Eletronic Post Box

André Silva – ViaCTT Service Manager

17th June – Basque Country, Spain

International Conference on InternetSafe Boxes & Post Boxes

CTT Correios de Portugal

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INDEX

Digital Solutions: delivering the future

Strategy: key competitive advantages

CTT: snapshot and key facts1

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ViaCTT: Electronic Postal Box4

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CTT: 500 YEARS OF HISTORY

1520 1969

Appointment of the 1stPostmasterKing D. Manuel I creates the first public mail service in Portugal

1911

Adoption of the CTT abbreviationThe institution is granted administrative and financial autonomy and becomes “Administração Geral dos Correios, Telégrafos e Telefones” (General Administration of Mail, Telegraphs and Telephones)

CTT becomes a public companyWith the designation CTT - Correios e Telecomunicações de Portugal, E. P.

1992

Becomes a Public limited company With the designation CTT - Correios de Portugal, S. A.. At the same time, the telecommunications area is split and becomes an autonomous company (later PT Portugal)

100% Privatized

Beginning of the door-to-door delivery in Portugal

2013

70% Privatized

1821 1978 2014

Successfully entry of CTT as a private company, listed on the Lisbon stock exchange

Introduction of the post code(4 digits; widened to 7 digits in 2003)

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N. Employees

Points of Sale

KEY FIGURES 2014 CTT

Revenues €718 M

Operating costs 1 €583 M

EBITDA1 €135 M

Capex €17 M

12.120

Addressed mail volume 841 M

Postal delivery routes ~5.000

Savings & Insurance (Financial Services) 2 €5,5 m.M.

Financial data

Operational data

Unaddressed mail volume 508 M

2.317

1 Excluding impairments, provisions, depreciation and non-recurring costs; 2 Amount of savings and insurance products placements and redemptions

Retail network

623

1.694

Post offices

Postal agencies (third parties)

∆∆∆∆2,4%

0,1%

9,9%

27,7%

Margin: 18,8%

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Mail & Business Solutions

Express & Parcels Financial Services

Third parties services

(private partnerships, services for the Portuguese Government)

Savings

Insurance

Payments

Transfers

Payshop network(cash payments through an

electronic platform, e.g., mobile phone top-ups)

73%

% Revenues 2014 2%

Source: CTT1 Corre – 50% Correios de Moçambique; 2 Revenues by business do not include intra-group eliminations and central services structure

BUSINESS AREAS CTT

17% 10%

MAILTransactional

Editorial

Advertising

USO Parcels

Philately

BUSINESSSOLUTIONS

RETAIL SERVICES

Portugal(CTT Expresso)

Spain(Tourline Express)

Mozambique(Corre1)

71% 7% 22%

% EBITDA 2014 2%

Printing & Finishing

Storage and Document Management

(Mailtec)

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SUBSTITUTION EFFECT: THE POSTAL TRAFFIC HAS DECREASED IN THE LAST YEARS, BUT SHOWED A SLOWER DECREASE IN 2014

The mail volume evolution is affected by the econom ic activity in general and by the e-replacement effect.

When there are GDP contraction periods, the mail vo lume is even more affected

Exp

ansi

onis

t

Rec

essi

ve

Exp

ansi

onis

t

Rec

essi

ve

The volume evolution shows a high relation with the GDP growth, before the technologic

substitution effect

The decrease in the volume was worse due to the impact of the

technological substitution and an adverse macroeconomic

environment

Rec

essi

ve

% internet usersMail volume

(million items)

Sources: CTT; OCDE; Marktest, Bareme Internet1 Bareme Internet counted 5.480 thousand individuals that used the internet in 2014, within a universe composed by the Mainland residents with 15 or more years-old.

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Digital Solutions: delivering the future

Strategy: key competitive advantages

CTT: snapshot and key facts1

2

3

INDEX

ViaCTT: Electronic Postal Box4

8

III. Launch of the Postal Bank to expand the Financial

Services business

I. Focus on the preservation of the value of the Mail business

II. Capture the growth trend in Parcels

FINANCIAL STRENGTH

Best-in-class EBITDA margin

Significant cash-flow generation and dividend growth

Strong Balance Sheet (with no leverage)

STRATEGY: CAPTURE THE FUTURE OF COMMUNICATION LEVERAGING ON OUR COMPETITIVE SKILLS AND ADVANTAGES

IV. Leverage on the scalability of our Assets

PHYSICAL/DIGITAL CONVERGENCE E-COMMERCE GROWTH CTT AS ONE-STOP-SHOP

OPERATIONAL EFFICIENCY

Ongoing transformation programme

Continuous efficiency management

PHYSICAL PROXIMITY

2,443 Own and partnership branches

3,886 Payshop Agents

5,000 Mailmen (Largest D2D in Portugal)

Trusted Brand

HUMAN CAPITAL

Talent and Know-how

Innovation

Performance measurement & incentives

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I. Focus on the preservation of the value of the Mail business

• Price update / regulatory landscape

• Efficiency programs (e.g. Network integration)

• Development of specialized segments (e.g. direct mail)

• Digital / physical mail offers

III. Launch of the Postal Bank to expand the Financial

Services business

II. Capture the growth trend in Parcels

IV. Leverage on the scalability of our Assets

STRATEGY: CAPTURE THE FUTURE OF COMMUNICATION LEVERAGING ON OUR COMPETITIVE SKILLS AND ADVANTAGES

E-COMMERCE GROWTH CTT AS ONE-STOP-SHOP

FINANCIAL STRENGTH

Best-in-class EBITDA margin

Significant cash-flow generation and dividend growth

Strong Balance Sheet (with no leverage)

OPERATIONAL EFFICIENCY

Ongoing transformation programme

Continuous efficiency management

PHYSICAL PROXIMITY

2,443 Own and partnership branches

3,886 Payshop Agents

5,000 Mailmen (Largest D2D in Portugal)

Trusted Brand

HUMAN CAPITAL

Talent and Know-how

Innovation

Performance measurement & incentives

Digital / physical mail offers

PHYSICAL/DIGITAL CONVERGENCE

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Digital Solutions: delivering the future

Strategy: key competitive advantages

CTT: snapshot and key facts1

2

3

INDEX

ViaCTT: Electronic Postal Box4

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Multichannel Document Production

Transpromo

• Multiple inputs (structured files, images, paper documents)

• Multiple outputs and delivery channels (paper, digital via standard and/or secure platforms)

Using the mandatory and costly writing transactional channel as a promotion channel, turning a cost into revenue.

219 million pages processed in 2014

DIGITAL: NEW DISTRIBUTION

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MailManagerViaCTT – Electronic Postal Box

reliability | privacy | legal value security | free | accessibility

1,250,527 registered users

57 Entities members

• Reception of invoices

• Returned correspondence

• Returned Registered Mail

• Answer with no Postage

MainFeatures

About 9,000 accesses (logins) daily

66 Customers in 2014 (57 in 2013)

5,5 Million scans in 2014 (5 million in 2013)

DIGITAL: NEW DISTRIBUTION – RECEIVING DIGITAL MAIL

Safe electronic mailbox, available in a secure Internet portal, which allows receiving mail in digital format.

Scanning, classification, indexing and sending correspondence in digital format.

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HYBRID LETTEReCARD, eSTAMP

• Convenient to residential users and small companies: The

creation time of mail items is reduced to seconds;

• Digital processing enables the transfer of the mail production to

a finishing center, using an industrial process;

• Printing and finishing have a lower cost than the manual

process;

• The expedition is made directly, eliminating the need for

handling paper mail in the company.

COMMON FUNCTIONALITY: SHOPPING CART and ON-LINE PAY MENT

DIGITAL: NEW DISTRIBUTION – DIGITAL EXPERIENCE ON SENDING PHYSICAL MAIL

Hybrid products that allow the production and sending of personalized cards or stamps, with legal value, just by loading or selecting images on a web page.

Document creation on a web page based on previously designed templates. The user uploads the destination addresses and the documents are transformed into mail items, sent via traditional postal services.

POSTAL ELECTRONIC SERVICES PLATFORM: Implemented in Portugal and Poland

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Geographic solutions(GeoAddress / GeoMarketing GeoRouting / Geocontacto )

STICO - Infraction Management Toll Payment PlatformSimplifies the infraction cycle execution to 6 steps, only two of which need intervention from the fining entity - registration of the infraction and certification

More than 4 millions addresses (all over the Portugal country) were geographically referenced

• Used for highways with automatic tolls

• Enables support for prepaid products

• Robust solution and ready to handle high volumes of transactions

• Possibility of loading from multiple channels (eg ATM, Payshop network or CTT Shops)

About 100,000 processes in 2014

Enrichment services of the databases of postal addresses and analysis of the territorial space, ensuring a better geographical knowledge of the market to our customers, assisting them in operational, sales and marketing decisions.

DIGITAL: INTEGRATED SOLUTIONS

PAY

TOLL

29 million transactions in 2014

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Digital Solutions: delivering the future

Strategy: key competitive advantages

CTT: snapshot and key facts1

2

3

INDEX

ViaCTT: Electronic Postal Box4

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Currently, there is a very wide range of communication channels used in the relationship between the sender and the receiver

E-mail

• Text (SMS)• Multimedia (MMS)

Messages

• Wire• Wireless• Video

Phone

• Social Networks• Websites

Internet Addressed mail

Television & Radio

• Outdoors• Unaddressed mail

Others

Segment

Illustrative and non-exhaustive

Citizen Companies

CHALLENGES: CHALLENGES IN POSTAL SECTOR… THE DIGITAL WORLD

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The trend of increase in the use of electronic communication is mainly caused by the speed of information exchange, the increase in the rate of users penetration and low costs associated

But all the conditions for a good electronic communication are

guaranteed ?

Security?

Privacy?

Reliability?

Justify?E-mail

Segment

Companies

Addressed mail

• Social Networks• Websites

Internet

CHALLENGES: CHALLENGES IN POSTAL SECTOR… THE DIGITAL WORLD

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Privacy

Digital Communication

Security Reliability

Communication Hub

Sender Receiver

VIACTT: DIGITAL COMMUNICATION SERVICE OF CTT

Justify

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Documents & metadata

ReceiverSender

Physical and Digital Documents Production

Non-Automatic Expedition

ViaCTT Service Other CTT Services

CORREIO

FÍSICO /DIGITAL

PRINTING & FINISHING

PAGAMENTOS/ SERVIÇOS

FINANCEIROS

MAIL

PHYSICAL /DIGITAL

… …

The ViaCTT service is positioned on the delivery phase, complementing CTT capabilities in the business value chain

VIACTT: BUSINESS VALUE CHAIN

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Services offering & acquisition

Services Usage

BillingPrinting & finishing

DeliveryPayments handling

The customer performs the service selection and acquisition

Services usage by customer

Billing phase, which is responsible create the raw data to fill the final documents

Document production, depending on receivers choice (physical or electronic)

Document delivery, physical or electronic channel

CTT provide several payment methods, including ViaCTT

CTT capabilities

Post Office

The ViaCTT service is positioned on delivery phase, complementing the CTT capabilities in business value chain

VIACTT: BUSINESS VALUE CHAIN

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No Restrictions

�Senders - No restrictions for senders adherence (only for companies)

�Communications - No restrictions on the type of documents to be delivered in the digital channel (ex: invoices, bank statements, insurance payment notices and renewals)

No Anonymous – Full and personal identification of each Receiver (final user)

Legal Procedures to ensure the existence of both parties

ServiceContract

Subscription

to ViaCTT ReceiversSenders

VIACTT: SERVICE CHARACTERISTICS

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� Only CTT knows the Electronic Post Box (EPB) addres s and is the one that delivers the documentation in the EPB, in order to prevent any unexpected contents for the receiver

Sen

ders

� ViaCTT is not a email system . The EPB address can’t be shared with the third parties, avoiding any phishing, SPAM and virus practices

abcd.efgh@email.com

VIACTT: SERVICE CHARACTERISTICS

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Sender Receiver

EMAIL

ViaCTT

ReceiverSender

Who is the owner? Who can justify the sending and reception of messages and its opening?

VIACTT: DIFFERENCES FROM EMAIL

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� Service not mandatory for Receiver. The Electronic Post Box owner isfree to:� Adhere with no costs

� Perform the selection of its Senders, and prevent the unwanted mail

� Cancel its adherence or cancel its senders selection, reverting the mail

reception to the physical way

� Use payment capabilities

� Service has no costs for the Receiver. All costs are supported by theSender (same business model as Physical Mail)

� Efficiency and Control . Delivery guarantee, considering there is a dedicatedconnection between the sender system and the ViaCTT system

VIACTT: SERVICE CHARACTERISTICS

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Entity (sender)

1The user adheres to ViaCTT service

3Entity Documentation Production

6Payment processing

User (receiver)

2The user performs the entity subscription

The subscription is validated by the entity

2

4The user receives a new document

5User performs the document payment

VIACTT: HOW DOES IT WORKS?

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ViaCTT provides a set of capabilities…

Archive

ViaCTT provides the archive service to the sender based on its needs. The document management is performed by the Sender Portal, that is a private portal provided by ViaCTT to the sender to manage its own contents on ViaCTT.

… to the sender

VIACTT: FUNTIONALITIES

Digital Signature of documents

ViaCTT provides the digital signature service to the senders. The digital certificate must be acquired to a Certificated Entity.This service provides the confirmation of the authenticity and integrity of the sender and the message content, as well as the non-repudiation from the sender

Document Response

ViaCTT provides to the sender the message reply service which allows to get a response from the receiver to the message sent.

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ViaCTT provides a set of capabilities…

… to the receiver

Alerts

Alerts (warning notifications). ViaCTT sends an alert (by email or SMS) to the receiver for each document arrived and other events (payments)

Document Sharing

The receiver can share the documents with other receivers, based on private or business relationships

VIACTT: FUNTIONALITIES

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Electronic Data Interchange (EDI)

Receiver access to the mailbox through

automated mechanisms (connectors).

Mainly applicable to B2B receivers with a

large volume of data or a need of automatic

integration on its document management

system, ERP and other systems.

Documents & metadata

Receiver

Conector (IED)

Receiver profiles areas

ViaCTT provides a set of capabilities…

… to the receiver

VIACTT: FUNTIONALITIES

Multi users access and profiling

To the receivers of type “organization”, ViaCTT provides the

ability of creating multiple accesses, with appropriate accessibility

profiles, allowing to adjust the mailbox to the needs of

organizations

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2006

The ViaCTT was launched in June 2006 and was one of the initiatives included in the Government “Technological Program”

2009

Now. Evolving…

2012

Electronic Tax Domiciliation

2010 2015

The Portuguese Government legislated the creation of the digital tax domicile and forced companies to join the electronic mailbox for reception of tax notifications

2007

National companies(utilities and telecommunications) adhere to ViaCTT

New functionalities were developed , including EDI connectors and SME tools

ViaCTT platform substitution , performed by CTT internal development teams, in order to improve management efficiency and capabilities and reduce operations costs.

2011

First advertising campaign after the service launch and the Tax Administration adherence to ViaCTT

VIACTT: 8 YEARS OF HISTORY

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Government commitment

• Minister’s Council Resolution nº 50/2006 of 5th May , for state agencies

• Included in the Government “Technological Program”

(Conclusions UE 2000 Lisbon European Council)

• Included in the Concession Contract, between Govern ment and CTT, as a no reserved service

(Decret-Law nº 112/2006 of 9th June)

• CTT is a reference of trust, quality, security, accessibility and equidistant in the market(CTT has been elected, in the last consecutive years, for the European Trusted Brands)

VIACTT: LEGAL CONTEXT

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It was approved by the Portuguese Government in 2012 that electronic tax domiciliation based on the electronic mailbox will be mandatory for legal persons and persons subject to the VAT regime.

1,1 million new users

Companies Citizen(VAT regime)

VIACTT: ELECTRONIC TAX ADDRESS

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Receivers(Companies and Citizens)

Senders

2006 2012

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More than 11 million objects delivered on 2014, which represent 1,3% of total Addressed Mail (841M)

2006 2011 2012

30K

250K

1000K

Users registered on ViaCTT

Sender Entities that adhered to ViaCTT

VIACTT: EVOLUTION

2014

1250K

60

20142011

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VIACTT: THE MARKET ADOPTION AND BEHAVIOR

SendersReceivers(citizens or companies)

� At the beginning, there was a goodexpectation with the service becausepeople like to separate the “good” mailfrom the “bad” mail, and the emaildoesn’t solve this need.

� The receivers felt some frustrationbecause there wasn’t a lot of senders.

� Nowadays, according to a surveytargeted to the receivers, they expect tohave more entities in the platform andthe general feeling is that the service isvery useful and “works very well”.

� At the beginning, the senders asked“how much receivers are registeredin ViaCTT?”.

� The senders are aware of thedifferences between ViaCTT andemail.

� According to a Portuguese E-invoiceForum survey, more than 60% of thecompanies are not yet thinking on e-invoice.

� The Public Administration intents toadopt ViaCTT for its electronicnotifications, but “the publicadministration” is composed ofthousands of autonomousdepartments…

Low Satisfaction

High Satisfaction

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VIACTT: EVOLUTION

How about the future?

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Muito obrigado!

“ Não são as espécies mais fortes nem as mais intelig entes que

sobrevivem, mas sim aquelas que melhor respondem às mudanças ”.

(Charles Darwin)