Investor Presentation • Jul 27, 2022
Investor Presentation
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27 July 2022
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 2022 results (1H22). 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.
Operational review
CU Committed to deliver
E&P in Portugal returned to CEP volume growth, nevertheless lower average revenue per item penalized revenue growth
Revenue growth in E&P in Spain driven by improved pricing, which more than compensates volume slowdown driven by market dynamics and changing commercial model
The pricing lever is enhancing sustainability of mail while benefiting from historically low volume1 decline of -2.5%
Solid and expanding balance sheet positions Banco CTT for further revenue growth and offers interest rate leverage
2030 Net-zero ambition announced at Capital Markets Day
1 Addressed mail excluding inbound mail
| $\epsilon$ million | Group CTT - Financials | Recurring EBIT evolution € million; % change vs. prior year |
||||||
|---|---|---|---|---|---|---|---|---|
| 2Q22 | 1H22 | $-35.0%$ | ||||||
| Revenues 1 | E211.7m $(+2.0\%)$ |
€446.4m $(+8.2\%)$ |
28.7 $-8.4$ |
$\overline{\phantom{1}}$ -1.7 | 18.6 | |||
| Recurring EBIT | E12.0m $(-12.2\%)$ |
€18.6m $(-35.0\%)$ |
1H21 Recurring EBIT |
$\triangle$ 1Q22 | $\triangle$ 2Q22 | 1H22 Recurring EBIT |
||
| Express & Parcels | Mail & other 2 | Financial Services & Retail | Banco CTT | |||||
| Revenues | Recurring EBIT | Revenues | Recurring EBIT | Revenues | Recurring EBIT | Revenues | Recurring EBIT | |
| 2Q22 | €61.3m $(-1.7%)$ |
€2.4m $(-18.1\%)$ |
€108.1m $(-0.8\%)$ |
€1.6m $(-66.6%)$ |
£12.3m $(+6.3\%)$ |
€6.0m $(+17.2%)$ |
€29.9m $(+22.0\%)$ |
E2.1m $(+109.6%)$ |
| 1H22 | €122.7m $(-2.5%)$ |
E3.7m $(-31.7%)$ |
€241.6m $(+11.0\%)$ |
$E-1.7m$ $(-118.1\%)$ |
E24.2m $(+2.2\%)$ |
E11.2m $(-0.6%)$ |
€57.9m $(+26.8%)$ |
€5.5m $(+128.9%)$ |
1 Excluding Specific items; 2 Including Central Structure.
Express & Parcels Portugal CEP Volumes % change vs. prior year
Express & Parcels Portugal EBITDA1 € million; % change vs. prior year
6
Historically low decline in volume, despite de minimis, which annualizes in 3Q22
1 Includes bulk and advertising mail; $2 - 52.4\%$ y.o.y
Notes: Additional conditions: i. Annual price change of domestic ordinary mail up to 20g cannot surpass £0.04; ii. Annual price increase cannot surpass 15%; iii. 3-year cumulative price increase cannot surpass 30%.
Retail products & services
11
$\epsilon$ million, except otherwise indicated
1 Net of impairments; 2 Consolidated contribution; 3 Excluding Specific items, annualized. 4 Average cost of customer deposits.
Financial review
CH Committed to deliver
| Quarter | ||
|---|---|---|
| 2Q21 | 2Q22 | y.o.y |
| 207.5 | 211.7 | 2.0% |
| 179.2 | 183.3 | 2.3% |
| 28.3 | 28.4 | 0.5% |
| 14.6 | 16.4 | 12.4% |
| 13.6 | 12.0 | $-12.2%$ |
| $-1.5$ | 0.6 | n.m. 3 |
| 15.1 | 11.3 | $-24.9%$ |
| $-2.7$ | $-2.5$ | 7.2% |
| 3.9 | $-0.3$ | $-108.4%$ |
| 8.5 | 9.2 | 7.9% |
| 21.4 | $-2.4$ | $-111.2%$ |
| Half | ||
|---|---|---|
| 1H21 | 1H22 | y.o.y |
| 412.8 | 446.4 | 8.2% |
| 355.5 | 396.0 | 11.4% |
| 57.3 | 50.4 | $-12.0%$ |
| 28.6 | 31.8 | 11.1% |
| 28.7 | 18.6 | $-35.0%$ |
| $-2.3$ | $-2.1$ | 10.6% |
| 31.0 | 20.7 | $-33.2%$ |
| $-5.4$ | $-4.7$ | 13.1% |
| 8.4 | 1.5 | $-82.2%$ |
| 17.2 | 14.5 | $-15.3%$ |
| 31.3 | 3.8 | $-87.7%$ |
Revenues1 $\epsilon$ million; % change vs. prior year
€ million; % change vs. prior year; % of total
$\epsilon$ million; % change vs. prior year
$\epsilon$ million; % change vs. prior year
1 Excluding Specific items; 2 Annualized 1H22 RoTE; 3 Including Central Structure
$\epsilon$ million; impact on cash flow vs. prior year
| $(+)$ Cash & cash equivalents | 847.3 |
|---|---|
| $(-)$ Net Financial Services & other payables $3$ | 198.4 |
| $(-)$ Banco CTT liabilities, net 3 | 510.4 |
| $(-)$ Other 4 | 33.6 |
| $(=)$ Adjusted cash | 104.9 |
| $(-)$ Financial debt | 77.2 |
| $(=)$ Net cash position | 27.8 |
| (-) Lease liabilities (IFRS 16) | 125.0 |
| Net financial debt 2 | 97.2 |
1 Impairments, provisions and IFRS 16 affecting EBITDA;2 Only financial debt presented in the table; it does not include net employee benefits of €169.8m as at 30 June 2022;3 The change in net liabilities of Financial third parties, depositors or other banking financial liabilities, net of the amounts invested in credit or investments in securities/banking financialassets, of entities of the CTT Group providing financial services, namel change inother 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
Deadline 18 Dec 22
$\epsilon$ million; change vs. prior year
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Contacts: Phone: +351 210 471 087 E-mail: [email protected]
ctt.pt
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