Ctt Correios Portgl Sa

Hello and welcome to CTT's first of 2026 results conference call. This event is hosted by Mr. Guy Pacheco, CEO of CTT, Mrs. Joana Freitas, CFO of CTT, and by Mr. João Sousa, CCO of CTT. Please note that this conference is being recorded. For the duration of the call, your microphones will be disabled. We will have a Q&A session at the end of the presentation and analysts will have the opportunity to ask questions. To do so, simply click on the button to raise your hands and we will give you access to the microphone. If you are dialing from a phone line, press star 9 to raise your hands and star 6 to unmute yourself. I'll now turn the call over to Mr. Gui Pacheco, our CEO.

Good morning to you all and welcome to our first half 2026 conference call. I would invite you to start in page 4, where we see our core business, CEP and mail services continuing to perform strongly, with temporary headwinds on Caceda as players anticipate the new regulatory context of the minimis. We had a very healthy organic growth of 6.3%, with strong contribution from our SEP business, also a strong contribution from our mail-in services, that is these guys by the effect of elections, that accounted for 8.6 million last year, so if we account we also had a strong contribution from mail, and bank contributing 7.4% to the growth. Our EVs declined 8.4, despite a good contribution from our SEP business and a very strong contribution of Melon Services, with Cassez giving this anticipation of the regular time context, waiting on the evolution. André Almeida Almeida Almeida So organically growing almost 21% and overall growing 24% in volume, so very strong growth. And with the very good news of diversification, we see on the right side of the slide a strong diversification from cross-border non-EU Tier 1 to other kinds of players, namely Iberian players and EU sources in marketplaces that continue to grow. Marcos Ferreira Marcos Ferreira Marcos Ferreira Marcos Ferreira Revenue growth above volumes with sequential acceleration with organic growth growing 21.2%. Our EBIT also growing 5.4% with a very robust margin that is normalizing, although some mixed and full inflation impacts were felt. and we are actively managing profitability with a number of implemented actions in terms of optimization of line oil handling and last one. On slide seven, we see our early validation On the GEV of DHL synergies, where we continue to see significant synergies of 17.5 million euros, a big portion of that coming from revenues, 40%, and then 50% coming out of operation efficiency and support functions. We know that the GB gives us more than scale, gives us commercial reach, network density and operational specialization, which are key to building a stronger e-commerce platform in Iberia with its enlarged offering and more strength on operations. On slide 8, we see the customs clearance activity that remains under pressure. The business environment remains very volatile, caused by regulatory volatility, changing inflows and airport shifts, but we are taking concrete actions to protect profitability. We are reducing Our workforce and optimizing temporary workforce while actively managing our facilities and warehouse in order to protect the decline in revenues and strongly decline on EBIT that you can see on the shot. We chose to spend a little bit more time explaining the trends around this business As we see this strong impact in the customs business driven by two regulatory chains, one affecting only the Spanish business, that is the introduction of the G4 regulation, And the anticipation of what has been implemented in the 1st of July, that is the end of the de minimis exemption, where all goods below 150 euros will be charged a 3 euro per product fee per category. Noting that in November is to be expecting an additional fee of 2 euros per parcel that will bring still more volatility. So, stricter regulation in Madrid and supply chain reorganization are in anticipation of the new regulation is what is driving the change of volumes as CTT or CACEDA has different market shares in all these airports. And we are seeing volumes moving from Madrid to Eastern Europe and Central Europe, namely Benelux. In Eastern Europe, we have strong market share in Poland, so that is good news, but in the central European part, Casseza is not as strong in the market, and that is driving the decline in share and those volumes. But we see this as temporary, and we see the market evolving to B2B clearance and fulfillment, where we have strong capabilities, And this regulatory reserve is creating opportunities that we are already acting on with strong leads from a number of marketplaces in Iberia within this combination of clearance and fulfillment that bring us comfort that the reorganization of the business will evolve André Almeida de Almeida The Regulation Anticipation or Impact on Cacerda. In EBIT, not the same dynamics as the incremental margin of the customer's business is putting pressure on margins and our EBIT is declining 26.9 but I would highlight this Various marked different dynamics between the two businesses and highlighting that we see on customs these as temporary in nature. And with that I will pass the floor to João Sousa to guide you through the mail and financial services.

Thank you Gui, good morning all. As you can see on slide 11 Second quarter confirms strong acceleration in saving placements driven by higher subscription limits, attractive interest ratings and growing digital adoption. At the same time, health plans continue to scale, reinforcing the diversification of our service revenue base. Also, we see that in our insurance services. On the left side of the slide on public debt placements, we can see that average monthly public debt placement reached 547 million in the second quarter of 2026, up to 60% when compared with the last quarter and up to 40% year on year. Topo's subscription amount to approximately 1.62 billion during the quarter, reflecting a very strong recovery from the customer demand for savings products distributing through our CPP network. And this performance is driven by three factors. So, Iger's savings certification, as you know, subscription limits was I guess the subscription limit last year was increasing attractive interest rates and the customer continued to confidence in this kind of low risk saving products. Also, I would like to highlight that digital channels continue to gain relevance. Digital savings subscription are representing around 12% of all transactions. And in May, it was May becoming the best month ever, surpassing 20 million from this channel. The outlook of public placements looking ahead remains very positive. We continue to see a strong customer demand from saving certificates, supported by the attractiveness of this product through a customer placement. And at the same time, the launch of the new treasury certificates generates additional demands from customers seeing longer investment horizons. It's important to highlight that we are not seeing a meaningful cannibalization between these two products. So we see an increasing and not a cannibalization. So on Pantrader, we see new customers come to our stores or to our digital platforms. And so that's the way we see an outlook very positive until the end of the year for these saving products in our network. On health plans, we continue to perform pretty well. As you can see on the left side of the slide, the number of customers reached 55.8 thousand customers represented the growth of 13% versus last year and 90% versus 2024. This growth validates our ability to develop subscription-based services and create customer relationships behind our traditional postal services. We are doing this on the health plans and also in the insurance services and creating these new services in our retail network. In summary, we are seeing a strong acceleration in savings placements, supported by both our physical and digital channels, and outlook for the next quarter remains favorable, with strong demand for both savings certificates and now this new product that will launch in 6th of July. At the same time, health plans and insurance continue to grow, reinforcing the diversification of CTT services portfolio. On the next slide, slide 11, Sorry, slide 12, where we see the mail and service revenues. Despite the challenging cooperation based created by the May of 25, because we have these legislative elections, mail and service revenues delivered a very solid performance. Because if you exclude the only one-off effect, revenues grow, Saving Placement Accelerates Significantly and Business Solutions Appendix Continues to Expand and in that way profitability improves materially. As you can see, revenues reach 127.9 million in the second quarter of 26 compared with 130.4 million in the previous year. However, this compression is significant if it impacts The contribution from the Portuguese legislative is one-off. If we exclude this, we can see this growth of 5% quarter-on-quarter. The growth was driven by savings placement, business solutions, and the resilience of the address mail revenues. I would like to highlight these address mail revenues that The address mail revenues declined 7.5 from 88.9 million compared with 82.2 million items or ever the revenue impact was sustainability lower. This means that excluding the election in fact address mail revenues would have declined only 0.9 demonstrating a significant revenue resilience. This continues to demonstrate our ability to manage the structural decline in physical mail While protecting both revenue and profitability. Also, like we saw before, sales placement also continued to increase the revenues and productivity, increased 56.1%, reaching 1.3 million in the second quarter of 26, and the total subscription increased 40% approximately 1.62 million. Business Solutions, the revenue increased 7.8 reaching 19.6 million during the quarter. This becomes a huge asset to our diversification in this business unit. We see also a very positive outlook until the end of the year and also a very good way to André Almeida de Almeida Almeida de Almeida 149%, highlighting the strong operational leverage that we have been doing in this segment. And so that we can see that this business area that can be very, very positive, because even you increase the saving certificates, these revenues, you are seeing an increase of margin much higher than coming just from the revenues of the saving certificate case. Sorry. And now I pass for Joana.

Thank you, João. Good morning, everyone. We're talking now about the bank. The bank has seen a very robust quarter in terms of growth. In business volumes, you can see that all categories have had a double-digit growth, both deposits, off-balance savings, loan book, accounting for nearly 40% of growth quarter on quarter. The current accounts, you can see the number is slightly growing, but there was a correction caused by the Bank of Portugal asking to eliminate accounts that were inactive for the past 24 months. So there's a slight difference on previous numbers that you may have seen. But we continue to see a very strong performance in the path of growth. It's translated also in the growth of banking revenues. Banking revenues went up 7.4%. In the quarter, both in net interest income, in commissions, there's a slight decrease in the category other that has to do with transactions and operations that happened last year that are not recurrent, namely the sale of NPL portfolio and credit recovery in the 321 credit unit. Looking at recurring EBIT, we are continuing our strategy of reinvesting The proceeds of the business in creating technology and commercial capabilities for future profitability growth. So we do see a slight decrease in recurring EBITDA from 5.6 to 5.2 in the second quarter of 26. And maintaining hot ROT at around 12.1%. So, I would say a quarter that continues to deliver on growth and investing for future improved profitability. On the next page, I think we've now moved to page 15, you have our financial indicators. Here you can see the full consolidation with the bank and no pro forma adaptations. I would highlight that we have a strong revenue growth quarter-on-quarter, 11.7%. We have the recurring EBITDA decreasing over the year-on-year, but increasing, improving versus the first quarter of this year, so on a positive trend sequentially. And also free cash flow at 31 million, improving 35% versus the last quarter. and these will be my highlights for the stage. Continue on page 16 and looking deeper into the revenues. Here we can see that revenues grew at 6.3%, so a solid performance that was underpinned by SEP and by mail-in services if we isolate for the effect of last year's elections. So e-commerce solutions grew 20.2 million. That's the combined effect of a drop in revenues that we consider to be temporary in the customs clearance area of 6.3. And then a very significant growth, organic growth in e-commerce where greater volumes are translated into higher revenue and also underpinned by higher revenue per item. In mail and services, we have here the effect of elections, as I was saying. If we didn't have that, this would have grown some 5% instead of a decrease of 1.9%. So we're seeing the underlying drivers of growth to be quite resilient. And the banks contributing here with 2.6 million or 7.4% increase, porto a porto. On the right-hand side, you can see that e-commerce solutions continues to be over half of our total revenue, so the growth engine of the group representing already more than half of our revenues. And on mail and services, this decrease, again, if we had isolated for elections, would be a slight positive of 0.6%, so also showing resilience and stability. On the next page, if you look at costs, we have adjusted the operating costs related to EBITDA to account for the pro forma incorporation of CACILSA and DHL to have a comparable basis. Starting with that basis, costs grew 7.6% in the quarter. They were driven mainly by the organic activity of the SEP business and also influenced by fuel inflation. We can see that e-commerce solutions, we have a decrease in costs in the non-SEP business, so adjusting for capacity and putting in place cost reduction measures to counter the effect of the drop in revenues. And then the remainder is the 26 million increase in costs has an impact of cost of fuel prices of 2.4 million in the quarter and the rest essentially accompanying the organic growth of e-commerce. In mail-in services, we actually can see a very positive decrease in cost. Cost optimization initiatives continuing to deliver, including headcount reduction and optimization of operations, and the bank investing in its commercial capacities and digital transformation for future growth. In the lower right-hand side, you have the first half OPEX breakdown. Again, these numbers, they don't account for any pro forma adjustment of the inclusion of CAFESA, just a small comment. For example, staff, if you account for like-for-like comparison, would have grown only 2%, which is essentially linked to the growth of minimum salaries, and so overall, the more stability in costs. On page 18, looking at the EVIT performance, We can see that EBIT has been pulled essentially by our seven mail-in services, starting here at 28 million with the adjusted CAFIAs and DHL pro forma incorporations. We can see on the e-commerce solution this temporary effect that we're seeing in the customs sector, decreasing EBIT by 5.1%. 5.1 million, positive influence of the e-commerce solutions of 0.5, and then mail and services growing 3.7%, and a slight decrease in the bank as we saw before. All in all, the margin remains at a robust level of 7.4%, and we can continue to see a recurring EBITDA that is improving and expected to improve in the rest of the year. On the next page, page 19, just talking a little bit about our leverage ratio and our debt. In terms of cash flow, we've seen a significant improvement in the change of working capital. The values for the first quarter of this year were minus 37.3. They have been improving on the second quarter. They're still Operational cash flow also growing quarter on quarter now standing at 8.4 but comparing with the second quarter of 37.5 so we are seeing also a positive trend on the evolution of cash flow and free cash flow stands at minus 6.9 at the end of the first half. But again, we're seeing a continued improvement. The first quarter was minus 33 million, the second quarter plus 26 million, so we're seeing a positive trend there. In terms of the evolution of net debt, our net debt has decreased. We've had payment of dividends, our share buyback program, and the proceeds of the Transaction with DHL that has taken us to 292.8 million net debt at the end of the period. And that means that our leverage ratio net debt to Evita has now improved to 1.8 times from 2.4 times, so giving us significant strategic flexibility and allowing for... Joana Oliveira Freitas, João Afonso Ramalho Sopas Pereira Bento, Joao Carlos Ventura Sousa, Nuno Manuel Teiga Luis Vieira, Ana Rita Baião Matos, Miguel Alexandre Ferreira Amaral Salema Garção

We are also guiding, I should say, with a lot of transparency. We are breaking our guidance in two parts. One with a lot of ambition. To grow our core with an overall growth of double-digit growth and ITINs if we exclude the bank and so guiding to what we consider here core, so SEP, Mail and Bank CTT to a growth of 7% to 12% to be in a range of 105 to 110 million. And then highlighting that the current context and still the implementation of a new levy in the end of the year brings limited visibility to Carcesa and as such we are giving a broader range and also highlighting to the higher risk of execution but all in all providing a guidance that will be between 115 and 125 This guidance is based in the assumptions of a flatish Banco CTT recurring EBIT as it was previously guided. A continued strong performance from mainland services given the efficiency measures that we continue to implement and a good outlook on financial services. and we continue to see growth on the CEP volumes that will lead to an overall high single-digit growth in the full year of 2026 and obviously with some key risks that is the car sales or the customs part and and some volatility around sector volumes on the post-Dominion world and continuous inflation pressure on fuels that continue to be driven by geopolitical instability, namely on the Middle East. On slide 22, so we firmly believe that we'll continue to deliver our future growth building in our strategic foundations. We have a very good quarter in our core with SEP and mail revenues remaining very healthy with excellent trading momentum in mail services and very strong growth on SEP. and that we continue to expect to grow during the second half of the year and with additional EBIT margin improvement. A tougher second quarter on Caceza but we continue to be actively managing profitability in order to preserve it and we see amidst this temporary volatility and other relevant opportunities to gain share in the B2B clearance and grow on the logistics fulfillment arena. Our recurrent EBIT guidance for the non-CEP excluding non-CEP between 105 and 110 million for overall guidance of growth between 115 and 125 million. Very disciplined on capital allocation, we aim to continue to invest in our growth and improve profitability, looking for additional workforce and cost-based optimisation, something that we have been actively doing and our specific items on the quarter show the effects of those efficiencies that also show through the mail and servicing numbers. We'll continue to optimize our portfolio, tilting it to a high growth e-commerce value chain, and we want to remain with some flexibility from inorganic growth on the sectors that we have been previously mentioning. And we will keep shareholder remuneration discipline, including the recurring dividend, but also with opportunistic buybacks, and that's why We are increasing our current share buyback program with an additional 10 million euros, taking opportunity of the attractive prices and keeping still additional flexibility on our balance sheet following the proceeds of DHLJV. So we'll continue to use the flexibility of our balance sheets as a strategic

We are now available to take your questions. As a reminder, analysts that wish to place a question should click on the button to raise your hands and we will give you access to the microphone. Analysts dialing from phone lines should press star 9 to raise your hands and star 6 to unmute yourself. Our first question comes from João Safara. João, you have been allowed to talk. Please ask your question.

Hi guys, good morning. Hopefully you can hear me well. So I have three questions, basically. The first one on CACESA and I wanted to understand a little bit better what I mean, what's happening here? I'm surprised that obviously with the minimis and when I look to your second half guidance, we actually see an improvement versus the first half of the year. So that it would be useful to understand what drives your confidence there on this. On this improvement, considering that the uncertainty is still there, or maybe I'm wrong and we've seen some anticipation of this already in the first half of the year, and so that's what makes your 7 to 12 million euros of added contribution from... Well, from non-Correio Express and Parcels, which is mainly CACESA, to explain this. And so this would be the question on CACESA, if you can help me there. And then the second question is on mail. I mean, it was quite a strong performance, excluding the impact of elections. I understand, as you were saying, there's a recurrent theme here, which is the cost savings. Do you think this kind of contribution to EBIT, assuming that dress mail revenues remain more or less the same, and also, obviously, Excluding the impact of financial services, so just thinking about everything else other than financial services, if this is sustainable in the next quarters. And then also connected to this, we saw a 17% increase in other revenues, and if you could help us understand why this increased. And then the last question on Banco CDT, you confirmed you have received an unsolicited non-binding offer. Was this the first one? Have you been approached by other players? Are you now basically more willing to accept offers than you were in the past? So if you could give us some color there, also it would be helpful. Thank you.

Thank you, Joao. So, on Casseza, our guidance actually is based on what is the normal seasonality of the business that, as you know, is very lean towards the peak season and the first quarter, and customs business is not an exception on that regard. And we are seeing also improvement from where we are, as we are expecting some normalization on the world of the post-terminities. On the customs side of things, the effects were slightly anticipated more than on the last mile. But I also want to be transparent saying that that was here the reorganization of flows between airports that are driven by stricter regulation in Madrid In terms of the G4 introduction and also cosmetic bans that are more a local issue. With supply chain reorganizations as these players are moving to fulfill in Europe and then geography plays a role here. So Eastern Europe is easier to access from Asia. and Central Europe is easier to distribute around Europe and we are seeing that reorganization happening and happening before the actual diminution is taking place because obviously players are anticipating that already in the months ahead of the actual 1st of July. We are also seeing strong decline in their investment in marketing because they were expecting some operational volatility and as such they are refraining of having huge volumes during these uncertain times. Good news is operationally everything, at least in operations, went very well and very smooth and so we are We are confident they will resume normal cost of business and volumes will improve, although being quite clear that there is a lot of lack of visibility and especially we still have the handling fee in November. That's why we are also labeling this part of the guidance with more risk of execution. In terms of mail, we are seeing two, three positive things. So, the financial services was a quite good quarter and the dynamics with the introduction of the new product, the long-term product that caters to a different kind of demand is accelerating placements. So, tailwinds there. Business Solutions and all the diversification areas of revenues are also performing well with good incremental margins and that is also helping. And we see amongst what has some seasonality around mail because sub-quarter tends to be a little bit more depressed and post-quarter Marcos Ferreira Marcos Ferreira Marcos Ferreira I will basically not add that much to the announcement that we made. So, as you mentioned, we received a non-solicited offer of non-binding for a potential transaction on Banco CPP. This is obviously leading us to evaluate the strategic alternatives that we have across our portfolio of assets, but That's what we can say for now and we also confirm that we have a financial advisor engaged in order to look to these strategic matters and I wouldn't add much more at this point.

If I can take the question also on the other that you were asking on On the mail, we do have positive revenue growth linked to the payment of the social mobility allowance that is contributing positively to that evolution. And also in fulfillment and others, we have the Deco Pharma business that only became part of CTP Scope in August 2025, so that difference is also there. And also in a positive evolution of central structure, so that's what's driving those developments. In terms of mail, you're asking is this contribution sustainable for the porter? We have seen a good evolution in terms of registered mail, a good evolution in terms of the price mix, so we hope to continue to see that and to carry on with our efforts in terms of also optimizing the Not only the operational, but also the headcount there.

Thank you, João. Thank you. Our next question comes from Felipe Leives. Felipe, you have been allowed to talk. Please unmute yourself and ask your question.

Hi. Hello, everyone. I have three questions, if I may. Regarding SEP volumes and if you can give us additional visibility on the July volumes after the changes in the de minimis regulation just to understand the initial impact of these changes in your SEP volumes during this month. Second question also on SEP volumes because you are saying that to reach your guidance, the revised guidance, you are assuming This game is after a very strong first half with almost 19 or more than 19% growth in terms of volumes or step volumes. So this leads to a quite conservative assumption for the second half with almost no growth if we consider this high single digit expectation for the first half. Is it related with the expected impact of the minimis or should we expect anything negative on the second half to impact debt volume? And last question, on public debt placement and if you can give us additional visibility regarding your guidance, what level of public debt placement are you assuming for the second half? If this compares with second quarter, we should expect higher or lower debt placing in second half and compare with this already strong second quarter. Thank you.

Thank you, Filipe.

So, on set volumes, as you know, when we discuss The Minimis we already mentioned and we continue to see some volatility on volumes on these coming months. We continue to see a very strong growth of demand in all the European accounts and Iberian accounts as we tried to show in the slide with the mix or the diversification there. We see Strong Growth in International Accounts, those three brands that are direct to consumer and also European marketplaces. Also in Chinese marketplaces like TikTok that are not cross-border, are more local to local, we continue to see there also strong demand. And this is what is helping us to offset The declines that we are seeing on the big three platforms as their GMVs, and this is publicly numbers, are declining between 30% and 40% that GMV. And we see July as the bottom of this as they refrain from marketing. as they were anticipating some operational issues on the adaptation to all of this and I remember that they need to deal with this country by country so there is some complexity of the difference of interpretation of this new regime across the European countries. In July we are expecting to have a decline Nuno Manuel Teiga Luis Vieira, Ana Rita Baião Matos, Miguel Alexandre Ferreira Amaral Salema Garção That we are showing right now, but we see this progressively evolving. As we mentioned in the past, we have two similar events in the recent past. The first on the US and the other on the Minimis on 2021, where the impact of the non-European marketplaces and this is what we are expecting until resuming a normal path of growth but luckily we continue to see strong demand on the other side and this all in all will continue to contribute to growth. In terms of financial services We see increased demand as João mentioned and we mentioned throughout our presentation so this new product is adding up a new class of demand so it's not cannibalizing the other placements as it seems that there is demand for these more long-term products We are not giving specific guidance on the breakdown of the two, but I can mention that we are assuming growth in parcels for SEP and growth on financial service placements year on year with the dynamics that you know.

Thank you, Filipe. Our next question comes from Joaquim Garcia Quiroz. Joaquim, you have been allowed to talk. Please unmute yourself.

Yeah.

Thank you for taking my questions.

Most of them were already answered, but I have a couple of questions. One regarding the margin for special USF part of the e-commerce solution. It has improved regarding the first few, but still lower than it was last year. If you can explain to us a bit of the moving parts here and When can we expect to see levels of above 6% that we saw last year? And then on the mail and service recurring a bit, it performed very well this quarter. I just wanted to know if you could share a bit if the good performance was more driven from financial services or from mail. And I know you don't provide the breakdown, but just talk to Bill on the mail part of the business, if that was all from the efficiencies and if we can expect similar performance going forward. Thank you.

Thank you Joaquim. So, on set, we are seeing basically two variables at play, so we resumed most of the normality on the operations and all what affected our first quarter, so on that regard things are going well. We have the fuel inflation that we mentioned, we disclosed that impacted 2.4 million euros the SEP business this quarter with some offset on revenues but still waiting on margins and we are changing on NICs so the change from Non-European players to Iberian and European players is driving a change in terms of the size of the parcels, so they are heavier and the incremental margin on heavier parcels is not the same as a very light package and there is some impact of that change of mix. We are seeing normalizations on that part of the business. Then the customs business, as you know, has a very high incremental margin and that That plays a role on the overall e-commerce solutions, but we are expecting some normalization of that as Rollins continues to normalize as well. In terms of mail, so three, as I mentioned before, three moving parts, all performing well. Financial services obviously a key driver because by incremental margins as you know business solutions so all the the new revenue plays as also that include PPO call centers and also the the social services as you want to mention that we provide in your retail are and payments are performing well and also contributing in margin, so incrementally this has higher margin than the average male margin. And we saw some resilience on the revenue on the male side that coupled with efficiency measures also provide some incremental margin there. So going forward we see the first two continuing to accrete to our EVIT and we see some stability on the pure male EVIT as we continue to see these positive trends on the price per unit and also more efficiency Thank you Joaquim.

Our next question comes from Henk Schlotboom. Henk, you have been allowed to talk. Please unmute yourself and ask your question. So with Henk having some difficulties, our next question comes from António Flavas. António, you have been allowed to talk, please unmute yourself and ask.

Hello, good morning. Thank you for taking my questions as well. First one is related with the banks, you know, performing loans, I mean, pretty high, the ratio is not stable, but even so it's high, and the absolute currency will continue to increase. So I'm surprised because, well, the environment is, the economic environment is quite good, so I'm surprised that this ratio remains so high, clearly above the industry, or at least above the trends. And I also am surprised because you are not selling any unknown performing loans. So, this is my first question, if you can explain, if you can provide more insights on this. And the second question is related with your consistence between step volumes for the second half year. and your Casseza target for the second half. So I know that the trends are similar, but of course the business are not exactly the same. Nevertheless, it seems that you are very optimistic for Casseza. You are optimistic for Casseza. I know that the seasonality should help. And sometimes you are cautious on step volume for the second half of the year. So my question is, if you reach step volume target for the second half, you believe that you also reach the target. Thank you very much.

Thank you. Thank you, Antonio.

On the bank, I would say that the dimension of the ratio is what we rightly pointed out, that contrary to what the industry normally does, they routinely sell these kind of portfolios. The bank is moving in that direction, so we'll be more and more doing these operations, but that continues to be sporadic and impacting the quarter where we made that movement. Actually, last year on the second quarter, we made one, and that's why you see some impacts on the other revenue line. This year we'll do another, but more towards the second half of the year, and this will become a routine, and that ratio will be actively managed by doing so. In terms of the expectations of Casseza, and in terms of CEP volumes. I wouldn't say that we are more optimistic on CACESE versus what we are in CEP. We actually see in a steady state some correlation between the two dynamics. That is pretty obvious the reason why. What we have is a very depressed starting point on Cacerda because most, I would say most of the impacts were front loaded and as such anticipated and we are seeing and the SEP business also has other kind of growth areas like the European, the customs because it's only for out of Europe Valence doesn't have that balance to offset the declines but we are seeing normalization on Caceza although highlighting that we see risk because the visibility remains low and on parcels we see Strong growth on European flags. We see a reduction of growth and some declines on the Chinese customers, but overall with growth. That as the Chinese resume a normal behavior will translate to normalization of the growth path that we have shown on the last couple of quarters, but that is to be expected some volatility on the coming quarters.

Yeah, technically, the e-commerce, the Chinese e-commerce platforms already showed in the past when they solve the problems, they come very strong. The question here is how many times they needed to solve the process that they are designing. So that's where it comes to this. Thank you very much.

Thank you, António, for your question. Our final question comes from Henk Slotboom. Henk, you have been allowed to talk. If you have a question, please unmute yourself and ask your question.

Okay, hopefully you can hear me now?

Yes.

I have two questions. Thanks for taking my questions, by the way, and sorry for the technical hiccup. The first one is on CACESA. If I understand you correctly, there's been a move in volumes away from Madrid to, for example, Central and Eastern Europe and the Benelux countries, and you're trying to get the business back, and not only what you just referred to, the Chinese solving their own problems, but also by means of offering them fulfillment, if I understood that correctly. Is that a line of business? According to me, that's a line of business which is fairly new to CTT. And you're rather late entering this business as well and looking what's happening with CMA, CGM, with their SEVA unit they've been acquiring. We've seen B-Post moving in with Paxon. I even see Austrian Post acquiring fulfillment companies. Is it a business you can build up by yourself or does it require acquisitions? And if so, How should we see that? Because it's a very competitive market. The second question relates to the CEP business. What proportion of your current parcel volumes is out of home versus to door? And given the fact that you have a collaboration with DHL and certainly also eyeing building up a position in Spain in parcels, why do you expect that to be in, let's say, three years down the road? Do you have any official ambitions there? Those are my questions.

Thank you, Henk. I'll start with the last one that I think is easier. So, right now, our out-of-home volumes in CEP are 16%.

So, the rest are at the door distribution.

We disclosed some views on our last Capital Markets Day on where we see the market. We see the market in three years between 20% to 30% distribution out of home and that's why we keep investing in which is the largest network in Portugal, that is our Lockheed network and it's why we are accelerating the deployment in Spain. We already have around 200 lockers and we continue to grow and fast forward that growth there in order to capture not only the opportunity but also to edge that market. In fulfillment, so there is, or in Caceza, you are right, so we saw... Because of supply chain reorganizations and because of the relatively strict customs rules in Madrid, we saw some reorganization on flows. We are seeing the market moving fast from what is B2C or H7 clearance to B2B clearance or So bold clearance with fulfillment within Europe and we are well poised to gain share when that change happens. We already have a number of important clients doing B2B clearance throughout Europe and we see as having a competitive advantage as the market reorganizes on that. We have, coupled with that, we see fulfillment. We have fulfillment operations, okay? They are not large, but we have fulfillment capabilities within CTT. But what we are seeing is a play on this vertical, so it's not pure fulfillment operations, it is integration between the clearance, The Fulfillment and also Last Mile and that integrated play that enabled us to differentiate in the market but also to have synergies, operational synergies that obviously can help us to compete better on that space. We never shy away of saying that we are Open to some M&A on the fulfillment front because of this, and that continues to be on the table. If it makes sense that we already have organic growth opportunities in Iberia on this type of services, as we see the market fast-tracking on shifting the way they are organized, from B2C to B2E.

Okay. That's ready here. Thank you very much. Have a nice day.

Thank you very much. I'll turn again the floor over to Guy for his final remarks.

Thank you, Nuno. As I said in the past, we will deliver future growth by building our strategic foundations. The CTT core business is healthy. CEP growth was very strong on the second quarter. Men's Services delivers excellent profitability and we also have a very strong cash generation. We see DHLJV also validating the strategic logic of building this stronger e-commerce platform. At the same time, we are being very transparent on CACERDA and how we have this temporary volatility on the customs clearance. And this was the main pressure point of the quarter where we took a number of concrete actions in order to We are guiding with discipline and excluding non-SEP and e-commerce activities we see recurring a bit of around 105 to 110 million euros for the full year, supported by this core business healthy performance. and we see with more caution with the custom spot and overall guidance between 115 and 25 million and we'll keep investing our growth in optimizing our business portfolio and remunerating our shareholders while using our balance sheet flexibility as a strategic lever and with that I thank you all for being present and I hope to see you again soon.

Thank you all. We hope to see you again on the roads as from September onwards. Thank you for your participation. This earnings call is now concluded. Thank you.