CTT - Correios De Portugal (CTT) Q4 2024 earnings summary

Executive summary

• Achieved FY24 guidance with €85 million recurring EBIT, driven by 38% year-over-year growth in logistics and banking, and record Express & Parcels performance, with E&P now the largest revenue contributor.

• Revenues reached €1,107.3 million, up 12.4% year-over-year, with strong Banco CTT performance.

• Operating cash flow grew 6.7% to €70 million, with free cash flow at €62.8 million and a net debt/EBITDA ratio of 1.6x, well below policy ceiling.

• Strategic M&A: acquired Cacesa and formed a joint venture with DHL, enhancing diversification and growth in Iberian e-commerce logistics.

• Maintained a predictable dividend policy with €0.17 per share (52% payout, 3.1% yield) and ongoing €25 million share buyback.

Financial highlights

• Full-year revenues up 12.4% to €1,107 million; Express & Parcels revenues grew 40.6% to €479 million, now the largest contributor.

• Recurring EBIT at €85.1 million (-2.7% year-over-year), with a margin of 7.7%; EBITDA rose 5.5% to €160.3 million.

• Net profit for the year at €45.5 million, down 24.7% year-over-year, impacted by higher costs and taxes.

• Free cash flow at €62.8 million; net cash position at €68.1 million.

• CapEx increased to €46.4 million, focused on capacity and network expansion.

Outlook and guidance

• 2025 guidance: organic recurring EBIT above €100 million, with revenues between €1.1 billion and €1.25 billion.

• Express & Parcels expected to maintain high single-digit EBIT margins, with further margin expansion anticipated.

• Financial services placements expected to normalize at €4.5–5 billion.

• CapEx guidance reiterated at €40–45 million, skewed to the high end due to growth.

• Focus on integrating Cacesa and DHL, organic investment in Iberian e-commerce, and new recurring retail services.