posted a slowdown due to the lower basic subscriber base in the quarter, albeit this decline was more than offset by the increase in ARPU driven by continued growth in Triple Play penetration, the price increase implemented at the start of 2011 and the less aggressive promotional environment. As regards the Cinema business, as mentioned before in this report, the number of box office hits premiered in 1Q11 was significantly less than in 1Q10, however 2010 was an exceptionally good year for movie content in general. The level of ticket sales and revenues from the cinema business is actually 3.4% and 8.1% higher respectively than in 1Q09, further highlighting the fact that 2010 was an extraordinarily good year in what is a relatively mature sector. Revenues from the Audiovisuals business grew by 9.8% yoy to 17.1 million euros, an increase explained primarily by the proportionate consolidation of the Dreamia joint venture (stake of 50%) which only happened as from 2Q EBITDA EBITDA grew more than proportionately to the increase in revenues, posting an increase of 8.5% in 1Q11 to 79.5 million euros with EBITDA margin increasing by 2.8 pp to 37.1% in 1Q11 and a strong sequential quarterly improvement of 4.0 pp compared with 4Q10. The growth in EBITDA was led by very good performance in terms of cost discipline, led by both a clear focus on cost control and a reduction in commercial and customer driven costs mostly due to the slower pace of RGU growth and the less aggressive promotional environment. EBITDA Margins (%) 34,3% 35,3% 35,9% 37,1% 33,2% 1Q10 2Q10 3Q10 4Q10 1Q Consolidated Operating Costs Wages and Salaries increased by 2.7% in 1Q11 compared with 1Q10 reflecting the marginal annual increase in lower and mid scale salaries that was implemented in 2010 and some headcount increase in new areas. Wages and Salaries were 5.4% lower than in 4Q10 due to the provision, in 4Q10, of bonuses to be paid in Q11 Earnings Announcement

9 Direct Costs in 1Q11 amounted to 61.1 million euros, marginally lower (0.8%) than in 1Q10, however posting a 4.3% sequential decline from 4Q10 as a result mostly of the lower level of costs relating to seasonally lower advertising revenues shared, less royalty charges related with the lower level of activity of the cinema business and comparatively lower costs related to DVD sales. Commercial Costs posted a significant sequential decline of 32% in 1Q11 in comparison with 4Q10 to 15.2 million euros, and a decline of 8.9% in comparison with 1Q10. The yoy reduction is a result of the lower level of commercial activity driving lower sales commissions related costs, also supported by a more efficient use of available sales channels, reducing the relative weight of more expensive door-todoor sales channels. Other Operating Costs posted a yoy decline of 8.3% in 1Q11 to 43.6 million euros and of 5.1% compared with the previous quarter. The yoy reduction was achieved through cost control of several General and Administrative areas. 3.4 Net Income Net Income increased by 9.3% to 10.2 million euros in 1Q11, explained primarily by the 8.5% increase in EBITDA explained before. Depreciation and Amortization recorded an increase of 4.7% in 1Q11 to 55.6 million euros, explained by the accelerated roll-out of terminal equipment and by the peak in network related CAPEX which occurred in This investment will flow through the P&L in coming years with relatively high levels of depreciation, thus affecting operating results even though CAPEX going forward will be recording significantly lower levels than the ones incurred in Net Financial Expenses in 1Q11 amounted to 10.3 million euros, compared with 8.1 million euros in 1Q10, an increase explained by the equity consolidation of the Angolan operation, ZAP as from March 2010 which in 1Q11 represented a negative contribution of 2.8 million euros and had a negligible impact in 1Q10. Net interest and other financial expenses recorded an increase of 2.3% to 7.5 million euros in comparison with 1Q10 led primarily by the higher interest rate environment and marginally higher level of net financial debt. Income Taxes amounted to 3.6 million euros in 1Q11 which represents an increase of 48.8% compared with 1Q10, albeit translating into a reduction in P&L tax rate to around 26%. ZON continues to receive tax benefits for development and investments in Next Generation Networks which had a smaller impact in 1Q11 than in 1Q10, and thus generating some discrepancies when comparing quarterly tax rates. 1Q11 Earnings Announcement 8

10 4. CAPEX AND CASH FLOW 4.1 CAPEX Table 4. CAPEX (Millions of Euros) 1Q10 1Q11 1Q11 / 1Q10 Pay TV, Broadband and Voice Infrastructure (6.0%) Terminal Equipment (45.9%) Other (8.4%) "Baseline" CAPEX (28.3%) Long Term Contracts (100.0%) Other Non-Recurrent Items % Total CAPEX (28.0%) CAPEX, as expected, is posting significant quarter on quarter reductions, reaching 38.8 million euros in 1Q11, compared with 53.9 million euros in 1Q10 and 78.5 million euros in 4Q10. Baseline CAPEX, a measure of the more recurrent levels of CAPEX declined by 28.3% yoy to 35.9 million euros led by the significant decline in customer related investment. As anticipated, once the pace of market growth started to subside, with penetration of HD boxes already at very significant levels and with the success of terminal equipment refurbishment processes, the additional need for investment in new terminal equipment would also begin to decline. In 1Q11, customer related investment fell to 15.1 million euros, almost half that of 1Q10 and 15% less than the previous quarter and this kind of CAPEX is set to remain at lower levels going forward. Total CAPEX (Millions of Euros) 78,5 53,9 56,3 59,4 33,3 3,8 14,9 17,8 50,1 41,5 41,6 45,2 38,8 2,9 35,9 1Q10 2Q10 3Q10 4Q10 1Q11 Baseline CAPEX Non-Recurrent CAPEX With the conclusion in 2010 of important non-recurrent projects, which made a structural change to how ZON manages its network infrastructure, the most relevant of which being ZON-IN (ZON invested to ensure network independence by deploying own fibre along the primary network and relocating hubs 9 1Q11 Earnings Announcement

11 onto own infrastructure) and the deployment of a new data centre, additional, non-recurrent investments are no longer significant representing just 2.9 million euros in 1Q11 and potentially decreasing further in the coming quarters. Table 5. Cash Flow (Millions of Euros) 1Q10 1Q11 1Q11 / 1Q10 EBITDA % CAPEX (53.9) (38.8) (28.0%) Baseline CAPEX (50.1) (35.9) (28.3%) Non-Recurrent CAPEX (3.8) (2.9) (22.7%) Non-Cash Items Included in EBITDA - CAPEX and Change in Working Capital (1) (18.1) (35.0) n.a. Operating Cash Flow After Investment n.a. Long Term Contracts (39.8) (14.2) (64.4%) Net Interest Paid and Other Financial Charges (2.3) 1.9 (181.7%) Income Taxes Paid (0.3) (0.7) 108.5% Disposals (0.0%) Other Cash Movements 0.4 (0.8) n.a. Free Cash-Flow (34.0) (1.4) (96.0%) (1) This caption includes non-cash provisions included in EBITDA and non-cash CAPEX related to the upfront capitalization of long term contracts. 4.2 Operating Cash Flow Operating Cash Flow in 1Q11 posted an improvement to 5.7 million euros supported by the 8.5% growth in EBITDA and the significant reduction in CAPEX, both of which discussed earlier in this report, thus generating significant growth in EBITDA - CAPEX to 40.7 million euros compared with 19.5 million euros in 1Q10 and (5.2) euros in 4Q10 due to the high level of non-recurrent CAPEX of the last quarter. EBITDA - Total CAPEX (Millions of Euros) (4.7) (5.2) 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 1Q11 Earnings Announcement 10

12 Operating Cash Flow was negatively impacted by the seasonally higher level of working capital mostly on the back of supplier payments that had been carried through from the end of 4Q10, which were particularly significant due to the high level of CAPEX incurred in 4Q Free Cash Flow Total FCF in 1Q11 was just marginally negative by 1.4 million euros and represented a significant improvement on the negative 34 million euros recorded in 1Q10. Main additional items affected total FCF were cash payments for long term contracts of 14.2 million euros and the receipt of the final payment due from the sale in 2009 of the stake in Lisboa TV representing a cash inflow of 6.7 million euros. Again, if it were not for the strong negative impact of the seasonal working capital, Free Cash Flow would already have been largely positive in 1Q Q11 Earnings Announcement

13 5. CONSOLIDATED BALANCE SHEET Table 6. Balance Sheet (Millions of Euros) Q11 Current Assets Cash and Equivalents Accounts Receivable, Net Inventories, Net Taxes Receivable Prepaid Expenses and Other Current Assets Non-current Assets 1, ,096.4 Investments in Group Companies Intangible Assets, Net Fixed Assets, Net Deferred Taxes Other Non-current Assets Total Assets 1, ,796.4 Current Liabilities Short Term Debt Accounts Payable Accrued Expenses Deferred Income Taxes Payable Current Provisions and Other Liabilities Non-current Liabilities 1, Medium and Long Term Debt Non-current Provisions and Other Liabilities Total Liabilities 1, ,535.7 Equity Before Minority Interests Share Capital Own Shares (0.0) (0.0) Reserves, Retained Earnings and Other Net Income Minority Interests Total Shareholders' Equity Total Liabilities and Shareholders' Equity 1, , Q11 Earnings Announcement 12

14 5.1 Capital Structure At the end of March 2011, Net Financial Debt stood at million euros, an increase of 0.3% in comparison with the end of FY10. ZON s gross bank debt is represented primarily by commercial paper lines, by the loan from the European Investment Bank described in previous announcements and by bond issues secured in 2009 and Facilities are all negotiated at floating interest rates. To protect against future interest rate fluctuations, ZON has negotiated interest rate hedging operations of million euros (approximately 80% of total Net Financial Debt). The hedging operations are booked at fair value on the Balance Sheet. With these funds in place, ZON today has a very solid debt position, under very good financial terms. Due to the refinancing of a 150 million euros commercial paper line until 2016, which took place at the end of 1Q11, the average maturity of ZON s financial debt had increased to 2.89 years. The all-in average cost of ZON s Net Financial Debt was 3.7%. Net Financial Gearing reduced to 71.1% compared with 71.9% at the end of 2010, and Net Financial Debt / EBITDA (last 4 quarters) stands at 2.1x, well below the average of ZON s peer group of cable companies. Total Net Debt of million euros also includes commitments with Long Term contracts recorded as liabilities on the Balance Sheet, of which the most relevant are long-term telecom, transponder and content contracts. Table 7. Net Financial Debt (Millions of Euros) Q11 1Q11 / 2010 Short Term n.a. Bank and Other Loans n.a. Financial Leases % Medium and Long Term (3.6%) Bank Loans (3.5%) Financial Leases (9.8%) Total Debt , % Cash, Short Term Investments and Intercompany Loans % Net Financial Debt % Net Financial Gearing (1) 71.9% 71.1% (0.8pp) Net Financial Debt / EBITDA 2.1x 2.1x n.a. (1) Net Financial Gearing = Net Financial Debt / (Net Financial Debt + Total Shareholders' Equity). 13 1Q11 Earnings Announcement

15 6. INTERNATIONAL GROWTH ANGOLA ZAP, ZON s Pay TV joint venture in Angola continues to develop well, with strong customer take-up to over 60 thousand active customers by the end of 1Q11. Enthusiasm with ZAP s offer remains high, with the majority of customers subscribing to the higher-tier pay TV offers sold at 60 USD per month including premium sports and movies. ZAP s offer in Angola benefits from the exclusive distribution of the Portuguese Football League (Liga ZON Sagres), and other key Portuguese sports competitions, and is also proving very attractive in other areas of content with a clear predominance of Portuguese language channels. During the quarter, ZAP further increased its reach being distributed by the cable providers in Angola and Mozambique. ZAP will be distributed potentially to an additional 20 thousand subscribers. 7. SUBSEQUENT EVENTS On 15 April, at the General Assembly, ZON s shareholders approved the Board s proposal to pay a 16 cent dividend representing a payout ratio of close to 140%. Payment of this dividend was made on 6 May Q11 Earnings Announcement 14

16 8. APPENDIX 8.1 APPENDIX I Table 8. Business Indicators ('000) 1Q10 2Q10 3Q10 4Q10 1Q11 Pay TV, Broadband and Voice Homes Passed 3, , , , ,206.9 Basic Subscribers (1) 1, , , , ,554.4 of which Fixed Broadband Fixed Voice Mobile (2) Cable Subscribers 1, , , , ,155.5 Triple Play Customers % Triple Play Cable Customers 45.6% 49.0% 51.9% 55.2% 57.6% Double Play Customers % Double Play Cable Customers 17.1% 16.0% 15.2% 14.2% 13.9% Single Play Customers % Single Play Cable Customers 37.3% 35.0% 32.9% 30.6% 28.5% DTH Subscribers Premium Sports and Movies Penetration (3) 48.5% 47.3% 45.6% 44.4% 44.1% RGUs (4) 2, , , , ,181.3 Cable RGUs per Subscriber (units) (5) Blended ARPU ( Euros ) Net Additions Triple Play Customers Basic Subscribers (6.4) (11.6) (3.8) (1.5) (17.1) Fixed Broadband Fixed Voice Mobile RGUs Cinema Revenue per Ticket (Euros) Tickets Sold 2, , , , ,016.5 Screens (units) (1) These figures are related to the total number of Pay TV basic customers, including the cable and satellite platforms. ZON Multimedia offers several basic services, based on different technologies, directed to different market segments (residential, real estate and corporate), with a distinct geographical scope (mainland Portugal and the Azores and Madeira islands) and with a variable number of channels. (2) Mobile subscribers include Mobile Voice and Mobile Broadband. (3) Includes Sports, Movies and other Premium channels with relevant scale and Subscription VoD services. (4) Total RGUs reported reflect the sum of Pay TV, Broadband, Fixed Voice and Mobile services. (5) Cable RGUs per Subscriber correspond to the sum of Cable Pay TV, Broadband and Voice Subscribers, divided by the number of Cable Pay TV Customers. 15 1Q11 Earnings Announcement

17 8.2 APPENDIX II Table 9. Profit and Loss Statement (Millions of Euros) 1Q10 2Q10 3Q10 4Q10 1Q11 Operating Revenues Pay TV, Broadband and Voice Audiovisuals Cinema Others and Eliminations (10.4) (12.3) (13.3) (11.9) (12.1) Operating Costs Excluding D&A W&S Direct Costs Commercial Costs (1) Other Operating Costs EBITDA (2) EBITDA Margin 34.3% 35.3% 35.9% 33.2% 37.1% Depreciation and Amortization Income From Operations (3) Other Expenses / (Income) (0.5) (0.3) Operating Profit (EBIT) (4) Financial Expenses (Income) Income Before Income Taxes Income Taxes (2.4) (1.5) (4.1) (1.4) (3.6) Income From Continued Operations o.w. Attributable to Minority Shareholders (0.4) (0.5) (0.4) (0.1) (0.2) Net Income Baseline CAPEX Total CAPEX Free Cash Flow (34.0) (8.7) 3.5 (7.0) (1.4) Net Financial Debt (1) Commercial costs include commissions, marketing and publicity expenses and costs of equipment sold; (2) EBITDA = Income From Operations + Depreciation and Amortization; (3) Income From Operations = Income Before Financials and Income Taxes + work force reduction programme costs + impairment of goodwill + Losses/Gains on disposal of fixed assets + Other costs/income; (4) EBIT = Income Before Financials and Income Taxes. 1Q11 Earnings Announcement 16

18 9. DISCLAIMER Except for historic information contained herein, this document contains certain forward-looking information and statements on [the results of operations or its economic and financial conditions] which are not guarantees of future performance. The Forward-looking statements herein included are subject to a number of factors, risks and uncertainties that could cause the assumptions and beliefs upon which the forward-looking statements were based to substantially differ from the expectations predicted herein. These factors, risks and uncertainties include, but are not limited to, the continuous and increasing demand of the company s services by its clients, the technological outcome, the effects of competition, the telecommunications sector conditions, the changes in regulation, and the economic conditions. The forward-looking information and statements are naturally based on management s current and reasonable expectations or beliefs only as of the date they were made. ZON Multimedia does not undertake any obligation to update any forward-looking information or statements included in this document or to provide reasons why actual results my differ from the plan, objectives, expectations, estimates and intentions expressed or implied in such forward-looking statements. This document is not an offer to sell or a solicitation of an offer to buy any securities. ZON Multimedia is exempt from filing periodic reports with the United States Securities and Exchange Commission ( SEC ) pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934, as amended. The SEC file number for ZON Multimedia s exemption is No Under this exemption, ZON Multimedia is required to post on its website English language translations, versions or summaries of certain information that it has made or is required to make public in Portugal, has filed or is required to file with the regulated market Eurolist by Euronext Lisbon or has distributed or is required to distribute to its security holders. 10. ENQUIRIES Chief Financial Officer: José Pedro Pereira da Costa Tel.: (+351) Analysts/Investors: Maria João Carrapato Tel.: (+351) / ir@zon.pt Press: Paulo Camacho / Irene Luís Tel.: (+351) / comunicacao.corporativa@zon.pt Conference call scheduled for 12h00 on 12 May 2011 Conference ID: Portugal Free Call: UK Standard International: +44 (0) USA Dial In: Encore Replay Access Number: # International Encore Dial In: +44 (0) Q11 Earnings Announcement