Ctt - Correios De Portugal Sa · EURONEXT:CTT
Ctt - Correios De Portugal Sa — CTT - Correios de Portugal — Shareholder Meeting (2024)
64 slides from Ctt - Correios De Portugal Sa's shareholder meeting presentation, Oct 23, 2024
Slide 1: We make our path fully committed to deliver
We make our path fully committed to deliver
Slide 2: Disclaimer
Disclaimer DISCLAIMER This documenthas been prepared by CTT ~ Correios de Portugal, S.A. (the “Company’ or'"CTT’) exclusively for use during AGM24 presentation. As aconsequence thereof, this document maynot be disclosed or published, norused by any other personor entity, for any other reason or purp
Slide 3: Agenda
Agenda Strategy Review 2023 Review Logistics Express & Parcels: Iberian e-commerce growth engine Mail & Others: Leveraging new USO Contract Retail Financial Services & Retail: Profitability enhancer Banco CTT: Fastest growing retail bank franchise in Portugal Real Estate ESG: Committed to the enviro
Slide 4: Strategy review
Strategy review
Slide 5: With declining mail volumes, diversifying was the only choice
With declining mail volumes, diversifying was the only choice Strategy review 1,355 in 2001 421 in 2023 (-69% vs 2001) Successful transformation with growth
Slide 6: Sustainable transformation: investment, shareholder remuneration and job creation
but also sustainable transformation Strategic review Investment, shareholder remuneration and job creation
Slide 7: Strategy by business unit
Our positioning: a company in transformation, exposed to sustained growth Strategy review Leveraging strategic assets… … as a highly synergic platform • brand • shared by bank, FS, mail parcels • sales force universal access to B2B • Mail workforce delivering E&P • last-mile distribution network • I
Slide 8: CTT is transforming itself in a leading e-commerce logistics player in Iberia
CTT is transforming itself in a leading e-commerce logistics player in Iberia 2023 Review Iberia is the 4th largest e-commerce CTT is the fastest growing player in Iberia market in Europe € billion 100% D+1 full geographical coverage >100M in Iberia 50% items per year (FY23) Spanish customers choose
Slide 9: Iberian e-commerce dynamics
Iberian e-commerce dynamics 2013 Review Portugal Romania Slovenia average of Italy top 5 excluding France +11% outliers +13% -9% Greece China and +39% +4% Spain South Korea +16% +7% Lithuania Poland +12% Germany Czech Republic Belgium Ireland Denmark Netherlands Australia US UK 2019 2020 2021 2022 2
Slide 10: 2023 Review: Logistics - Express & Parcels
2023 Review Logistics Express & Parcels
Slide 11: E-commerce adoption driving record volumes in E&P Portugal
e-commerce adoption driving record volumes in E&P Portugal 2023 Review 1Q 2Q 3Q 4Q 4Q22 1Q23 2Q23 3Q23 4Q23 Steady and resilient growth throughout the year
Slide 12: E&P Spain gaining market share as it grew well above market
E&P Spain gaining market share as it grew well above market 2023 Review +57.4% Onboarding of relevant new customers y.o.y in • FY23 • High quality and efficiency • Adding new services • • • High growth fuelled by all client segments 1Clients with daily volumes below 20,000 items
Slide 13: E&P in Portugal with a robust margin expansion
E&P in Portugal with a robust margin expansion 2023 Review Operational leverage delivering sustainable high margins 1Individual accounts; 2Recurring EBIT excludes specific items;
Slide 14: Growth and operational leverage enabling margin expansion in E&P in Spain
Growth and operational leverage enabling margin expansion in E&P in Spain 2023 Review 1Individual accounts; Swift capacity upgrades to protect quality at much higher volumes 2Recurring EBIT excludes specific items;
Slide 15: Logistics: Mail & Others
Logistics Mail & Others
Slide 16: New mail concession agreement up and running
New mail concession agreement up and running ∆ Visibility and stability
Slide 17: Higher price increase offer improved outlook
Higher price increase offer improved outlook 2023 Review 1Includes basket of Non-reserved and Reserved USO services, and Special Prices, penalties associated with quality standards are not considered (0.08% in 2019 and 1% in 2020, of which 0.5% reflected on prices and 0.5% compensated by an alternat
Slide 18: Increasing average revenue per item leads to flattish addressed mail revenues
Increasing average revenue per item leads to flattish addressed mail revenues 2023 Review Price increase of 9.49% in February 2024
Slide 19: Additional cost measures to deal with inflation
Additional cost measures to deal with inflation 2023 Review Volumes and pricing render revenue stability Staff reduction will improve results in 2024
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Slide 21: Significant progress on retail network repositioning towards services distribution
Significant progress on retail network repositioning towards services distribution 2023 Review
Slide 22: Rise of Euribor rates led to extraordinary public debt placements
Rise of Euribor rates led to extraordinary public debt placements 2023 Review Present placements below normal level given tighter ceilings and higher deposit rates 1Source: Banco de Portugal, new term deposit rates of Portuguese banks for retail clients
Slide 23: Higher public debt placements impacted positively revenues and profitability
Higher public debt placements impacted positively revenues and profitability 2023 Review
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Slide 25: Combined healthy growth in loans and deposits
Combined healthy growth in loans and deposits 2023 Review Growth on all fronts 1Retail Deposits, consolidated accounts; 2Source: Banco de Portugal; 3Net of impairments; 4Consolidated contribution; 5Cumulative
Slide 26: Consecutive overall growth and significant RoTE expansion
Consecutive overall growth 2023 Review Significant RoTE expansion 1Cumulative; 2Recurring RoTE, cumulative and excluding specific items. Assuming a Tangible Equity of 15% of average RWAs RoTE would be 10.0% in FY23; 3Banco CTT consolidation perimeter, excluding specific items; 4Proforma due to Paysh
Slide 27: Steady growth towards medium-term targets
Steady growth towards medium-term targets 2023 Review
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Slide 29: 2 strategies for 2 different portfolios to maximize value
2 strategies for 2 different portfolios to maximize value 2023 Review 398 assets €138m of market value €50-60m of market value • €101m book value • with €26m of net book value • Improve utilization of vacant • Includes land owned by CTT spaces (around 25%) • Logistic assets that may be reformulated
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Slide 31: Committed to the environment, while caring about our people and the community
Committed to the environment, while caring about our people and the community 2023 Review Climate change mitigation and adaptation (E) Caring people and diversity experience (S) Ambitious promotion of our local community (S) Leading ESG operating model (G)
Slide 32: New headquarters and an intense people's agenda
New headquarters and an intense people’s agenda 2023 Review New initiatives on compensation and benefits, talent and employee experience
Slide 33: Last mile fleet electrification is picking up towards objectives
Last mile fleet electrification is picking up towards objectives and so is gender parity , recycled materials and social impact programs 2023 Review 92 85 82 83 100 20 50 41 15 1Reduction of carbon emissions related to transport activity (owned + subcontracted fleets) 2In 2023, there was an increase
Slide 34: Significant progress regarding sustainability reporting
Significant progress regarding sustainability reporting 2023 Review • Eligible activities • • • Aligned activities • 1For taxonomy purposes, opex only includes buildings renovation/maintenance, non-capital R&D, short term leases and other non-capital lease costs and other expenses directly related t
Slide 35: 2024 Priorities
2024 Priorities
Slide 36: Logistics: Express & Parcels
Logistics Express & Parcels
Slide 37: Harmonization of the Iberian offer
Harmonization of the Iberian offer 2024 Priorities Standardisation of the offer and the commercial processes
Slide 38: Standardizing processes and increasing Iberian efficiency
Standardizing processes and increasing Iberian efficiency 2024 Priorities Standardization of operational processes across Iberia Nurturing the largest Iberian PUDO network Express handling and distribution Continuous expansion of the CTT Iberian points network and will integrate Expresso its added v
Slide 39: Integrated e-commerce solutions along the entire value chain
Integrated e-commerce solutions along the entire value chain 2024 Priorities
Slide 40: Continuous strengthening of e-commerce positioning
Continuous strengthening of e-commerce positioning 2024 Priorities Impactful implementation of initiatives 1Prize awarded to Locky; 2Prize awarded to CTT Express
Slide 41: Expansion and consolidation of the Locky network
Expansion and consolidation of the Locky network 2024 Priorities 2024 milestones: integration with major e-sellers and new software generation
Slide 42: Logistics: Mail & Others
Logistics Mail & Others
Slide 43: Priorities in Mail are Quality, Price and New Offering
Priorities in Mail are Quality, Price and New Offering 2024 Priorities Pricing Strategy (+9.49%) and commercial proactivity 3 strategic pillars for Mail Quality Launching of Intelligent Mail Improvement
Slide 44: Business Solutions complement the Mail offer, driving higher client relationship
Business Solutions complement the Mail offer, driving higher client relationship 2024 Priorities Payshop New client acquisition and cross selling with existing clients
Slide 45: Retail: Financial Services & Retail
Slide 46: Unique network capillarity, refocusing on services
Unique network capillarity, refocusing on services 2024 Priorities across the country CTT products and services
Slide 47: In-store experience aligned with customer needs
In-store experience aligned with customer needs 2024 Priorities Unique proximity platform leverages a highly differentiated CTT asset
Slide 48: Activating internal resources and promoting a customer-centred vision
Activating internal resources and promoting a customer-centred vision 2024 Priorities Focus on Customer Key Enablers • • Resource Optimisation • Structuring a holistic vision of the CTT Retail Network • • Improving Service Levels •
Slide 49: Retail: Banco CTT
Slide 50: High franchise potential establishes foundation for monetization
High franchise potential establishes foundation for monetization 2024 Priorities Following years Current state Initial years • value per client product penetration • • • commercial force • • digital • • 1Considers first holders above 18 years of age
Slide 51: Banco CTT will continue to scale up for profitable and sustainable growth
Banco CTT will continue to scale up for profitable and sustainable growth 2024 Priorities • • • • • • • • Growing on business volumes and engagement with an improved risk profile
Slide 52: Adopting market best practices
Adopting market best practices 2024 Priorities • • • • • • • • • • • •
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Slide 54: 2 strategies for 2 different portfolios to maximize value
2 strategies for 2 different portfolios to maximize value 2024 Priorities 398 assets €138m of market value €50-60m of market value • €101m book value • with €26m of net book value • Improve utilization of vacant • Includes land owned by CTT spaces (around 25%) • Logistic assets that may be reformula
Slide 55: ESG
Slide 56: Continued focus on the ESG agenda
Continued focus on the ESG agenda 2024 Priorities Carbon emissions reduction and positive impact on people and community
Slide 57: Outlook 2024-25
-25 Outlook 2024
Slide 58: Continued growth in 2024, follows a beat of the twice upgraded 2023 guidance
Continued growth in 2024, follows a beat of the twice upgraded 2023 guidance Outlook 2024-25 Growing revenues and EBIT towards the CMD 2025 ambition 12-year CAGR
Slide 59: To support growth, we will carry on investing sharply
To support growth, we will carry on investing sharply Outlook 2024-25 Key areas of investment sorting capacity lockers network Investing in IT quality of service Revamp hubs upgrade core digital channels 1Transformational includes Express & Parcels, Financial Services & Retail, Banco CTT and Busines
Slide 60: Strong cash flow generation and flexible and solid balance sheet
Strong cash flow generation and flexible and solid balance sheet Outlook 2024-25 Net Debt/EBITDA FCF EBITDA Net Debt 182 186 177 154 1.7 1.6 1.6 123 113 1.4 106 96 40 45 24 14 2020 2021 2022 2023 Significant buffer for expansion 1From 2022 onwards it includes Payshop, which was previously part of Ba
Slide 61: Capital allocation priorities
Capital allocation priorities Outlook 2024-25 ✓ ✓ ✓ ✓ 1For detailed information on CTT’s Financial Policy, including its shareholder’s remuneration principles, please refer to CTT’s investor relations website and to the announcement disclosed on 23 June 2022; 2Yield calculated taking as a reference
Slide 62: The sell side community recognized the merits of the strategy and execution of CTT
The sell side community recognized the merits of the strategy and execution of CTT Outlook 2024-25 Source: CTT internal calculations based on analyst’s recommendations (AS Independent Research, Barclays, CaixaBank BPI, Caixa BI, JB Capital, Santander) as of 19 April 2024; Bloomberg
Slide 63: CTT outperformed all the postal peers and the PSI20 throughout 2023-24
CTT outperformed all the postal peers and the PSI20 throughout 2023-24 Outlook 2024-25 59 50 37 32 14 14 15 -13 -19 -23 PostNL Bpost UPS DHL PSI20 Austrian Post Royal Poste Italiane CTT CTT FedEx Mail (IDS) Source: Bloomberg
Slide 64: 2023: a great year for CTT!
2023: a great year for CTT! wa
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