Earnings Release • Jul 27, 2023
Earnings Release
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This document has been prepared by CTT - Correios de Portugal, S.A. (the "Company" or "CTT") exclusively for use during the presentation of the first half 2023 results (1H23). 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.
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.
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 bevond 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 neither represent 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 the date of this presentation. Except as required by applicable law, CTT does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
1 Recurring EBIT excludes specific items;2 Including Central Structure
Average revenue per item
% change vs. prior year
Addressed mail revenues $\epsilon$ million; % change vs. prior year
% change vs. prior year, excluding impact of elections
Thousands, EoP
| Quarter | ||
|---|---|---|
| 2Q22 | 2Q23 | y.o.y |
| 211.7 | 238.6 | $+12.7%$ |
| 183.3 | 199.4 | $+8.8%$ |
| 28.4 | 39.2 | +38.2% |
| 16.4 | 16.6 | $+1.0%$ |
| 12.0 | 22.7 | +89.2% |
| 0.6 | 8.4 | $\rightarrow$ |
| 11.3 | 14.3 | $+26.1%$ |
| $-2.5$ | $-4.0$ | n.m. |
| $-0.3$ | 0.4 | n.m. |
| 9.2 | 9.9 | $+8.2%$ |
| $-2.4$ | 8.3 | n.m. |
| Half | ||
|---|---|---|
| 1H22 | 1H23 | y.o.y |
| 446.4 | 480.4 | $+7.6%$ |
| 396.0 | 400.3 | $+1.1%$ |
| 50.4 | 80.1 | $+58.7%$ |
| 31.8 | 31.7 | $-0.2%$ |
| 18.6 | 48.4 | > |
| $-2.1$ | 9.1 | n.m. |
| 20.7 | 39.3 | +89.6% |
| $-4.7$ | $-7.1$ | n.m. |
| 1.5 | 6.1 | $\rightarrow$ |
| 14.5 | 26.0 | $+79.0%$ |
| 3.8 | 47.9 | > |
1 Excluding Specific items; 2 Excluding Specific items, depreciation & amortization
€ million; % change vs. prior year
€ million; % change vs. prior year; % of total
$\epsilon$ million; % change vs. prior year
1 Excluding Specific items; 2 Including Central Structure
€ million; % change vs. prior year
$\epsilon$ million; impact on cash flow vs. prior year
| EBITDA | $80.1 (+29.6)$ | |
|---|---|---|
| Non-cash items 1 | $-0.9 -$ | $(+2.5)$ |
| Specific items impacting EBITDA | $-9.1-$ | $(-11.2)$ |
| Capex | $-11.3-$ | $(+0.7)$ |
| Change in working capital | $-3.2-$ | $(+15.0)$ |
| Operating cash flow | 55.6 | $(+36.7)$ |
| Tax | $0.6 -$ | $(+8.2)$ |
| Employee benefits | $-8.3 +$ | $(-0.8)$ |
| Free cash flow | 47.9 | $(+44.1)$ |
$\epsilon$ million
| Consolidated | |
|---|---|
| $(+)$ Cash & cash equivalents | 336.3 |
| $(-)$ Net Financial Services & Other payables $3$ | 208.7 |
| $(-)$ Banco CTT liabilities, net 3 | $-124.9$ |
| $(-)$ Other 4 | 30.0 |
| (=) Adjusted cash | 222.5 |
| $(-)$ Financial debt | 98.0 |
| $(=)$ Net cash position | 124.6 |
| (-) Lease liabilities (IFRS 16) | 117.0 |
| Net financial debt 2 | $-7.6$ |
1Impairments, provisions and IFRS 16 affecting EBITDA;2 Only financial debt presented in the table; it does not include net employee benefits of €149.1m as at 30 June 2023;3 The change in net liabilities of Financia 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 and 321 Crédito. 4 The 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 b
Strong growth and margin expansion of Express & Parcels in Iberia with a solid outlook
Price increase and steady focus on costs and efficiency compensating volume decline
Growing in insurance distribution, while savings are normalising following intense commercial activity
Banco CTT continues to deliver client, volume and revenue growth thus enhancing profitability
Very strong quarter with consolidated revenue and recurring EBIT growth across all businesses
Strong cash-flow generation improving financial flexibility
Launched $\epsilon$ 20m share buyback complementing the annual dividend ( $\epsilon$ 0.125 per share) paid in May
We reaffirm our recurring EBIT guidance of "at least €80m in 2023"
Phone: +351210 471087 E-mail: [email protected]
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