Ctt - Correios De Portugal Sa · EURONEXT:CTT
Ctt - Correios De Portugal Sa — CTT - Correios de Portugal — FY2017 Earnings Presentation
29 slides from Ctt - Correios De Portugal Sa's earnings presentation, 2018
Slide 1: Full Year 2017 Results Presentation
FULL YEAR 2017 RESULTS PRESENTATION CTT - Correios de Portugal, S.A.
Slide 2: Disclaimer
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 full year 2017 results. As a consequence thereof, this document may not be disclosed or published, nor used by any other person or ent
Slide 3: Agenda: Company overview
1. Company overview 2. Key 2017 highlights 3. Key 2017 financials 4. Business units 2017 performance 5. 2018 outlook
Slide 4: Postal operators diversifying their business model
COMPANY OVERVIEW: Postal operators globally are diversifying their business model, becoming less dependent on the mail business; CTT is still in the early stages of this transformation Revenues per line of business Sector CTT Postal operators have been adapting their business model to Other 7% 6% 10
Slide 5: Mail volume declining since 2001
COMPANY OVERVIEW: Mail volume has been declining since 2001, with CTT delivering today c. 50% of the volume distributed then Addressed mail volumes evolution Billion items; CAGR (%) 2001 1.4 c. -50% 0.7 2017 2001-2011 2011-2014 2014-2016 2017 -2.5% -3.7% -5.6% -7.2% Sovereign debt crisis Mail volume
Slide 6: Growing E&P volumes with Transporta and Spain turnaround
COMPANY OVERVIEW: CTT has been investing to capture the growing flows of parcels, having grown >23% in E&P volumes in 2017, with positive impacts from the Transporta acquisition and the turnaround in Spain Volumes evolution within E&P business unit Million items; CAGR (%) CAGR CAGR Δ16-17 12-17 33 8
Slide 7: Growth potential of e-commerce in Iberia
COMPANY OVERVIEW: There is still a great potential for growth of e-commerce in Iberia, since it is still lagging behind other European countries in online retail E-Commerce penetration Domestic e-commerce parcels per capita 1 10x 5x Average: ~20 parcels / capita 26 22 16 17 18 ~1-2 Average: ~7 parce
Slide 8: Banco CTT growing rapidly
COMPANY OVERVIEW: Banco CTT is growing rapidly and has been well received by the population – in 2017 the number of current accounts tripled to 226k and customer deposits doubled to €619m Current accounts evolution September to December June Expansion to 202 branches Insurance offer December ~285 th
Slide 9: Transforming the postal business and developing growth levers
COMPANY OVERVIEW: Focus on transforming the postal business in the medium term and investing in the development of growth levers Postal business GROWTH Adjust HR policies and deepen the ES&S Grow above market in parcels and value- cost reduction efforts added services (mail & parcels) TRANSFORMATION
Slide 10: Agenda: Key 2017 highlights
1. Company overview 2. Key 2017 highlights 3. Key 2017 financials 4. Business units 2017 performance 5. 2018 outlook 10
Slide 11: Key highlights: revenue growth, pressure on profitability
KEY HIGHLIGHTS: Growth in revenues despite pressure on profitability as a result of higher than expected decline in mail volumes and increase in operating costs, the latter mostly related to the growth businesses Addressed mail volumes decline higher than the guidance range [-4% to -5%] Softer decli
Slide 12: Mail and parcels volumes trends
KEY HIGHLIGHTS: Addressed mail volumes decline normalised in 4Q17, back within the guidance range [ -4% to -5%], while parcels volumes growth accelerated throughout the year Addressed mail volumes (Quarter change YoY) -0.4% FY16 guidance FY17 range guidance -3.3% range MAIL -3% -3.7% -4% -4.4% -4.5%
Slide 13: Financial services and Banco CTT indicators
KEY HIGHLIGHTS: CTT continues to capture the trust and savings of the population; placement of credit products is growing rapidly (from a small base) Savings & insurance products placements (€ billion, quarterly volumes) FINANCIAL SERVICES ) 2.25% 1.39% Treasury debt certificates average remuneratio
Slide 14: Operational Transformation Plan status
KEY HIGHLIGHTS: The Operational Transformation Plan is on target do date; launched in 4Q17 to prepare the next wave of efficiency and quality at CTT Initiatives Operational Transformation Plan status ▪ No variable compensation for the Executive Committee for 2017 & 2018. 25% reduction of fixed compe
Slide 15: Agenda: Key 2017 financials
1. Company overview 2. Key 2017 highlights 3. Key 2017 financials 4. Business units 2017 performance 5. 2018 outlook 15
Slide 16: 2017 financial and operational performance
KEY FINANCIALS: The Operational Transformation Plan implementation is underway, which has already resulted in an increase in non-recurring op. costs in 4Q17, impacting reported earnings 2017 financial and operational performance € million, except when otherwise indicated Reported Recurring 1 Financi
Slide 17: Recurring revenues breakdown
KEY FINANCIALS: Slight growth in recurring revenues driven by good performance in Express & Parcels and Banco CTT, and by the Transporta acquisition 2017 recurring revenues Revenues breakdown € million; % change vs. prior year; % of total € million +2.5% Financial Banco CTT 714.3 Services €7.6m (>>)
Slide 18: Recurring operating costs breakdown
KEY FINANCIALS: The recurring operating costs increase resulted, in large part, from the Transporta acquisition and the increase in costs of the parcels and banking businesses, related to growth in activity 2017 recurring operating costs Operating costs breakdown € million; % change vs. prior year;
Slide 19: EBITDA breakdown and dependence on Mail
KEY FINANCIALS: CTT continues to be very dependent on Mail EBITDA, as the contribution to profitability of the growth levers (parcels & banking) is still building up 2017 recurring EBITDA EBITDA breakdown € million; % change vs. prior year; % of total € million -20.5% -24.8% Banco CTT -€20.4m (+2.1%
Slide 20: Cash flow from operating activities recovered
KEY FINANCIALS: Cash flow from operating activities recovered, reaching €44.3m Cash flow € million; % change vs. prior year Adjusted 1 Reported (Excl. FS float & Banco CTT deposits and fin. assets) 2016 2017 ∆% 2016 2017 ∆% From operating activities 268.2 291.1 +8.5% 23.7 44.3 +86.6% Cash flow excl.
Slide 21: Balance sheet with net financial cash of €163m
KEY FINANCIALS: Strong Balance Sheet with net financial cash equal to €163m at the end of the year Balance Sheet – 31 December 2017 € million; % change vs. 31 December 2016 1,609 1,609 €270m Financial Services payables (-18.6%) + Cash and cash equivalents +€627m €627m Cash & cash equivalents (+1.3%)
Slide 22: Agenda: Business units performance
1. Company overview 2. Key 2017 highlights 3. Key 2017 financials 4. Business units 2017 performance 5. 2018 outlook 22
Slide 23: Mail business unit
BUSINESS UNITS: Volumes decline higher than 5% and incremental staff and energy & fuel costs put strong pressure on Mail EBITDA 2017 Mail revenues by type Operating costs EBITDA € million, % change vs. prior year € million € million +3.1% -19.8% – Transactional €401.9m (-€1.8m; -0.5%) -17.1% 435.7 4
Slide 24: Express & Parcels business unit
BUSINESS UNITS: Strong parcels volumes growth in Portugal, helped also by the Transporta acquisition, and especially in Spain, drove slight like-for-like earnings & margin improvement in E&P 2017 E&P revenues by region Operating costs EBITDA € million, % change vs. prior year € million € million +14
Slide 25: Financial Services business unit
BUSINESS UNITS: Continued payments business weakness, as a result of volumes decline & competitive price pressures, and lower insurance placements impacted FS revenues 2017 FS revenues by type Operating costs EBITDA € million, % change vs. prior year € million € million -19.4% -12.0% -4.9% 37.9 – Sa
Slide 26: Banco CTT results
BUSINESS UNITS: Banco CTT results were within expectations, with customer acquisition remaining strong, consumer credit and mortgage products gaining traction, and NII accelerating throughout the year 2017 Banco CTT revenues Operating costs EBITDA € million, change vs. prior year (€ million) € milli
Slide 27: Agenda: 2018 outlook
1. Company overview 2. Key 2017 highlights 3. Key 2017 financials 4. Business units 2017 performance 5.2018 outlook 27
Slide 28: 2018 outlook
2018 OUTLOOK: Goal of slight growth in revenues and stable recurring EBITDA levels; the Operational Transformation Plan to have a significant impact on dividend policy in the short term REVENUES Slight increase in revenues, supported by continued growth of the parcels and banking businesses & VOLUME
Slide 29: Contacts
Contacts: Phone: +351 210 471 087 E-mail: investors@ctt.pt
CTT - Correios de Portugal — FY2017 Earnings Presentation on 6ix