Good morning, everyone. Welcome to our first results presentation. I'd like to invite you to follow us on slides 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. 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. Talking about the contribution of CACESA, I would invite you to move to slide number five, where we have an outlook of CACESA. On the left-hand side, nothing new, just to highlight that CACESA has been growing significantly in the last two years, and it will keep growing this year, based mostly on its customs clearance activity.
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 a unified sales strategy to leverage cross-selling between CACESA and TD Express, given that this is an activity that we were already developing before the acquisition of CACESA. We have also aligned end-to-end logistics, including route optimization and standardization of services between both networks. Of course, all the support functions, finance, accounting, planning, and control have been already migrated to CTT with the new governance in place, including a new board of directors. We continue to focus on the integration of CACESA in the CTT universe to ensure a smooth and efficient transition. 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. 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. 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 derives, 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 CACESA. We have observed the 14.4% growth on revenues in the quarter, or a 29% growth on EBIT. If we account for the contribution of CACESA and add to the organic growth, this produces a 34% growth on revenues, and then an impressive 73% growth on EBIT. Probably more important than that, we have seen one additional percentage point added to our EBIT margin that is now, it's now stabilized at 9.5% EBIT margin. CACESA enhances and differentiates our offering more than already had because we have this value proposition that covers a wider part of the value chain of e-commerce logistics.
Because we are integrating CACESA for some customers also with last-mile delivery, this will improve further our profitability on the parcels business. All in all, a very good quarter with a very significant contribution from E&P. I will now pass the floor to my colleague, João Sousa, to address starting with mail.
Thank you, João. Good morning, everyone. On slide eight, as you can see on mail revenues, mail revenue was impacted by April blackout, like we see also in Express & Parcels, putting pressure on overall quarterly performance. Addressed mail volumes down 10.5% year-on-year, falling from 99.2 million to 88.9 million on volumes. Seeing this, Mail & Other revenues performed resiliently, growing 2.9% year-on-year, despite the election effect we had in May of 2025. Excluding the election effect, revenue declined 4.8% year-on-year, total revenue reaching EUR 118.7 million, comparing with last year, or year-on-year, EUR 115.4 million, helped by Business Solutions that grow 10.5% year-on-year. Business Solutions continue to contribute positively to help 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 manage the revenues on this business area. Recurring EBIT growth 49.6% year-on-year from EUR 1.8 million to EUR 2.7 million. 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 the minus EUR 2.2 million coming from activity. It's important to say here that EBIT remains subjected to volatility during the quarter. Due to client behavior on large accounts decisions, particularly on central government, because it's difficult to manage the behavior of the mail on these big clients. During the quarter, it's very difficult to manage these EBIT. In these business areas, we stay focused on, we maintain focus on profitability. 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 mail. On slide nine, as you can see, our commercial productivity continues to underpin Financial Services performance with very good public placements, with strong performance in the financial services. Public placements increased more than 259% year-on-year this quarter compared with last year, and more than 13.4% versus the end of 2024. This results on a daily subscription more than EUR 19.90 million per day. We see a sustainable outlook for the coming days, despite the falling interest rates. 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 this second quarter versus the end of last year. Already, after we already grow more than 700% year-on-year in the last year. This means for us, this business area, the revenue grows 64.8% in this quarter from EUR 5.5 million to EUR 9.1 million in revenues. EBIT grows from EUR 2.7 million to EUR 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, is very important to claim in the market that we have the largest footprint in Iberia. As you know, it's also very important for the Express & Parcels business area. Now I pass to Guilherme Pacheco.
Thank you, João, 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. In commissions with off-balance sheet and uncommissioned accounts also 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 slide 12, we can see now the key financial indicators of the group.
On the second quarter, as João mentioned, we include two months of CACESA, and we have strong dynamics throughout the KPI. 18.3% on revenues, 47.4% on recurring EBIT. Net profit also grew 34.3%, and free cash flow reached EUR 23 million in the quarter. In slide 13, we can see our revenue growth detail. I will focus on the performance numbers, so accounting for CACESA in the perimeter in 2024. We see strong growth driven by Express & 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 this 14% growth. Mail growing 2.9%, mainly the contribution of elections, as João shared. The bank growing EUR 4 million, or 13%, driven by volumes that drove net interest income and commissions.
Financial services also growing EUR 3.6 million, or 64.6%. This is the result of the EUR 1.2 billion placements of public debts, or a growth of 259%. All in all, all divisions contributing for growth. That is a very strong performance. In the next slide, we see our operating costs that grew 9.1% performer, EUR 15.3 million coming from Express & Parcels, or 13.1%. This is the combination of increased volumes and investments in capacity as we continue to prepare our business to volumes increase. In Mail, we see EUR 2.5 million increase. That is mostly explained by the EUR 5.4 million costs related with the elections. If it was not for that effect, we'll be declining almost EUR 3 million in costs due to the restructuring that we keep doing in this business unit. In Financial Services, we see EUR 1.8 million growth in costs driven by activity.
In the Bank, we see EUR 4 million of increase in staff and IT costs that reflect the digital and physical investments in capabilities. Also, contribution from the impairments, where cost of risk now stands at 1% in the Bank, up from 0.9% in the same quarter last year. In slide 15, we see our recurring EBIT with a very strong progress of 28%. Our margin now stands at 8.6%, up from 7.5% last year. This is mainly driven by the growth on Express & Parcels, volumes, and customs clearance contribution. Higher margins are driving this growth. In Mail, the growth came mostly from elections, as we saw, and Financial Services with a very strong quota also contributing EUR 1.7 million for the EBIT growth. In the Bank, a slight growth of 0.1%, EUR 0.1 million. That is some trend that we'll continue to see this year.
Looking forward, we continue to see strong growth in Express & Parcels, above 15% in volumes, and some more margin expansion as we continue to integrate CACESA. 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 Financial Services. The Bank remaining strong in the business volume growth, 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 EUR 36.4 million, free cash flow EUR 25.2 million, and now our net debt stands at EUR 44.45 million. On slide 17, we see 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 operating cash flow that grew 74%.
Our free cash flow almost tripled in the quarter. Our leverage now stands after dividends and the CACESA acquisition at 2.4 times net debt to EBIT. As we guide that, we will remain below the 2.5 after including CACESA, and we should see the leverage going forward as free cash flow generation and the proceeds from the JV with the DHL will help us deleverage going forward. With that, I will pass you to João Bento for his final remarks.
Thank you, Guy. If you follow me on slide number 19, the main message here is obviously the upgrading of the guidance to more than EUR 115 million with the eight months of CACESA counted. Following the main topics for the quarter on operating performance, I would like to highlight once more the differentiated offer that we have in Express & Parcels, that combining a growth that we see for the remainder of the year, above 15% in volumes with the contribution of CACESA, will provide 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 digital platforms and the stores to prepare for further growth. We have seen, of course, a recovery of Public Debt Placements at levels that are clearly above what we had last year.
On the cash flow front, he already mentioned very good performance for the quarter, 74% on operating cash flow, and three times more free cash flow than the equivalent of last year. Very good quarter in terms of cash generation, which provides for a balance sheet with as much flexibility as we have guided in the sense that we remain below our net debt over EBIT ceiling that is in itself quite conservative. Good news also on the balance sheet front. The contribution of our inorganic transactions, so CACESA goes without saying. It's been, I would say, an extremely successful integration 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 the European Commission. It is, as we would expect, a rather complex process, but going well.
The final comment on shareholder remuneration, because we had two meaningful events in the quarter. The first one is that we have closed the EUR 25 million acquisition of shares of our third recent share buyback, whereby we have acquired 3.3% of the CTT shares. We have also canceled the outstanding shares on May 13, and it was also in the quarter, as always, that we have paid a dividend of EUR 0.17 this year. Moving to our last slide on page number 20. All in all, we have reinforced our growth profile, asserting ourselves as the leading e-commerce logistics player in Iberia. Actually, the e-commerce logistics player that shows the higher growth amongst all the e-commerce logistics players in Europe, not only the first quarter, but we expect the same to happen in the second quarter.
We have a sustainable growth in E&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 clearance service, which is, as you know, a service with a higher EBIT margin. This differentiated service portfolio has been reinforced with the acquisition of CACESA 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 mail coming back. As I stated before, our revised 2025 EBIT guidance is for now more than EUR 115 million, including eight months of CACESA.
We believe that with strong execution, this is going to be achieved this year. Thank you for being with us. We will now remain open for your questions.
are now available to take questions. As a reminder, analysts that wish to pose a question should click on the button, raise your hand, and we will give you access to the microphone. Analysts dialing from the following line should press nine, raise your hand, and seek to unmute yourself. We will take our first question from Joseph Fedele from the Sundanese. Please go ahead. Your microphone is enabled.
Yes. Hi, good morning, guys. Hopefully, you can hear me. I have one question that is, actually several questions in one question, just to try to understand here the drivers of growth in Express & Parcels in the second quarter. I mean, basically, the question here is, is this being driven already by synergies, or were synergies meaningful already in the second quarter, synergies from CACESA? Is CACESA growing above or below what is the average for the rest of the business? 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 this second quarter? You're seeing a higher growth in EBIT from your business ex CACESA. These are basically my questions regarding Express & Parcels. I also have another question just on the Public Debt Placements.
I was trying to, obviously, I know that the IGCP reporting is not very, doesn't compare entirely with your numbers, but I was curious to see that when you compare the growth in the first quarter to the fourth quarter, that's 13% above for your placements. When you look at IGCP numbers, it was actually a decline of 9.5%, if I'm not mistaken. I just wanted to understand if there's any specific reason for that difference. Thank you.
Thank you, João. On the last question of the public debt placements, I will ask in the end of my answer to reframe it because I'm not sure we fully understood it. Regarding the question of the drivers of the growth on E&P and CACESA contribution, what we can say is, as we saw, volumes were at a difficult month in April and then resumed growth that we continue to foresee coming in the next months, above 15% growth. That dynamics continues to go well in what we call the old perimeter. The operational gearing also resumed in E&P as unit costs are now with a better evolution and growth starts to dilute the capacity investments that we saw and that we did in the end of last year.
CACESA is growing, but the CACESA growth also includes growth synergies as part or more of 50% of the synergies that we announced in CACESA were revenue synergies that we are already delivering on this quarter, although something that will be reinforced as we grow. CACESA growing above our traditional business, operational gearing already happening in the old perimeter. As we need full flexibility to continue to manage the integration, 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 other markets are obviously a different discussion.
Let me just reinforce this, Guy. João, this aspect that Guy mentioned is very important even for your modeling in the sense that we need to be fully free to allocate customers to CACESA or to TD Express for customs regarding a number of options that we have and they have. Sometimes we would allocate them to one or the other, and therefore, the growth of each other is somehow influenced by the growth of CACESA and vice versa. Having said so, the CACESA growth has been obviously higher than we have in volumes in TD Express for the quarter.
For the public debt, I would ask you to try yourself and understand it.
Sorry, and thank you very much for the explanation. It was very clear. The numbers are the following. If you sum just the flows coming from the IGCP, you get roughly EUR 1.6 billion in the second quarter. If we look at your numbers, you get EUR 1.1 billion. 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 IGCP, there's a decline of 9.5%. Basically, what has been happening in the past was that, let's say, the ratio of your placements versus what we see in the IGCP was closer to 55 to 60%. This quarter, it jumped to 75%. I don't know if there's a reason for this other than the way IGCP reports.
I'm thinking about, for example, the fact that you developed the app and this is getting more traction and that you're basically getting flows that would go through the IGCP web, and now instead, they go through your app. Again, I don't know what happened there.
Thank you, João. I will propose for us to discuss this further offline, 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-à-vis the IGCP during the fourth, first, and second quarter. Maybe we can discuss this in detail with Nuno.
Okay, perfect. Thank you.
We will now take our next question from the free slide from Philippe. You're on the phone. You may go ahead.
Yeah, hi. Good morning, everyone. I have three questions, if I may. The first one is actually a follow-up on João's initial comments regarding guidance for the parcel volumes. Can you clarify what your expectations in terms of Express & Parcels volumes for this year? Second question on competitive mail, because looking at the breakdown of regulated and competitive mail, you can see that the revenue drop of this competitive mail accelerated in the second quarter. Can you elaborate on the reasons for this higher drop and if you are seeing more competition and also your expectations for this subsegment for the future? Last one, if you can also elaborate on the regulatory compensation of EUR 3.5 million impacting specific items during this quarter and what is this related? Thank you.
Thank you, Philippe. On the Express & Parcels and volume growth for the year, we have seen this strange month of April for reasons that are, I think, quite objective. We've seen growth resuming to the levels that we believe will be here for the remainder of the year. In terms of guiding for volumes on Express & 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 regulated and competitive mail, I will ask you to address the question.
Let's say in competitive mail and regulated mail, we have a difficult month of April, as in parcels. Pretty much the same dynamic, the market dynamics, it was the blackout and the less working days that put a lot of pressure on that month, the same on April. We continue to see a lot of volatility in the dynamics of those customers, also in the government mail, as elections and some constraints on the value chain of mail have been putting backlogs growing. It was a difficult month, a difficult quarter on that regard. We see strong dynamics in the fourth quarter, as we saw last year and the previous one, where you see some softer declines during the second half of the year, very backend loaded in the fourth quarter. That is also the seasonality of that business.
We see better trends throughout the second half and ending the full year on that guided range between the 6% and 8% full year declines on volumes. Regarding that regulatory compensation that you mentioned in specific items, as all the communication sector has been claiming past taxes or regulatory fees collected by ANACOM due to some inclusion of costs that were deemed not to be recoverable by ANACOM. We, as all the sector, also did the same, and we are recovering some amounts that are included in that number. The recovery that we are seeing is about EUR 4 million for the past years.
These are taxes that were illegally charged by ANACOM, and we are now recovering them.
It's the same in the telco sector if you follow it. The reasons are the same.
We will now take our next question António Seladas from AS Independent Research. Please go ahead. Your microphone is enabled.
Ant`onio.
You need to unmute yourself. Next question Joaquín García-Quiros from JB Capital. Please go ahead.
Yes, hello. Thank you for taking my questions. I think you mentioned something, but I wasn't able to, I didn't listen 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 because you are going to keep investing in the division, I guess, and should we start to see some growth in 2026? Another question regarding 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? On the number of placements, the EUR 1.1, EUR 1.2 billion, do you feel this is a comfortable level if nothing in the macro changes for the future quarters? Thank you.
Thank you, Joaquín. Starting with the placements, we see some stabilization at the second quarter number, so between EUR 1 billion, EUR 1.2 billion in placements. If nothing changes on the macro and interest rate environment, that is the scenario that we are working with. In the bank, yes, as we previously mentioned, we are investing in increasing the commercial capabilities of the bank, and that entails investment in the people and in the stores and in the digital channels of the bank. That obviously entails increased costs in staff and IT. It's what we are seeing this year with a step up on those costs that are eating 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.
We should start to see those costs stabilizing and the growth accelerating as we continue to invest in acquiring more customers and increasing the revenues per customer that we currently generate. The net interest margin, if that was your question, we see stabilization on these levels, so the 2.1%, 2.2% range that as we have been mentioning to the market.
We will now take our next question António Seladas from AS Independent Research. Please go ahead, Ant`onio. Your microphone is enabled.
Hello. Yeah.
Yes, yes.
Thank you. Sorry. I have two questions. The first one is related with if you would like to provide some color in terms of price increase on mail for 2026. The second one is related with the bank and non-performing loans that continue to grow. I know that if you sell it, you will reduce it. Nevertheless, just if you can comment on it and why you are not selling non-performing loans or what kind of level of ratio do you think is reasonable for the bank? Thank you very much.
Thank you, António. I'm not sure we understood the question on the price increase for mail for 2026, but if you were asking any clarification, the formula is basically the same with the new cap for the yearly price increase on 12%, which is something that we don't foresee could be activated in any case. We have basically the same formula that we had 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 has now been reduced to, I believe, 15%, where before it was 16%. 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.
Regarding the price increase for next year, it's still early days to share it. We should expect something in line with the 2025 increase, but we are still in discussions. We are not comfortable disclosing any number right now.
Yes, but it will be, of course, a function of a volume decline between June and June and inflation. As Guy said, it should be something along the same range, but a bit early days.
On the non-performing loans, as you mentioned, it's still not an activity that we perform, the seller portfolios, frequently. It's something that we'll be increasingly doing in the coming months. With that, we see stabilization going forward around these levels. That's subject to the more recurring sales of these portfolios that we foresee in the future.
Okay. Just a follow-up question on Bank. On the fiscal quarter, assets have been more or less stable, slightly above EUR 1 billion. Is that something that we should continue to expect, or do you think that once you finish on digitalization and all the process that we are going through, it should increase, basically getting more exposure to risk?
Thank you, António. As we continue to see the underlying trend of RWAs in line with the loan book, this quarter or this first semester, we have a positive effect on regulation on the mortgage capital consumption in line with the EBA new rulings. As such, that in a way offset the underlying trend of growth that is driven by the loan book. We foresee the loan book continue to increase and even accelerating, that trend should be seen in RWAs going forward.
Okay, thank you very much.
Nothing.
We'll now take our next question from Anke Slotboom. Please go ahead. Your microphone is enabled.
Okay. Good morning from the Netherlands. One question from my side, please. Last month, one of your peers InPost took over Sending in Spain. They've already got 3,000 APMs in Spain, plan to increase the number by 1,000. You have a, in theory, fantastic collaboration with DHL. Unfortunately, you have to wait for permission for this deal. In the meantime, your competitor is making progress there. How do you see the competitive environment in Portugal and Spain? Has anything changed on the back of that deal in your perception, how you look at this market, and could it lead to pricing pressure? That's my question. Thank you.
Thank you for your question. First, starting with the fact that we have to wait for authorization, InPost also has to wait for authorization, although it's probably a much quicker and simpler operation. They also are pending from competition authorization. We feel very comfortable with this. Sending is a very small company. InPost operates on the out-of-home delivery mostly, not to say alone. In Iberia, CTT is the player with the highest and wider and largest network of pick-up points, being it lockers, mostly in Portugal, or other physical pick-up point shops. We feel very comfortable with that. More than that, CTT 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 a top performer in terms of quality in Iberia, Iberia to Iberia flows. With the coming of DHL, a joint venture, we will also be a very strong player on B2B, in which InPost is totally absent. We will most likely lead on outflows to the world and inflows from the world, given the sales reach of DHL. Of course, we like competition. This is a very competitive market. We don't see that particular move of InPost by acquiring Sending as a relevant threat to our leadership in this market.
Okay. That's very clear. Thank you.
Thank you. Another question from António Seladas. Please go ahead. Your microphone is enabled.
I just have a follow-up question related to your DHL deal. I guess that taking consideration of your performance on parcels, I'm assuming that CACESA will be included on the deal. I don't know if you are able to provide some color on this or not. Thank you very much.
Thank you, António. As it was publicly disclosed, because we had to close the signing of our agreement with DHL almost at the same time as we announced the acquisition of CACESA, the deal of CACESA could not be included. What DHL has stated publicly is that they are willing to join this. What was agreed was that we should now allow them, after the signing and the closing of CACESA, 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. The expected outcome is that they will be part of the deal as an equity partner. If not, they will certainly be a customer of CACESA.
Okay, thank you very much.
Thank you. As there are no further questions at this time, I'd like to hand the call back over to Mr. João Bento for any additional closing remarks.
Thank you, Mathilde. 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. 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. That's why we feel confident that the EUR 115 million of the recurring EBIT that we have guided for is going to be achieved. Once more, thank you for coming. We remain available to further clarifications or questions that you have through our IR team. Good morning.
This concludes today's conference call. Thank you for your participation.