Ctt Correios Portgl Sa

Good morning and welcome to CTT's first half 2024 results conference call. Please note that this conference is being recorded. For the duration of the call, your microphones will be disabled. However, analysts will have the opportunity to ask questions at the end of the presentation. To do so, simply click on the button to raise your hand and we will give you access to the microphone. If you are dialing from a phone line, press star nine to raise your hand and star six to unmute yourself. I will now turn the call over to Mr. João Bento, CEO.

Thank you, João. Good morning, everybody. Welcome to our second quarter results presentation. So if we move to the first slide, which is slide number four, we had a very strong execution in express and parcels, which drove the revenue growth. Indeed, we actually are with the volumes close to those in our last big season, having delivered more than 63 million objects in the first half. And since the second half of the year should be stronger, this compares extremely well with the 100 million parcels we delivered last year. We've started now a common segmentation of large accounts and a unique pricing system for Iberia, so no longer Portugal and Spain. And all this, including these very high volumes, drove us to record high margins in the second quarter. On mail-in dollars, we have a slight increase in addressed mail revenues, and we are using business solutions as a lever to enhance the commercial relationships with our customers, and therefore trying to improve the situation also through business solutions in mail-in dollars. Moving to the great part of the slide, talking about bank and financial services. We have not been standing increasing sequentially the placement of public debt. It's still not normal. So it's taking a little bit more than we thought to normalize, although we are, as I said, growing again. We have launched the online public debt placement in the CTT app recently. And we also have heard several statements, and we believe that improvement in the products and in the cap should happen sooner than later. With strong commercial activity, we are building up our insurance and health care plans book. The bank saw another 20,000 accounts open in the first half. So in line to, again, around 40,000 to 45,000 accounts in the year, with continuous focus on client engagement, supporting growth in business resources. We had a very significant increase in profit before tax of 45% in the quarter. So if we move now to the next slide. We see in both charts that we have very, very impressive growth, not only resilient, but also very high in Spain. We are growing 69% on top of 37% growth in the similar quarter last year. And also in Portugal, with good growth, 9% growth, comparing with the highest quarter that we had last year, which was exactly the second quarter. So Express and Parcels on path for another record year, which is not strange since we are the fastest growing parcel company in Iberia, indeed in Europe. Moving to next slide, we see that these volumes also brought record recurring EBIT margin in the quarter. with 42% growth in revenues, and with an average of 526,000 parcels per day. We see a very significant growth in margin, more than 54% in quarter-on-quarter compared to last year. With this, we see growth in volumes and that, in fact, is driving operational leverage, as we always said. We had built capacity ready for significant growth, and the growth is now driving us to significant margin increase. And with this, I would move the floor. I will pass the floor to João Souza to guide us through mail and public debt. Up to you, João.

Good morning, everyone. Thank you. Thank you very much. Well, as you can see on slide seven, mail price increase and mix are partially offsetting the falling volumes. Saying this, we know that some public entities have postponed some volumes for the coming quarters, even so. the address mail volumes decreased 10.9% year-on-year, but at the same time, we are seeing the average revenue per item increasing 10.2%. That's why we say these mail price increases are partially offsetting the falling volumes. In that way, we can see that address mail volumes increasing in this first half of the year 2.1% against last year, So that way we reach 189.9 million euros on revenues, on addressment revenues. We still, like we said in the last quarter, we are still implementing cost cut programs that will support the progression in margins. And as we're going to see in the coming slides, I just want to also highlight in this slide that we are still developing digital solutions like via CTT for the coming months to help us to address these customers when even they want to go for more digital than for physical in-mail. If you go for slide eight, as you can see, the... the costs in mail and others are reached 235.6 million euros, an increasing of 10.5% comparing with the last year. But this comes for elections, inflation and also lower financial services activity that drove expense higher on this first half of the year in this year. Because if you Assuming a normalized placement activity, in fact, the recurring EBIT and others will be 2 million higher. Saying this, we are, like I told you in the last slide, we are still implementing cost-efficient programs that we expect to see results in 2024. We are working on this progression in price that's going to help us to stabilize the margins. And we also see for the coming months a normalization in public debt that allow us also to recovering these fixed costs. On slide nine, and coming for the public debt placements, We are seeing sequentially subscriptions increasing. As you can see, in the second quarter, we increased 10.7% against the first quarter. We are doing a lot of actions to increase and to see a better path for the coming quarters. We launched a marketing campaign in this second quarter. that we see a good feedback from the market. So in that way, we are designing more campaigns for the coming months. We also launched last week the online platform for subscription in public debt. It's early days, but we like the early numbers we are seeing right now after one week of using this app. This allows just for you to understand that typical more young subscribers that likes more digital to use right now this app. Also, it's more easy in the customer experience for the customer who wants to do savings in a daily basis or in a weekly basis to have this online platform and don't need to go to our store. And also that we are seeing in the news, public information that suggests that the conditions of that certificate could be reassessed in the coming weeks that also give us a better view for the coming months, for the coming quarters in public debt placements. And after this, I pass the word to my colleague, Guy Pacheco, our CFO.