Hello, and welcome to the CTT 9M 2023 Results Conference. My name is Karen, and I'll be your coordinator for today's event. Please note, the conference is being recorded, and for the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. I will now hand you over to your host, João Bento, to begin today's conference. Thank you.
Thank you, Karen. Good morning, everyone. Welcome to the nine months CTT results presentation. We are reporting yet again a strong revenue, sorry, a strong quarter. If you follow me on slide number 4, mostly on E&P and Banco CTT, coupled with a solid cash flow performance. So starting with parcels, or with E&P, we had in Portugal a significant growth volume, and that we have, we have now actually, indeed, volumes ahead of peak season and ready for a great peak season. While in Spain, we had a very strong growth, both in large clients and in smaller clients, which is something that is also noticeable.
Moving to mail, this was a quarter With softer than expected mail volumes, mostly due to digitization and this decline in volumes was not enough to offset the price increases that we have, given the new formula of the concession contract. We remain focused on cost control and we believe that it's something that will somehow with the new formula, well, provide a tool for a better performance of mail going forward. On Retail and financial services, we have, as we all know, a very high level of public debt placements in the beginning of the year.
Then with the re-rating of the rates, volumes came down and came down also because we have very strict ceilings on the volumes that each account can provide. And therefore, with that, we have a decline in terms of placement. Our commercial focus now remains on the distribution of insurance and other services, as well, as on revamping the digital placement that we're going to have soon. The bank has a very strong growth in deposits, in line with the announced strategy. In fact, grabbing market share in terms of deposits, with the resilient growth on loans, and therefore, is moving towards the targets for 2025 at a very strong and steady pace.
All in all, it was a quarter which delivered revenues up 9% year-on-year. With, of course, as I said, express and parcel in the bank accelerating. In Express and Parcels, we have a 36.5% growth. In the bank, almost 20%, and hence it provided for EUR 12.7 million of Recurring EBIT. Or if you want an accumulated EUR 68 million for the first nine months of the year or 75%, 76% higher than last year. In fact, we have now an accumulated Recurring EBIT, which is higher than the whole of 2022. And this was mostly the result of excellent performance on Express and Parcels and the bank.
With this, we have provided strong operating cash flow, with the roughly 29% ahead of last year. Free cash flow more than doubling to EUR 64.5 billion, and it provides for a consolidated net cash position of EUR 22 million or a EUR 51 million improvement versus last year. With the bank accounted on equity accounted, the net debt now stands at EUR 176 million or slightly close to 10% lower than it was one year ago.
Moving to slide 5, well, just a picture on how the Recurring EBIT has grown in all segments, and it did so against a more challenging macroeconomic environment that we are all testing. We can see on the chart on the right-hand side, the positive contribution of all business areas so far. Also, I'll call your attention to the number on the revenues on Express and Parcels at EUR 88.1 million, getting close to revenues in this quarter for mail, which is something that will be more and more a trend in our business structure.
Moving to slide number 6 and getting into the details of Express and Parcels. So as I said, and the charts show a very resilient growth since e-commerce adoption increases in Portugal. And although we see declining lines in the right-hand side of the charts, these represent-... Still very high growth, 20.5% on volumes and 14% on revenues. And also, on the basis of very diversified pool of clients, as you can see on the pie chart on the right, which provides for some comfort in the structure of our customers in Portugal.
Moving to slide number 7, we can assess the robust margin expansion that we have. With the 15% growth in revenues, well, this then transforms on 47.5% on growth in EBITDA and 160% of growth on EBIT. So demonstrating how operational leverage delivers a sustainable growth in margins, a trend that we see building up in our portfolio.
Moving to slide number 8 and looking at Spain, also, a very high rate, I would say impressive, growth rate, with 69% growth in volumes in the quarter, which is truly outstanding. Or the 76%, on smaller clients, which is an important factor. But we'd like to call your attention to the fact that in Spain, we have very large clients, it is—this is a very important trend, the fact that we are growing even more on smaller clients. And with this, this high growth is fueled by all segments, as I said, with the smaller ones outperforming the larger ones and hence, improving diversification of the customer base.
Moving to slide number 9, we see even more so than in Portugal, how the growth and operational leverage enables margin expansion. In fact, we came to an EBIT margin in Spain of 6.1%, which is a result of a 58% growth on revenues, 190% growth on EBITDA, and a hugely positive accumulated EBIT. And on the chart on the right-hand side, you can see the comparison between this third quarter two years ago, 2021, then last year, almost breaking even, and now with a very positive accumulated EBIT, which is, of course, very good news.
So, swift capacity upgrades to protect quality at much higher volumes. This is very important, and we believe that the quality that we are able to deliver in Iberia and of course in Spain is probably one of the key success factors for the present situation on the EMP business. And with this, I would hand the floor to João Sousa to guide us starting on the mail business unit and on financial service in retail.
Thank you, João. So as you can see on slide 10, addressed mail revenues decreased -3.9% versus last year, come to EUR 80.9 million in the Q3 2023. This comes from a mix of average revenue per item that we can increase 9.2%, but the softer mail volumes penalize the revenues when you see a decreasing of less 12% on the volumes in this quarter. We know this is a business very volatile, so in that way, we're still working on solutions we have because we want to be part of the process of the digitalization of the customers with the solutions we have in, like, printing and finishing, mail, mail rooms, and so on.
So in that way, being part of this process and helping the customers in this path. And also, in the same way, we see the e-commerce growing in Portugal. We also believe that we can use mail to help the startups and the small companies using mail on this business. Saying this, on the slide 11, we continue to focus on profitability. As you can see, our costs in the Q3 comes for EUR 100 million, and this is a decrease compared with last year. If you put here the EUR 3.4 million coming from Newspring, even with the inflation growing in this quarter.
This comes from to a Recurring EBIT of EUR 100,000 in this quarter. We know that with drivers profitability in mail is volumes and pricing. In volumes, we already speak in the slide before, and in costs, we already have taking 83 people removed from the company in the first nine months of the year. That comes, that count for EUR 4.2 million in costs. That, if you look for normalized impact in EBIT is EUR 2.5 million, and we are planning for this quarter and for the next year, more 200% of people that we want to remove from the company.
That allow us to take care about EUR 12-15 million of costs, and we think and we look for an impact of EBIT of EUR 5-5.5 million. Coming for slide 12, Financial Services and Retail, we can see that less than attractive rates and the strength impact in the placements and profitability of this business area. We come from EUR 883 million of public debt placements in this quarter. That comes for EUR 8.5 million of revenues, a decrease of 44.6%, and a Recurring EBIT for EUR 4.9 million. Saying this, the margin increased from 44.8% to 58.2%.
I think it's important to explain in this front. We are working in two major fronts. So the first one is the digital front. We are still working to have the best we think we can have the best digital front for public placements in the future. That's something that we are working in this quarter, and grab all the new savers that wants to do this process by digital. Just to remember you that in the last quarter, we already launched in the market the capability of the customer to schedule in our website the visit to the store and upload all the documents, that we have more than 3,000 visit scheduled.
We think with this bringing this process to our app, it's going to help us to grab more market share, market share in the future, and also using the more than 10,000 persons that use our app in a daily basis. Saying this, we are working in two fronts, like Bento was saying before, insurance products.
Now we see almost our stores already selling these insurance products, and we see an increasing of client interactions and doing simulations that help us a lot to sell these products. And also, we communicated this quarter, the partnership with Crosswood, that we think also it's a services well connected with our strategy for Retail. And that way, we think we have two major points here. So the first one is working on digital for public placements, and the second one is have more services well connected with this strategic for Retail. We have these savings and credits we want to develop here. Now I pass to Guy Pacheco.
Thank you, João, and good morning to all. On page 15, we can see the bank key figures with a steady progress towards our 2025 targets, be it in accounts, be it in business volumes. Our accounts grew 35,000 up to this quarter, and our loans and resources growing EUR 0.6 billion in the first nine months. In the top of the chart, we can see that we are trading per quarter above what is needed to fulfill our targets, so a clear and strong progress here. On the next page, we can see more detailed key figures for the bank, where we see our customer deposits were very impressive growth of 21%, against the backdrop of the Portuguese market declining 4.3%.
The bank, auto loans and mortgage also with a good progress, 10.4% and 7%, although here we see some pressure on the evolution of the market. In terms of yields, very steady yields on the auto loans, 6.2%, and a very strong progress on mortgage that are now up to 3.1%. Also, the cost of deposits are going up as the banking industry starts to react in this front. On the next page, we see also a strong set of results, I should say, with revenues up to 19.3%, so with net interest margin reaching 3%. And this is, of course, being driven by net interest margin.
With costs of risk under control and steady, and higher efficiency, we can see our-- we saw our EBIT more than doubling versus last year, EUR 8.5 million in the Q3 , 22% EBIT margin, and our profit before taxes also with a very impressive growth. Our return on tangible equity in this quarter reached 11.5%, double digits for the first time. On the slide 17, we start our financial review, where we can see a good quarter, consolidating a very strong performance up to the nine months of the year. Revenues growing 8.6%.
Our Recurring EBIT, stable as, when we are exiting these very strong periods of financial debt, placements, that fueled our growth, during the last 4 quarters. Our net income reaching EUR 9.5 million in the quarter, EUR 35.5 million in the nine months.... and our free cash flow for the Q3 to the EUR 16.6 million. On the slide 18, we can see the Retail revenue evolution with a very, very strong contribution from Express and Parcel and a strong contribution from Banco CTT. Our parcels business growing 35% year-on-year on revenues, with our Portuguese operations, growing 20.5 million in volumes and, and more than 13% in revenues.
In Spain, we see a fantastic acceleration to 68.9% in revenues, with growth across all segments with a good progress in diversification, as John already mentioned. And I should highlight that this is done against a backdrop of E-commerce that is rather flat in the beginning of this year and for some quarters now. Mail & Other declining EUR 3.8 million, with an acceleration of the decline of mail volumes, especially on the financial sector, where it seems to be a new acceleration of digitalization.
Financial Service declining EUR 6.9 million, with debt placements below EUR 900 million, with a difficult comparison, where the Q3 last year was the Q1 of these high periods of finance, where we placed EUR 1.7 billion, and that's the comparison that shows on the revenue dynamic. The lack of competitiveness of the product right now vis-à-vis term deposits and the volume cap introduced by the Portuguese government is withholding the growth of the placements. The cap is something that we see starting next year being removed, and as such, fueling again the placements of this product.
Bank revenue is growing EUR 6.2 million on the back of net interest, net interest income expansion, and driven by also by higher volumes and higher yields. On OpEx, slide 19, we can see an increase of 9.7%, driven by Banco and Express and Parcels. Well, our Express and Parcels increased 28%, our cost EUR 17.9 million, and which is a normal, normally difficult quarter for parcels in terms of unit costs. I think this quarter we show a very good progress in unit costs with much resilience and a strong progress on margins, especially in Spain. Our unit cost is declining in Iberia, despite we are in a inflationary context that is pushing mainly wages and energy upwards.
And this is a fact that we are reaching critical mass in Spain and our continuous investments in efficiency are paying off, and as such, we see resilient margins in this unit. Mail and Other decline in EUR 0.7 million if we account for the one-off of the other quarter, more than compensating the wage inflation that was to then EUR 2.6 million in this quarter. Financial Services declining EUR 3.4 million, and this is completely linked with the decrease in the activity that we saw. And Banco CTT increasing EUR 1.8 million, directly also with activity. The cost of risk in the Q2 declined and remain and stood at 1.2%.
That is a progress or improvement year-on-year. On slide 20, we see our Recurring EBIT that was roughly flat, and where we see a change on the contribution by business unit versus the nine months, that is in line with what it was anticipated. Express and Parcels, the main contributors, with a very strong progress in Express and Parcels, that is a trend that we see going forward. Mail with a difficult comparable on costs because of the effect of the third quarter, and higher than anticipated declining volumes. Financial Services declining after this abnormally high demand that will be this tough comparable to be remaining here until the Q2 next year.
Banco CTT, growing for EUR 4.4 million due to strong growth in net interest, higher efficiency, and good cost of risk performance. All in all, we see these two big contributors to our growth, the Express and Parcels and Banco CTT, as the strong motors of our improvement in profitability going forward. And with that, on the next slide, we still have the cash flow generation on slide 21. Our cash flow stood at operational cash flow stood at EUR 76.2 million, with a strong operational performance. Free cash flow, EUR 64.5 million. We have now a consolidated cash position, including lease liabilities, of EUR 21.7 million.
With that, I'll pass you to João to his final remarks.
Thank you. So, summarizing, on slide 23, this was a very good quarter, with strong revenue growth, improved profitability, and we want to draw your attention, this is happening while the macroeconomic environment is somehow deteriorating. This was a result mostly of the performance of parcels and the bank. Indeed, on parcels, we've seen very strong growth with market share gains in Portugal and in Spain, with margin expansion, and with that, we feel very confident for the forthcoming peak season.
On mail, we continue working on pricing, but mostly on cost reduction, and we believe that with the new formula and with the price increase for next year and all the cost reduction initiatives that also João Sousa has detailed, we will be able to cope with this softer demand that we are seeing. Well, for public debt, we've well, everything has been said. We see the placements normalizing, and we are now focusing on the distribution of insurance and other services, and also in the short-medium term, on the digital placements that we believe will bring again market share gains.
The bank continues to grow in all fronts, in clients, in volumes, in profitability, and towards actually the 2025 targets that we have recently updated with the reverse virtual that we did. This was a quarter that provided a steady and strong cash flow, as seen, and well, maintaining supporting over the existing financial flexibility. We also kept executing the EUR 20 million share buyback program that complements our dividend policy.
And with that, as a result of the performance that we have described, namely, against the backdrop of very good performance of Express and Parcels, we have decided to upgrade, yet again, our Recurring EBIT that now stands to at least EUR 85 million. And with this, we close the presentation and remain available for answering to your questions. Thank you.
Ladies and gentlemen, as a reminder, if you would like to ask a question on today's call, please press star one on your telephone keypad. We'll take our first question from João Safara from Banco Santander. Your line is open, please go ahead.
Yes. Hi, good morning. So I have two questions from my side. The first one, just, and I think we mentioned this briefly, but just wanted to understand a bit on the sustainability of these margins, and if there was any, I mean, any particular driver for the unit costs to be so low in this third quarter. I mean, I would say we're talking about pretty strong margins for this business, around 8% in Portugal, 6% in Spain, in EBIT margin. So if you could a bit elaborate on what's the sustainability of these margins, obviously with the usual volatility due to seasonality.
But it seems that as long as revenues keep growing, this should be sustainable. So just my first question will be just to touch on that. And then the second one, regarding, I mean, what the recent decision by ANACOM to approve the new quality service indicators, basically reducing it to 8 instead of 24 before. I have two questions regarding this. I mean, first, I understand this will only be applied from January 2025. So the question here is, what will happen in the meantime? So what is ANACOM's view on the quality indicators that you deliver in 2023 and 2024?
What can this imply in terms of either additional CapEx or any fines? Then, the second, just regarding these indicators, if you feel comfortable that you can achieve them, and if you could give us a bit of overview on that. Those are my questions. Thank you.
... Our next question comes from Marco Limite from Barclays.
Sorry. Sorry, sorry?
Yeah, go ahead.
Okay. Well, I'd like to answer the question. I will start with the, thank you, João, for your question. I will start with the quality KPI and then hand over to Guy for the sustainability of our EBIT margin. So the quality indicators proposal that came to the public should not have come to the public because the law is quite clear and has no ambiguity whatsoever. It says that the quality indicators are set by a government ruling in Portuguese. Following the proposal by ANACOM, or after hearing the representatives of the customers.
So this is not supposed to be a public hearing, and we are handling that accordingly. I will anyhow disclose that this is not what it looks like, because in fact, these new indicators, they are a condensation of all the previous indicators, and therefore, our view is that this proposal is rather useless because it doesn't conform with the law, not in terms of process, nor in terms of the content.
And I would only expand to a final example, which is, as you know, the law and the contract state that indicators should be in line and using the average of European countries and these eight indicators address six different products. And the European average is 2.7 products. So in general, and this is just one example of many that we could provide. This does not comply with the law, and therefore, we are not. Of course, we are participating in the public hearing, but we are also moving ourselves towards, well, getting, making sure that the proposal and finally, the KPIs will comply with the law.
With this, I will pass to Guy to answer the first question.
On sustainability of margins. So we are, I should say, at least on the second quarter of strong progress on margins. Normally, the summer, and especially in August, is very challenging, because all the market normally has softer volumes. All the providers have softer volumes during August. And because we cannot dismantle operations only for one month and just to resume on the next, we normally have higher unit costs. This quarter, we had very strong volumes even in August, that enable us to dilute our fixed base costs during August.
And that is a function of we are sustainably above a threshold of volumes, be it in Portugal and Spain, that enable us to be on these kinds of margins. So they are sustainable with as we see volumes sustainable going forward and pretty much in line in what were your assumption during your question. So it's foreseeable sustainable margins, even some improvement vis-a-vis the third quarter in what should be sustainable margins going forward.
Perfect. Thank you very much.
Our next question comes from Marco Limite, from Barclays. Your line is open. Please go ahead.
Hi, good morning. Thanks for taking my questions. First question is on Spain. Just a follow-up question there. Clearly, you are benefiting from volumes growing a lot, 60%-70%. And I guess Spain, for the first time, Spain profitability was higher than the Portuguese profitability for the first time. So I'm just wondering when we should expect basically volume growth to normalize more closer to the underlying market growth. So when your campaign of new clients acquisition will sort of normalize on a higher base, and from there, we should expect a just, you know, more of a normal growth. Second question is on capital allocation. You recently announced about EUR 25 million of compensation from the state. So when are you gonna receive that amount of cash?
And, similarly, when you're gonna cash in from this, the real estate disposal, and what do you intend to do with all of that money? Thank you.
Thank you, Marco. So, on Spain- ... we've been acting and performing and grabbing the benefits of an attacker, a sensible attacker, in the sense that we still have a very small market share, although growing at an interesting pace. So it's very hard to answer to what should be the normalized growth rate. What we see is that, and Guy already mentioned that, we see the situation in Spain where e-commerce is not growing. We've been able to specialize very significantly on out of Europe e-commerce. We have this vertical of customs clearance and combined with sorting. So we believe we have a very significant quality.
We have a very integrated operation with Portugal more and more. So we see that we have a significant number of levers that would allow us to keep some growth, but of course, it's 70% is not sustainable, but it's still early days to establish what would be a normal market growth. Coming to capital allocation, so this EUR 23 million we expect to receive them somewhere next year. These processes, while there are tweaks and ways of sponsoring this, and the state has used them as usually does in these processes. And so the fund should come next year.
As for the real estate cashing, we've said that we want to complete legal before year end. Part of the cash would come in into tranches, and we think that, well, we are so far comfortably executing that route. What to do with this money? We've said that very clearly. We want to reserve room for additional efficiencies. So some part of these funds are going to be invested on additional efficiency, namely by reducing our workforce base. We want to provide and keep providing an interesting level of shareholder remuneration.
As we said, we have now, after two years, a stable and explicit dividend policy of between 35% and 50% of net profit. And when we have available cash, opportunistically, we will perform share buybacks, as we are doing exactly now. And third, we want to reserve some room for additional growth and non-organic growth, on the delivery space. So this is, well, the final end of this fund is going to be a mix of these three capital allocation destinations of the site. Thank you.
Thank you.
Our next question comes from Felipe Leite, from CaixaBank. Your line is open. Please go ahead.
Hi, good morning, everyone. I have two questions, if I may. The first one is regarding mail and mail prices for next year, because I believe that the 12-month reference period for next year price increase ended in June. Do you already have some view or what is your belief in terms of magnitude of price increase for next year, if you can share it with us? And second question, also regarding mail, and if you can give us the breakdown in terms of volume evolution during this quarter from regulated mail and bulk mail, just to understand what's the type of mail that has a higher volume drop, because on regulated mail, you can recover the drop on next year prices, but on bulk mail, you cannot recover it. Just to understand the breakdown.
Thank you.
Thank you, Filipe. So on net prices, as you know, we are now, well, you rightly said that the data is computed between June and June. The formation of price is a combination of a number of things. The most obvious one with the pure application of the formula, and then the constraints that we have of various kinds. Just to remind some of them, we have a constraint on the normal letter, we have a constraint on no more than 15% in any product on the three years, no more than, I believe 10%, so 15%, sorry, 30% on three years and 50% on one year.
So with all that, what we can say is that the, the price, the price increase will be clearly above the one we have this year. And, and, we are now in the process of nego- oh, not negotiating, arranging that, discussing that, because it is- there's no negotiation, it's, it's very factual, and we should come up with, disclosing that, that number as soon as it is finally set up, but clearly above what we had this year. On, on the second question, Guy will, will, will ans- will answer.
... Thank you, Filipe. You have the details on the appendix on slide 7. But nevertheless, just commenting that we have an increased decline or a higher decline in both regulated and competitive mail, but the sharper increase was on regulated mail. And also in some customers on bulk, but very concentrated on financial services. So, some banks, or some specific banks are changing the dynamics in terms of statements. And we had some changes in law for insurance companies regarding the
The green card.
The green card and that is showing off also those kind of digitalization measures on that sector specifically.
Our next question comes from Antonio Seladas from AS Research. Your line is open, please go ahead.
Good morning. Thank you very much for taking my questions. So it's related with the addressed mail and sharp fall over the third quarter. Do you think that the customers changing the way and the digitalization and so on, it is related with the price increases that you applied this year or not? So just first question. And second question is related with the competitive environment in the Express and Parcels. I don't know if you can explain a little bit more because your performance in Spain is really, really strong, so, and taking consideration that the market is not growing so much. And what is... So you, and you are gaining market share, for sure. But in Portugal, how it is, how you are playing?
I guess that you are just keeping your market share nevertheless, because I'm just at home, I'm just receiving more and more suppliers, different suppliers. So my feeling is that competitive environment is increasing. So I don't know if you can elaborate on this? Thank you very much.
On mail, let's say, it's very difficult to assess if it's elasticity. I think it's both factors. But on big customers, what we see is very sharp changes in dynamics in very concentrated clients. So it's why we see dramatic falls on these swings after movements like the bank statements or finishing the green cards and all of that. On regulated mail, it depends on the quarter, but until right now, we increased prices in March. We didn't saw such dramatic change on volumes, so difficult to assess if it is elasticity or not.
On Spain, it's important to understand that the market, although it's not growing that much, there are very swings or some dramatic swings between the players that operate there. So namely, out of Europe, players that are gaining share aggressively. And we are lucky enough to be actually providing services to everyone, and also to those out of Europe players that are driving the growth.
But we are also growing on the smaller clients, so we see ourselves as an attacker on the market, and as such, we keep grabbing share, and that, I think, it's our obligation as we have the market stance that we have in Spain. In Portugal, we see ourselves growing at least as the market, but we see ourselves also gaining share. What do you see? It's in your home? That, I'm not always sure if it is a good proxy for the market, but it's normal.
It's normal because it's what we have is a number of players that only operate in very dense areas like Lisbon and Porto that can be geographically competitive, but not that nationwide. We ourselves are also having tariffs that edge our exposure to that because we have tariffs oriented to density in order to give less space for them. But we don't see that dynamic. We are growing- ... slightly above the market, and we are gaining share, so it's at least our view.
Okay. Thank you very much.
Our next question comes from Arthur Amaro from CaixaBank. Your line is open, please go ahead.
Hi, good morning, everyone. Just one question, if I may. We witness EBIT guidance revision upwards. I think it's fair to assume that this EBIT target has been achieved quite supported by the performance of financial services. Meanwhile, we see a very significant slowdown of this segment. It generated EUR 5 million this quarter. If we annualize this, we're talking about roughly EUR 20 million per year. My question is, how are you incorporating these new trends in your EBIT target for 2025? Which is, if I'm correct, the average point is EUR 110 million, and this is my question. Thank you.
Thank you, Arthur. So, you are right that financial service is playing a different role. We are, well, clearly in line with the targets for 2025. We are not happy with the level of placements as of now. We've already mentioned a few measures that we are acting on. The digital channel will be probably one of the most relevant ones. We are also, I cannot say pretty sure, but with very strong confidence that the caps per account will be removed, hopefully back to five times more the previous EUR 224, EUR 250,000.
Larger placements occur mostly on our branches, so we are confident that that will improve. But we see very positive trends on Express and Parcels on the bank. We have a very hedged portfolio and diversification is, in fact, the most relevant sustainability lever for a postal operator. And so we keep, I would say, strongly confident that we are in a conversion path towards the... well, in a soft way, towards the expectations that we have forward to the market or capital markets today. We've seen, for example, the bank achieving this quarter return on tangible equity. That, that is, well, surprisingly, ahead of, ahead of what we had in mind. So we are pretty confident that we will be there, even if with the slight contribution of the, of the various, business areas.
Okay. Thank you very much. Well, very clear, your answer.
Ladies and gentlemen, as a final reminder, if you would like to ask a question, press star one on your keypad now. Our next question does come from Marco Limite, from Barclays. Your line is open, please go ahead.
Hi, thanks for taking a follow-up question from me. So back to the Spanish volumes. Would it be possible to know what's the split between domestic volumes versus cross-border volumes? I'm just aware that there were a few press articles mentioning some security issues with some of the Asian retailers' apps. Thank you.
Thank you, Marco. I'm not sure I understood very well the security issue, but we have I would say predominance of large customers. Most of them are out of Europe. We are not... Of course, we don't disclose data on a customer-by-customer basis, but I would say that there is a significant contribution of out of Europe customers in Spain, also in Portugal, and also because most of the out of Europe volumes in Portugal come from Spain. I probably can add that and this also goes to a point that I believe Antonio Seladas mentioned earlier on why are we so grabbing market share in Spain?
We have developed this specialization on out of Europe and especially Chinese e-commerce players, because as you know, a few years ago, Chinese e-commerce would come into Europe, actually into the world, through the postal network... and hence, postal operators have had a privileged opportunity to replace when those players abandoned the mail network to replace them, and we were very well positioned to do that in Portugal and Spain. So that's one of the reasons why we have this privileged relation with that part of that segment of the market. Also, as I've mentioned before, we have launched a customs clearance operation in Madrid early this year.
This is the only operation where customs clearance and sorting are together, which we believe is also a competitive advantage. I mean, we are going to disclose customer by customer, but you may trust that there is a significant importance on out of your customers.
Okay, thank you.
João, João Sousa can complement my comments.
Yeah. What I think is, what you are seeing in Spain is the result of the our betting diversification of our customers. So like João was saying, that we focus on these out of Europe customers, and also Chinese, that before comes from mail, not grab this traffic for Portugal and Spain, for Express and Parcels. But we also are very happy what we are seeing growing in SMEs and in big customers. So what we can say, we see a very good numbers on this diversification in Spain, in different segments and different dimension of customers, and also using CTT to distribute in Spain and also for cross-border.
In the same way, if you allow me, we are also very happy to diversification in Portugal, because you see different sizes of companies and different sectors that allow us to managing the different economic environments, also for the traffic in Spain. And we can say that using the backdrop of the Iberian proposition we have, that we know that is a unique thing, and we don't see any competitor using this like we are, we have been using. This bring us a very happy growth in Spain with diversification of the customers.
Okay, thank you.
Our last question in the queue is from João Safara from Banco Santander. Your line is open, please go ahead.
Yes, hi, and last question from my side. When in this quarter, in particular, we've seen the, I mean, the market share of your market share of the total placements reducing significantly. If I'm not mistaken, I think third quarter last year was around 80% of the total public debt sales, meaning new subscriptions, obviously, and this year close to 63, 62%. I mean, the question here is, first, was there a new competitor for placing these products? Or is this just the digital segment of the public credit agency that had a higher market share in this quarter?
And also, if you expect this to be a trend also in the future?
Thank you. Thank you, João, for your question. So as you know, with the growth of which we have been seeing from last quarter, the last quarter of last year and also the first half of this year, of new savers, comes a lot of new young people putting their savings on public debt placements. These allow us to bring for these services, more digital persons. That's what we are competing. That's why it's so important, like I said before, we have a very good experience and the capacity we're going to put in our app for these savers also can use our digital channel.
So what we have strong feelings for the future is when you deploy this digital channel from CTT, that we're going to grab more market share for the future. And I think that's the big difference.
Okay. That's, that's clear, João. Just, just a follow-up on, on that. Do you have any date for the launch of this digital platform?
Most likely, beginning of next year.
Okay, thank you.
There are no further questions, so I will hand you back over to your host, João Bento, CEO, to conclude today's conference.
Thank you again for coming and for your questions. And of course, we remain available through our IR team, to follow up ones. Thank you very much. Have a, have a nice day and have a nice weekend.
Thank you for joining today's call. You may now disconnect.