Earnings call transcript: CTT Correios de Portugal Q2 2025 sees revenue surge, stock dips

CTT Correios de Portugal reported strong financial results for the second quarter of 2025, with significant growth in revenue and net profit. Despite these positive figures, the company’s stock fell by 2.25% to €7.39, reflecting investor concerns over declining mail volumes and net debt levels. According to InvestingPro data, the company maintains impressive gross profit margins of 18.37% and has demonstrated profitability over the last twelve months. The company revised its 2025 EBIT guidance to exceed €115 million, highlighting a robust outlook for its logistics and banking segments.

Key Takeaways

• Revenue increased by 18.3% year-on-year.
• Net profit rose by 34.3%.
• The stock price declined by 2.25% following the earnings release.
• Revised 2025 EBIT guidance to more than €115 million.
• Express and Parcels volumes projected to grow by 15%.

Company Performance

CTT Correios de Portugal demonstrated strong performance in Q2 2025, driven by its logistics segment. The integration of the CASESA acquisition and a unified sales strategy with TD Express contributed to this growth. However, a 10.5% decline in mail volumes and a leverage ratio of 2.4 times net debt to EBITDA were points of concern for investors.

Financial Highlights

• Revenue: €311 million, up 18.3% year-on-year.
• Net profit: Increased by 34.3%.
• Free cash flow: €23 million.
• Operating cash flow: €36.4 million.
• Net debt: €44.45 million.

Market Reaction

Despite strong financial results, CTT’s stock fell by 2.25% to €7.39. This decline could be attributed to concerns over declining mail volumes and high leverage. The stock’s movement contrasts with the company’s position as a market leader in e-commerce logistics in Iberia. Based on InvestingPro Fair Value calculations, CTT currently appears undervalued, presenting a potential opportunity for investors. The stock trades at a P/E ratio of 173.61, reflecting market expectations for future growth.

Outlook & Guidance

CTT revised its EBIT guidance for 2025 to exceed €115 million, driven by expected growth in the Express and Parcels segment. The company anticipates a 15% increase in volumes and continues to invest in its banking sector’s digital capabilities. Management also expects stabilization in public debt placements.

Executive Commentary

CEO Jean Bento stated, "We are the e-commerce logistics player that exhibits the highest growth amongst all e-commerce logistics players in Europe." CFO Guy Pashek added, "We continue to see strong growth in express and parcels above 15% in volumes."

Risks and Challenges

• Declining mail volumes: A 10.5% year-on-year decrease poses a challenge.
• High leverage: With a ratio of 2.4 times net debt to EBITDA, financial flexibility may be constrained.
• Competitive market: Intense competition in the logistics sector could pressure margins.
• Regulatory risks: Changes in regulations could impact operational costs.
• Macroeconomic conditions: Economic downturns could affect consumer spending and logistics demand.

Q&A

During the Q&A session, analysts focused on the synergies from the CASESA acquisition, regulatory compensation recovery, and the bank’s investment strategy. Management addressed concerns about competitive pressures following InPost’s recent acquisition, emphasizing CTT’s differentiated service portfolio and strong market position.

Full transcript - CTT Correios de Portugal SA (CTT) Q2 2025:

Jean Bento, CEO, CTT: Good morning, everyone. Welcome to our first semester results presentation. I’d like to invite you to to follow us on on in slide 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 CASESA, revenue grew, 18.3% and EBIT grew an impressive almost, sorry, 47%, year on year. And and talking about the the the contribution of CASESA, I would invite you to move to Slide number five, where we have an outlook of CASESA.

On the left hand side, nothing new. Just to highlight, that CASESA has been growing significantly in the last two years, and it will it will keep growing this year based mostly on the 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 Casiesa and and TD Express given that this is an activity that we were already developing before the acquisition of Casiesa. 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 a new board of directors. So we continue to focus on the integration of Casseosa in the CTT universe to ensure a smooth and efficient transition, and we start already we have started already seeing the results in this quarter. Moving to the next slide, slide number six. We 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 to the first quarter, we had a very difficult April month.

But 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 in June, therefore, above 15% growth. And this is what we are guiding 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, also the contribution of CASESA. 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 CASESA and add to the organic growth, This produced a 34 growth on on on revenues and an impressive 73% growth on on EBIT. And probably more important than that, we we have seen one additional percentage point added to our EBIT margin that is now it’s now stabilized at 9.5% EBIT margin. So CASESA enhances and differentiates our offering more than than than already have because we have we have this value proposition that covers a larger a wider part of the value chain of ecommerce logistics. And and because we are integrating Casies for some customers also with last mile delivery, 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 and P.

I will now pass the floor to my colleague, Jean Souza, to address, starting with mail.

Joao Souza, Executive, CTT: Thank you, Joe. Good morning, everyone. On Slide eight, as you can see on mail revenues, mail revenue was impact by April blackout, like we see also in in express and parcels, putting pressure on overall quarterly performance. Address mail volumes down 10.5% year on year, falling from 99,200,000.0 to 88,900,000.0 on volumes. Same these mail and other revenues perform resiliently, growing 2.9% year on year despite the election effect we had in May ’25.

Excluding the election effect, the revenue declined 4.8% year on year, total revenue reaching $100.18700000.0 euros comparing with the last year or year on year, $1,115,400,000.0 euros helping by business solutions that growth 10.5% year on year. Business solutions continue to contribute positively to helping to shifting the revenue mix on these business units. Also, average price increasing on mile increasing 6.72 year on year and also helping year to to to to managing the revenues on this business area. Recurring EBIT grow 49.6% year on year from 1,800,000.0 to €2,700,000. Margin EBIT improving 2.3% year on year versus one point point 1.1% last year even with the positive effect of elections that we saw comparing with minus €2,220,000 in from coming from from from activity.

It’s important to say here that EBIT remains subject to volatile to volatility during the quarter. Do the do the client behavior on large accounts decisions practically on central government because it’s difficult to managing the behavior of the of mail on these big clients. So during the quarter, it’s very difficult to to to to managing this EBIT. And on these business areas, we stay focused on remain we 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 churn management with the digitalization solutions for for for. On slide nine, as you can see, we are commercial productivity continues to underpin financial service performance with very good public debt placements with strong performance in the financial services. Public debt placements increased 200 more than 259% year on year this quarter compared to last year and more than 34 13.4% versus the the the end of the of ’24. These results on a daily subscription more than 19 from 90,000,000, per per day. We see a sustainable outlook, for the for the coming for the coming days despite the the falling interest rates.

But but we maintain a positive and stable outlook for for the coming for the coming for the coming days, mainly because of the positive communications we see in the news and also seasonal factors such as immigrant savings and all of this bonus that people typical put on these on these 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 the of last year. And already after we already grow more than 7700% year on year in the in the in the in the last year, thus that means for us, this business area, the revenue growth, 64.8% in this quarter from 5.5 millions to €9,100,000 in revenues. And EBIT growth from four $2.52700000.0, sorry, to 4,500,000.0 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, is very important to claim in the market that we have the largest prudent network in Iberia. Thus, as you know, is also very important for the express and parcel business area. And now I pass to to Guy Pashek.

Guy Pashek, CFO, CTT: Thank you, Joao, and 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 with off balance sheet and and commission the accounts also with a with a strong dynamics. In terms of profit before taxes, we see 1.2% growth that reflects the buildup that we are doing in terms of digital and physical commercial capabilities as we transition the bank to a new growth phase.

In in slide 12, we can see now the the key financial indicators of the group. On the second quarter, we obviously, as Rome mentioned, we include two months of Casa, and and we have a strong dynamics throughout the the KPI. So 18.3% on revenues, 47.4 on recurring EBIT. Net profit also grew 34.3%, and free cash flow reached 23,000,000 in the quarter. In the Slide 13, we can see our revenue growth detail.

I will focus on the on the pro form a numbers. So accounting for CASESA in the perimeter in 2024. We see strong growth driven by 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 for for this 14% growth. Mail growing 2.9%, mainly the contribution of elections as one share.

The bank growing 4,000,000 or 13% driven by volumes that drove net income in net interest income and and commissions. And also financial services also growing 3,600,000.0 or 64.6%, and this is the result of the 1,200,000,000.0 placements of public debts or or a growth of 259%. So all in all, all divisions contributing for growth, that that is a very strong performance. In the next slide, we see our our operating costs that grew 9.1% pro form a, 15,300,000.0 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 our our business to to volumes increase.

In mail, we see 2,500,000.0 increase. That is mostly explained by the $45,400,000.0 costs related with the elections. If it was not for that effect, we’ll be declining almost €3,000,000 in cost due to the restructuring that we keep doing in this business unit. In the in financial services, we see 1.8% $11,800,000.0 growth in in in costs driven by by by activity. And in the bank, we see 4,000,000 of increase in staff and IT costs that reflect the the digital and physical investments in in capabilities.

Also, contribution from from the impairments where cost of risk now stands at 1% in the bank, up from 0.9% in the in the same quarter last year. In slide 15, we see our recurring EBIT with with a very strong progress of 28%. Our margin now stands at 8.6%, up from 7.5% last year. This mainly driven by by the growth on express and parcels, volumes, and and and customs clearance contribution and and higher margins are driving the the this growth in in mail. The growth came mostly from elections as we saw, and financial services with with a very strong quarter also contributing 1,700,000.0 for for for the EBIT growth.

In the bank, a slight growth of 0.1% of 100,000, and that 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 Casseza, 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 in financial services, the bank remaining strong in the volume growth, business volume growth, and and 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 36,400,000.0, free cash flow 25,200,000, and now our debt net debt stands at €44,450,000.

On slide 17, we see the 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 on operation cash cash flow that grew 74%, and and and our free cash flow almost tripled in the in the in the in the quarter. Our leverage now stands after dividends and the Acassez acquisition at 2.4 times net debt to EBITDA that as we guided that we will remain below the 2.5 after including, and we should see deleverage going forward as free cash flow generation. And the the proceeds from the JV with DHL will help us deleverage going forward. And with that, I will pass you to Jean Bento for his final remarks.

Jean Bento, CEO, CTT: Thank you, Gabe. So if you if you follow me on slide number 19, the main message here is obviously the upgrading of the guidance to more than €115,000,000 with the with the eight months of CACIUS accounted. And and and following the the main topics for the quarter on operating performance, I would like to highlight once more the differentiated offer that we have in Express and Parcels that combining a growth that we see for the remainder of the year, about 15% in volumes with the contribution of CASESA will will well, provided for a very good quarter and will remain as such for the remainder of the year. We’ve seen also the bank reaccelerating growth in business volumes while investing in in in in platform digital platforms and the stores to prepare for further growth. And we have seen, of course, a recovery of public debt placements at levels that are clearly above what we had last year.

On the solid cash the cash flow front, Guy already mentioned very good performance for the quarter, 74% on operating cash flow and and three times more free cash flow than than the equivalent of last year. So very good quarter in terms of of cash generation, which provides for a balance sheet with the with the the as as much flexibility as we have guided in the sense that we remain below our net debt over EBITDA ceiling that is in itself, quite conservative. So good news also on the balance sheet, front. The contribution of our inorganic transactions, so Casieza goes without saying, it’s been it’s been, I would say, an extremely successful integration process process. On the DHL joint venture, antitrust process, we are now guiding that completion should be closer to year end.

Things are progressing well between ourselves, DHL and European Commission. But it’s as we would expect, a rather complex process, but going well. And the final comment on on shareholder remuneration because we had two meaningful events in the quarter. One is that the first one is that we we have closed the 25,000,000 acquisition of shares of our third recent share buyback whereby we have acquired 3.3% of the CDD shares. We have also canceled the outstanding shares on on on May 13, And this it was also in the quarter as always that we have paid a dividend of $0.17 this year.

Moving to our last slide on Page number 20. So all in all, we have reinforced our growth profile, asserting ourselves as a leading e commerce logistics player in Iberia. Actually, the the e commerce logistics player that shows exhibits the higher growth in in amongst the all the all the ecommerce logistics players in Europe, not only in the first quarter, but we expect to have the same happen in the second quarter. We have a sustainable growth in E and P that is now reaccelerating through volume growth around 15% for the remainder of the year, but also expanding margin given the additional contribution that we have from the customs clearing service, which is, as you know, a service with a higher EBIT margin. This differentiated service portfolio has been reinforced with the acquisition of Casies that will now remain with us and growing at a very significant pace.

Finally, in terms of mail against the backdrop of some volatility on revenues and the corresponding lumpiness in EBIT generation, we will continue to deploy cost cutting initiatives, and we are also seeing some of the backlog of state driven coming back. And finally, as as I stated before, our revised 2025 EBIT guidance is for now more than €115,000,000, including eight months of CASESA. And we believe that with strong execution, this is going to be achieved this year. So thank you for being with us. We we will now remain open for your questions.

Matilde, Conference Moderator, CTT: We are now available to take questions. As a reminder, analysts that wish to place a question should click on the button, raise your hand, and and we will give you access to the microphone. Analysts dialing from the following line should place mine, raise your hand, and six, you unmute yourself. We will take our first question from from Santander. Please go ahead.

Your microphone is enabled.

Jerome, Analyst, Santander: Yes. Hi. Good morning, guys. So hopefully, you can hear me. I have one question that is well, several questions in in one question, but is just to try trying to understand here the drivers of growth in Express and Parcels in the second quarter.

The so, I mean, basically, the the the question here is, I mean, is this being driven already by by synergies or were synergies meaningful already in the second quarter synergies from CASESA? Is CASESA growing above or below what is the average for the rest of the business? And the third is this also, which was something that we didn’t see in the first quarter, some operating leverage on your business that basically didn’t happen. Is that something that happened in the second quarter? So you’re seeing a higher growth in EBIT from your business ex Casesa, and that’s and these are basically my questions regarding the Express and Parcels.

And then also, have another question just on the on the public debt placements. I I was trying to I mean, obviously, I know that the e EGCP reporting is is not very, doesn’t compare entirely with your numbers. But it was curious to see that your when you compare the growth in the first quarter to the fourth quarter, that’s 13% above for your placement. But when you look at AGCP numbers, there was actually a decline of 9.5, if I’m not mistaken. So just wanted to understand if there’s any specific reason for that difference.

Thank you.

Guy Pashek, CFO, CTT: Thank you, Jerome. On the last question of the public placements, I will will ask in the end of my answer to to reframe it because I’m not sure you we fully understood it. In in in regarding the the question of of the drivers of the growth on on E and P and and CASE as a contribution, what what we can say is as as as we saw volumes were had a difficult month in in April and then resumed growth that we continue to foresee coming in in the next months. So above above 15% growth, And that dynamics continues to go well in the in in what we call the the the old perimeter. The operational gearing also resumed in in E and P as as unit costs are are now with a better evolution and and and growth starts to dilute the capacity investments that we that we that we that we saw and that we did in the in the end of last year.

And Casseza is growing, but but the Casseza growth also includes gross synergies as parts or small 50% of the synergies that we announced in CASESA were revenue synergies that we are already in delivering on this quarter, although something that that that will be reinforced as we grow. So Casa is growing above above our traditional business. Operational gearing already happening in the in in the old perimeter. But as we need full flexibility to continue to manage manage integration, it’s it’s difficult to keep discussing perimeters going forward as we have a very strong integration in terms of revenues and also in terms of operational business in Spain, obviously. The the other the other markets are obviously a different a different discussion.

Jean Bento, CEO, CTT: Let me just reinforce this, Guy. Joel, the the this aspect that Guy mentioned is very important for for even for your modeling in the sense that we need to be fully free to allocate customers to Casios or to CD Express for customs regarding the well, a number of options that we have and they have. So it it it’s sometimes we we we would allocate them to to one or the other, and therefore, the growth of each other are are influenced by the growth of Casies is somehow influenced by the growth of GTExpress and and vice versa. Having said so, the the Casia growth is obviously has been obviously higher than than than than we have in volumes in GD Express for the quarter.

Guy Pashek, CFO, CTT: And for the public reps, I would ask you to to Yes. Try as open and standard.

Jerome, Analyst, Santander: Yeah. Sorry. And and and thank you very much for for the explanation there. It was it was very clear. No.

The numbers are the following. I mean, if you sum just the flows in coming from the GCP, you get roughly 1,600,000,000.0 in the second quarter. And if we look at your numbers, get €1,100,000,000 And then when I compare this with the fourth quarter like you do in the presentation, in your case, there’s a growth of 13.4%. And in the case of GCP, there’s a decline of 9.5%. So, basically, what has been happening, in the past was that the, let’s say, the ratio of your placements versus what we see in the GCP was closer to, I mean, 55 to 60%.

In this quarter, it jumped to 75%. So I I don’t know, if there’s a a reason for this other than the way, GCP reports. And and I’m thinking about, for example, the the fact that you developed the app and if this is getting more traction and basic and and that you’re basically getting, flows that would go through the e GCP web ins and now instead they go through your app. But, again, I don’t know what happened there.

Guy Pashek, CFO, CTT: Thank you, Joao. I will propose for you for us to discuss this further off line, but we don’t see that decline that you are seeing in our numbers. What I can comment is we have flat to growing share vis a vis the GCP during the fourth, first and second quarter. But maybe we can discuss this in detail with Nunu.

Jerome, Analyst, Santander: Okay. Perfect. Thank you. We will

Matilde, Conference Moderator, CTT: now take our next question from from. Please go ahead. From.

Philippe, Analyst, Unknown: I have three questions, if I may. First one is actually a follow-up on Joao’s initial comments regarding guidance for the Parcels volume. Can you clarify what is your expectations in terms of Express and Parcel volumes for this year? Second question on competitive mail. Just looking at the breakdown of regulated and competitive mail, you can see that the revenue drop of this competitive mail accelerate in second quarter.

Can you elaborate on the reasons for this higher drop and if you are seeing more competition and also your expectation for this subsegment for

Jerome, Analyst, Santander: the

Philippe, Analyst, Unknown: future? And last one, if you can also elaborate on the regulatory compensation of $3,500,000 impacting specific items during this quarter and what is this related? Thank you.

Jean Bento, CEO, CTT: Thank you, Philippe. So on on the expression volume growth for the year, so we have seen this strange month of April for reasons that are, I think, quite objective. And and we’ve seen then growth resuming to the levels that we believe will be here for the remainder of the year. So in terms of guiding for volumes on Express and Parcels growth, as I’ve mentioned and Guy also has referred, we are expecting a growth in the range of 15% growth in volumes. This is driven by volumes growth in the clients and some client acquisition as well.

On the regular on the regulate reg regulated and competitive mail, I I will I will ask you to address the question.

Guy Pashek, CFO, CTT: Let’s say we in a in reg in competitive mail and and regulated mail, we have a difficult month of of April as in parcels. The pretty much the same dynamic the market dynamics, it was the the blackout and the and the the less working days that that put a lot of pressure on that month, the same on April. We continue to see a lot of volatility in in the dynamics of of those customers also in in the in the government mail as as elections and and some constraints on the on the value chain of mail have been putting backlogs growing. So it was it was a difficult month difficult quarter on that regard. We see strong dynamics in the fourth quarter with as as we saw last year and the previous one where you see some the the softer declines during the second half of the year, very back end back end loaded in the first quarter that are also the the seasonality of that business.

So so we see better trends throughout the second half and and ending the full year on that guided range between the 68% full year declines Regarding the comp that that regulatory compensation that you mentioned in specific items, as all the all the communication sector has been claiming past taxes or regulatory fees collected by by Anacom due due to some inclusion of costs that were deemed not to be recoverable by by by Anacom. As and we and we, as as all the sector, also did the same, and and we recover we are recovering some amounts that are included in that in that in that number. The the the recovery that we are we are seeing is above above €4,000,000 for for the past years.

Jean Bento, CEO, CTT: So these are taxes that were illegally charged by Anacom, and we are now recovering them.

Guy Pashek, CFO, CTT: It’s the same in the telco sector if you follow it. The reasons are the same.

Matilde, Conference Moderator, CTT: We will now take our next question from Tony Slalasch from ISC Talent Research. Please go ahead. Your microphone is enabled.

Philippe, Analyst, Unknown: I’m sorry.

Matilde, Conference Moderator, CTT: I’m done. You need to unmute yourself. So next question from Rockinger Sikhirosh from JV Capital. Please go ahead.

Joaquin, Analyst, JV Capital: Yes. Hello. Thank you for taking my questions. I think you mentioned something, but I wasn’t able to didn’t listen to it very well. It’s just on the bank profitability.

Just to confirm, you said that for this year, we shouldn’t expect much growth in profitability. And then because you are going to keep investing in the division, I guess. And then should we start to see some growth in 2026? And then another question regarding to financial services is on the yield that you get. It was much lower this quarter compared to the previous quarter.

Should we expect similar yield for the next quarter? And then on the number of placements, the 1,100,000,000.0 $1,200,000,000 do you feel this a comfortable level if nothing in the macro changes for the future quarters? Thank you.

Guy Pashek, CFO, CTT: Thank you, Joaquin. Starting with the placements, we see some stabilization after the second quarter numbers, so between EUR 1,000,000,000, 1,200,000,000.0 in placements, if nothing changes on the macro and interest rate environment, that is the scenario that we are working with. In the in the bank, yes, we as as we previously mentioned, we are investing in in increasing the commercial capabilities of the bank, and that entails investments in the people and in the stores and in the digital channels of the bank. That so that obviously entails increased costs in staff and IT, and it’s what we are seeing this year with the set a setup a a step up on on those costs that are eating part of the the the the growth that we see in banking income. That is a trend that we’ll continue to see this year and the beginning of next year, and then you should start we should start to see those those costs stabilizing and the growth accelerating as we continue to invest in in acquiring more customers and increasing the the the the revenues per customer that we currently generate.

The net interest margin, if that was your question, we we see stabilization on this on this on this level, so to 2.1, 2.2 range as as we have been mentioning to the market.

Matilde, Conference Moderator, CTT: So we will now take our next question from Antonik Slavish from IS Independent Research. Please go ahead, Antonik. Your microphone is enabled.

Antonio, Analyst, IS Independent Research: Hello? Hello? Yes.

Jerome, Analyst, Santander: Yes.

Matilde, Conference Moderator, CTT: Yes.

Antonio, Analyst, IS Independent Research: Okay. Thank you. Sorry. So I have two questions. First one is related with if if you like to provide some color in terms of price increase on mile for 2026.

And second one is related to the bank and non performing loans that continue to grow. I know that if sell it, you will reduce it. Nevertheless, just just you can comment on it and why you are not selling non performing loans or what kind of level of pressure do you think is is reasonable for the bank. Thank you very much.

Jean Bento, CEO, CTT: Antonio, I’m not sure we understood the question on the price increase for mile for ’26. But if if you were asking any clarification, the the formula is basically the same with the new cap for the yearly the price increase on 12%, which is something that we don’t foresee could be activated in any case. So we have basically the the same formula that we have up to now where inflation and volume decline are automatically compensated. We have actually a detail which improves slightly our case because the indirect costs that are associated with the volume decline that we do not incur in those costs is now is now been reduced to, I believe, 15% where before it was 16%. So it’s basically the same formula with a cap that is not activated in a foreseeable situation and with a slightly improved accounting for indirect costs.

Guy Pashek, CFO, CTT: Regarding the the price increase for next year, it’s still early days to share it. We well, you should expect something in the line aligned with with 2025 increase, but we are still in discussions. We are not comfortable disclosing any number

Jean Bento, CEO, CTT: But right it will be, of course, a function of volume decline between June and June and deflation. And so as we said, it should be something along the same range, but a bit a bit early days.

Guy Pashek, CFO, CTT: On the nonperforming loans, as as you mentioned, we still it is still not activity till that we perform the seller portfolios frequently. It’s something that that we’ll be increasingly do in the in the coming months. And with that, we see stabilization going forward around these levels, and and that’s what we subject to to the to the recurring to the more recurring sales of of these portfolios and that we foresee in the future.

Antonio, Analyst, IS Independent Research: Great. And just a follow-up quick question on bank. Risk weighted assets have been more or less stable, slightly above 1,000,000,000. So that that is something that we should continue to expect, or do you think that once once you finish on digitalization and all the process that we are going through, it should increase? So, basically, getting more exposure to risk.

Guy Pashek, CFO, CTT: Thank you, Antonio. As yes, we continue to see underlying trend of RWAs in line with the loan book. This quarter or this this first semester, we have a positive effect on on on of regulation on the on the mortgage capital consumption in line with the EVA new rulings. And as such, that that, in a way, offset the the underlying trend of growth that is driven by by the by the loan book as we foresee the loan book continue to increase and even accelerating, that that trend should be seen in RWAs going forward. K.

Okay. Thank you very much.

Matilde, Conference Moderator, CTT: We will now take our next question from Inc. Please go ahead. Your microphone is in a row.

Unknown, Analyst, From The Netherlands: Okay. Good morning from The Netherlands. One question from my side, please. Last month, one of your peers in post took over sending in Spain. They’ve already got 3,000 APMs in Spain, plan to increase the number by a thousand.

You’ll have a, yeah, in theory, collaboration with DHL. Unfortunately, you have to wait for permission for this deal. So in the meantime, your competitor is is making progress there. How do you see the competitive environment in, Portugal and, Spain? Has anything changed on the back of that, that deal in your perception how you look at this market?

And would it lead could it lead you to pricing pressure? That’s my question. Thank you.

Jean Bento, CEO, CTT: Okay. Thank you for your question. The so well, first, starting with the with the fact that we have to wait for for for authorization. InPost also has to wait for authorization, although it’s probably much much quicker and simpler operation, but they they will also they also are also pending from competition authorities authorization. We feel very comfortable with this.

Sending is a very small company. In post operates on the out of home delivery mostly, not to say alone. But in Iberia, CTT is the player with the highest and wider and and and and largest network of poodles, being it lockers, mostly in Portugal, or physic other physical poodles shops. And so we feel very comfortable with that. More than that, the CTD has a has a totally differentiated platform in Iberia, whereby we cover a wider portion of the value chain of e commerce logistics, mostly given the fact that we are very strong, actually, market leaders in customs clearance.

We are top performer in terms of quality in Iberia, Iberia to Iberia flows. And with the coming of DHL joint venture, we will also be a a very strong player on b two b, which in post is is is totally absent. And we will most likely lead on outflows to the world and inflows from the world given the sales reach of DHL. So of course, we like competition. This is a very competitive market.

We don’t see that particular move of in post by acquiring sending as a as a a relevant threat to our to our leadership in this market.

Unknown, Analyst, From The Netherlands: Okay. That’s very clear. Thank you.

Jerome, Analyst, Santander: Thank you. Leave there. Another

Matilde, Conference Moderator, CTT: question, comment on. Please go ahead. Your microphone is enabled.

Antonio, Analyst, IS Independent Research: So just a follow-up question related to your DHL deal. I guess that taking consideration your performance on the parcels, I’m assuming that CASEZ will be included on the deal. I don’t know if you are able to provide some some color on this or not. Thank you very much.

Jean Bento, CEO, CTT: Thank you, Antonio. So as it was publicly disclosed because we had to close the well, the signing of our agreement with DHL almost at the same time as we have announced the acquisition of CASESA, the deal of CASESA could not be included. So what DHL has stated publicly is that they are willing to join this. And what was agreed was that we should now allow them we should after close after the signing and the closing of CASESA, we should allow them to do the due diligence that they didn’t have the time to do. That process is almost reaching the end.

We are doing that with them together. And they should take a decision sooner than later if well, the company. Shareholders. And

Matilde, Conference Moderator, CTT: very shareholders. And Thank you. And as we there are no further questions at this time, I’d like to hand the call back over to mister Lundin, CEO, for any additional closing remarks.

Jean Bento, CEO, CTT: Thank you, Matilde. Well, thank you for attending and for your questions. Once again, we believe that this has been a very decent quarter. We have upgraded our outlook. We are very positive on our forthcoming performance on parcels.

And allow me a final word to repeat once more that the growth we expect on parcels given the pipeline that we have and the market dynamics in Iberia is going to be at least 15% growth in volumes. And that’s why we feel confident that 115,000,000 of recurring EBIT that we have guided for is going be achieved. So once more, thank you for coming, and, we remain available to further clarifications, or questions that you have through our, IR team. Good morning.

Matilde, Conference Moderator, CTT: This concludes today’s conference call. Thank you for your participation.

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