CTT - Correios de Portugal SA · EURONEXT:CTT
CTT - Correios de Portugal SA — CTT - Correios de Portugal — H1 2021 Earnings Presentation
37 slides from CTT - Correios de Portugal SA's earnings presentation, Aug 5, 2021
Slide 1: 1H21 Results Presentation
4 ci Tse” Wiese? 12 Seth ui Gl “i [ig (co “x 1H21 ctt Results Presentation Committed to deliver 5 August 2021
Slide 2: Disclaimer
ect Disclaimer DISCLAIMER This documenthas been prepared by CTT ~ Correios de Portugal, S.A. (the "Company" or "CTT") exclusively for use during the presentation of the first half 2021 results. As a consequence thereof, this document may not be disclosed or published, nor used by any other person or
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Slide 4: Key takeaways: another transformational quarter
ft. CEE an2tnicuuicuts Key takeaways: another transformational quarter fa Solid revenue growth and improved profitability on the back of prior investments and turnaround initiatives implementedin 2019 and 2020 Investmentin digital transformation and e-commerce enabling ecosystem to drive continued g
Slide 5: Accelerating revenue growth, driven by Express & Parcels
ect Accelerating revenue growth, driven by Express & Parcels 1H21 HIGHLIGHTS Revenues € million; % change vs. prior year 2921 1H21 = 14.1% €207.5m €412.8m . +22.6% 418.2% 1.7% 0.3% 1Q20 ~ —~2920 —_ 3920 4Q20 1Q21 2Q21 -5.0% Express & Parcels Mail & other+ | Financial Services Reta Banco CTT 2Q21 +30
Slide 6: Revenue growth and cost control catalyzing EBIT expansion
ect 1H21 HIGHLIGHTS Revenue growth and cost control catalyzing EBIT expansion Recurring EBIT+ € million; % change vs. prior year 2921 1H21 €13.6m €28.7m >> >> +€17.3m 22.1 13.7 15.0 13.6 - i L_I 36 1920 ss 3Q20 4920 1921 2921 Express & Parcels Mail & other 2 — Banco CTT 2Q21 €2.9m > 1H21 €5.4m +268.
Slide 7: Express & Parcels Portugal: CTT is acting as the shaper for e-commerce growth
ft. CEE an2tnicuuicuts REMEMBRANCE 7” Express & Parcels Portugal: CTT is acting as the shaper for e-commerce growth E-commerce offer Value Chain Marketing / Advertising Online and physical marketing campaigns Partnership Omnicom im —_ ol dott: Online Shops creation Ey payshop & Bs yy © ns | mae | re
Slide 8: Express & Parcels Portugal: e-commerce is growing fast
il Ct trainicHucuts Express & Parcels Portugal: e-commerce is growing fast and poised for further growth E-commerce E-sellers How much do you expect e-commerce to grow in Portugal? 3 +15% 1H21 2021 fo) 40-60% | 40-50% 30-40% 39% 56% © 0-20% 20-50% f50-100% j>100% Source: Eurostat -May 2021;?IMR E-co
Slide 9: Express & Parcels Portugal: consistent growth leveraged by e-commerce
ft. CEE thatnicHuchts Express & Parcels Portugal: consistent growth leveraged by e-commerce Express & Parcels Portugal CEP Volumes Express & Parcels Portugal - Revenues million items; % change vs. prior year € million; % change vs. prior year +19.2%) +16.8% +49.3% ——, 74 r= 1%) — te) 6.2 27.4 a Oo 4
Slide 10: Express & Parcels Spain: turnaround and EBITDA breakeven
ect 1H21 HIGHLIGHTS 10 Express & Parcels Spain: turnaround driven by market share gains, scale and operational efficiency, resulting in sustained growth and EBITDA breakeven in the quarter Express & Parcels Spain I. Growth million €; % change vs. prior year Revenues +49.9% Y + Captureandincrease of
Slide 11: Express & Parcels Spain: enabling growth while focusing on quality and profitability
ect 1H21 HIGHLIGHTS m Express & Parcels Spain: enabling growth while focusing on quality of service and profitability Express & Parcels Spain- Volume per working day Spain CEP unit costs thousanditems per working day €per item, % change vs. prior year 157.9% 1 175k Linehaul: renegotiated contracts a
Slide 12: Express & Parcels Spain: commercial strategy aims at balanced growth
PEE ronichucers 12 Express & Parcels Spain: commercial strategy aims at abalanced growth Large B2C customers Consistent improvementin quality of service andinvestment in capacity resulted in gains of scale through the signing of largee-tailers Global large e-tailers volumes rebased at 100 500 400 2Q
Slide 13: Strong mix effect resulting in higher-value mail
ft. Ctt | tnatichucsts 13 Strong mix effect resulting in higher-value mail and comparison effects driving growth Mail revenues € million; % change vs. prior year oO Delta (p.p.) 2Q20-2Q21 Hl Business solutions, advertising mail & other Average revenue +16.0% . Hl Higher-value mail? peritem ” 108.3 L
Slide 14: Acquisition of NewSpring Services reinforces business services beyond mail
ft. CEE thatnicHuchts 7 Acquisition of NewSpring Services will reinforce CTT’s business services solutions beyond mail Acquisition rationale Company overview Transaction Update @ . iti Contribute to CTT's business growth * Business services company operating in BPO On 23/07/2021, the Competition 9 a
Slide 15: Financial Services & Retail underpinned by commercial proactivity
ect 1H21 HIGHLIGHTS 15 Financial Services & Retail underpinned by commercial proactivity while benefitting from the opening of the economy and the increased savings propensity Financial Services Public debt placements Financial Services revenues € million;% change vs. prior year €million;% change vs
Slide 16: Banco CTT continues to grow in retail credit and savings
ect 1H21 HIGHLIGHTS 16 Banco CTT continues to grow in retail segment credit, with the introduction of the credit card business of Sonae as an additional growth lever, and in savings solutions Banco CTT - business volumes evolution € million except otherwise indicated p16 560.4 596.1 Dec-20 Jun-21 +
Slide 17: Consumer lending core business of Banco CTT with robust performance
1H21 HIGHLIGHTS ect Consumer lending core business of Banco CTT with robust performance 17 Used cars - Auto loans production (market) * € million; May YTD 766 412.0% 607 ——— —— YTD19 YTD20 YTD21 CTTmarketshare 10.3% * Cyclical recovery of the market post-pandemic onits way * Continued market share g
Slide 18: Alignment with the UN Sustainable Development Goals
ect 1H21. HIGHLIGHTS 1s Alignment with the UN Sustainable Development Goals 4 CTT bases its approach to sustainability on 10 of the Principles of the United Nations Global Compact National Sustainability Award Initiatives to be implemented mainly regarding four ESG areas: Honourable mention awarded
Slide 19: Financials
ect ) Financials ctt Committed to deliver
Slide 20: Improved profitability due to Express & Parcels growth and operational leverage
ft. Cet Financiais Improved profitability due to Express & Parcels growth and operational leverage Key financial indicators € million; % change vs. prior year Quarter Half 2920 2Q21 y.0.y 1H20 1H21 y.0.y Revenues+ 169.3 207.5 22.6% 349.2 412.8 18.2% Operating costs 2 157.3 179.2 13.9% 313.5 BEES 13.
Slide 21: Express & Parcels growth and Mail recovery foster strong revenues expansion
FINANCIALS ect Express & Parcels growth and Mail recovery foster strong revenues expansion Revenuest € million; % change vs. prior year +22.6% 07.5 —— ——— 2Q20 Mail & other AE&P ABancoCTT AFS&Retail 2Q21 revenues? revenues revenues revenues 0. change (+15.9%) (+30.5%) (+29.5%) (+36.1%) (%) — — — — +
Slide 22: Express & Parcels growth and Mail recovery also push operating costs
FINANCIALS ect 22 Express & Parcels growth and Mail recovery, also push operating costs Operating costs € million; % change vs. prior year __193.8 146 \ ial \ 2920) =2Q20 = 2Q20) =AMail AE&P ABanco AFS& 2Q21 2Q21 2Q21 Op.costs D&A Op.costs S&other costs CTTcosts Retail Op.costs D&A Op.costs (EBITDA)
Slide 23: Recurring EBIT margin improvement
ect FINANCIALS 23 Recurring EBIT margin improvement of +8.7 p.p. in 2Q21 and +5.3 p.p.in 1H21 supported by Express & Parcels, Mail and Banco CTT Recurring EBIT* € million +€17.3m +€23.0m Recurring EBIT breakdown 1H21 +8.8 FS&R: Mail & other? BancoCTT Express —_ - & Parcels 3.6 2Q20 AMail& AExpress A
Slide 24: Adjusted cash increased by c.€9m in 1H21
ect FINANCIALS 24 Adjusted cash increased by c.€9min1H21 1H21 Cash flow 30 June 2021 Net financial debt 2 € million; impact on cash flow vs. prior year € million EDITOA |i 57.3 422.6) i (+) Cash & cash equivalents 654.7 Non-cash items F9.3) (-7.0) (-) Net Financial Services & other payables? 185.4 S
Slide 25: The COVID-19-related uncertainty remains present
ctt FINANCIALS The COVID-19-related uncertainty remains present CTT expects to achieve above €60m in EBIT in FY21 Progress on the concession process allows for reaffirmed confidence in the formalization of a sustainable new contract within the term of the current extension 25
Slide 26: Committed to deliver
ctt Committed to deliver
Slide 27: Key balance sheet details June 2021
APPENDIX ect Key Balance sheet details 30 June 2021 Balance sheet € million; % change vs. 31 Dec 2020 3,097 1 Fixed tangible Equity [F assets Other liabilities Other assets (+12.2%) Employee benefits = 5 (1) tax credits pu ese) Employee benefits Financial Services 208 payables Cash & cash 655 equiva
Slide 28: Express & Parcels: exceptional growth of parcels volumes and revenues
ft. Cte —aPPennix 28 Exceptional growth of parcels volumes and revenues provides a considerable boost to profitability Revenues EBITDA12 Recurring EBIT2 Consolidated view; € million; % change vs. prior year € million € million 460.7% +138.5% uv Portugal €67.1m (+29.6%) We 9.6 6.9 as Parcels €58.6m (
Slide 29: Banco CTT benefitting from significant operational leverage
ft. Cte —aPeenoix 29 Banco CTT is benefitting from significant operational leverage, as the fixed-cost infrastructure is largely in place Revenues EBITDAt € million; % change vs. prior year € million % change vs. prior year +19.0% 45.7 w-by type: 38.4 Other Other 18 Insurance 6.2 Off-Balance sheet s
Slide 30: Banco CTT cost of risk remains low while capital and liquidity are ample
APPENDIX: ect 30 Banco CTT cost of risk remains low while capital and liquidity are ample 30 June 2021 Banco CTT Balance Sheet Loans b' e Non-performing exposures? € million; % change vs. 31 Dec 2020 oO typ oO P gexp Other 45.1 3.3 2,232 2,232 Credit cards [El 27.4 “gn Other 2.5 Cash & cash equivale
Slide 31: Mail profitability recovering through mix effect
ft. ChE aprenpix 31 Mail profitability recovering through the mix effect of value-added mail increased weight on total mail in LH21 Revenues! EBITDA2 Recurring EBIT € million; % change vs. prior year € million €million Transactional €185.4m (+7.1%) 127.3% 28.9 Advertising €9.1m (+5.9%) 22.7 » Editor
Slide 32: Financial Services & Retail comparison impacted by 2Q20 lockdown
ft. Cte —aPPennix 32 Financial Services & Retail comparison impacted by full lockdown of 2Q20 Revenues EBITDA! Recurring EBIT € million; % change vs. prior year €million € million +5.4% +6.6% Savings & insurance €12.4m (-1.8%) 10.7 3 10.6 3 Money orders €2.8m (-6.3%) Payments €0.9m (+11.9%) Retail p
Slide 33: Consolidated Income statement
ft. Cte aprennix Consolidated Income statement 33 Income statement Reported wikD EETIE Guus? €million equity method 1H20 1H21 1H20 1H21 Revenues 349.2 4128 318.4 375.2 Operating costs 313.5 355.5 281.8 322.3 of which Impairments & provisions 111 5.8 3.7 0.8 EBITDA 35.7 57.3 36.6 52.9 Depreciation &
Slide 34: Consolidated Balance sheet
ft. Cte aprennix Consolidated Balance sheet Balance sheet Reported With Banco CTT under equity method 31-Dec-20 30-Jun-21 31-Dec-20 30-Jun-21 Non-current assets 1,984.3 1,834.3 638.8 657.2 Current assets 910.6 1,262.3 484.0 4541 Assets 2,894.9 3,096.6 1,122.8 1,111.4 150.3 148.8 150.3 148.8 2,744.6
Slide 35: Consolidated Cash flow statement
ft. ChE aprenpix 35 Consolidated Cash flow statement Cash flow Reported With Banco CTT under equity method € million 1H20 1H21 421/20 1H20 1H21 421/20 EBITDA 35.7 57.3 +216 36.6 52.9 +16.3 Non-cash items -2.3 233 -7.0 -9.3 =l3©) -4.6 Specific items affecting EBITDA -0.8 2.3 +3.1 -0.8 -9.7 -8.9 Capex
Slide 36: Specific items with a positive impact on the 1H21 P&L
ft. Cte aprennix Specific items with a positive impact on the 1H21 P&L Specific items € million Reported 1H20 1H21 Recurring EBIT 5.7 28.7 Specific items 0.8 -2.3 Revenues -0.6 0.0 Staff costs on 8.2 ES&S & other op. costs & other gains 13 -10.5 EBIT 4.9 31.0 €8.2m restructuring charge, of which €8.
Slide 37: Investor Relations contacts
CTT Correios de Portugal, S.A. Investor Relations Contacts: Phone: +351 210471 087 Froma E-mail: investors@ctt.pt parcel to whatever you want ctt.pt Froma parcel to whatever you wish for 7 agi Froma parcel to whatever you dream of We connect people and companies
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