1019 RESULTS PRESENTATION

CTT - Correios de Portugal, S.A. 29 April 2019

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 1^st quarter 2019 results. As a consequence thereof, this document may not be 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 supplement 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 revis 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 t 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 liabilit 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 co 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 subsi 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 responsibl about, and observing any such restrictions. Moreover, the recipients of this document are invited and advised to consult the public information disclosed by CTT on its website (www.ctt.pt) as well as on the Portuguese Secu 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 d document. By attending the meeting where this presentation is made and reading this document, you agree to be bound by the foregoing restrictions.

FORWARD-LOOKING STATEMENTS

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 dire 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", "pr "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 diff indicated in these statements. Any forward-looking statements in this document reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the growth strategy and liquidity, and the wider environment (specifically, market developments, investment opportunities and requlatory 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 u 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 di 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 the 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 st result of new information, future events or otherwise.

key highlights

Solid operating cash flow generation and resilient revenues in a quarter where expected special factors pressured strongly the volumes evolution

Resilient revenues in a quarter with tough volumes evolution, impacted by special factors

$-0.0\%$

(Revenues growth)

Significant progress made towards securing the OTP¹ FY19 operating costs savings objective

€12.4m (FY19 op. costs savings secured)

Operating costs increasing as a result of growth in activity in parcels & banking

Continued recovery in public debt placements boosts Financial Services profitability

(Public debt placements growth)

Completion of 321 Crédito acquisition expected in May, reaffirming Banco CTT's targets

(Banco CTT expected Net profit break-even) Strong operating cash flow generation, due to better working capital management

¹ Operational Transformation Plan.

Significant progress has been made towards securing the OTP FY19 operating costs savings objective; working on additional cost containment measures

Banco CTT key financial targets $^{\tt 1}$
Positive EBITDA contribution (on a pro-forma basis)	2019
Positive Net profit	2020
Additional capital until 2020 ²	$c.\epsilon$ 20m
ROE long-term aspiration	c.15%

Strong recovery of savings placements; positive mail price & mix effect were unable to offset the high volumes decline, which was impacted by seasonal & comparison factors

Savings & insurance products placements

FINANCIAL SERVICES

Continued solid expansion in key Banco CTT business drivers; E&P volumes were impacted by the loss of a large client in Spain

Key financials

Banco CTT and Financial Services revenues advanced strongly, offsetting the decline in Mail, pressured by expected special factors

■ Positive mix effect in Mail and effective 4.7% price increase in the period unable to compensate the addressed mail volumes decline of 11.3%, influenced by seasonal
(government mail, -3.3m objects, -1.5p.p. impact) and

Express & Parcels revenues remained resilient, growing 2.0%, despite the loss of a key account in Spain (-€1.4m, -0.5m objects impact)
Banco CTT revenues registered a solid advance, driven by net interest ( $+€1.0m$ ) and fees & commissions ( $+€0.7m$ ) income growth
Strong recovery in Financial Services, on the back of 90.5% growth in public debt placements

¹ Includes Central Structure.

The operating costs increased as a result of growth in activity in Express & Parcels and Banco CTT; additional cost containment measures are being introduced

Staff costs: HR optimisation initiatives (-€2.0m) and a cut in the telephone subscription fee benefit (-€0.9m) fully offset the impacts of the increase in headcount in growth areas and the salary revision agreed with the unions in 2018 ( $+ \epsilon$ 0.7m)

■ ES&S & other costs: savings realised in rents & buildings costs (-€1.3m) were unable to offset the increase in costs related to growth in activity in parcels and the adjustment to increased scale acquired throughout 2018 in Spain (+€1.7m), more customers driving higher transactionality in banking (+€0.2m), and the increase in mail (+€0.3m) & audit costs $(+\epsilon 0.3m)$ due to new regulatory standards and procedures ¹ Includes Central Structure.

The EBITDA evolution reflects the strong expansion in Financial Services and the challenging mail & parcels volumes developments in the quarter

The Balance sheet reflects the impacts of the adoption of IFRS 16 - an increase in both tangible assets & equity and financial debt, as guided

Balance sheet - 31 March 2019

€ million; % change vs. 31 December 2018

Solid operating cash flow generation, as a result of better working capital management, in what is traditionally a weak quarter due to seasonally high Capex payments

let financial cash (debt)

$\epsilon$ million

(+) Cash & cash equivalents	365
(-) Financial Services payables, net	111
(-) Banco CTT liabilities, net	93
(=) Own cash	161
(-) Financial debt (excl. leases)	35
(-) Leases liabilities (IFRS 16)	93
Net financial cash (debt)

business units

Seasonal and comparison factors, affecting volumes evolution, impacted negatively the profitability of Mail in the quarter

revenues¹

$\epsilon$ million; % change vs. prior year

Total	€123.3m $(-3.2%)$
– Central structure	€1.2m $(+8.1%)$
$-$ Retail & other	€5.4m $(-20.8%)$
– USO Parcels	€1.5m $(-10.6%)$
– Business Solutions	€2.8m $(+15.8%)$
- Editorial	€3.7m $(-5.9%)$
– Advertising	€5.6m $(-11.7%)$
- Transactional	€103.0m $(-1.9%)$

$\epsilon$ million

Exc. IFRS $16$ --- Inc. IFRS $16$

Exc. IFRS 16 --- Inc. IFRS 16 $-\bullet$ - Exc. IFRS 16 EBITDA Margin

$\mathbf{F} = \mathbf{N}$ Mail volumes by type (mitems)

Metric	Avg. mail prices	Addressed mail	Transactional	Advertising	Editorial	/ Unaddressed mail /
1Q19	N/D	164.2 $-8.2\%$ excl.	142.6	13.1	8.5	106.2
vs. 1Q18	$+4.7%$	special factors $-11.3%$	$-11.0%$	$-15.7%$	$-10.6%$	$+5.9%$

Express & Parcels revenues remained resilient, despite the loss of a large client representing >10% of the sales of Tourline in Spain

revenues

€ million; % change vs. prior year

Operating costs

otal	€36.7m $(+2.0%)$
Mozambique	€0.5m $(-1.1%)$
Spain	€13.3m $(-0.4%)$
- Other	€0.3m $(+9.8%)$
- Banking network	€1.6m $(+3.6%)$
- Cargo & Logistics	€3.9m $(+5.2%)$
-Parcels	€17.1m $(+3.0%)$
Portugal ¹	€22.9m $(+3.5%)$

$\Box$ Exc. IFRS 16 --- Inc. IFRS 16

Exc. IFRS 16 --- Inc. IFRS 16 $-\bullet -$ Exc. IFRS 16 EBITDA Margin

BE&P volumes by region (mitems)

Metric	Total	Portugal	------------------ Portugal (excl. Transporta)	Spain	Mozambique
1Q19	9.0	4.9	4.1	$-4.1$	0.01
vs. 1Q18	$+1.7%$	$+2.3%$	$+1.6%$	$+1.0%$	$-13.6%$
			-------------------

$\sim$

Mortgage & consumer credit growth and a new savings product launch drove a noticeable improvement in Banco CTT revenues and profitability

${\bf 1}$ Q19 revenues $^{\bf 1}$ Operating costs EBITDA € million; % change vs. prior year $\epsilon$ million $\epsilon$ million Mortgage credit growth vs. 4018³ $-9.9%$ €40.7m €2.5m (+€1.0m) - Net interest income 12.1 €2.7m (+€1.0m) - Interest income $- - - - 11.8$ 11.0 $\mathbf{C}$ $10.8 - F^{--}$ €0.2m (+€0.0m) - Interest expense Consumer credit arowth €1.6m (+€0.7m) - Fees & commissions income vs. 4018² $-2.8$ €9.7m - Consumer credit and insurance €0.5m $(+60.4m)$ $-3.2 -3.1$ $-3.4$ €1.1m (+ $€0.3m$ ) - Own products - Payshop & other €4.9m ( $-€0.3m$ ) Customer funds Total €9.0m (+ $€1.4$ m) 1Q18 1Q19 1Q18 1019 €1.0bn elected Banco CTT Balance Sheet indicators $\Box$ Exc. IFRS 16 --- Inc. IFRS 16 Exc. IFRS $16 - -$ Inc. IFRS $16$

Metric (non-consolidated)	Assets ( $\in$ million)	Cash & equivalents	Investments	Credit to clients ³	Deposits (€million)	Consolidated Equity $(\epsilon \text{ million})$ / CET 1 $(\%)$ ⁴
31-Mar-19	1,040.2	247.6	456.8	288.6	922.0	$85.4 / 23.0\%$
vs. 31-Dec-18	$+4.4%$	$-1.3%$	$+0.6%$	$+16.3%$	$+4.3%$	$-4.6\%$ / $-0.4$ p.p.

¹ Part of the payments services of the Financial Services business unit (billing and invoicing, Western Union transfers, integrated solutions and tolls) migrated to the Banco CTT business unit in 1Q19 (proforma figures p ² Consumer credit & credit cards sold in partnership with BNP Paribas Personal Finance (Cetelem). Amount outside CTT's Balance Sheet, representing the amount of credit placed in 1Q19, in partnership with BNP Paribas Pers ³Net of impairments. ⁴Fully implemented.

The continued recovery in public debt placements with high incremental margin coupled with robust cost control provided a strong boost to Financial Services profitability

Q19 revenues¹

$\epsilon$ million; % change vs. prior year

Total	€7.8m $(+31.1%)$
– Other	€0.2m $(-52.1\%)$
- Money orders	€1.4m $(-20.1%)$
- Payments	€0.2m $(-18.1\%)$
- Savings & Insurance	€ $6.1$ m (+65.2%)

$\epsilon$ FS volumes by type

Metric	Savings & insurance flows $(\epsilon$ bn)	Savings & insurance placements	Savings & insurance reimbursements	Money orders $(m$ ops)
1Q19	1.1	0.9	0.2	3.6
vs. 1Q18	$+44.7\%$	+78.3%	$-19.4\%$	$-16.1\%$

appendix

Changes to accounting policies and management reporting

IFRS16 adoption

The adoption of IFRS16 has changed the manner in which statutory accounts are presented with respect to operating costs related to fleet and buildings, which are no longer considered in External Supplies and Services costs and are accounted for in amortisations and interest expense. This change had an impact not only on the current reporting period (1Q19) but also on 1Q18, which was restated for comparison purposes.

Allocation of internal revenues to operating costs

The purpose of this amendment is to allow the evolution of the consolidated revenues to be seen as the sum of the performance of the external products that CTT offers, removing the effects of internal revenues with intragroup companies. As a result of this change, internal revenues are now deducted from the respective business segments operating costs.

Migration of the payments business to Banco CTT

Part of the payments services in the Financial Services business unit (billing and invoicing, Western Union transfers, integrated solutions and tolls) migrated to the Banco CTT business unit.

Allocation of the Central Structure costs by business unit

Until 2018, the Central Structure of the Company, along with Intragroup Eliminations, was reported together with Mail under the Mail & Other business unit. The Central Structure reflects a structure of costs whose revenues are of a negligible value, leaving a net cost deficit in what regards central / corporate costs, which have been traditionally split between two business areas: Mail (99.7%) and Financial Services (0.3%). Considering the immateriality of the value attributed to the Financial Services business unit, in view of the migration of the Payments from the Financial Services business unit to Banco CTT business unit, the Company simplified this allocation procedure by placing 100% of the allocation of the central structure under the Mail & Other business unit.

Elimination of recurring / reported terminology

Any non-recurring items are now recognised below EBIT under the caption "Specific items". The 1Q18 reporting was restated, for comparison purposes.

Income statement detail

The amounts related to "Gain/losses on disposal of assets" are now disclosed separately in the Income Statement.

Income statement

$\epsilon$ million	Reported	Reported with Banco CTT
				under equity method 1
	1Q18	1Q19	1Q18	1Q19
Revenues	176.9	176.9	173.7	172.3
Operating costs	145.4	148.9	138.1	141.7
EBITDA (incl. IFRS 16 impact)	31.5	28.0	35.6	30.6
of which, IFRS 16 impact:	8.8	6.9	8.6	6.8
EBITDA margin	17.8%	15.8%	20.5%	17.7%
Depreciations, amortisations, impairments & provisions	13.6	13.7	14.8	12.6
of which, IFRS 16 impact:	6.9	5.6	6.7	5.5
EBIT	17.9	14.2	20.9	18.0
Specific items	6.4	5.6	4.2	4.1
Financial income / (costs)	$-2.5$	$-2.4$	$-2.5$	$-2.4$
of which, IFRS 16 impact:	$-1.1$	$-1.0$	$-1.1$	$-1.0$
Associated companies - gains / (losses)	0.1	0.3	$-3.9$	$-3.9$
Earnings before taxes (EBT)	9.2	6.6	10.2	7.6
Income tax for the period	3.2	2.9	4.3	4.0
Non-controlling interests	0.0	0.0	0.0	0.0
Net profit attributable to equity holders	5.9	3.7	5.9	3.7

Balance sheet

$\epsilon$ million		CTT		With Banco CTT under equity method ¹
	31-Dec-18	31-Mar-19	31-Dec-18	31-Mar-19
Non-current assets	1,108.1	1,149.0	486.6	479.3
Current assets	746.3	683.8	456.9	399.7
Assets	1,854.5	1,832.8	943.5	879.0
Equity	135.9	139.5	135.9	139.5
Liabilities	1,718.6	1,693.3	807.6	739.6
Non-current liabilities	364.3	362.5	363.5	362.0
Current liabilities	1,354.3	1,330.8	444.1	377.6
Equity and Liabilities	1,854.5	1,832.8	943.5	879.0

Cash flow

$\Delta \sim 1$

$\epsilon$ million		Adjusted ¹
	1Q18	1Q19	$\triangle 19/18$
EBITDA excl. IFRS 16	22.7	21.0	$-1.7$
Specific items*	$-4.3$	$-5.6$	$-1.2$
Capex	$-5.0$	$-6.3$	$-1.4$
∆ Working capital	$-25.4$	$-0.8$	24.7
Operating cash flow	$-12.0$	8.4	20.3
Tax	$-0.5$	$-0.1$	0.4
Employee benefits	$-3.5$	$-3.4$	0.2
Free cash flow	$-16.0$	4.9	20.9
Debt (principal + interest)	$-0.1$	3.7	3.8
Net change in own cash	$-16.1$	8.6	24.7
$\Delta$ Liabilities related to Financial Services (net)	$-49.4$	$-84.5$	$-35.2$
$\Delta$ Liabilities related to Banco CTT (net)	$-66.3$	18.2	84.5
Net change in cash	$-131.7$	$-57.7$	74.1

*Specificitems affecting EBITDA.

Specific items

$\epsilon$ million			Specific items
	1Q18		1Q19
EBIT		17.9	14.2
Specific items affecting EBIT		6.4	5.6
Revenues		0.0	0.0	Indemnities related to the Operational Transformation
Staff costs		3.7	4.0	Plan
ES&S & other op. costs		0.6	1.6	€1.5m of strategic studies, of
Provisions		1.7		which €1.4m related to the Operational Transformation Plan
Impairments and D&A		0.3
EBIT including specific items		11.5	8.7

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