CTT-Correios de Portugal

Investor Presentation • Dec 19, 2024

Partnership with DHL for e-commerce in Iberia

December 2024

Disclaimer

DISCLAIMER

This document has been prepared by CTT – Correios de Portugal, S.A. (the "Company" or "CTT") exclusively for use during this investor announcement and related presentation. As a consequence thereof, this document may not be disclosed or published, nor used by any other person or entity, for any other reason or purpose without the express and prior written consent of CTT. This document (i) may contain summarised information and be subject to amendments and supplements, and (ii) the information contained herein has not been verified, reviewed nor audited by any of the Company's advisors or auditors.

Except as required by applicable law, CTT does not undertake any obligation to publicly update or revise any of the information contained in this document. Consequently, the Company does not assume liability for this document if it is used for a purpose other than the above. No express or implied representation, warranty or undertaking is made as to, and no reliance shall be placed on, the accuracy, completeness or correctness of the information or the opinions or statements expressed herein. Neither the Company nor its subsidiaries, affiliates, directors, employees or advisors assume liability of any kind, whether for negligence or any other reason, for any damage or loss arising from any use of this document or its contents. Neither this document nor any part of it constitutes a contract, nor may it be used for incorporation into or construction of any contract or agreement.1

This document has an informative nature and does not constitute, nor must it be interpreted as, an offer to sell, issue, exchange or buy any financial instruments (namely any securities issued by CTT or by any of its subsidiaries or affiliates), nor a solicitation of any kind by CTT, its subsidiaries or affiliates. Distribution of this document in certain jurisdictions may be prohibited, and recipients into whose possession this document comes shall be solely responsible for informing themselves about, and observing any such restrictions. Moreover, the recipients of this document are invited and advised to consult the public information disclosed by CTT on its website (www.ctt.pt) as well as on the Portuguese Securities Market Commission's website (www.cmvm.pt). In particular, the contents of this presentation shall be read and understood in light of the financial information disclosed by CTT, through such means, which prevail in regard to any data presented in this document. By attending the meeting where this presentation is made and reading this document, you agree to be bound by the foregoing restrictions.

FORWARD-LOOKING STATEMENTS

This presentation contains forward-looking statements. All the statements herein which are not historical facts, including, but not limited to, statements expressing our current opinion or, as applicable, those of our directors regarding the financial performance, the business strategy, the management plans and objectives concerning future operations and investments are forward-looking statements. Statements that include the words "expects", "estimates", "foresees", "predicts", "intends", "plans", "believes", "anticipates", "will", "targets", "may", "would", "could", "continues" and similar statements of a future or forward-looking nature identify forward-looking statements.

All forward-looking statements included herein involve known and unknown risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results, performance or achievements to differ materially from those indicated in these statements. Any forward-looking statements in this document reflect our current views concerning future events and are subject to these and other risks, uncertainties and assumptions relating to the results of our operations, growth strategy and liquidity, and the wider environment (specifically, market developments, investment opportunities and regulatory conditions).

Although CTT believes that the assumptions beyond such forward-looking statements are reasonable when made, any third parties are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of CTT, what could cause the models, objectives, plans, estimates and / or projections to be materially reviewed and / or actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.

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All forward-looking statements included herein speak only as at the date of this presentation. Except as required by applicable law, CTT does not undertake any obligation to publicly update or revise any forwardlooking statements, whether as a result of new information, future events or otherwise.

Partnering with DHL in Iberia to fuel further growth in e-commerce logistics

TRANSACTION HIGHLIGHTS

Transformational milestone in becoming a full-fledged e-commerce logistics player

• JV with aiming to lead last mile in Iberia with more than €1.25Bi in revenues (2024E) and daily capacity of >1m shipments
• Access to additional cross border import and export flows originating from DHL's bet in consolidating the day defined products market
• Combination of Tier1 brand with competitive B2C operation will fuel penetration in large Iberian accounts
• Full suite intercontinental offer
• DHL B2B business in Iberia (~€300m/year, 75% of total sales) will enable a natural source of diversification as CTT is primarily exposed to B2C

Key financial terms

• Implicit valuations are aligned with Transaction Multiples and DCF of both companies
• CTT Expresso valued at €482m enterprise value, DHL Parcel Iberia at €106m and DHL Parcel Portugal at €12m
• Value levers for CTT and DHL, not included in the Enterprise Value, with a net amount of €15m, to be paid by CTT in favour of DHL
• Cash contribution from DHL, for Phase I transaction amounts to c.€69m¹ assuming debt free/cash free basis
• Post completion of this Transaction² , CTT will have a leverage ratio (measure by net debt to EBITDA) below 2.0x

3

4

2

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Significant value creation

• Strong value creation for shareholders through visible synergies (>€35m run-rate at EBIT level)
• The proposed transaction structure aligns incentives to execute the Business Plan and protects CTT from the execution risk

Next steps

• The transaction is subject to customary closing conditions, including applicable regulatory approvals
• The transaction is expected to close in 2H25
• Both Parties will grant each other options to increase, in the future, their mutual shareholdings in the respective companies up to a stake of 49%

¹Conditional to be adjusted at closing; ²Considering a successful completion of the acquisition of a 100% shareholding in Cacesa by CTT Expresso, accounting for Banco CTT under the equity method; excluding synergies

Complementary and synergic business models to underpin profitability

BUSINESS OVERVIEW

CTT Expresso	DHL Parcel Portugal	DHL Parcel Iberia (Spain)

Partnership structure to maximise focus on execution

TRANSACTION STRUCTURE

Structure

• Acquisition of 100% of DHL Parcel Portugal by CTT Expresso
• Acquisition of 25% indirect stake in DHL Parcel Iberia by CTT, through its sole shareholder Danzas
• Acquisition of 25% of CTT Expresso by DHL group

Operating model of the joint venture

• CTT Expresso
  • operates B2C and B2B in Portugal
  • operates B2C in Spain
• DHL Parcel Iberia operates B2B in Spain

Valuation

• DHL Parcel Portugal valued at an Enterprise Value of €12 million
• DHL Parcel Iberia valued at an Enterprise Value of €106 million
• CTT Expresso valued at an Enterprise Value of €482m
• Value levers for CTT and DHL, not included in the Enterprise Value, with a net amount of €15m, to be paid by CTT in favour of DHL
• Cash contribution from DHL, for Phase 1 transaction amounts to €69¹m assuming debt free/cash free²

Call Option scheme (exercise following close of FY27 accounts)

▪ CTT and DP International are granted options, upon the fulfilment of certain conditions³ related with operational performance, to increase their minority stakes up to 49%.

Creating the most comprehensive pick-up and delivery network in Iberia

STRATEGIC RATIONALE

Value levers
Cross border	✓ Leverage inbound flows combining DHL's cross border expertise with CTT's wide Iberian e-commerce last mile network ✓ Increase share in the outbound flows using DHL international network ✓ Expanding full suite intercontinental offer ✓ CTT's sales force to push highly competitive outbound offer
Iberian B2C	✓ Combination of Tier1 brand with competitive B2C operation will fuel penetration in large Iberian accounts ✓ Large national and international accounts with presence in Spain and Portugal as key targets in short/mid term
High Complementarity	✓ DHL Parcel B2B revenues (~€300m/year, 75% of total sales) highly complementary to CTT's revenues which are mainly B2C ✓ Intra Europe cross border import and export volumes from DHL also complement CTT share on Asian cross border

Iberian e-commerce is a sizeable market with high growth potential

STRATEGIC RATIONALE

Iberia is the 4th largest e-commerce market in Europe¹

… but e-commerce² penetration is still low, 2023 e-commerce share of total retail, %

Doubling the market opportunity with access to new cross-border flows

STRATEGIC RATIONALE

New cross border opportunity to be a key growth driver

STRATEGIC RATIONALE

Competitive last mile operation with Tier1 brand

STRATEGIC RATIONALE

Operating efficiency combined with global footprint

Iberian JV fully equipped to provide exceptional quality service

JV ASSETS1

Generate synergies and pursue Iberian e-commerce growth opportunities

KEY TAKEAWAYS

Diversification towards B2B business
Access to additional cross-border import and export flows
Opportunity to attract larger accounts in Spain due to stronger brand recognition
Full suite intercontinental offer
Relevant operational synergies
Significant cash inflow that will support further growth and shareholder remuneration
Option to further expand the partnership

We make our path fully committed to deliver

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Investor Relations Phone: +351 210 471 087 E-mail: investors@ctt.pt

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