Ctt - Correios De Portugal Sa · EURONEXT:CTT
Ctt - Correios De Portugal Sa — CTT - Correios de Portugal — Spring Investor Summit 2019
31 slides from Ctt - Correios De Portugal Sa's conference presentation, 2019
Slide 1: Spring Investor Summit
SUMMIT
Slide 2: Disclaimer
Disclaimer ctt DISCLAIMER This document has been preparedby CTT - Correios dePortugal, S.A. (the "Company" or"CTT") exclusively for use during the presentation of the full year 2018 results in the Spring Investor Summit (New York). As a consequence thereof, this document may notbe disclosed or publi
Slide 3: CTT company overview
vo company overview
Slide 4: CTT is a modern and dynamic postal services operator with a diversified portfolio
CTT is amodern and dynamic postal services operator with a diver: 69% o> ~ us EXPRESS & PARCELS MAIL BUSINESS RETAIL PORTUGAL SPAIN MOZAMBIQUE Transactional SOLUTIONS SERVICES ft sOURLINE so Editorial Printing & One-stop shop ‘ettexpresso >>> Corre finishing for services sosvwithCoreiod with Correio
Slide 5: Standing out with the capillarity of its networks, proximity and strong brand
..Standing out with the capillarity of its networks, proximity to the population and strong brand fe. c LAST-MILE LOGISTICS PLAYER... .. WITH A GROWING FINANCIAL SERVICES BUSINESSES SAVINGS & CURRENT CUSTOMER CREDITTO MY BOD RESSED Ae L_ay Eultests) INSURANCE ag secounrs “oanerasts CLIENTS 681mitems
Slide 6: CTT has been investing to capture the Express & Parcels flows in Portugal and Spain
CTThas been investing to capture the Express & Parcels flows in Portugal and Spain, markets with fh. great potential for e-commerce growth ctt / Portugal and Spain still lagging behind other / Development of new initiatives for the e-commerce countries in online retail ecosystem expansion E-commerce
Slide 7: Banco CTT robust growth and entering consumer credit through acquisition
Banco CTT has presented robust growth rates since its launch and is entering a market with strong fh. growth potential through an acquisition with significant synergies ctt ..and will expand inorganically into the consumer credit market to enhance growth Banco CTT is experiencing aremarkable organic
Slide 8: Recurring EBITDA guidance delivered in 2018
Recurring EBITDA guidance delivered in 2018, as aresult of an acceleration of the revenues growth ae and a stabilisation of the cost base ett Recurring revenues Recurring EBITDA growth trend guidance delivered 11.4% |W €904m @ (+0.4% in 2017) (€89.9m in 2017)
Slide 9: Mail performance underpinned by strong mix effect; savings placements recovered
Mail performance underpinned by strong mix effect; Savings & insurance placements recovered throughout the year, as prior treasury certificates issues started to mature yr Mail revenues breakdown € million; % change vs. prior year -3.6% 527.5 MAIL -_ Higher value mail -11.2% -6.0% \ > FY17 Mail Ordi
Slide 10: Positive evolution in the growth levers continued
The positive evolution in the growth levers continued; CTT is still in the early stages of along-term diversification process Wrarcets volumes cr Quarterly change vs. prior year = rT 442.39 9 — Portugal (excl. Transporta) 43% 9.9% 08.9% ft Spain 421.8% a 18.6% “12.9% *12.3% *11.3% 111.0% 4 ooo _—e o
Slide 11: Key financial indicators registered gradual improvement as 2018 progressed
Key financial indicators registered gradual improvement as 2018 progressed [key recurring? financials € million; % change vs. prior year 708.0 4 176.9 178.2 169.7 183.2 2 ee ee Revenues increased duringa 2 aan +2.3% 77> —* +1.8% large part of the period & -0.0% _—-—~ +1.7% -— FY18 2 3 154.2 154.8 15
Slide 12: Operational Transformation Plan launched in 2017
In 2017, CTT launched an ambitious Operational Transformation Plan to improve profitability levels, fh. ctt complying with all regulatory obligations and positioning the company for the next growth phase SA pans EBITDA J impact (by 2020) One-time costs ) Adjust HR policies and deepen the ES&S cost r
Slide 13: Operational Transformation Plan savings and capital gains exceeded 2018 objectives
The Operational Transformation Plan costs savings & capital gains exceeded the 2018 objectives fh. FY18 recurring operating costs savings Savings objective exceeded FY18 non-recurring revenues / capital gains Capital gains objective exceeded S FY18 non-recurring operating costs €15.0m Costs savings
Slide 14: CTT strategy: transform postal business and develop growth levers
CTT strategy: transform the postal business and continue to develop the Express & Parcels and Banco CTT growth levers, committed to business diversification ctt Preserve the value of the Mail Consolidate CTT’s positioning Develop an innovative retail suemomen tne EEL + : : : i Network capacity, focu
Slide 15: 2018 results
2 2018 results
Slide 16: Revenues softness in Financial Services more than offset by growth levers
The expected revenues softness in Financial Services was more than offset by solid progress in the fh. growth levers ctt Recurring revenues Revenues breakdown € million; % change vs. prior year; % of total € million; % change vs. prior year BancoCTT 42.3(-23.4%) 23.6 (+27.0%) Gs 714.3 Express @OO =m
Slide 17: Recurring operating costs increased due to growth in activity
The recurring operating costs increased due to growth in activity, declining in the staff category asa result of the operational transformation plan HR optimisation initiatives /Recurting operating costs € million; % change vs. prior year; % of total Other 27.1 (+2.6%) 617.6 (+1.6%) 257.6 (+6.6%) A2
Slide 18: Recurring EBITDA growth reflects sustained improvement throughout the year
The recurring EBITDA growth reflects an underlying trend of sustained improvement throughout the fh. year ctt /Recurting EBITDA EBITDA breakdown € million; % change vs. prior year; % of total € million; % change vs. prior year 17.5 (-29.9%) “8.4 16% Banco CTT -17.3(-15.8%) 90.4 Express (+0.6%) 8.8:
Slide 19: Mail: strong expansion of recurring EBITDA margin
Mail: strong expansion of the recurring EBITDA margin as a result of revenues growth coupled with fh. efficiency improvements ctt Recurring revenues € million; % change vs. prior year - Transactional €413.1m (+2.8%) — Advertising €24.2m -14.6%) — Editorial €14.7m (-5.0%) — Business Solutions €9.6m (
Slide 20: Express & Parcels: double-digit volumes and revenues growth
Express & Parcels: double-digit volumes and revenues growth, driven predominantly by e-commerce Recurring revenues € million; % change vs. prior year - Portugal & other? €94.0m (+14.9%) —Parcels €67.8m (+7.8%) —Cargo & Logistics? €15.9m (+53.6%) -Banking network €6.3m (+22.2%) - Other? €4.1m (+16.8%
Slide 21: Banco CTT: net interest margin expansion
Banco CTT: netinterest margin expansion spurred by continued growth in all customer volumes metrics Recurring revenues /rerating costs EBITDA ar credit growth € million; % change vs. prior year € million € million €172m —Netinterestincome €7.9m (+€4.5m) (€54min 4Q) -- 41.7 - Interest income €8.6m (+
Slide 22: Financial Services: savings placements recovery in 4Q18
Financial Services: savings placements registered a strong recovery in 4Q18, as prior treasury fh. certificates issues started to mature, but unable to offset 9 months of declines ctt /Reauring revenues operating costs EBITDA € million; % change vs. prior year €million €million [ © — 30.3-3a5 [ 30.2
Slide 23: Net profit impacted by restructuring costs
Net profit impacted by restructuring costs related to the Operational Transformation Plan Financial and operational performance € million, except when otherwise indicated Quarter Full year Financial indicators 4Q17 4Q18 A% 2017 2018 A% Recurring revenues 180.0 183.2 41.8% 697.9 708.0 41.4% Recurring
Slide 24: Operating cash flow impacted by non-recurring items
Operating cash flow generation impacted by non-recurring items related to the Operational Transformation Plan Jiash flow € million; change vs. prior year Adjusted (Excl. FS float & Banco CTT deposits and financial assets) 2018 Aa 31.8 -12.6 Operating cashflow, excl. Banco CTT 35.7 -27:5 Banco CTT op
Slide 25: 2019 objectives
3 2019 objectives
Slide 26: Mail objectives for 2019
Mail objectives for 2019 aw * & 1% - 2% positive mix effect, benefiting from ‘ international inbound and registered mail contribution & R = NY tw ( MAIL j we b “ OBJECTIVES #) €15m of recurring operating cost savings fromthe! r 4 Operational Transformation Plan €25m additional Capex related to and i
Slide 27: Express & Parcels objectives for 2019
Express & Parcels objectives for 2019 fe. c —s. \' ae — cm} ©} Sustain double-digit growth in volumes & revenues” — EXPRESS jug & Pp ARC E LS © Stablish new partnerships in order to accelerate the e-commerce \ ecosystem expansion, namely through the launching of | O B J E CT ] Vv E Ss a Portuguese e
Slide 28: Banco CTT objectives for 2019
BANCO CTT objectives for 2019 fe. c j g oS f ustomer base monetisation, © ng a wider retail banking product portfolio BANCO CTT OBJECTIVES Crédito integration to take advantage & FOR 2 '@) 1 9 e growing consumer credit market and capture
Slide 29: Financial Services objectives for 2019
Financial Services objectives for 2019 fe c a Recover the levels of savings —— placements, taking advantage of the © maturity of the certificates previously placed through CTT F | N A N C | A L Maturity of the Treasury Certificates (Poupanca Mais) — € billion; Estimate based on savings placed inn-5
Slide 30: 2019 outlook
2019 outlook fh. ctt a :x \ Increase in revenues, supported by organic & inorganic impacts inthe growth levels Racal ‘e Decline in addressed mail volumes expected to be in the -6% to- 8%, rang A 2 O 1 9 \ Growth in organic recurring EBITDA, reflecting contr ee: > OUTL O OK © improvements o” X 9 Tota
Slide 31: CTT - Correios de Portugal, S.A. Investor Relations
CTT - Correios de Portugal, S.A. Investor Relations Contacts: Phone: +351 210 471 087 E-mail: investors@ctt.pt SPRING iy t INVESTOR ie SUMMIT ctt
CTT - Correios de Portugal — Spring Investor Summit 2019 on 6ix