CTT - Correios De Portugal, S.A.

Good morning and welcome to the second quarter of 2020. 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, raise your hand, and we will give you access to the microphone. If you are dialing from a phone line, press 9 to raise your hand. and seek to well meet yourself. I will now turn the call over to Mr. Jongen, CEO.

Good morning, everyone. Welcome to our first 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 CACESA, revenue grew 18.3% and EBIT grew an impressive almost, sorry, 47% year on year. And talking about the contribution of CACESA, 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 an 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, derived 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 the 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. more than already had, because we have this value proposition that covers a larger, a wider part of the value chain of e-commerce logistics. And because we are integrating Cassieuse for some customers also with last-mine delivery, this will improve further uh our profitability on the parcels business so all in all a very good a very good quarter with with a very significant contribution from emp i will now pass the floor to my colleague john sosa to address uh starting with mail

Thank you, Joe. Good morning, everyone. On slide 8, 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 this, mail and other revenues performed 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 elections that we saw, comparing with minus 2.2 million euros coming from activity. It's important to say here that EBIT remains subject to volatility during the quarter due to the client behavior on large accounts decisions particularly on central government because uh it's difficult to managing uh the behavior of the of mail on these big clients so during the quarter is very difficult to to to to managing this ebit and on these business areas uh uh we stay focused on uh remain uh with you you maintain focus on profitability so in that way we still uh 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 trend 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 with very good public placements 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 grow health plans 49.8% in the second quarter versus the end of last year. and already after we already grows more than 700% year on year in the last year. Thus, that means for us, this business area, the revenue grows 64.8% in this quarter 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 PUDU network in Iberia. That, as you know, is also very important for the express and parcel business area. And now I pass to Kipa Sheik.