Ctt - Correios De Portugal Sa · EURONEXT:CTT
Ctt - Correios De Portugal Sa — CTT - Correios de Portugal — 9M21 Earnings Presentation
30 slides from Ctt - Correios De Portugal Sa's earnings presentation, Nov 4, 2021
Slide 1: 9M21 Results Presentation
9M21 Results Presentation Committed to deliver 4 November 2021
Slide 2: Disclaimer
2 Disclaimer DISCLAIMER FORWARD-LOOKING STATEMENTS This document has been prepared by CTT – Correios de Portugal, S.A. (the “Company” or “CTT”) exclusively for This presentation contains forward-looking statements. All the statements herein which are not historical facts, use during the presentation
Slide 3: Operational review
Operational review Committed to deliver
Slide 4: 3Q21 earnings show resilient growth against inbound mail headwinds
KEY TAKEAWAYS 4 3Q21 earnings show resilient growth against inbound mail headwinds Quarterly growth in revenues (+8.1%), underpinned by Express & Parcels and Banco CTT was achieved notwithstanding a deterioration observed in Mail due to lower inbound Inbound mail revenues penalized by the end of de
Slide 5: Resilient revenue growth with room to further improve mail cost base
GROUP CTT 5 Resilient revenue growth with room to further improve mail cost base Group CTT - Financials 3Q20 ΔE&P ΔMail ΔFS&R ΔBanco 3Q21 € million CTT 200.1 Revenues +1.1 +5.1 3Q21 9M21 +14.1 -5.3 185.1 Revenues €200.1m €612.9m Recurring Recurring +2.1 EBIT 13.7 +0.7 11.0 €11.0m €39.7m +0.2 -5.6 EB
Slide 6: Healthy growth of CEP driven by market growth and share gains in Spanish operations
EXPRESS & PARCELS 6 Healthy growth of CEP driven by market growth and share gains in Spanish operations Express & Parcels Iberia 1 – Volumes Express & Parcels Iberia 1 – Revenues Express & Parcels Iberia 1 – Recurring EBIT million items; % change vs. prior year € million; % change vs. prior year € m
Slide 7: Continued rollout of complementary CEP solutions in the e-commerce value chain
EXPRESS & PARCELS 7 Continued rollout of complementary CEP solutions in the e-commerce value chain REMINDER Cargo • New operating model of last mile B2B cargo with specialized partner • Establishment of partnership for 2-man delivery/B2C cargo • Revision of pricing policies to improve profitability
Slide 8: Portugal CEP showing steady growth notwithstanding induced lower cargo activity
EXPRESS & PARCELS 8 Portugal CEP showing steady growth notwithstanding induced lower cargo activity Express & Parcels Portugal – CEP Volumes Express & Parcels Portugal - Revenues million items; % change vs. prior year € million; % change vs. prior year Cargo & other CEP +15.0% +8.7% +19.5% +33.6% 7.
Slide 9: Buoyant revenue growth in Spain driven by solid market share gains
EXPRESS & PARCELS 9 Buoyant revenue growth in Spain driven by solid market share gains Express & Parcels Spain – CEP Volumes Express & Parcels Spain - Revenues million items; % change vs. prior year € million; % change vs. prior year +79.8% +69.4% 9.7 27.7 +44.3% +36.7% 5.4 16.3 12.0 3.7 3Q19 3Q20 3
Slide 10: Market share gains driven by B2C client acquisition on top of a growing market
EXPRESS & PARCELS 10 Market share gains driven by B2C client acquisition on top of a growing market Express & Parcels Spain –CEP market (shipments) Express & Parcels Spain – CEP market share (shipments) # shipments % market share B2C B2B x% Total market CAGR x% B2B market CAGR + 𝟏𝟏�𝟑𝟑 B2C…
Slide 11: Spain: profitability driven by relentless focus on growth, efficiency and increased scale
EXPRESS & PARCELS 11 Spain: profitability driven by relentless focus on growth, efficiency and increased scale Operating costs (EBITDA) EBITDA 3Q19 -2.6 € million; % change vs. prior year € million 4Q19 -4.3 EBITDA margin 18.9% of revenues in 3Q21 1Q20 -3.3 (-5.3 p.p. y.o.y) -20.8% -15.7% 1.5% 2Q20
Slide 12: CTT Express ambition in Spain is to increase market share to high single digit
EXPRESS & PARCELS 12 CTT Express ambition in Spain is to increase market share to high single digit and grow EBIT margin to mid-to-high single digit Current Mid-term ambition Commercial goals Market share • Grow in B2C market with a more efficient delivery network, based in 2020 (revenue) Increase m
Slide 13: Revenue trends penalized by inbound mail decline driven by the end of VAT de minimis
MAIL & OTHER 13 Revenue trends penalized by inbound mail decline driven by the end of VAT de minimis Mail revenues € million; % change vs. prior year Delta (p.p.) 3Q20-3Q21 -5.0% • Renewed commercial effort 105.9 + 100.6 • NewSpring consolidation (detailed in slide 15) 10.0% 11.6% Value-added servic
Slide 14: De minimis negative impact was higher than anticipated and across the sector
MAIL & OTHER 14 De minimis negative impact was higher than anticipated and across the sector Non-EU inbound mail revenues EU tracked inbound mail volumes 1 € million; % change vs. prior year million items quarterly average volume -7.9% 10.1 -46.3% End of VAT exemption 9.3 -30.0% 5.0 3Q19 3Q20 3Q21 J
Slide 15: Having concluded the acquisition of NewSpring, focus is on cross selling
BUSINESS AND COMMERCE SERVICES – BUSINESS SOLUTIONS 15 Having concluded the acquisition of NewSpring, focus is on cross selling NewSpring individual financials 1 € million, change vs prior year Revenues EBITDA Recurring EBIT +13.1% +68.7% +88.8% CTT client base 18.4 3.3 2.8 • Expand market share in
Slide 16: Business solutions portfolio can be comprised in 6 pillars, each with different goals
BUSINESS AND COMMERCE SERVICES – BUSINESS SOLUTIONS 16 Business solutions portfolio can be comprised in 6 pillars, each with different goals Business and Commerce services BPO Commerce services Other Mail & Doc. Management Support services Advertising Commerce services Transactional management verti
Slide 17: Against a backdrop of quick decline in inbound mail revenues, CTT remains focused on costs
MAIL & OTHER - COST EFFICIENCY 17 Against a backdrop of quick decline in inbound mail revenues, CTT remains focused on costs Operating costs – Recurring EBIT (excluding Banco CTT Segment) 1 Operating costs grew above € million; % change vs. prior year revenues in 3Q21 for two motives: y.o.y operatin
Slide 18: Optimization of last mile and interoperability of express and mail networks
MAIL & OTHER - COST EFFICIENCY 18 Optimization of last mile and interoperability of express and mail networks offer room for improvement Last mile route optimization Increased parcels internalization in mail network… • Mail: 40% of routes have been optimized; the whole network to be fully Express vo
Slide 19: Seizing cross-border synergies
MAIL & OTHER - COST EFFICIENCY 19 Seizing cross-border synergies Operations & Innovation Iberian IT integration Procurement In operation: Benefits: • Optimization of Iberian linehaul network: Three Coordinated commercial strategy concentration hubs near the border; Benavente Portugal (Spain), Guar
Slide 20: Continued commercial proactivity
FINANCIAL SERVICES & RETAIL 20 Continued commercial proactivity Financial Services Public debt placements Financial Services revenues 1 € million; % change vs. prior year € million; % change vs. prior year • A 28.4% increase in public debt +28.4% -2.3% placements in 3Q21, almost compensated lower re
Slide 21: Consumer, auto lending and savings continue to drive growth and offer substantial potential
BANCO CTT 21 Consumer, auto lending and savings continue to drive growth and offer substantial potential Banco CTT – business volumes evolution € million except otherwise indicated Customer deposits & Off-Balance sheet savings Mortgage loans 1 Moratoria Cost: 0.02% Off-Balance sheet savings Yield: 0
Slide 22: Financial review
Financial review Committed to deliver
Slide 23: Revenue growth on the back of Express & Parcels growth will be translated into profitability
FINANCIALS 23 Revenue growth on the back of Express & Parcels growth will be translated into profitability Key financial indicators € million; % change vs. prior year Quarter 9-months 3Q20 3Q21 y.o.y 9M20 9M21 y.o.y Revenues 1 185.1 200.1 8.1% 534.3 612.9 14.7% Operating costs - EBITDA 2 155.4 174.5
Slide 24: Express & Parcels and Banco CTT growth foster strong revenues expansion
FINANCIALS 24 Express & Parcels and Banco CTT growth foster strong revenues expansion Revenues 1 Revenues 1 breakdown € million; % change vs. prior year € million; % change vs. prior year; % of total 9M21 +8.1% +5.1 200.1 12% Express & +14.1 -5.3 Parcels +1.1 6% 186.3 (+41.7%) Mail & other 2 185.1 5
Slide 25: Operating costs growing due to Express & Parcels growth
FINANCIALS 25 Operating costs growing due to Express & Parcels growth Operating costs Operating costs (Rec. EBIT) 1 breakdown € million; % change vs. prior year € million; % change vs. prior year; % of total +10.3% 9M21 Staff +4.4 189.1 14.6 259.3 (+3.4%) +12.0 +0.4 +0.9 8% External Supplies 5% & Se
Slide 26: Recurring EBIT declined in 3Q21 as a result of Mail & other decline
FINANCIALS 26 Recurring EBIT declined in 3Q21 as a result of Mail & other decline of €5.6m, not entirely compensated by the positive performance of the remaining business units Recurring EBIT 1 € million -19.6% +105.2% +2.1 -5.6 +5.3 39.7 13.7 +3.4 +0.9 +10.7 +0.7 11.0 Recurring EBIT breakdown +0.2
Slide 27: Adjusted cash increased by c.€2m in 9M21
FINANCIALS 27 Adjusted cash increased by c.€2m in 9M21 9M21 Cash flow 30 September 2021 Net financial debt 2 € million; impact on cash flow vs. prior year € million EBITDA 82.9 (+17.5) (+) Cash & cash equivalents 933.0 Non-cash items 1 -13.9 (-6.1) (-) Net Financial Services & other payables 3 198.3
Slide 28: New step towards a more sustainable concession contract to be signed before year-end
CONCESSION CONTRACT 28 New step towards a more sustainable concession contract to be signed before year-end Concession contract – key highlights • The criteria that define the minimum threshold for the density of the postal network remain under the • Government approved the Density jurisdiction of A
Slide 29: Outlook: ready to grab further growth
OUTLOOK 29 Outlook: ready to grab further growth Continued acceleration of the digital initiatives will further strengthen CTT’s competitive position Impact of de minimis on revenues was stronger than anticipated and remains a risk factor The COVID-19 remains an uncertainty Persistence on cost optim
Slide 30: CTT Correios de Portugal, S.A. Investor Relations
CTT Correios de Portugal, S.A. Investor Relations Contacts: Phone: +351 210 471 087 From a From a E-mail: investors@ctt.pt parcel to parcel to whatever whatever you want you dream ctt.pt of From a We parcel to connect whatever people and you wish companies for
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