Ctt - Correios De Portugal Sa · EURONEXT:CTT

Ctt - Correios De Portugal Sa — CTT – Correios de Portugal — 6th Annual Haitong Iberian Conference (January 2017)

27 slides from Ctt - Correios De Portugal Sa's conference presentation, Jan 13, 2017

  1. Slide 1: CTT – Correios de Portugal, S.A. – 6th Annual Haitong Iberian Conference

    CTT – Correios de Portugal, S.A. 6th Annual Haitong Iberian Conference London, 13 January 2017 1

  2. 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 6th Annual Haitong Iberian Conference. As a consequence thereof, this document may not be disclosed or published, nor used by any other person or entity,

  3. Slide 3: Agenda

    01. Sector & company overview 02. Key highlights - 9M16 03. Strategy update 04. Recent developments 3

  4. Slide 4: Global postal sector overview

    POSTAL SECTOR OVERVIEW: THE GLOBAL POSTAL SECTOR IS NOW WELL DIVERSIFIED AND DRIVES THE FULFILMENT OF THE “INTERNET OF THINGS” €424.4bn postal industry E-COMMERCE revenues +2.8% postal industry revenues growth ADVERTISING FINANCIAL SERVICES 37.7% mail share of industry revenues GLOBAL -4.8% decrease

  5. Slide 5: People and things still need to be physically connected

    POSTAL SECTOR OVERVIEW: GOING THROUGH A SIGNIFICANT TRANSFORMATION PHASE IN ORDER TO ADAPT TO NEW MARKET TRENDS Online shopping Internet of A new paradigm and Postal Things an opportunity Leverage on data PEOPLE and technology AND THINGS Digitalisation STILL NEED Substitution effect What can be digi

  6. Slide 6: CTT overview: a modern and dynamic postal services operator

    CTT OVERVIEW: A MODERN AND DYNAMIC POSTAL SERVICES OPERATOR WITH A DIVERSIFIED PORTFOLIO OF BUSINESSES 72% 10% 18% Mail Financial Express Banco CTT & Other Services & Parcels 69% 28% 3% MAIL BUSINESS RETAIL SAVINGS & INSURANCE PORTUGAL SPAIN MOZAMBIQUE SOLUTIONS SERVICES CREDIT Transactional Printin

  7. Slide 7: CTT overview: delivering on the promise of the IPO

    CTT OVERVIEW: DELIVERING ON THE PROMISE OF THE IPO AND REPORTING CONSISTENTLY STRONG RESULTS Reversing the revenues 1 declining trend (€ million) Strong recurring EBITDA 2 growth (since 2012) (€ million) Before the IPO After the IPO Before the IPO After the IPO -5.4% 1.6% -0.3% 8.2% 798 766 714 705

  8. Slide 8: Key highlights – 9M16

    01. Sector & company overview 02. Key highlights – 9M16 03. Strategy update 04. Recent developments 8

  9. Slide 9: 9M16 recurring EBITDA excluding Banco CTT declines by only 2.3%

    KEY HIGHLIGHTS: 9M16 RECURRING EBITDA EXCLUDING BANCO CTT DECLINES BY ONLY 2.3% (11.9% INCREASE IN 3Q16, DRIVEN BY RECOVERY IN FS, AS EXPECTED) Financial and operational performance € million, except when otherwise indicated Including Banco CTT Excluding Banco CTT 4 Financial indicators: 9M15 9M16 Δ

  10. Slide 10: Revenues evolution influenced by mix effect in mail, Spain restructuring

    KEY HIGHLIGHTS: REVENUES EVOLUTION INFLUENCED BY MIX EFFECT IN MAIL, RESTRUCTURING IN SPAIN & STILL SKEWED (DUE TO A STRONG JAN-15) COMP IN FS 9M16 recurring revenues Revenues breakdown € million; % change vs. prior year; % of total € million Banco CTT -3.6% Financial Services 10% €0.3m (N/A) €53.4m

  11. Slide 11: Efficiency measures drive 4.4% reduction in recurring operating costs

    KEY HIGHLIGHTS: EFFICIENCY MEASURES DRIVE 4.4% REDUCTION IN COMPARABLE RECURRING OPERATING COSTS (EXCLUDING BANCO CTT) 9M16 recurring operating costs 1 Operating costs breakdown € million; % change vs. prior year; % of total € million 1.6% Other €18.2m (-8.7%) 4% -4.4% 436.0 433.3 -2.8 430.5 9.8 426

  12. Slide 12: Double-digit growth in 3Q16 recurring EBITDA excluding Banco CTT

    KEY HIGHLIGHTS: DOUBLE-DIGIT GROWTH IN 3Q16 (RECURRING EBITDA, EXCLUDING BANCO CTT) SUPPORTS A SMALL DECLINE IN THE 9M16 RESULTS 9M16 recurring EBITDA Recurring EBITDA 3 breakdown € million; % change vs. prior year; % of total € million -13.2% Banco CTT Bus. Unit -€14.6m (N/A) -2.3% Financial Servic

  13. Slide 13: Balance sheet optimisation and Banco CTT launch impact cash flow

    KEY HIGHLIGHTS: BALANCE SHEET OPTIMISATION MEASURES AND BANCO CTT LAUNCH IMPACT THE CASH FLOW IN THE PERIOD Cash flow Adjusted cash at the end of the period € million, % change vs. 9M15 € million Reported Adjusted 1 9M16 ∆% 9M16 ∆% 279.0 From operating activities 212.4 >> 171.7 >> Cash flow excl. Ba

  14. Slide 14: Consolidated balance sheet reflects pick-up in Banco CTT deposits

    KEY HIGHLIGHTS: THE CONSOLIDATED BALANCE SHEET REFLECTS A STRONG PICK- UP IN BANCO CTT DEPOSITS AND INVESTMENTS Balance Sheet – 30 September 2016 € million; % change vs. 31 December 2015 1,252 1,252 Net financial debt (cash) + ST&LT debt: €10m + Net FS payables: €365m €558m - Cash and cash equivalen

  15. Slide 15: Mail: retail and distribution networks increase profitability

    KEY HIGHLIGHTS: USE OF THE RETAIL & DISTRIBUTION NETWORKS BY OTHER BUSINESS UNITS INCREASES THE PROFITABILITY OF MAIL 9M16 Mail revenues by type Recurring operating costs 2 Recurring EBITDA 2 € million, % change vs. prior year € million € million -4.2% USO Parcels Other 1 €50.1m (-0.8%) +1.6% €4.5m

  16. Slide 16: E&P revenues affected by prior cancellation of large contracts

    KEY HIGHLIGHTS: E&P REVENUES CONTINUE TO BE AFFECTED BY THE PRIOR CANCELLATION OF LARGE CONTRACTS; NEW INITIATIVES UNDERWAY 9M16 E&P revenues by region Recurring operating costs 2 Recurring EBITDA 2 € million, % change vs. prior year € million € million -9.9% Mozambique +93.3% €1.2m (-32.5%) 94.6 2.

  17. Slide 17: Savings & insurance revenues recover in 3Q16

    KEY HIGHLIGHTS: SAVINGS & INSURANCE REVENUES RECOVER IN 3Q16, ALTHOUGH STILL BELOW 2015 DUE TO JAN-15 COMPARISON EFFECT 9M16 FS revenues by type Recurring operating costs 2 Recurring EBITDA 2 € million, % change vs. prior year € million € million -5.9% -9.9% Credit Other 1 30.6 €0.3m (0.0%) €4.0m (>

  18. Slide 18: Banco CTT project spend within target; accounts double

    KEY HIGHLIGHTS: BANCO CTT PROJECT SPEND WITHIN TARGET; CUSTOMER ACCOUNTS DOUBLE AND DEPOSITS TRIPLE IN THE QUARTER 9M16 Banco CTT key indicators ASSETS € million 32.6 €14.6m €5.4m Recurring Non-rec. 4.0 €66.5m Cash & cash equivalents & other 2 op. costs op. costs €132.3m Financial assets & investmen

  19. Slide 19: Updated FY16 outlook

    KEY HIGHLIGHTS: UPDATED FY16 OUTLOOK  Addressed mail volumes decline expected to be closer to the -3% bound of the initially forecasted range [-3% to - 5%], but continued negative mix effect (registered mail volumes decline) makes the flat revenues guidance difficult to achieve Revenues &  Revenue

  20. Slide 20: Strategy update

    01. Sector & company overview 02. Key highlights – 9M16 03. Strategy update 04. Recent developments 20

  21. Slide 21: Fine-tuning of key strategic levers

    STRATEGY UPDATE: FINE-TUNING OF THE KEY STRATEGIC LEVERS TO ENSURE THE SUSTAINABILITY OF REVENUES & EBITDA GROWTH COMMERCIAL EXCELLENCE Redefine an integrated commercial approach to identify and fully meet our clients’ needs and preferences 1 OPERATIONAL EFFICIENCY Focus on continuous improvement of

  22. Slide 22: Revamp of product offer and commercial excellence for E&P

    STRATEGY UPDATE: REVAMP OF THE PRODUCT OFFER AND FOCUS ON 1 COMMERCIAL EXCELLENCE ARISE AS STRATEGIC PRIORITIES FOR E&P E&P Portugal market split by type 2015; % of total market (including domestic & cross-border) BUILD MARKET AND DEVELOP COMPETITIVE TARGETED OFFER B2C Traditional OFFER AND SOLUTION

  23. Slide 23: Operational efficiency ever more important for mail profitability

    STRATEGY UPDATE: OPERATIONAL EFFICIENCY EVER MORE IMPORTANT FOR 2 THE PRESERVATION OF THE PROFITABILITY IN MAIL TRACK RECORD OF OPERATIONAL EFFICIENCY… …FURTHER ENHANCING THE FOCUS ON THIS LEVER IN THE FUTURE Executed initiatives; 2011-2016 (non-exhaustive) Main objectives Timeline Impact p.a. Posta

  24. Slide 24: Building on successful launch to turn Banco CTT profitable

    STRATEGY UPDATE: BUILDING ON A SUCCESSFUL LAUNCH TO TURN BANCO 3 CTT INTO A PROFITABLE OPERATION Launch achievements Next steps • Banco CTT opened in 137 CTT post offices (end of • Presence in c. 200 post offices by the end of 2016 Oct-16) and a head office (with widespread Network & • The high mark

  25. Slide 25: Recent developments

    01. Sector & company overview 02. Key highlights – 9M16 03. Strategy update 04. Recent developments 25

  26. Slide 26: Recent developments

    RECENT DEVELOPMENTS Promissory agreement for the sale of former head office  Real estate property owned by CTT located at Rua de São José in Lisbon  Sale in line with the strategy of disposal of non-strategic assets when the necessary market conditions are met  Total price due for the sale is €25

  27. Slide 27: CTT Investor Relations

    CTT Investor Relations Upcoming Events: 1 Feb. – Madrid – Santander Iberian Equities Conference 10 Mar. – Lisbon – Roadshow with Caixa BI 13 Mar. – Edinburgh – Roadshow with JP Morgan 14 Mar. – London – Roadshow with Barclays 15 Mar. – Frankfurt – Roadshow with Morgan Stanley 16 Mar. – Madrid – Road

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