CTT-Correios de Portugal

Investor Presentation • Mar 19, 2024

We make our path fully committed to deliver

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 2023 results (FY23). 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 reqarding 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

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

E&P and Banco CTT are increasing its contribution for CTT growth

• Surpassed 100 million packages delivered
• Portugal
• Spain
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E&P became the biggest contributor for revenues and rec. EBIT in 4Q23

	Express & Parcels		Mail & Other2		Financial Services & Retail		Banco CTT
	4Q23	FY23	4Q23	FY23	4Q23	FY23	4Q23	FY23
Revenues	€ 11.1m € 111.1m € 111.1m € 111.1m € 111.1m € 111.1m € 111.1m € 111.1m € 111.1m € 111.1m € 111.1m € 111.1m € 11.1m € 11.1m € 11.1m € 11.1m € 11.1m € 11.1m € 11.1m € 11.1m € 1	€340.6m	€ 111.1m	€434.1m	€8.0m	€62.8m	€39.6m	€147.7m
	(+55.9%)	(+31.5%)	(-3.8%)	(-5.8%)	(-62.3%)	(+3.4%)	(+10.2%)	(+17.3%)
Recurring	€7.7m	€19.7m	€1.1m	€6.0m	€3.5m	€36.4m	€7.3m	€25.4m
EBIT1	(+103.6%)	(+131.5%)	(-82.0%)	(-44.1%)	(-68.9%)	(+18.0%)	(+49.6%)	(+76.1%)

Adoption of e-commerce driving record volumes in E&P Portugal

Steady and resilient growth throughout the year

E&P Spain growth accelerates in peak season

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High growth fueled by all client segments

While expanding, the Iberian e-commerce penetration maintains significant upside

E&P Portugal with a robust margin expansion

Operational leverage delivering sustainable high margins

Growth and operational leverage enabling margin expansion in E&P Spain

Swift capacity upgrades to protect quality at much higher volumes

Average revenue per item is increasing leading to flattish addressed mail revenues

Prices have increased 9.49% in February 2024

Resilient mail revenues as pricing and mix compensates softer volumes

Performance underlines the predictability of the current universal service contract

Additional cost measures to deal with inflation, against a backdrop of flattish revenues

	Headcount (#)	Cost (€m)	Annualised impact in EBIT (Em)	Payback (years)
FY23	116	7.9	4.1	1.7
FY24	~200	13.4	>6.0	~3.0-3.5
			Cost fully recognized in 2023

Key profitability drivers are volumes and pricing, now leading to revenue stability Staff reduction will deliver results in 2024

Less attractive rates and stringent cap impacted placements and profitability

Steady growth towards medium-term targets

+7-13k Per quarter: 700-750 50 ( +53-103k ) +45k 647 602 700 FY22 FY23 2025 target

Business volumes (loans and resources) € billion; EoP

Combined healthy growth in loans and deposits

Strategic focus on customer deposits

Consecutive growth is driving RoTE expansion

Cumulative; ²Recurring RoTE, cumulative and excluding specific items. Assuming a Tangible Equity of 15% of average RWAs RoTE would be 10.0% in FY23; ³Banco CTT consolidation perimeter, excluding specific items; ⁴Proforma due to Payshop transaction

Closing the Universo partnership reduces risk

Committed to the environment, while caring about our people and the community

Climate change mitigation and adaptation (E)

100% of green vehicles in the last mile up to 2023 (50% by 2025) Reduction of 55% gross carbon emissions until 2030 with aim of compensating the balance Reach 80% of recycled and/or reusable packaging by 2025, and 100% by 2030

Caring people and diversity experience (S)

Gender parity of top and mid-management by 2025

One of the top employers in Portugal by leveraging employees' centric culture as one of the key priorities

Ambitious promotion of our local community (S)

Allow CTT employees' active participation and an investment of 1% of EBIT, in volunteering and social impact programs that positively impact local communities by 2025

Leading ESG operating model (G)

Introduce specific incentives linked to ESG goals to 50% for top and midmanagement by 2025 and boost employee engagement

Linked with SGDS

Last mile fleet electrification picking up towards objectives

Reduction of carbon emissions related to transport activity (owned + subcontracted fleets)

In 2023, there was an increased proportion of women in the Board and, especially, in the 1st Line Directors (+1,2 p.p. YoY). This was slightly offset a higher rate of male hiring as 2nd Line directors. 17 initiatives, +400 participants, ~1,834 volunteering hours

Significant progress throughout 2023 regarding sustainability reporting

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¹For taxonomy purposes, opex only includes buildings renovation/maintenance, non-capital R&D, short term leases and other non-capital lease costs and other expenses directly related to the maintenance of tangible assets or investment properties.

²For taxonomy purposes, capex is required to include new vehicles lease contracts booked as right of use and remeasurements.

Continued growth of revenues and recurring EBIT coupled with healthy FCF

Key financial indicators
€ million; % change vs. prior year		Quarter			Full year
		4Q22	4Q23	y.o.y	FY22	FY23	y.o.y
Revenues 1		243.8	269.8	10.6%	906.6	985.2	8.7%
Operating costs - EBITDA <		201.4	233.5	15.9%	777.3	833.3	7.2%
EBITDA ²		42.5	36.3	-14.5%	129.3	151.9	17.5%
Depreciation & amortisation		16.7	16.8	0.6%	64.8	64.3	-0.7%
י Recurring EBIT י		25.8	19.5	-24.3%	64.5	87.6	35.7%
Specific items		12.6	-1.2	n.m.	8.4	9.8	16.6%
EBIT		13.1	20.7	57.8%	56.1	77.8	38.6%
Financial result		-2.3	-4.6	n.m.	-9.4	-16.2	n.m.
Tax		2.8	-8.9	n.m.	10.4	1.1	-89.4%
Net profit attributable to equity
holders		8.1	25.0	208.4%	36.4	60.5	66.2%
Free cash flow		35.5	29.8	-16.1%	67.4	94.4	40.0%

Excluding Specific items; Excluding Specific items, depreciation & amortisation

E&P revenues 1/3 of total in 2023 due to high growth

Continued focus on cost reduction attenuates the impact of stronger activity

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Strong growth of recurring EBIT in 2023 mainly due to E&P and Banco CTT

Recurring EBIT 1

€ million; % change vs. prior year

U

Consistent strong cash flow generation

	Consolidated
(+) Cash & cash equivalents	351.6
(-) Net Financial Services & Other payables 3	188.0
(-) Banco CTT liabilities, net >	-180.7
(-) Other 4	36.4
(=) Adjusted cash	308.0
(-) Financial debt	150.8
(=) Net cash position	157.2
(-) Lease liabilities (IFRS 16)	118.3
Net financial debt 2	-39.0

1 Impairments, provisions and IFRS 16 affecting EBITDA; ²Only financial debt presented in the table; it does not include net employee benefits of €124.1m as at 31 December 2023; 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

Prudent balance sheet enabling strategic and financial flexiblity

Outlook & Final remarks

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Continued growth in 2024, follows a beat of the twice upgraded 2023 guidance

Growing revenues and EBIT towards the CMD 2025 ambition

To support our growth, we will continue to invest in our business

Growing dividend combined with opportunistic SBB

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¹For detailed information on CTT's Financial Policy, including its shareholder's remuneration principles, please refer to CTT's investor relations website and to the announcement disclosed on 23 June 2022; ²Yield calculated taking as a reference the year end share price of each year;

³Based on individual accounts; ⁴Yield calculated taking as a reference the year end market cap of 2022 and 2023 respectively

Top performer in E&P in Iberia, with record growth driving market share gains and strong margin expansion

Approved price increase and mix enabling stable mail revenues

Expanding insurance distribution, while public debt placement remains below regular levels

Growth in Banco CTT clients, volumes and profitability towards the recently upgraded 2025 targets

Strong and steady cash flow, leading to improved financial flexibility

€20m share buyback ongoing and dividend of €0.17 to be proposed to the 2024 AGM

Strong 2023 results, beating the quidance upgraded twice throughout the year

On the back of strong growth in Iberian E&P, we expectrecurring EBIT in 2024 to be above € 88m assuming public debt placements of ~€3.0b

ctt

19 march 2024

We make our path fully committed to deliver FY23 results presentation

Investor Relations

Phone: +351210 471 087 E-mail: investors@ctt.pt

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