Operator
Hello and welcome to CTT's First Half 2026 Results Conference Call. This event is hosted by Mr. Gui Pacheco, CEO of CTT, Mrs. Joana Freitas, CFO of CTT, and by Mr. João Sousa, CCO of CTT. Please note that this conference is being recorded. For the duration of the call, your microphones will be disabled. We will have a Q&A session at the end of the presentation and analysts will have the opportunity to ask questions. To do so, simply click on the button to raise your hands and we will give you access to the microphone. If you are dialing from a phone line, press star 9 to raise your hands and star 6 to unmute yourself.
I'll now turn the call over to Mr. Guy Pacheco, our CEO. good morning to you all and welcome to our first half 2026 conference call um i would invite you to start in a phase four uh where we see our core business separate mail services continuing to perform strongly uh with temporary edwin's on cassesa as players anticipate the new regulatory context of the minimis we are the very healthy organic growth of 6.3 percent with strong contribution from our sep business also a strong contribution from melon services that is these guys by the by the effect of elections that accounted for 8.6 million last year and so if we account we also had a strong contribution from mail and and bank uh contributing 7.4 percent to the growth our ebit decline in 8.4 despite a good contribution from our sep business and a very strong contribution of of million services with casses giving this uh anticipation of the regulatory and context uh waiting on the on the evolution due to his high incremental margin but all in all the underlying business the underlying engine of the group remains healthy and the pressure in cassese is temporary in nature linked to this regulatory transition on the next slide we can see accelerated growth of e-commerce volumes with very strong growth be it including or excluding DHL Portugal so organically growing almost 21 percent and overall growing 24 percent in volume so very strong growth and with a very good news of diversification we see on the right side of the slide a strong diversification from cross-world and non-EU tier one to other kind of players namely Iberian players and EU sourced marketplaces that continue to grow traction within our portfolio. And this brings resilience to our business going forward. So we are increasingly exposed to the structural growth of e-commerce demand in Iberia. And this remains very much so the underlying dynamic in our business. on page six we see the financials of our step with once again a solid revenue growth above volumes with the sequential acceleration with organic growth growing 21.2 percent our ebit also growing 5.4 with a very robust margin that is normalizing although some mix and full inflation impacts were felt and we are actively managing profitability with a number of of implemented actions in terms of optimization of line haul handling and and last mile on slide seven we We see our early validation on the GEV of DHL synergies, where we continue to see significant synergies of 17.5 million euros, a big portion of that coming from revenues, 40 percent, and then 50 percent coming out of operation efficiency and support functions. We know that the GV gives us more than scale, give us commercial reach, network density and operational specialization, which are key in building a stronger e-commerce platform in Iberia with its enlarged offering and more strength on operations. On slide 8, we see the customs clearance activity that remains under pressure, the business environment remains very volatile, caused by regulatory volatility, changing in flows and airport shifts, but we are taking concrete actions to protect profitability. we are reducing our workforce and optimizing temporary workforce while actively managing our facilities in warehouse in order to protect the decline in revenues and strong look decline on EBIT that you can see on on the shot we chose to to spend a little bit more time explaining the trends around this business as as we see this strong impact in in the customs business driven by by two regulatory chains one affecting only the spanish business that is in the introduction of the g4 regulation and the anticipation of what has been implemented in the first of july that is the end of the Dominimis exemption where all the goods below 150 euros will be charged a three euro per product fee per category. Noting that in November is to be expecting an additional fee of two euros per parcel that will bring still more more volatility so stricter regulation in Madrid and supply chain reorganization are in anticipation of the new regulation is what is what is driving the change of volumes as CTT or Casesa as different market shares in all these airports and we are seeing volumes moving from Madrid to Eastern Europe and Central Europe, namely Benelux. In Eastern Europe we have strong market share in Poland, so that is good news, but in the Central European part Cassez is not as strong in the market and that is driving the decline in share and those volumes but we see this as temporary and we see the market evolving to b2b clearance and fulfillment where we have strong capabilities and this regulatory reset is creating opportunities that we are already acting on with strong leads from a number of marketplaces in Iberia within this combination of clearance and fulfillment that does bring us comfort that the reorganization of the business will evolve to a context where we will continue to have strong share and growth opportunities. in slide 10 uh we we see our e-commerce solutions as a whole so including this the sep and the non-seps or customs business uh so it was still strong growth of 12.7 percent organically with the strong momentum of sep of setting the the the regulation anticipation or impact on on cassesa In EBIT, not the same dynamics as the incremental margin of the customs business is putting pressure on margins and our EBIT is declining 26.9 but I would highlight these various marked different dynamics between the two businesses and and highlighting that that we see on on customs these as temporary in nature and with that i will pass the floor to to joan sosa to guide you through the mail and financial services thank you good morning all uh as you can see on slide 11
And second quarter confirmed a strong acceleration in saving placements driven by higher subscription limits, attractive interest rating, and growing digital adoption. At the same time, health plans continue to scale, reinforcing the diversification of our service revenue ways. Also, we see that in our insurance services. on the left slide on the left side of the of the slide on public debt placements we can see that average public average monthly public uh their placement reached 547 million uh in the second quarter of 2026 up to 60 percent when compared with the last quarter and up to 40 percent year on year total subscription amount to approximately uh 1.62 billion during the quarter um reflecting a very strong recovering from the customer demand for savings products uh distributing through our ctt network and this performance driven by three factors so eiger eiger's savings certification As you know, subscription limits last year was increasing, attractive interest rates, and the customer continued to confidence in this kind of low risk saving products. Also I would like to highlight that digital channels continued to gain relevance. digital savings subscription at the representing around 12% of all transactions and and in May it was May becoming the best month ever surpassing 20 million on from this this channel the outlook of public debt placements looking ahead looking remain very positive we continue to see a strong customer demand from saving certificates support by the the the activeness of the this product through through a customer placement and at the same time the launch of the new treasury certificates uh generate additional demand from customers seeing seeing longer investment horizons it's important to highlight that this uh we are not seeing a meaningful canalization between these two products so we see an increasing and not the canalization so on contrary we see new customers comes to our stores or to our digital platforms and so that's the way we see an outlook very positive until the end of the year for this for these saving products in our network on health plans we continue to see to perform pretty well as you can see on the left side of the of the slide the number of customers reach 55.8 000 customers representing the growth of 13 percent versus last year and 90 percent of versus 2024. this growth validates our ability to developing a subscription-based services and create the customer relationships behind our traditional postal services we are doing these on the health plans and also in the insurance services and creating these new services in our retail network and in summary we are seeing a strong acceleration in savings placements supported by both our physical and digital channels and outlook for the next quarters remains favorable with strong demand for both saving certificates and now this new product that we launch in 6th of july at the same times health plans and insurance returns continue to grow, reinforcing the diversification of CTE services portfolio. On the next slide, slide 11, sorry, slide 12, where we see the mail and service revenues, despite the challenging cooperation based created by the May of 25, because we had these legislative elections, mail and service revenues delivered a very solid performance. Because if you exclude the only one-off effect, revenues grow, savings placement accelerates significantly, and business solutions advancements continue to expand. And in that way, profitability improves materially. As you can see, revenues reach $127.9 million in the second quarter on 26, compared with $130.4 million compared with last year. However, this comparison is significantly impacted by the contribution from the Portuguese legislative, this one-off. If we exclude this, we can see this growth of 5% quarter-on-quarter. Growth was driven by savings placement, business solutions, and the resilience of the address mail revenues. I would like to highlight this address main revenues, that the address main revenues declined 7.5 from 88.9 million compared with 82.2 million items, however, the revenue impact was sustainability lower. This means that excluding the election, in fact, address main revenues would have declined only 0.9, demonstrating a significant revenue resilience. This continues to demonstrate our ability to manage the structural decline in physical mail while protecting both revenue and profitability. Also, like we saw before, savings placement also continued to increase the revenues and our activity, increased 56.1%, reaching 1.3 million in the second quarter of 26. and the total subscription increased 40% approximately $1.62 billion. Business solutions, the revenues increased $7.8, reaching $19.6 million during the quarter. This becomes a huge asset to our diversification in these business units. We see also a very positive outlook until the end of the year and and and and also a very good way to uh to continue to uh help to to diversify this business area on the right side you can see that the profitability recurring ebit reached 9.6 million representing 37 37.3 percent year on year recurring ebit margin improved from city for 5.4 to 7.5% and if you adjust the election effect, the recurring growth has been 149%, highlighting the strong operation leverage that we have been doing in this segment. And so that we can see that this business area that can be very, very positive because even When we increase the saving certificates, these revenues, you are seeing an increase of margin much higher than coming just from the revenues of the saving certificates. Sorry. And now I pass for Joana.
Thank you, Joao. Good morning, everyone. We're talking now about the bank. The bank has seen a very robust quarter in terms of growth. In business volumes, you can see that all categories have had a double-digit growth, both deposits, off-balance savings, loan book, accounting for nearly 40% of growth quarter-on-quarter. The current accounts, you can see the number is slightly growing, but there was a correction caused by the Bank of Portugal asking to eliminate accounts that were inactive for the past 24 months so there's a slight difference on previous numbers that you may have seen but we continue to see a very strong performance in the path for growth it's translated also in the growth of banking revenues banking revenues went up 7.4 percent in the quarter both in net interest income in commissions there's a slight decrease in the category other than has to do with transactions and operations that happened last year that are not recurrent namely the sale of NPL portfolio and credit recovery in the 321 credit unit. Looking at recurring EBIT we are continuing our strategy of reinvesting the proceeds of the business in creating technology and commercial capability for future profitability growth so we do see a slight decrease in recurring EBITDA from 5.6 to 5.2 in port in the second quarter of 26 and maintaining hot rote at around 12.1 percent so i would say a quarter that continues to deliver it on growth and investing for future improved profitability on the next page I think we've now moved to page 15 you have our financial indicators here you can see the fully full consolidation with with the bank and no pro forma adaptations I would highlight that we have a strong revenue growth quarter on quarter 11.7 percent we have the recurrent a bit decreasing over the year on year but increasing improving versus the first quarter of of this year so on a positive trend sequentially and also free cash flow at 31 million uh improving 35 percent versus versus the last quarter and these will be my highlights for for this page to continue on page 16 and deeping looking deeper into the revenues here we can see that revenues grew at 6.3 percent so a solid performance that was underpinned by by sep and by mail-in services if you isolate for the effect of last year's elections so e-commerce solutions grew 20.2 million that's a combined effect of a drop in revenues that we consider to be temporary in the customs uh clearance area of 6.3 and then a very significant growth organic growth in e-commerce where uh greater volumes are translating into higher revenue and also underpinned by higher revenue per item. In mail and services, we have here the effect of elections, as I was saying. If we didn't have that, this would have grown some 5% instead of a decrease of 1.9%. So we're seeing the underlying drivers of growth to be uh quite resilient uh and the bank contributing here with 2.6 million or 7.4 percent increase uh border on border uh on the right hand side you can see that uh e-commerce solutions continues to be over half of our total revenue so the growth engine of of the group uh representing um already more than half of our of our revenues and on mail and services this decrease again if we had isolated for elections would be a slight positive of 0.6%, so also showing resilience and stability. On the next page, if we look at costs, we have adjusted the operating costs related to EBITDA to account for the pro forma incorporation of CASESA and DHL to have a comparable basis. In that, starting with that basis, costs grew 7.6% in the quarter. They were driven mainly by the organic activity of the SEP business and also influenced by fuel inflation. We can see that e-commerce solutions, we have a decrease in costs in the non-SEP business, so adjusting for capacity and putting in place cost reduction measures to counter the effect of the drop in revenues and then the remainder is the 26 million increase in costs has an impact of cost of fuel prices of 2.4 million in the quarter and the rest essentially accompanying the organic growth of e-commerce in mail-in services we actually can see a very positive decrease in costs cost optimization initiatives continuing to to deliver including a headcount reduction and optimization of operations and the bank investing in its commercial capacities and digital transformation for for future growth. In the lower right hand side, you have the first half OPEX breakdown. Again, these numbers, they don't account for any pro forma adjustment of the inclusion of Casesa, just a small comment, for example, staff, if you account for like for like comparison, would have grown only 2%, which is essentially linked to the growth of minimum salaries and so overall the more stability in costs. On page 18, looking at the EBIT performance, we can see that EBIT has been pulled essentially by our SEB and mail-in services, starting here at 28 million with the adjusted Casillas and DHL pro forma incorporations. um we can see on the e-commerce solution this temporary effect that we're seeing in the in the custom sector uh decreasing um even by 5.1 5.1 million positive influence of the e-commerce solutions of 0.5 and then mail-in services growing um 3.7 percent uh and a slight decrease in the bank as we saw before uh all in all the margin remains at a at a robust level of 7.4 percent um and we can continue to see a recurring evita that is improving and expected to improve uh in the rest of the year um on the next page uh page 19 uh just talking a little bit about our uh leverage ratio and our debt uh in terms of cash flow we've seen um a significant improvement improvement uh in the change of working capital um the values for the first quarter of this year were minus 37.3 they have been improving on on the second quarter they're still uh negative but we are seeing a improvement in in this category operational cash flow also uh growing quarter on quarters now standing at 8.4 but comparing with the second quarter of 37.5 so we are seeing also a positive trend on the evolution of cash flow and free cash flow stands at minus 6.9 at the end of the first half but again we're seeing a continued improvement the first quarter was minus 33 million the second quarter plus 26 million so we're we're seeing a positive trend there uh in terms of the evolution of net debt um our net debt has decreased uh we've had payment of dividends um share by our share buyback program and the proceeds of uh the transaction with the DHL that has taken us to a 292.8 million net debt at the end of the period and that means that our leverage ratio net debt to EBITDA has now improved to 1.8 times from 2.4 times so giving us significant strategic flexibility and allowing for space for capital allocation
as we see and with that I would pass on to Gui thank you Joana so on slide 21 you can see our updated guidance a growth guidance that is underpinned by a strong core business growth despite in temporary customs volatility except volumes and revenues continue to perform well Mellon Services is delivering on profitability, and we continue to see a good cash flow generation. We are also guiding, I should say, with a lot of transparency. We are breaking our guidance in two parts. One with a lot of ambition to grow our core with an overall growth of double digit growth and high teens if we exclude the bank and and so guiding to to what we consider here core so sep mail and bank ctt to a growth of seven to twelve percent to be in a range of 105 to 110 million and then highlighting that the current context and still the implementation of a new levy in the end of the year brings limited visibility to Casesa and as such we are giving a broader range and also highlighting to the higher risk of execution but all in all providing a guidance that will be between 115 and 125 million euros. This guidance is based is in the assumptions of a flattish bank of CTT recurring EBIT as was previously guided. A continued strong performance from mail-in services given the efficiency measures that we continue to implement and a good outlook on financial services and we continue to see growth on the step on the set volumes to to uh that will lead to an overall high single digit growth in the full year of 2026 um and and obviously uh with some key risks that is the casselza or the custom spots and and still uh some some volatility around uh separate volumes on the post-dominities world and and continuous inflation pressure on fuels and that continued to be driven by by geopolitical instability namely on the middle east on slide 22 so we we firmly believe that we'll continue to deliver our future growth building in our strategic foundations, we have a very good quarter in our core with SEP and mail revenues remaining very healthy with excellent trading momentum and mail services and very strong growth on SEP that we continue to expect to grow during the second half of the year and with additional EBIT margin improvement. A tougher second quarter on Casseasa, but we continue to be actively managing profitability in order to preserve it. And we see amidst this temporary volatility relevant opportunities to gain share in the B2B clearance and grow on the logistics fulfillment arena. Our recurrent EBIT guidance for the non-CEP excluding non-CEP between 105 and 110 million for overall guidance of growth between 115 and 125 million. We remain very disciplined on capital allocation. We aim to continue to invest in our growth and improve profitability looking for additional workforce and cost-based optimization something that we have been actively doing and our specific items on the quarter show the effects of those efficiencies that also show through the mail and servicing numbers will continue to optimize our portfolio tilting it to a high growth e-commerce value chain and And we want to remain with some flexibility from inorganic growth on the sectors that we have been previously mentioning. And we will keep shareholder remuneration discipline, including the recurring dividend, but also with opportunistic buybacks. And that's why we are increasing our current share buyback program with an additional 10 million euros uh taking opportunity to to of the attractive prices and and keeping still additional flexibility on our balance sheet uh following the the proceeds of DHLJV so we'll continue to use the flexibility of our balance sheets as a strategic optionality and with that i will turn the floor to your questions and answers that we will be pleased to answer.
Operator
We are now available to take your questions. As a reminder, analysts that wish to place a question should click on the button to raise your hands and we will give you access to the microphone.
Operator
Analysts dialing from a phone line should press star 9 to raise your hands and star 6 to unmute yourself our first question comes from joan safara joan you have been allowed to talk please ask your question uh hi guys good morning hopefully you can you can hear me well um so i i have two two three questions uh basically um the first one on on cassessa and um just i wanted to understand a bit better what i mean what's what's happening here um i'm surprised that obviously with the the minimis um and when i look to your second half guidance we actually see an improvement versus the the first half of the year so so that that it would be useful to understand what uh what drives your confidence there on this improvement, considering that, I mean, the uncertainty is still there, or maybe I'm wrong and we've seen some anticipation of this already in the first half of the year, and so that's what makes your 7 to 12 million euros of Avid contribution from non-Courier Express and Parcels, which is mainly Casesa, to explain this. So this would be the question on Casesa, if you can help me there. And then the second question is on mail. I mean, it was quite a strong performance excluding the impact of elections. And I understand, as you're saying, there's, well, a recurrent theme there, here, which is the cost savings. And do you think this kind of, I mean, contribution to EBIT, assuming that dress mail revenues remain more or less the same, is end? And also, obviously, excluding the impact of financial services. So just thinking about everything else other than financial services, if this is sustainable in the next quarters. And then also connected to this, we saw a 17% increase in other revenues. And if you could help us understand why this increase. And then the last question on Banco CTT, you confirmed you have received an unsolicited non-binding offer. Was this the first one? Have you been approached by other players?
Are you now basically more willing to accept offers than you were in the past? so if you could give us some color there also it would be helpful thank you thank you joel um so on on cassesa we our guidance actually is based upon on what is the normal seasonality of the business that as you know is is very lean to towards the peak season on on the first quarter and and customs business is not an exception on that regard and we are seeing also improvement from where we are as we are expecting some normalization on the world of the post the minimis on the custom side of things the the effects were slightly anticipated more than than than than on on the on the last mile but i also want to to be transparent saying that that was here the reorganization of flows between airports that are driven by stricter regulation in madrid in terms of the g4 introduction and also cosmetic bands that are more a local issue to with supply chain reorganizations as these players are are moving to to fulfill in europe and and then their geography plays a role here so eastern europe is is easier to to access from asia and Central Europe is easier to distribute around Europe and we are seeing that reorganization happening and happening before the actual diminishing is taking place because obviously players are anticipating that already in the month ahead of the 1st of July. we are also seeing strong decline in their investment in marketing because they were expecting some operational volatility and as such they are refraining of having huge volumes during these uncertain times good news is operationally everything at least in operations went very well and very smooth and and so we are we are confident they they will resume uh normal cost of business and volumes will will improve although being quite clear that that is a lot of lack of visibility and especially we still have the handling fee in november uh that's why we we are also labeling this part of the guidance with more risk of execution. In terms of mail we are seeing two, three positive things, so the financial services was a quite good quarter and the dynamics with the introduction of the new product, the long-term product that caters to a different kind of demand and is accelerating placements. So tailwinds there, business solutions and all the diversification areas of revenues are also performing well with good incremental margins and that is also helping. And we see amongst what has some seasonality around mail because third quarter tends to be a little bit more depressed and fourth quarter more stronger some resilience on the margins on that side given everything that we are doing in terms of savings and also some some some positive impact of of average price as as the pricing formula and mix evolution continues to drive unit prices up there in terms of Banco CTT I will basically not add that much to the announcement that we made so as you mentioned we received a non-solicited offer of a non-binding for a potential transaction on Banco CTT. This is obviously leading us to evaluate the strategic alternatives that we have across our portfolio of assets but that's what we can say for now and we also confirm that we have a financial advisor engaged in order to look to these strategic matters and I wouldn't have much more at this point.
If I can take the question also on the other that you were asking on the mail. We do have positive revenue growth linked to the payment of a social mobility allowance that is contributing positively to that evolution. And also in fulfillment and others, we have the Deco Pharma business that only became part of CQT Scope in August 2025, so that difference is also there, and also in a positive evolution of central structure, so that's what's driving those those changes. In terms of mail, you're asking is this contribution sustainable for the porter? We have seen a good evolution in terms of registered mail, a good evolution in terms of the price mix, so we hope to continue to see uh to see that and to carry on with our efforts in terms of um also optimizing the um the not only the operational but also the the headcount here thank you joan thank you our net our next question comes from philippe light flip you have been allowed to talk please unmute yourself and ask your question hi hello everyone i have three questions if i may
first one regarding set volumes and if you can give us additional visibility on the on the july volumes after the changes in the the minimis regulation just to to understand the initial impact of these changes in your in your step volumes doing during this month second question also on set volumes because you are saying that to reach your guidance the revised guidance you are assuming that volumes growing at least by single digit in in full year this came after a very strong first half with almost 19 or more than 19 growth in in terms of volumes on set volumes so this leads to a quite conservative assumption for the second half with almost no growth if we consider this high single digit expectations for two years is this related with the expected impact of the minimis or should we expect anything negative on the second half to impact that volume and last question on public debt placement and if you can give us additional visibility regarding your guidance what level of public depth placement are you assuming for second half if this compares with second quarter if we should expect higher or lower depth placing in second half when compared with this already strong second quarter thank you Thank you, Philippe.
So on SEP volumes, as you know, when we discuss the minimis, we already mentioned and we continue to see some volatility on volumes on these coming months. we continue to see a very strong growth of demand in all the european accounts and iberian accounts as we try to show in the slide with with the with the mix or the diversification of there we see strong growth in international accounts those big brands that are direct to consumer and also European marketplaces. Also in Chinese marketplaces like TikTok that are not cross-border, are more local to local, we continue to see there also strong demand. And this is what is helping us to offset the declines that we are seeing on the big three platforms, as they are GMVs, and this is publicly numbers are declining between 30 and 40 percent that GMV and we see July as the bottom of this as they refrain from marketing as they were anticipating some operational issues that are on the adaptation to to all of this and I remember that they they need to deal with this country by country so there is some complexity of the difference of interpretation of this new regime across the European countries. In July we are expecting to have a decline between 2 and 3 percent overall so that shows that the rest is performing well and offsetting most of the decline that we see as the shiny is normalized and we continue to have a strong demand on the other side. We see growth on the second half of the year obviously not on the 20% that we are showing right now but we see these progressively evolving as we mentioned in the past we have two similar events in the recent past the first on the US and the other on the minimum is on 2021 where the impact of the non-European marketplaces was felt between six to nine months and this is what we are expecting until resuming a normal path of growth. But luckily we continue to see strong demand on the other side and this all in all will continue to contribute to growth. um in terms of of of financial services we we see increase we increase demand uh uh as joe mentioned and we mentioned throughout our presentation so this new product is is adding up a new class of demand so it's not uh cannibalizing the other the other the other the other placements as it seems that there is demand for these more long-term products. We are not giving specific guidance on the breakdown of the two, but I can mention that we are assuming guidance, growth in parcels, so SEP, and growth on financial service placements year on year um with with the dynamics that you know thank you philip our next question comes from joaquin garcia quiroz joaquin you have been allowed to talk please unmute yourself yes we're taking my questions uh most of them were already uh answered but i have a couple
of questions one regarding the margin for uh especially the sub part of the e-commerce solution uh it has improved uh regarding the first queue but still lower than it was last year so if you can explain to us a bit of the moving parts here and when can we expect to see uh levels of above six percent that we saw last year um and then uh on the mail uh and service uh recurring a bit did perform very well this quarter i just wanted to to know if you could share a bit if the good performance was more driven from financial services or uh from mail and i know
you don't uh provide the breakdown but just uh talked a bit uh on the male part of the business uh if that was all from the efficiencies and if we can expect similar performance uh going forward thank you thank you Joaquin um so on on set we we we are seeing basically two two variables at play so we we resumed the most of the normality on the operations in all what what affected our office quarter so so on that regard things are going well we we have the fuel inflation uh that we that we mentioned we disclosed that impacted 2.4 million euros the the set business uh this quarter with with some offset on revenues but but still uh waiting on margins and we have changing on mix uh so the the change the change from from non-european players to to iberian and and european players is driving a change in terms of the size of the parcel so they are heavier and the incremental margin on every apostles is is not is is not the same as a very light package and there is some some impact of that change of mix uh but but we we with continuous gain of scale and with inflation on fuel hopefully subsiding uh we we see normalizations on on that on that part of the business then the customs business as you know has a very high incremental margin and that that plays a role on the overall e-commerce solutions but we are expecting some some normalization of that as as volumes continue to normalize as well in terms of mail um so three as as i mentioned before three moving parts uh all performing well um financial services obviously a key driver because by incremental margins as you know business solutions so all the the new uh revenue plays uh as also that include ppo call centers and And also the social services, as Joana mentioned, that we provide in your retail and payments are performing well and also contributing in margin. So incrementally, this has a higher margin than the average male margin. and and we saw some resilience on the on the revenue on the male side that coupled uh with with the with efficiency measures also well provide uh some some incremental margin there so going forward we see the first two um continuing to to accrete to to to our evite and we see some some stabilization some stability on the on the on the male the on the pure male a bit as as we continue to see this this positive trends on the on the price you per unit
Operator
and also more efficiency that that we continue to to implement thank you Joaquim our next question comes from hank slot boom hank you have been allowed to talk please unmute yourself and ask your question okay um so so with hank having some difficulties our next question comes from antonio
sladas antonio you have been uh uh allowed to talk please unmute yourself and ask your hello good morning thank you for taking my questions i have two first one is related with the bank no performing loans um pretty high the ratio is now stable but even so it's high and in absolute terms figures continue to increase so i'm surprised because well the environment is is is it's uh economic environment is quite good so i'm surprised that this ratio remains so high clearly above the industry or at least above the trends and i also am surprised because you are not selling them any unknown performing loan so this is my first question if you can explain uh these these if you can provide more insight from this and the second question is related with your consistency between set volumes for the second half year um and your cash is a target for the second half so So I know that, well, the trends are similar, but of course the business are not exactly the same. Nevertheless, it seems that you are very optimistic for Cassese, or you are optimistic for Cassese. I know that the seasonality should help, and sometimes you are cautious on set volumes for the second half of the year. so my question is if you reach um step volume targets for the for the second half you believe that you also discusses the targets thank you very much thank you thank you uh antonio on the bank i would say that the the dimension of the ratio is what we rightly pointed out that we
contrary what what the industry normally does they they are they routinely sell uh these kind of portfolios the bank the bank is moving in that direction so we'll be more and more doing these operations and but but continues to be sporadic and and and impacting the quarter that where we made made that movement actually last year on the second quarter we made one and that's why you see some impacts on on the other on the other revenue line um this year we'll we'll do another but more towards the second year of partners second half of the year and this will become um a routine and that ratio will be actively managed by by by doing so um in terms of of the expectations of cassese and and and and and in terms of of set volumes i wouldn't say that that we are more optimistic on Cassez versus what we are in CEP. We actually see in a steady state some correlation between the two dynamics. That is pretty obvious, the reason why. What we have is a very depressed starting point on Cassez because most i would say most of the impacts are were front loaded and and as such anticipated and and we and and we are seeing and and the set business that also has other other kind of of growth areas like the european uh the customs because it's only for out of europe volumes that doesn't have that that other balance uh to to offset the the declines but we are seeing uh we are seeing normalization on on cassese uh although uh highlighting that we see risk because it's the visibility remains low um and on on parcels we see strong growth on the european flags we see a reduction of growth and some and some declines on on on the chinese customs but customers sorry and but overall uh with growth that as the chinese Chinese resume a normal behavior will translate to normalization of the Google for Pass that we have shown on the last couple of quarters, but this to be expected some volatility on the coming quarters.
Yeah, thank you Guy. The e-commerce, the Chinese e-commerce platforms already showed in the past when they solve the problems, they come very strong. the the question here is how many how many time they needed to solve the the process that they are designing so that's that's where comes this this window that we are putting here so we we expect when they solve this problem they become very strong they could they continue to they can be investing again in in marketing and comes the volumes and so the the question here is what time they needed to solve these these these these problems they are solving right now with this
Operator
new regulation we are seeing in europe thank you very much thank you antonio for your question our final question comes from eng slot boom thank you have been allowed to talk uh and if if you have a question please unmute yourself and ask your question okay hopefully you can hear me now i have two questions thanks for taking my questions by the way and and sorry for the for the technical hiccup um the first one is on cassessa if i understood you correctly
there's been a a move in volumes away from madrid to for example central and eastern europe and the boundaries countries and you're trying to get the business back and not only what you just referred to and the chinese solving their own problems but also by means of offering them fulfillment if i understood that correctly um is that a line of business according to me that's a line of business which is fairly new to ctt and you're rather late entering this business as well and looking what's happening with cma cgm with their save by unit they've been acquiring we've seen bpost moving in with with paxon i even see or see post acquiring fulfillment companies is it a business you can build up by yourself or does it require acquisitions and if so how how should we how should we see that because it's it's it's a very competitive market the second question relates to the cep business um what proportion of your current parcel volumes is out of home versus to door and given the fact that you have a collaboration with with DHL
and certainly also eyeing building up a position in Spain in in parcels why do you expect that to be in let's say three years down the road do you have any official ambitions there those are my questions thank you hank i'll start for from with the last one uh that i think it's easier um it's it's um so right now our out of whom volumes in sep are 16 so the right the rest are are at the door distribution uh we we disclosed uh some some some views on on our last couple market stay on where we see the market uh we see the market in three years between 20 to 30 percent distribution out of home and that's why we keep investing in in which is the the the largest network in portugal uh that is our late locking network and it's why we are accelerating the deployment in Spain we already have around 200 locas and we continue to to grow and fast forward that that grows there in order to capture not only the opportunity but also to edge that market in fulfillment so so there is there is or in Casesa you are right so we we saw because because of supply chain reorganizations and because of the of relatively strict customs rules in Madrid we saw some reorganization on flows we we are seeing the market moving fast from what is b2c or h7 clearance to b2b clearance or sort of both clearance with fulfillment within Europe and we we are well poised to to to gain share when when that when that change happens we already have a number of important clients doing b2b clearance uh throughout europe uh and we see us as having a competitive advantage as the market reorganized on that we have and coupled with that we see fulfillment we have fulfillment operations okay we they are not large and and and and but we have fulfillment capabilities within CTT but with what we are seeing is is a play on this vertical so it's not pure fulfillment operations is this integration between between the clearance the fulfillment and also last mile and that integrates and integrated play that they enable us to differentiate on the market but also to have synergies operational synergies that obviously can help us to compete better on that space. We never shy the way of saying that we are open to some M&A on the fulfillment front because of this. And that continues to be on the table, if it makes sense. but we already have organic growth opportunities in Iberia on this on this type of services as we see the market fast tracking on on on shifting the way they are organized from B2C to B2E okay that's very clear thank you very much have a nice day you too thank you very much i'll i'll turn again the the floor over to me for his final remarks thank you nuno um so we will as i i said in past we will deliver uh future growth by building our strategic foundations uh the ctt core business is healthy except growth growth was very strong on the second quarter uh main services delivers excellent profitability and we also had a very strong cash generation we we see dhl jv also validating the strategic logic of building this stronger e-commerce platform um at the same time we are being very transparent uh on casses and and how we have this temporary volatility on the customs clearance uh and this was the main pressure point of the quota where we took a number of concrete actions in order to protect profitability going forward looking ahead we we are guiding with discipline and excluding non-step and e-commerce activities we see a recurring a bit of around 105 to under 10 million euros for the full year supported by this core business stealthy performance and we see with more caution with the with the custom spot and overall guidance between 115 20 25 million and when we'll keep investing our growth in optimizing our business portfolio and remunerating our shareholders um while uh using our balance sheet uh flexibility as a strategic lever and with that uh i thank you all for being present and i i hope to see you again soon thank you all we hope to see you again on the road as from september onwards thank you for your participation this earnings call is now concluded.
