Ctt - Correios De Portugal Sa · EURONEXT:CTT
Ctt - Correios De Portugal Sa — CTT – Correios de Portugal — ODDO BHF Forum 2020
34 slides from Ctt - Correios De Portugal Sa's conference presentation, January 2020
Slide 1: ODDO BHF Forum Presentation
ODDO BHF Forum Presentation January 2020 1 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 roadshows and conferences of the 3rd quarter 2019 results. As a consequence thereof, this document may not be disclosed or published, nor used by any othe
Slide 3: Company overview
1. company overview 3
Slide 4: CTT is a modern and dynamic postal services operator with a diversified portfolio of businesses
CTT is a modern and dynamic postal services operator with a diversified portfolio of businesses… Key financials FY18 Revenues breakdown € million € million; % of total Revenues % of total Addressed mail 444.6 62.8% Transactional 413.1 58.3% Mail Advertising 16.7 2.4% Indisputable market leader Reven
Slide 5: 1st place last-mile logistics player with growing financial services businesses
…standing out with the capillarity of its networks, proximity to the population and strong brand LAST-MILE LOGISTICS PLAYER… …WITH GROWING FINANCIAL SERVICES BUSINESSES ADDRESSED UNADDRESSED SAVINGS & CURRENT CUSTOMER CREDIT TO PARCELS MAIL MAIL INSURANCE ACCOUNTS DEPOSITS CLIENTS 681m items 427m it
Slide 6: Strategy: transform the postal business and develop Express & Parcels and Banco CTT growth levers
Strategy: transform the postal business and continue to develop the Express & Parcels and Banco CTT growth levers Express Mail Banco CTT Financial Services & Parcels Strengthen the retail network’s Consolidate positioning as an Develop an innovative and fast- Preserve the value of the Mail capacity,
Slide 7: Mail revenues have shown resilience since the IPO
Mail revenues have shown resilience since the IPO, as the price and mix effects have been able to offset the structural decline in volumes CTT addressed mail volumes CTT addressed & unaddressed mail revenues Million items; CAGR (%) € million; CAGR (%); price change vs. prior year USO price +4.1% +1.
Slide 8: Mail benefited from positive mix effect and one-time impact of elections
In 2019, mail benefited from positive mix effect and the one-time impact of legislative elections 9M19 Mail revenues € million; % change vs prior year Total: 358.9 (-2.8%) 10.7 (-2.5%) Editorial mail (-9.2%) Parcels USO 4.5 66.4 Business solutions (+12.6%) International mail (+9.7%) 7.8 Solid perfor
Slide 9: Operating costs savings ambition upgraded
The successful execution of the Operational Transformation Plan and newly implemented measures allow us to upgrade the overall costs savings ambition Operating costs savings 1 € million; % change vs prior year +12.5% +6.7% 18.0 €15.1m of FY19 operating costs savings secured (vs €15.0m initial obje
Slide 10: Significant upside potential exists in e-commerce in Portugal and Spain
Significant upside potential exists in e-commerce, a market which remains underpenetrated in Portugal and Spain, the main geographies where CTT operates Percentage of internet users who purchased goods online 1 E-commerce growth 2 past 12 months, 2018 2013-17 CAGR (%) EU-28 average 60% 53% 37% IT GR
Slide 11: CTT is the market leader in Express & Parcels in Portugal
CTT is the market leader in Express & Parcels in Portugal and has been investing in new products and partnerships in order to spur e-commerce growth Portugal Express & Parcels volumes Initiatives for e-commerce ecosystem expansion Million items; CAGR (%) SUPER EXPRESS +12.6% 20.8 A convenient, flexi
Slide 12: Spain remains a key growth pillar for CTT Express & Parcels
Spain remains a key growth pillar for the CTT Express & Parcels business, due to its market size and growth dynamics The Spanish Courier, Express & Parcels (CEP) market is disproportionately larger than the Portuguese one • The Spanish CEP market size is 8 times the Portuguese one 1 (population is 5
Slide 13: Tourline's gradual recovery was halted in 2019
Tourline’s gradual recovery was halted in 2019 by the loss of a key account and cost pressures, prompting a change of management and the launch of a new turnaround plan Tourline track record and future perspectives € million, contribution to consolidated results CAGR c. 15% ∆% 19 / 18 -6.9% • The pr
Slide 14: New turnaround plan aiming for organic B2C growth and profitability
The new turnaround plan is aiming for strong organic B2C growth and profitability enhancements, driven by operational efficiency measures New local management team, with sector & turnaround knowledge & experience Commercial Improve unit Improve Internal reorientation costs & margin Quality reorganis
Slide 15: Parcels volumes recovered in Portugal; public debt placements accelerated
Parcels volumes recovered strongly in Portugal after a slow start to the year; the growth in public debt certificates placements accelerated +28.9% Portugal (excl. Cargo) Spain Parcels volumes +13.3% (% change vs prior year) +12.2% +11.3% +11.1% Portugal parcels volumes registered double-digit growt
Slide 16: Banco CTT has an attractive mass market value proposition
Banco CTT has an attractive mass market value proposition and strong potential to build a growing and profitable business Current accounts & customer funds Credit to clients Number of current accounts (thousands); Customer funds (€ million); cumulative Total; € million; cumulative 1,410 909 827 1,23
Slide 17: 9M19 financials
2. 9M19 financials 17
Slide 18: Solid 3Q19 performance driven by Banco CTT, Financial Services and elections
Solid 3Q19 performance, driven by Banco CTT, Financial Services and the one-time impact of elections on Mail • Addressed mail volumes decline of –7.6% (vs -10.3% in 1H19), benefiting from elections EBITDA 2 • €15.1m of FY19 operating costs savings secured (vs €15.0m target), with €13.8m of € million
Slide 19: Key financial indicators registered further acceleration of improvement trends
Key financial indicators registered further acceleration of the improvement trends observed in 2Q19 Key financial indicators € million; % change vs prior year Year-to-date Quarter 9M18 9M19 Δ% 3Q18 3Q19 Δ% Revenues 524.8 539.6 +2.8% 169.7 184.6 +8.8% Operating costs 1 459.8 466.3 +1.4% 150.7 157.7 +
Slide 20: Revenues returned to growth
Revenues returned to growth, underpinned by strong organic and inorganic evolution in Banco CTT and solid performance in Financial Services 9M19 revenues Revenues breakdown € million; % change vs prior year; % of total € million; % change vs prior year Financial Services Banco CTT 24.6 (+30.3%) +2.8
Slide 21: Operating costs, excluding 321 Crédito, were practically flat
Operating costs, excluding the inorganic contribution of 321 Crédito, were practically flat 9M19 operating costs 1 Operating costs breakdown € million; % change vs prior year; % of total € million; % change vs prior year +2.5% Other +1.4% +8.7 -1.3 466.3 20.6 (+7.4%) 4% External Supplies 459.8 -6.1
Slide 22: Double-digit EBITDA growth; Banco CTT achieves breakeven
Double-digit EBITDA growth underpinned by banking & financial services - Banco CTT achieves breakeven with the inorganic contribution of 321 Crédito 9M19 EBITDA 1 EBITDA breakdown € million; % change vs prior year € million; % change vs prior year Financial +4.2% Services 93.7 89.9 15.3 (+84.7%) Ban
Slide 23: Balance Sheet reflects expansion of Banco CTT
The Balance Sheet reflects the successful expansion of Banco CTT business unit, already representing two thirds of total assets Balance Sheet – 30 September 2019 € million; % change vs 31 December 2018 2,367 2,367 Net FS & other payables of €202m & €214m as at Financial Services payables €405m Dec-1
Slide 24: Positive net cash position excluding leases and employee benefits
Positive net cash position, excluding leases liabilities and net employee benefits Cash flow Net financial cash (debt) 1 € million; impact on cash flow vs prior year € million (+) Cash & cash equivalents 405 EBITDA 73.3 (+€8.2m) (-) Net Financial Services & other payables 214 Specific items -14.6 (+
Slide 25: Mail
Mail 9M19 Mail & other revenues EBITDA 1 EBIT 2 € million; % change vs prior year € million € million -6.8% – Transactional €303.0m (-1.8%) 63,6 59,3 – Advertising €16.6m (-7.5%) – Editorial €10.7m (-2.5%) -1.6% – Business Solutions €7.8m (+9.7%) 33,5 33,0 – USO Parcels €4.5m (-9.2%) – Retail & othe
Slide 26: Express & Parcels
Express & Parcels 9M19 E&P revenues EBITDA 1 EBIT 2 € million; % change vs prior year € million € million – Portugal €70.5m (+5.9%) 2.2 – Parcels €52.9m (+8.3%) – Cargo €9.5m (-2.5%) – Banking network €5.0m (+5.9%) – Logistics €2.3m (+5.1%) -2.5 – Other €0.8m (-25.4%) – Spain €37.8m (-6.9%) -1.7 -7.
Slide 27: Banco CTT
Banco CTT 9M19 Banco CTT revenues 1 EBITDA 2 EBIT 3 € million; change vs prior year € million € million 0.3 – Net interest income €9.1m (+€3.6m) – Interest income €9.7m (+€3.7m) – Interest expense -€0.6m (-€0.1m) -5.9 – Fees & commissions income €6.0m (+€2.6m) –Own products €3.8m (+€1.2m) – Consumer
Slide 28: Financial Services
Financial Services 9M19 Financial Services revenues 1 EBITDA 2 EBIT 3 € million; % change vs prior year € million € million +84.7% +91.2% 15.3 14.9 – Savings & Insurance €19.3m (+50.9%) – Payments €0.9m (-0.9%) 8.3 – Money orders €4.1m (-11.0%) 7.8 – Other €0.2m (-54.7%) Total €24.6m (+30.3%) 9M18 9
Slide 29: Appendix
3. appendix 29
Slide 30: Income statement
Income statement Reported with Banco CTT € million Reported under equity method 1 9M18 9M19 9M18 9M19 Revenues 524.8 539.6 513.3 510.4 Operating costs 459.8 466.3 435.9 434.0 EBITDA (excl. IFRS 16 impact) 65.0 73.3 77.4 76.4 IFRS 16 impact: 24.9 20.4 24.3 20.0 EBITDA (incl. IFRS 16 impact) 89.9 93.7
Slide 31: Balance Sheet
Balance Sheet With Banco CTT € million CTT under equity method 1 31-Dec-18 30-Sep-19 31-Dec-18 30-Sep-19 Non-current assets 1,108.1 1,638.6 486.6 575.1 Current assets 746.3 728.4 456.9 437.1 Assets 1,854.5 2,367.0 943.5 1,012.2 Equity 135.9 143.6 135.9 143.6 Liabilities 1,718.6 2,223.4 807.6 868.5 N
Slide 32: Cash flow
Cash flow With Banco CTT under Reported equity method 1 € million 9M18 9M19 ∆ 19 / 18 9M18 9M19 ∆ 19 / 18 EBITDA 65.0 73.3 8.2 77.4 76.4 -1.0 Specific items affecting EBITDA 19.3 14.6 -4.6 18.6 13.3 -5.2 Capex 11.7 18.5 6.7 7.3 15.3 7.9 Change in working capital -32.2 -16.5 15.7 -33.0 -15.7 17.4 Ope
Slide 33: Specific items
Specific items € million Specific items 9M18 9M19 EBIT excluding Specific items 47.1 50.2 Specific items 20.5 16.0 Of which €8.9m of indemnities related to Revenues -0.1 -0.6 negotiated staff exits Staff costs 16.0 10.0 Of which €4.7m of M&A costs & strategic ES&S & other op. costs 3.4 5.2 studies:
Slide 34: Investor Relations
Investor Relations Contacts: Phone: +351 210 471 087 E-mail: investors@ctt.pt CTT – Correios de Portugal, S.A. 34