CTT - Correios De Portugal (CTT) investor relations material

Strategic transformation and business evolution

• Achieved significant transformation from a mail-centric to an e-commerce logistics and banking-focused business, with parcels and the bank now accounting for nearly 60% of revenue and driving margin growth.

• Pursued Iberian leadership in e-commerce logistics, expanding through acquisitions and partnerships, notably with DHL and Cacesa, and scaling up express and parcels operations to become the fastest-growing player in the region.

• Simplified organizational structure into three business areas—e-commerce solutions, mail and services, and the bank—each with clear strategic priorities, reflected in a new reporting structure from 2025.

• Enhanced operational efficiency through technology, automation, and proprietary innovations, resulting in improved EBIT margins and cost reductions.

• Strengthened ESG commitments, including a target for 100% fleet electrification by 2030, 100% recycled materials in CEP products, and 100% green energy usage, with a 47% reduction in carbon emissions per object (2021–24).

Financial guidance, ambition, and capital allocation

• Delivered on all financial targets set in 2022, with revenue and EBIT growth exceeding guidance, recurring dividends, and three share buybacks totaling over 12% of share capital.

• Set new targets for 2024–2028: annual revenue growth of 7–9% to €1.6–1.7 billion and recurring EBIT growth of 13–17% (€170–195 million), aiming for Iberian market leadership in e-commerce logistics.

• CapEx to increase to €50–55 million annually (3.5–4.0% of revenues), focused on expanding locker networks, infrastructure, and IT, with a major Madrid hub and capex intensity peaking below 4% of revenues.

• Dividend payout policy maintained at 35–50%, with opportunistic buybacks, a leverage ceiling of 2.5x net debt/EBITDA, and recurrent shareholder remuneration covered by free cash flow.

• Banco CTT to self-fund its growth, with no dividends expected from the bank during this cycle as all earnings are reinvested.

E-commerce and logistics growth strategy

• Achieved top growth in Iberian e-commerce logistics, with a 24% revenue CAGR (2021–24) and best-in-class EBIT margins, supported by comprehensive D+1 coverage and a dense PUDO/locker network.

• Targeting Iberian leadership in e-commerce logistics, leveraging integration, scale, and partnerships (notably with DHL and Cacesa) to capture cross-border and B2C growth.

• Out-of-home delivery (lockers and PUDOs) to expand from 20,000 to nearly 30,000 points by 2028, driving cost efficiency and customer convenience.

• Focused on tier-one and global marketplace clients, with a value proposition spanning the full e-commerce value chain, including customs, fulfillment, and last mile.

• Positioned to capture further e-commerce growth as Iberian online retail penetration remains below EU benchmarks, with B2C expected to outpace B2B.