CTT-Correios de Portugal

Earnings Release • Jul 29, 2024

Disclaimer

DISCLAIMER

This document has been prepared by CTT – Correios de Portugal, S.A. (the "Company" or "CTT") exclusively for use during the presentation of the 1H24 results. 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 oblicly update or revise any of the information containedinthis document. Consequently, the Company does not assume liability for this documentif 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 of the information or the opinions or statements expressed herein. Neither the Company nor its subsidiaries, 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.

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 documentare 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-LOOKINGSTATEMENTS

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 that include the words "expects", "estimates", "foresees", "predicts", "intends", "plans", "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 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.

Forward-looking statements (in particular, the objectives, estimates and projections as well as the corresponding assumptions) do neitherrepresent a commitment regarding the models and plans to be implemented, nor are they guarantees of future performance, nor have they been reviewed by the auditors of CTT. You are cautioned not to place undue reliance on the forward-looking statements herein.

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

Operational review

ctt

ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﻮﺍﻗﻊ ﺍﻟﻤﻮﺍﻗﻊ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘﻮﻯ ﺍﻟﻤﺴﺘ

Strong execution in Express & Parcels driving revenue growth

Overview

Logistics

• Express and Parcels
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• Mail and Other
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Bank and Financial Services

• Financial Services
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• Bank
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Spanish volumes continue to show resilient very high growth

Express & Parcels

E&P on path for another record year

Record E&P recurring EBIT margin in 2Q24

59.0% 60.9%

Express & Parcels

5.5%

27.9%

36.7%

Growth in volumes is driving operational leverage

Mail price increases and mix are partially offsetting the fall in volumes

Mail & Other

Progression on cost cut programmes will support margins

Elections, inflation and lower FS activity drove expenses higher

Mail & Other

Sequentially, subscriptions are increasing

Financial Services

Improved client engagement by BCTT driving business resources

Bank

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Growth in business volumes driving topline growth even with lower NIM

Bank

EBIT and FCF penalised by the abnormally low debt placements

€ million; % change vs. prior year		Quarter			Semester
	2Q23	2Q24	y.o.y	1H23	1H24	y.o.y
Revenues1	238.6	260.9	+9.3%	480.4	524.3	+9.1%
Operating costs - EBITDA²	199.4	224.1	+12.4%	400.3	453.6	+13.3%
EBITDA²	39.2	36.7	-6.4%	80.1	70.8	-11.6%
Depreciation & amortisation	16.6	18.6	+12.2%	31.7	35.7	+12.7%
Recurring EBIT+	22.7	18.1	-20.1%	48.4	35.0	-27.6%
Specific items	8.4	0.6	-92.6%	9.1	2.6	-71.6%
EBIT	14.3	175	+22.3%	39.3	32.4	-17.4%
Financial result	-4.0	-4.1	-3.0%	-7.1	-8.2	-14.9%
Tax	0.4	0.7	+62.4%	6.1	4.1	-33.8%
Net profit attributable to equity holders	و.و	12.4	+24.9%	26.0	19.8	-23.9%
Free cash flow	8.3	6.7	-18.8%	47.9	10.6	-77.9%

E&P already accounts for 40% of consolidated revenues

Continued focus on cost reduction attenuates the impact of stronger activity

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EBIT generation to be more skewed to 2H24, as mentioned in our guidance

With normalised public debt, Recurring EBIT in Mail & Other would have been flattish

Free cash-flow to improve throughout 2024

	Consolidated
(+) Cash & cash equivalents	270.2
(-) Net Financial Services & Other payables 3	175.1
(-) Banco CTT liabilities, net >	-188.5
(-) Other 4	40.0
(=) Adjusted cash	243.6
(-) Financial debt	80.9
(=) Net cash position	162.7
(-) Lease liabilities (IFRS 16)	137.5
Net financial debt 2	-25.3

1 Impairments, provisions and IFRS 16 affecting EBITDA; ²Only financial debt presented in the table; it does not include net employee benefits of €126.8m as at 30 June 2024; ³The change in net liabilities of Financial Services and Banco CTT reflects the evolution of credit balances with third parties, depositors or other banking financial liabilities, net of the amounts invested in credit or investments in securities/banking financial assets, of entities of the CTT Group providing financial services, namely CTT financial services, Payshop, Banco CTT and 321 Crédito. ⁴The change in other cash items reflects the evolution of Banco CTT's sight deposits at Bank of Portugal, outstanding cheques/clearing of Banco CTT cheques, and impairment of sight and term deposits and bank applications

Outlook & Final remarks

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EBIT growth in 2024 penalised by debt placements taking longer to normalise, whilst E&P is outperforming

Growing like no one in Iberian E&P

Outlook

• Stepping up investment in E&P in Iberia to keep improving competitive position
  • Balance sheet leverage4 offers organic and inorganic growth optionality
    • Announced new SBB of € 25 m, equivalent to circa 4% of market cap

We make our path fully committed to deliver 1H24 results presentation

Investor Relations

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

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