Ctt - Correios De Portugal Sa · EURONEXT:CTT
Ctt - Correios De Portugal Sa — CTT – Correios de Portugal — Q3 2014 Earnings Presentation
26 slides from Ctt - Correios De Portugal Sa's earnings presentation, Nov 4, 2014
Slide 1: CTT – Correios de Portugal 3Q14 Results Presentation
CTT – Correios de Portugal 3Q14 Results Presentation 4 November 2014
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 financial results of the third quarter and the first nine months of 2014. As a consequence thereof, this document may not be disclosed
Slide 3: Agenda
Agenda I Key highlights of 3Q14 and 9M14 II Business units performance III Outlook IV The Postal Bank project 3Q14 Results Presentation 3 4 November 2014
Slide 4: Strong 3Q14, with key indicators showing further progress and acceleration
Strong 3Q14, in which key operational and financial indicators register further progress and acceleration on the already solid trends observed in 1H14 Financial Performance 3Q14 vs. 3Q13 9M14 vs. 9M13 Reported Revenues €174.4m +3.0% €530.9m +2.1% Reported Operating costs €141.6m -0.7% €429.3m +0
Slide 5: Rate of decline of addressed mail volumes slows to -6.1% in 9M14
The rate of decline of addressed mail volumes slows down to -6.1% in 9M14, in line with expectation; Mail like-for-like revenues grow year-on-year… Addressed mail volumes by type -6.1% Mail like-for-like 1 revenues by type m items € million +0.3% 672.1 630.9 399.8 400.8 35.9 66.7 35.2 47.5 -4.3% 54.
Slide 6: Recurring like-for-like revenues growth accelerates to +3.6% in 3Q14
…as a result, recurring like-for-like revenues growth accelerates to +3.6% in 3Q14 (+2.1% in 9M14), driven also by continued strong performance of FS Reported revenues +3.6% 174.4 4.2 € million Reported revenues 2.3 -0.5 € million +2.1% 169.4 0.0 -1.0 3Q 520.0 530.9 44.1 57.5 +3.0% 95.1 94.0 3Q13 Δ
Slide 7: Recurring like-for-like operating costs decrease by 1% in 9M14
Recurring like-for-like operating costs decrease by 1% in 9M14, due to relevant reduction in ES&S spend Operating costs 1 Reported operating costs 1 € million € million Reported Recurring 2 9.2 -2.2 1.4 -4.9 +0.6% -1.5% -1.0% 426.7 429.3 432.9 426.2 18.9 18.0 18.9 17.9 -0.9 429.3 176.2 172.3 176.2 1
Slide 8: Recurring like-for-like EBITDA growth accelerates to +32.6% in 3Q14
Recurring like-for-like EBITDA growth rate accelerates to +32.6% in 3Q14 and reaches high double-digits in 9M14 Recurring EBITDA 1 +32.6% 35.4 € million 2.7 4.2 Recurring EBITDA 1 € million +16.8% 1.8 26.9 -0.2 3Q 101.7 87.1 28.7 19.9 3Q13 3Q13 EAD Δ Rev. Δ Δ Op. 3Q14 4.5 Mail, E&P Revenues costs +3
Slide 9: 9M14 operating free cash flow reaches €73.3m
9M14 operating free cash flow reaches €73.3m, more than double the amount generated in the same period last year Cash Flow € million 3Q13 3Q14 ∆ 9M13 9M14 ∆ Cash flow from operating activities 1 6.3 6.7 0.5 34.4 68.9 34.5 Cash flow from investing activities -1.2 0.7 1.9 -0.1 4.4 4.5 Capex payments -
Slide 10: Balance Sheet shows high solvency and solid liquidity
The Balance Sheet continues to demonstrate high solvency and solid liquidity position Balance Sheet € million Assets Liabilities & Equity 1,246 1,246 1,100 1,100 Financial Services 458 310 payables 697 Cash &cash equivalents 545 156 172 Other current liabilities 7 8 Financial debt (ST & LT) Other cu
Slide 11: Agenda
Agenda I Key highlights of 3Q14 and 9M14 II Business units performance III Outlook IV The Postal Bank project 3Q14 Results Presentation 11 4 November 2014
Slide 12: Mail: revenue growth and cost containment expand EBITDA margin
Revenue growth coupled with strict cost containment allows for the expansion of the Mail EBITDA margin Mail reported operating costs 1 Mail reported EBITDA 1 -2.3% € million € million 67.1 65.6 116.5 +17.8% 112.4 111.2 21.4 18.2 16.7% 111.6 16.2% 16.4% 111.2 14.1% 107.9 Q1 Q2 Q3 3Q13 3Q14 9M13 9M14
Slide 13: Financial Services continue as a strong engine of growth
Financial Services continue to be a strong engine of growth, as savings flows in 9M14 reach €5 billion FS volumes by type FS recurring revenues by type +23.4% m ops (left axis) / € billion (savings flows 1, right axis) € million m ops €bn 54.5 44.1 2.2 200 10 2.5 5.0 +28.7% 21.8 150 9.0 2.1 2.2 5 0.
Slide 14: Express & Parcels restructuring progressing well
Express & Parcels restructuring progressing well, with reported 3Q14 EBITDA margin improving ~60bps, despite continued pressure on revenues E&P volumes by region +8.0% E&P revenues by region -1.2% m items € million 19.8 95.1 94.0 18.3 8.8 10.0 54.8 56.8 +1.2% -1.6% 6.4 6.5 31.8 31.3 3.1 3.3 9.5 9.7
Slide 15: Agenda
Agenda I Key highlights of 3Q14 and 9M14 II Business units performance III Outlook IV The Postal Bank project 3Q14 Results Presentation 15 4 November 2014
Slide 16: Upgrade to the FY14 outlook
Upgrade to the FY14 outlook Revenues • Goal of 1% to 2% growth in FY14 like-for-like revenues, inverting the historical declining trend in the top-line (upgrade) CAPEX • FY 2014 Capex of circa €15m (vs. €20m previous guidance) • Mail: o Goal of stable like-for-like FY14 revenues (+/-1% revenue growt
Slide 17: Trends shaping our future – convergence and convenience
Trends shaping our future – convergence and convenience, still a key role for physical assets E-substitution effect …for People ▪ E-mail vs. physical world ▪ E-billing vs. transactional mail ▪ Physical vs. online shopping E- ▪ Call centres / online vs. face-to-face Express & Commerce Parcels E-integ
Slide 18: Agenda
Agenda I Key highlights of 3Q14 and 9M14 II Business units performance III Outlook IV The Postal Bank project 3Q14 Results Presentation 18 4 November 2014
Slide 19: Key milestones of the Postal Bank project
Key milestones of the Postal Bank project 5/Aug/2013 – Submission of the Postal Bank project to the Bank of Portugal (BoP) 2013/2014 27/Nov/2013 – Conditional authorisation of the project by the BoP 4/Dec/2013 – Conclusion of the 1st phase of the privatisation and IPO 24/Mar/2014 – New governance mo
Slide 20: CTT is uniquely positioned to launch a bank in Portugal (1/3)
CTT is uniquely positioned to launch a bank in the Portuguese market (1/3) CTT with competitive advantage CTT worse than competitors Price perception is a key factor, making no-frills concept very appealing There is an opportunity to launch a Percentage of respondents to market survey banking operat
Slide 21: CTT is uniquely positioned to launch a bank in Portugal (2/3)
CTT is uniquely positioned to launch a bank in the Portuguese market (2/3) CTT’s network extension compares to the major Portuguese banks’ and has There is an opportunity to launch a available capacity that can be used to provide banking services banking operation in the Portuguese market, addressin
Slide 22: CTT is uniquely positioned to launch a bank in Portugal (3/3)
CTT is uniquely positioned to launch a bank in the Portuguese market (3/3) Current offer of CTT’s Financial Services There is an opportunity to launch a banking operation in the Portuguese market, addressing average-income Examples Partnerships Awareness 1 and more conservative customers ▪ Postal ch
Slide 23: Postal Bank targeted to have no impact on CTT's dividend policy
Postal Bank targeted to have no impact on CTT’s dividend policy 2012 & 2013 operating free cash flow 1 and dividend € million 1. Over the last years, CTT has consistently generated Operating free cash flow operating free cash flow 1 > dividend 117.9 (reported) 1 2012 2. In 9M14, even excluding the F
Slide 24: Postal Bank key financial targets / estimates
Postal Bank key financial targets / estimates Estimates € million Year 3 Year 5 Year 10 Main Targets Previous years Current year Projected accumulated injected Capital 85 100 100 ▪ Break-even point (CTT Capex to Postal Bank) 20 5 0 to be reached in year 3 161 231 Projected Revenues 91 ▪ Regulatory c
Slide 25: The Postal Bank project – recap of the key messages
The Postal Bank project – recap of the key messages Solid timing & • Clear opportunity to launch a banking operation, addressing average-income value proposition and more conservative customers with a no-frills offer Retail Network • The existing CTT Retail Network is highly capillary and has untapp
Slide 26: CTT Investor Relations
CTT Investor Relations Upcoming Events: 5 Nov. – Results webcast 5 Nov. – Lisbon roadshow 6 Nov. – Frankfurt roadshow 7 Nov. – Paris roadshow 10 Nov. – London roadshow 11 Nov. – Edinburgh roadshow 12 Nov. – Warsaw roadshow 2 Dec. – Credit Suisse 4th Annual European Business Services and Transport Co
CTT – Correios de Portugal — Q3 2014 Earnings Presentation on 6ix