Ctt Correios Portgl Sa

Good morning, everyone. Welcome to our first SESA results presentation. I'd like to invite you to follow us starting in slide number four, where you can see accelerating organic growth with revenues growing 11%, recurring EBIT growing 28% if we account for a similar perimeter. But given that we are now accounting two months of CASEZA, revenue grew 18.3% and EBIT grew an impressive almost, sorry, 47% year on year. And talking about the contribution of CASEZA, I would invite you to move to slide number five. where we have an outlook of CASEZA. On the left-hand side, nothing new, just to highlight that CASEZA has been growing significantly in the last two years, and it will keep growing this year based mostly on its customs clearance activity. But looking at the right-hand side of the slide, I'd like to refer to what I would call, I would say extremely successful integration. going along a number of tasks that we are following in a very structured way. We have unified sales strategy to leverage cross-selling between CASEZA and TD Express, given that this is an activity that we were already developing before the acquisition of CASEZA. We have also aligned end-to-end logistics, including route optimization and standardization of services between both networks. And of course, all the support functions, finance, accounting, planning, and control have been already migrated to CTT with the new governments in place, including a new board of directors. So we continue to focus on the integration of Casioza in the CTD universe to ensure a smooth and efficient transition. And we have started already seeing the results in this quarter. Moving to the next slide, slide number six. we highlight this positive outlook for growth. We've been growing our parcels volumes with a peculiar quarter in the sense that a growth of 8% in volumes was a combination of a very peculiar month of April, in which between the blackout in Iberia, the fact that we had two less working days, and also that Easter moved to the first quarter, we had a very difficult April month. But then we see growing volumes. And in fact, the level of growth or parcels volumes that we are expecting for the remainder of the year is around the figures that we've seen in June, therefore above 15% growth. And this is what we are guiding in terms of volume growth for parcels this year. This growth, if we move to slide number seven on volumes, derives obviously growth on revenues and recurring EBIT and including an expanded EBIT margin given, again, not only the growth of volumes but also the contribution of cases. We have observed a 14.4% growth on revenues in the quarter or a 29% growth on EBIT. But again, if we account for the contribution of Casseza and add to the organic growth, this produced a 34% growth on revenues and an impressive 73% growth on EBIT. And probably more important than that, we have seen one additional percentage point added to our EBIT margin that is now stabilized at 9.5% EBIT margin. So CASEZA enhances and differentiates our offering. uh more than than already uh have because we have we have this value proposition that covers a larger a wider part of the value chain of e-commerce logistics and and because we are integrating cassius for some customers also with last my delivery this will this will improve further our profitability on the parcels business. So, all in all, a very good quarter with a very significant contribution from E&P. I will now pass the floor to my colleague, João Sousa, to address starting with mail.

Thank you, Joe. Good morning, everyone. On slide eight, as you can see on mail revenues, mail revenue was impacted by April blackout, like we see also in Express and Parcels, putting pressure on overall quarterly performance, address mail volumes down 10.5% year on year, falling from 99.2 million to 88.9 million on volumes. Seeing these mail and other revenues perform resiliently, growing 2.9% year on year, despite the election effect we had in May of 25. Excluding the election effect, the revenue declined 4.8% year-on-year. Total revenue reaching €118.7 million, comparing with the last year, or year-on-year, €1115.4 million. helping by business solutions at growth 10.5% year-on-year. Business solutions continue to contribute positively to shifting the revenue mix on these business units. Also, average price increasing on mail increasing 6.72% year-on-year and also helping here to managing the revenues on this business area. Recurring EBIT grow 49.6% year-on-year from 1.8 million to 2.7 million euros. Margin EBIT improving 2.3% year-on-year versus 1.1% last year. even with the positive effect of the elections that we saw, comparing with the minus 2.2 million euros coming from activity. It's important to say here that EBIT remains subjected to volatility during the quarter due to the client behavior on large accounts decisions, particularly on central government because It's difficult to managing the behavior of the mail on these big clients. So during the quarter is very difficult to managing this EBIT. And on these business areas, we stay focused on remain, we maintain focus on profitability. So in that way, we still have a strict cost control to protect the profitability on these business areas. We are expanding the business solutions pipeline to helping this business area and also chain management with the digitalization solutions for man. On slide nine, as you can see, we are commercial productivity continues to end up being financial service performance. We do very good public investments with strong performance in the financial services. Public debt placements increased more than 259% year-on-year this quarter compared to last year, and more than 13.4% versus the end of 2024. This results on a daily subscription of more than $19.9 million per day. We see a sustainable outlook for the coming days, despite the falling interest rates, but we maintain a positive and stable outlook for the coming days, mainly because of the positive communications we see in the news and also seasonal factors such as immigrant savings and holidays bonus that people typically put on these products. Also, we see a sustainable growth in subscription based services like insurance and health plans, as you can see we growth health plans 49.8% in the second quarter versus the end of the, of last year. And already after we already grows more than seven, 700% year on year in the, in the, in the, in the last year, that's, that means for us, this business area, the revenue growth, 64.8% in this quarter from, from, 5.5 million to 9.1 million euros in revenues and EBIT grows from 2.7 million to 4.5 million this year. We maintain this strategic retail footprint because more than also selling these public debt placements and selling insurance, This big retail network also, as you know, it's very important to claim in the market that we have the largest PUDO network in Iberia. That, as you know, is also very important for the express and parcel business area. And now I pass to Guilper Chico.

Thank you, João, and good morning. Starting on slide 10, we continue to see strong progress on the business volumes of the bank that grew 12.5% year-on-year with a sequential acceleration driven by the loan book and the off-balance sheet placements. These trends also translate to the banking revenues where we see a growth of 13% driven by net interest income with volumes driving that growth and in commissions with off balance sheet and commissioning accounts also with a strong dynamics. In terms of profit before taxes, we see 1.2% growth that reflects the build-up that we are doing in terms of digital and physical commercial capabilities as we transition the bank to a new growth phase. In slide 12, we can see now the key financial indicators of the group. On the second quarter, we obviously, as Ron mentioned, we include two months of CACESA and we have a strong... dynamics throughout the KPI, so 18.3% on revenues, 47.4% on recurring EBIT, net profit also grew 34.3% and free cash flow reached 23 million in the quarter. In the slide 13, we can see our revenue growth detail. I will focus on the performance numbers. So we're counting per caseza in the perimeter in 2024. We see strong growth driven by Express and Parcels that continues to be our most important contributor of growth with a 14.4% growth in revenues. driven by 8% growth in volumes, also positive contribution on unit price, and obviously customs clearance growth all contribute for this 14% growth. Mail growing 2.9%, mainly the contribution of elections as one share. The bank growing 4 million, or 13%, driven by volumes that drove net interest income and commissions. And also financial services also growing 3.6 million or 64.6%. And this is the result of the 1.2 billion placements of public debt or a growth of 259%. So all in all, all divisions contributing for growth. That is a very strong performance. In the next slide, we see our operating costs that grew 9.1% pro forma, 15.3 million coming from express and parcels or 13.1%. This is the combination of increased volumes and investments in capacity as we continue to prepare our business to volumes increase. In mail, we see 2.5 million increase that is mostly explained by the 5.4 million costs related with the elections. If it was not For that effect, we'll be declining almost €3 million in costs due to the restructuring that we keep doing in this business unit. In financial services, we see €1.8 million growth in costs driven by by activity and in the bank we see 4 million of increase in staff and IT costs that reflect the digital and physical investments in capabilities. Also contribution from the impairments where cost of risk now stands at 1% in the bank from 0.9% in the same quarter last year. In slide 15, we see our recurring EVs with a very strong progress of 28%. Our margin now stands at 8.6% up from 7.5% last year. This is mainly driven by the growth on express and parcels, volumes and customs clearance contribution. and higher margins are driving this growth. In May, the growth came mostly from elections, as we saw, and financial services with a very strong quota, also contributing 1.7 million for for the EBIT growth. In the bank, a slight growth of 0.1%, 0.1 million, and that is some trend that we'll continue to see this year. Looking forward, we continue to see strong growth in express and parcels, above 15% in volumes, and some more margin expansion as we continue to integrate CASEZA, and we continue to see the benefits of scale in Iberia. Mail, in line with previous years, with seasonality being very strong in the fourth quarter, stable placements in financial services, the bank remaining strong in the volume growth, business volume growth, and some stabilization on margin as we continue to invest in the capabilities of the bank In slide 16, we see our consolidated free cash flow. Operating cash flow stood at 36.4 million. Free cash flow, 25.2 million. And now our net debt stands at 44.5 million euros. On slide 17, we see our cash flow, but excluding the bank contribution or the bank is accounted under the equity method, where we see a very strong progress on operation cash flow that grew 74% and our free cash flow almost tripled in the quarter. Our leverage now stands after dividends and the CACESA acquisition at 2.4 times net debt to EBITDA that as we guided that we will remain below the 2.5 after including CACESA and we should see the leverage going forward as free cash flow generation and the proceeds from the JV with the HL will help us deliver going forward. And with that, I will pass you to João Bento for his final remarks.