CTT-Correios de Portugal

Earnings Release • Nov 3, 2022

9 M 2 2

Results Presentation

Ctt Committed to deliver

3 November 2022

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 first nine months 2022 results (9M22). 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

City Committed to deliver

Key takeaways

Positive revenue trend across all business units in Financial Services & Retail and Banco CTT, in spite of a very challenqing economic context

3Q22 recurring EBIT of €20.1m (+82.7% y.o.y)

Strong operating cash flow generation in the quarter (€40.0m vs. €13.5m in 3021) on the back of efficient working capital management, namely improved collections

Acceleration of CEP volumes growth in Portugal, growing 5.8% in the 3Q22, while positive average revenue per parcel dynamics results in revenue growth in Spain

Recordlevel demand of public debt certificant revenue growth in Financial Services & Retail, against a favorable interest rate environment

Volume growth across all Banco CTT seqments is resulting in revenue growth and healthy expansion of RoTE and will benefit from the repricing of short-term interest rates

Solid operational and financial performance in 3Q22, as anticipated

€ million	Group CTT - Financials					Recurring EBIT evolution € million; % change vs. prior year
		3Q22		9 M 22			(-2.4%)
Revenues		€216.4m (+8.1%)		€662.8m (+8.1%)	39.7 -8.4		9.1	38.8
	Recurring EBIT	€20.1m (+82.7%)		€38.8m (-2.4%)	9M21 Recurring EBIT	△ 1Q22	△ 2Q22 △ 3Q22	9M22 Recurring EBIT
Express & Parcels		Mail & Other 2		Financial Services & Retail		Banco Cill
	Revenues	Recurring EBIT	Revenues	Recurring EBIT	Revenues	Recurring EBIT	Revenues	Recurring EBIT
3Q22	€65.1m (+7.6%)	€1.1m (-35.2%)	€103.9m (+2.5%)	€6.6m (>>)	€15.3m (+29.1%)	€8.4m (+43.8%)	€32.1m (+21.5%)	€4.1m (+21.8%)
9M22	€187.8m (+0.8%)	€4.8m (-32.5%)	€345.5m (+8.3%)	€4.8m (-50.8%)	€39.5m (+11.2%)	€19.6m (+14.6%)	€90.0m (+24.9%)	€9.6m (+66.5%)

1 Excluding Specific items; 2 Including Central Structure.

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EXPRESS & PARCELS

E&P Spain: Favorable evolution of average revenue per item driving profitability

Stable trends in addressed mail volumes while inbound continues under pressure

Requlated price increase over 59% of revenues, while competitive segment shows volume and revenue growth

Revenue growth driven by positive performance in public debt placements, which has encouraging outlook

Financial Services

· In 3Q22, public debt placements grew 40.5% y.o.y due to growth in demand of floating rate public debt products

Retail products & services

• Retail revenues growing in 3Q22 on the back of new products, renewed commercial dynamics and less restrictions on physical retail from the pandemic, when compared with 3Q21

Banco CTT revenue growth and RoTE expansion driven by growth in volumes and will benefit from interest rate outlook

Banco CTT - Book volumes evolution

€ million, except otherwise indicated

1 Net of impairments; 2 Consolidated contribution; 3 Excluding Specificitems, annualized. 4 Average cost of customer deposits.

Banco CTT - Key ratios

Main drivers of CTT's carbon footprint are being tackled

CTT carbon footprint per source % of total tCO2 2021

Key messages

• Main emission sources to be tackled are:
  • o own fleet (26%)
  • o subcontracted road (46%)
• Electricity and ● heating/cooling (Scope 2): maintain acquisition of green energy + production of green energy (photovoltaic panels )

ESG Framework: to create long-term value (2025-2030)

Environmental (E)

Net zero by 2030 with 100% of green vehicles in the last mile, and 50% of green vehicles by 2025

Reach 80% of recycled and/or reusable packaging by 2025, and 100% by 2030

Caring for 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

Highlights 2022

• V Five 100% electric hubs
• ✔ +90% EV 1 and +64% km travelled (base year: 2021)
• ✓ 60% Mail and E&P products incorporate recycled material
• ✓ CTT, in partnership with EDP, launched ~40 solar energy communities in Portugal
• ✔ Certified as a Family-Responsible company
• √ €0.6m invested in social initiatives (0.9% of EBIT)
• ✔ 6 one-off volunteering actions and 1 continuity program, with 205 volunteers (~580 hours)
• ✓ New Code of Conduct
• ✔ Awarded the CSR Coups de Coeur 2022 by PostEurop (Environmental category), with the To-Be-Green project to reuse plastic waste in the production of new products

Financial review

Revenue and EBIT growth, coupled with FCF generation

Key financial indicators € million; % change vs. prior year		Quarter
	3Q21	3Q22	y.o.y
Revenues 1	200.1	216.4	8.1%
Operating costs - EBITDA <	174.5	180.0	3.1%
EBITDA ²	25.6	36.4	42.1%
Depreciation & amortization	14.6	16.3	11.4%
Recurring EBIT +	11.0	20.1	82.7%
Specific items	-3.5	-2.2	36.8%
EBIT	14.5	22.3	54.1%
Financial result	-2.7	-2.5	8.7%
Tax	2.6	6.1	135.9%
Net profit attributable to equity holders	9.1	13.8	50.8%
Free cash flow	8.1	23.1	244.7%

	9-months
9M21	9M22	y.o.y
612.9	662.8	8.1%
530.0	576.0	8.7%
82.9	86.8	4.7%
43.2	48.1	11.2%
39.7	38.8	-2.4%
-5.8	-4.3	26.3%
45.5	43.0	-5.4%
-8.1	-7.1	11.6%
11.0	7.6	-30.7%
26.3	28.3	7.6%
39.4	31.9	-19.1%

1 Excluding Specific items; 2 Excluding Specific items, depreciation & amortization

Quarterly revenue growth across all business units

Revenues 1 breakdown

€ million; % change vs. prior year; % of total

Further initiatives to be implemented in cost structure

Operating costs 1

€ million; % change vs. prior year

Operating costs (Rec. EBIT) 2 breakdown

€ million; % change vs. prior year; % of total

In 3Q22:

• · E&P costs grew by E.J.m mainty due to esternal services (+E.2.4m), impacted by the growth in activity in the quarter, and to anincrease of C.1.1 of D&A as a result of the investment being made in capacity expansion and automation
• · Mail & Other costs decreased €3.8m primarily impacted by facilities optimization, as previously highlighted
• · Banco CTT costs increased €4.9m mainly as a result of impairment & provisions growth (+3.1m) from the consumer credit book

Significant EBIT growth in the quarter

Recurring EBIT 1

€ million; % change vs. prior year

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Strong cash flow generation in 3Q22

9M22 Cash flow

€ million; impact on cash flow vs. prior year

30 September 2022 Net financial debt 2 € million

(+) Cash & cash equivalents	309.8
(-) Net Financial Services & Other payables 3	259.8
(-) Banco CTT liabilities, net 3	-103.0
(-) Other 4	34.2
(=) Adjusted cash	118.9
(-) Financial debt	70.1
(=) Net cash position	48.8
(-) Lease liabilities (IFRS 16)	111.9
Net financial debt 2	63.2

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Guidance considerations

The economic context remains volatile and challenging in both demand and inflation, as already flagged by CTT and other industry players

Nonetheless, CTT's 9M22 results confirm the anticipated recovery trend anchored on the measures already implemented

We remain committed to continue to undertake the necessary initiatives to deliver on the guidance, which naturally depends on economic conditions in Iberia

CTT

Correios de Portugal, S.A. Investor Relations

www.rail.com.com

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

ctt.pt