CTT - Correios De Portugal, S.A. (CTT) Earnings Call Transcript & Summary

Good morning, and welcome to CTT's Full Year 2024 Results Conference Call. Please note that this conference is being recorded. [Operator Instructions] I will now turn the call over to Mr. João Bento, CEO.

Good morning, everyone. Welcome to our 2024 results conference call. It's been a great year that we chose to qualify from transformation to growth. So starting with Slide #4. Guidance was accomplished with EUR 85 million recurring EBIT, but most important than that, with EUR 71 million or 38% growth year-on-year for the Bank -- Logistics and Bank. Logistics, we refer to logistics to the combination of Mail and Express. It was also a year of very strong cash flow with operating cash flow growing 6.7% to EUR 70 million and a year that enables us to keep a very balance sheet flexibility, a very flexible balance sheet with a 1.6 net debt-to-EBITDA ratio, which is well below our own financial policy, which is in itself already conservative. So very good news in that sense, too. It was a special year, given the M&A transactions that we have disclosed at year-end on the 18th and 19th of December, I'm referring to the acquisition of Cacesa and the joint venture with DHL, which enable further diversification and will fuel further growth in Iberia towards we want and we expect Iberian leadership. And the final initial comments to shareholder remuneration, given that we decided to remain within our stated policy. So with a predictable dividend policy, which accounts for EUR 0.70 to be paid, and we remain with the ongoing EUR 25 million share buyback. Moving to Slide #5. A more detailed description of this results while I would highlight 38% growth on recurring EBIT for Logistics and Bank, the business areas that we fully control, which beats our own guidance. Given a very strong performance on parcels and the bank and where we've seen a 17% growth on this Logistics plus Bank package that converts to 38% growth on EBIT on the backdrop of a strong fourth quarter. We have also observed in this last quarter, for the first -- for a long time, we didn't see this a public debt placement normalizing to levels that we were -- we have seen before. Moving to Slide #6. And starting with a bit more detail on the Express & Parcels business area. We've seen record volumes in peak season, again, sustaining revenue growth throughout the year. And with the 30.9% quarter-on-quarter, that converted to a 33.7% growth on EBIT which suggests, of course, that we can grow and having the margin also growing. We expect that 2025 will be another record year in line with what we have been achieving. Moving to Slide #7 and going into further detail regarding the margin, we've observed significant margin expansion due to operational leverage, a statement that we have -- that we are confirming consistently. You might observe that looking at the chart on the left, the line on -- with the quarterly growth, you might observe a slight decline in the fourth quarter from 8.7% to 8.1% of percentage EBIT, which is a common trend for the fourth quarter, given the intensity of activities and operations, there are always persist of inefficiency in the peak season quarter. But here, the decline is clearly better than the one observed between the fourth quarter -- in the fourth quarter of last year. Having said so, the huge improvement in EBIT generated in the quarter. So quarter-on-quarter, fourth quarter and fourth quarter with a 57% growth. And if we move to the right-hand side, the chart on the right, and looking at the yearly improvement, we came from EUR 20 million of EBIT in this business to EUR 36 million, an 83% improvement, but interestingly enough, the EUR 16 additional million of revenue are -- might be seen as a combination of the additional revenues and the additional costs. So the detailed chart we have on the top right part of the slide, illustrates that the EUR 138 million additional revenues, combined with the additional EUR 88.2 million of costs, computed the EUR 16 million of new EBIT generated or an 11.8% margin. So this drove a yearly overall margin of 5.8% in 2023 to 7.5% in this year. But more importantly is that it somehow demonstrates that we can keep growing while expanding operating margin. So very good news for -- in our view, for the Parcels business. It was also a year moving to Slide #8, as I said, with these important steps regarding Cacesa and DHL and the slide basically attempts to illustrate several of the advantages that we have. So it accelerates our leadership -- Iberian leadership ambition because it expands our offer and strengthens our customer relationships. It diversifies risk, particularly on -- in what regards much higher exposure to B2B, given the contributions of DHL and the wider presence in the value chain because it expands, I would say, hugely expands our presence in the customs clearance part of the value chain, which is very important, especially for out of Europe e-commerce, which is, as we're going to see in the next slide, a very important part of e-commerce expansion. It also effectively attacks our -- allow us to attack international segment given that we have not only an international presence with Cacesa, but also the contribution of the DHL network for both inbound to Iberia and outbound from Iberia and finally, enhances future opportunities given the incorporation of these new skills. Slide #9. It's a very interesting slide. Given that it illustrates the relevance of e-commerce, cross-border e-commerce coming to Europe from Asia, 19% of the global e-commerce is cross-border from Asia to Europe. But more interesting than that is that it also illustrates that the intra-European cross-border e-commerce is of the same dimension. 17% according to the most recent data. And this is very interesting in the sense that it shows the complementarity of the deals that we have announced at year-end. On the one hand, given the Asia to Europe our strong foothold on cross-border becomes reinforced by the acquisition of Cacesa. And of course, given the European cross-border e-commerce, DHL, which is simply the largest operator in Europe, also differentiates our presence given their ability to bring new flows to Iberia, given the quality and price that we allow them to have and also it enables and promotes outbound exports of e-commerce from Iberia to Europe, given their ability to place them at a very high efficiency rate. Moving to Slide #10, a quick word on our activities regarding strengthening our portfolio in e-commerce logistics. It was a very important year in terms of standardizing our Iberian offer in all sorts of aspects operationally, commercially, pricing, user experience and so on. It was also an year important for out-of-home delivery since that we started deploying more -- higher than 20,000 PUDOs for our clients in Iberia, of which in Portugal already includes more than 1,000 lockers and we are now expanding and started last year in 2024 expanding to Iberia -- sorry, to Spain, also the deployment of lockers; and of course, because of the inorganic growth that I referred multiple times. For 2025, the priorities remain somehow the same or associated with this, given that we will keep expanding the PUDOs and especially the lockers network in Spain. We, of course, have a huge commitment to execute synergies that these operations, M&A acquisitions have -- allow us to grab. It will be a very important year to keep growing organically as we've done so significantly in recent years and also a year where we are aiming at improving profitability in Parcels as we have been doing in a consistent way in the last years. And with this, we would move to Mail business areas, and I will ask João Sousa to join us and guide us through the Mail and retail.

Thank you, João. Good morning, everyone. As you can see in Slide 11, we saw good news after third quarter where we felt the impact of some clients backlog, mainly in the government. We saw a recovery in the fourth quarter, and this, combined with more business days had a positive impact on the volumes of Q4. We also saw an increase in the average value per item all the year in '24, considering the price increase we have done and also the product mix during this year. And as you already know, this year, we already implemented in February, the price increase of 6.9% in Mail. On Slide 12, you saw the results of this. So we had a solid revenue performance in addressed mail in the fourth quarter. When you saw the fourth quarter comparing with last year, we see an increase on 4.1%, achieving EUR 92.8 million. And we can say that was the second best quarter in '24. And if you take the elections of the first quarter, we even can say that the fourth quarter was the best quarter of the year. And with this, we see in the last semester of '24 revenue per business day grow during the second half. On Slide 13, we see a strong revenues in Q4 in Mail & Others with a good performance also in Business Solutions and Payments that helps also the performance in Mail. Constantly, we achieved high margin of 4.4%. We can say that it was the highest margin we saw in 2022 through increasing traffic, this comes from the increasing of traffic. We see the better cost-cutting measures and also like João Bento was saying before an improvement of public there we saw in this last quarter of '24. On Slide 14, we maintain our focus on cost-cutting strategic to protect the margin in Mail because as you can see, given the cost reduction we have done in '24 only offset the impact of inflation. So we still maintain this focus on cost-cutting and always maintain the quality Mail, but we are doing a lot of things in operations to have this cost cutting. But saying this, with this impact of the inflection we saw the margin decline in '24 for EUR 8.2 million in the year. On Slide 15, we had a path in '24 and also we're going to continue to do it in '25 to significant improvements in quality of service, but also new services to our customers. We have -- as you know, after a few years of discussion about the quality indicators, we have a change of the quality indicators. And also, we designed new product that we call traceability mail that we have new services that bring value-added service to our customers in mail. We still maintain a reorganization of the network that improved quality. At the same time, we felt cost cutting in this area of business. And for '25, we're still promoting digital alternatives because, as you know, the main competitor in mail is digital and what we have is creating digital offers to our customers. And we're going to continue in '25 to doing additional operational efficiencies like I told you before, for this focus on cost cutting and also retention in our customers. On Slide 16, now coming for financial services and retail. In Q4, we saw a strong recovery in the public placement debt driven by the adjust of the cap. As you remember, during the calls we had in '24, we talked and we say that the cap was a problem to put -- to sell more public debt. After the government changes in October, we saw a strong recovery. However, with the challenge we have in the 3 first quarters of '24, we have designed a lot of advertising campaigns and also implementing for digital that was bringing the subscription of public debt to digital, and this allow us to become more strong. And when we saw the change of the cap, we saw a recovery of public debt placement, but also now with the CBD more strong to sell this. Why I say this? We saw a lot of new [indiscernible] if I can say it in this way, go for digital. So I think we opened the public debt for new segments, and we see a very strong trend, positive trend for digital. And as you saw also in the numbers of January, we see a positive outlook for 2025 in public debt placements. On the Slide 17, as you know, we also are implementing a new strategic for our retail network, launching new service for citizens and also for SMEs that enable us to have different services in our stores, in our retail network. That also bring us to us new revenue streams and predicted revenue streams. We launched insurance that is running pretty well, but also the health care plans, as you can see, with an increasing of 40% against 2023. And we have also a very, very positive outlook for 2025 because we see the market like this kind of services and well connected to what is the retail network of CTT. For these -- on the Slide 18, we are taking a lot of actions in our retail network. We are investing and expanding new layout services. We already launched these new stores [indiscernible] in May in the last quarter of '24, and we're going to still maintain this in '25. This is a co-investment also with the Bank of CTT because this new way helps to sell more services for CTT but also in the bank. We are investing and we are investing in '24 in a new customer data platform. So know better the customers help us to retain and sell better and more in our retail network, and we are training our sales persons in the stores to sell these new services to suggest better service to our customers. On this, we are also working on omnichannel. And like I told you before, this for digital was a good example what we have done to have also our physical retail, but also digital working together and continue to expand the services portfolio for this network. Saying this, now I pass to Guy Pacheco, my colleague, to talk about the bank.

Thank you, João, and good morning. On Slide 19, we can see the strong progress the bank made on number of accounts. We increased 5.3% the number of accounts with another year adding clients. The bank continues to be one of the top preferences to change bank in Portugal, and this shows through the numbers. On the right part of the slide, we can see also a very strong progress on business volumes, growing 20.9% and achieving the target of more than EUR 7 billion that we set back in 2022 for the year of 2025. So anticipating 1 year that number. The bank continues to focus on increasing the engagement per client. In Slide 20, we can see a strong gain on market share. The bank continues to grow its deposit base very significantly, growing 30.8% vis-a-vis the industry that only grew 7.2%. On loan on the credit books, very, very steady progress in auto loans of 9% and also 10% on mortgages. The bank is on this phase of investment to improve client engagement. We aim to double our client engagement, investing in commercial capabilities, be it digital or physical in order to gain -- continue to gain traction in the market. On Slide 21, we see strong progress on revenues also if we exclude the end of the universal credit card partnership with Sonae. The revenues grew 11.8% despite some margin -- net interest margin compression of 2.6% to 2.2%. So that growth coupled with lower cost of risk on the year of 2024 led to a strong progress in profit before taxes that grew 25.9% in 2024. Our return on tangible equity also progressed well to 13% and entered the interval that we committed also back in 2022. So another target that was anticipated 1 year. In Slide 22, we can see that the bank will continue to focus its strategy on growing volumes. We have been able to manage well the interest rate cycle and gain significant share. We aim to continue to do so, excelling in savings. It's what our brand caters to and the Generali partnerships have a significant contribution on this strategy with this wide range of products that will continue to help the bank growing its balance sheet. While we will continue to invest in upgrading our core and the digital channels and the branches stabilization in order to grow the client engagement. We just to include a slide to show our progress on ESG front with significant progress in alignment and eligibility of revenues in CapEx, showing the strategic bet on this kind of products. On the right part of the slide, you can see also strong progress on our green fleet. We are clearly in line to meet our target of 50% of last mile own fleet of green vehicles. Last year, we closed the year with 35% of the fleet already green. Our carbon emissions grew despite of all these efforts because of lack of traction on having the same movements on third-party providers. On Slide 25, we see our key financial indicators, where we can see a very impressive quarter of very strong growth on the revenue side with 16.8%. Our recurring EBIT also progressed significantly, 56.5%, reaching more than EUR 30 million in the quarter. And our cash flow grew also 82%, EUR 54.3 million in the fourth quarter. In the full year, our revenues exceeded EUR 1 billion for the first time, EUR 1.1 billion actually, growing 12.4%. Our EBIT declined slightly, 2.7% because of these headwinds on the financial services after a record year in 2023. But as João shared, a very strong progress on the normalized EBIT, if you want, with 38% growth in logistics and bank and free cash flow -- sorry, net profit in the year, reaching EUR 45.5 million with a decline of 24.7%. In Slide 26, we can see our revenue bridge with a strong contribution of Express & Parcels where we continue to see volumes growing more than 30% with market share gains in Iberia. Our unit prices also increased, and we saw more contribution of value-added services that helped the revenues to grow more than the volumes. In the Mail & Other division, 5.5% increase with the price lever and the mix effect contracting the decline on volumes that declined 4.5% in the quarter. On Financial Services, we also saw strong progress with 47.5% growth or EUR 2.3 million. We, this quarter, placed more than EUR 1 billion in public debt returning to -- we think it's a normalized level. Since then, we continue to see strong placements in public debt. So we are fully confident that this division will enter on this normalized path that we guided the market since the end of last year. Bank with a slight decline following the end of Universal partnership that would grow if we exclude that effect just to highlight that for the first time, we see Express segment being our business segment with highest contribution in -- to the overall top line that we think it marks a strong step on the transformation of the profile of this company, and that is now more skewed to growth than before. On Slide 27, we can see our operating costs that grew 13.7%, mainly driven by Express & Parcels. This is mostly activity, although some increase in unit costs. It's important to highlight that the last quarter of the year is a quarter with very strong growth on volumes. And as such, we need to account for extra capacity, and that comes with a slight increase in prices. But overall, a strong expansion year-on-year on the margin. So nothing to highlight here. Mail growing 2.9% in terms of basically wage inflation and inflation in the cost base, namely on transport. Financial services also with some growth of EUR 0.8 million in line -- fully in line with activity and the bank with a strong decline of 2.6%. This is mainly driven by impairments or our cost of risk declined from 1.5% to 0.5% this quarter. So good news on that front. We can move to Slide 28, where we see a record quarter in terms of EBIT generation with 56.5% growth and 9.7% margin with a strong expansion of margin in Express & Parcels driven by the growth and value-added services. Mail & Other also with a strong recovery in volumes that we are seeing softer declines in the fourth quarter as we guided, 2 effects, the number of days and recovery of backlogs from government. And Financial Services also contributing EUR 1.6 million with a normalization of the placements of the debt. We think this will be a trend that will stay during 2025 and the bank also with a strong expansion of EUR 1.7 million in EBIT, mainly driven by the lower cost of risk that I already commented. In the year, the Financial Services division with a strong negative comparison effect, but we always highlighted that 2023 was an abnormally high year. So we now see this division stabilizing and improving EBIT going forward. On the Slide 29, we can see our consolidated cash flow that reached EUR 93.9 million. Our CapEx picked up to EUR 46.4 million. This is mainly driven by investments in capacity. We always said that we should be on the highest part of the guidance range in terms of CapEx to sustain capacity or to expand capacity, sorry, and that's what happened. Free cash flow stood at EUR 62.8 million. Our net cash position is now of EUR 68.1 million. On Slide 30, we can see mostly the same vision, but having the bank accounted in the equity method. So operational cash flow growing 6.7%. The free cash flow stood at EUR 39 million in 2024. And on the right part of the slide, you can see our leverage that is still very low and steady between -- it evolved from 1.4 to 1.6x EBITDA with a net debt of EUR 206 million in the end of 2024. And with that, I will pass to João for his final remarks.

Thank you, Guy. So on Slide #32, the gears, I'm at signifying that we are actually with every single line for another growth year. And if you follow me from the left to right, we are, we believe, very well positioned to be the most relevant e-commerce logistics player in Iberia, not only because we kept and will keep expanding our market share based on not only commercial productivity, but mostly quality and also service differentiation in the sense that we are providing more and more services along the value chain. And in that respect, the acquisitions of Cacesa and DHL and the DHL deal will fuel this further growth on Express & Parcels. Moving to the lower gear. We do keep leveraging on a synergic mail operation, especially so on the retail network because it is shared and rightly served with the bank, financial services, mail, parcel, insurance, and that is, in a way, also a winning move. We then have seen and we'll see the bank affirming itself as the fastest-growing retail bank in Portugal with growing business volumes with an expanding client base and now with the significant steps to increase engagement with clients. And with this, we see the bank growing very healthy. And as was already stressed by Pacheco Guy, we are now within normalized financial services placement period and therefore, financial services and retail in general, will remain as a significant profitability enhancer. With this normalized debt placement, but also the new services that we are deploying. All in all, this allowed us during 2024 to achieve the guidance that was given to the market. And indeed, in terms of revenues, we have already exceeded -- I'm sorry, we have already reached the guidance for 2025 that was provided in the Capital Markets Day back in 2022. And we are guiding 2025 as a recurring EBIT from organic growth. So without the contributions yet of Cacesa and DHL of over more than EUR 100 million, which again is very much in line with what was the ambition set in our Capital Markets Day in 2022. And a final word to the dividend per share of EUR 0.17. We decided to remain consistent with our dividend policy, and this corresponds to a 50% payout and 30.1% yield. And with this, we believe it was a great year that positions CTT very well to continuing growing story, and we remain available for your questions.

[Operator Instructions] We will take our first question from Joao Safara from Santander.

I have 3 questions. The first on Cacesa and DHL, just a reminder of the timing here. And if anything changed versus what -- I mean the timing that you mentioned back in when you announced these 2 transactions and particularly the fact that the DHL transaction didn't include the Cacesa deal. And so what would be the timing for that to be sorted out? So that would be my first question. The second question is on the working capital. So this year, we've seen quite a volatile working capital in terms of by quarters. And obviously, you've recovered that in the fourth quarter of the year. My question is mainly if this is something that we should see also in 2025 or it was mainly just one thing that happened in 2024, and so you don't see that happening again in the next couple of years. If you could give us a bit of some color there. And then the last question on the digital -- sorry, on financial services on your digital offer of -- well, now that you have the subscription in your platform, if you can give us the percentage of placements that are being done online through CTT.

Thank you, Joao. Questions for the 3 of us. So I'll start with the first one. There are indeed no differences regarding our expectation on the Cacesa and DHL. What we have is that both processes evolved and as expected. And indeed, we have the preliminary approval by the Spanish Competition Authorities that enabled us to submit the final formal filing, and we are expecting that to be cleared between the end of this month and beginning of April. As for DHL, timing is again the same. We are fully in line with all the submissions. And our expectation is that if it doesn't go for an enhanced investigation, clearance should arrive around September. If it goes for enhanced investigation, then that should come by the end of the year. The inclusion of the Cacesa deal is something that was duly resolved, and it remains -- so expectation from both parties is that the deal in the end will include DHL's involvement in Cacesa provided everything goes along with the expectations. I will then ask Guy to address the working capital.

Thank you, João. Joao, working capital, in fact, it was very volatile. We need to take into consideration 2 dynamics going forward. First quarter of our consolidated working capital is fully negative, and this has to be -- is linked especially with dynamics in the banking on credit and the way incentives are paid in the distribution network that are cash paid in the beginning of the year and then this is accrued throughout the year, and that's because it's a significant amount, it renders typically negative the first quarter. And we have been growing in a lot in Express & Parcels that has a collection profile that is highly different from, for instance, financial services where you collect immediately. You actually withdraw your remuneration from the amounts that you place in the market. So in a way, our payment receiving terms are increasing because of this shift of profile. And as this seasonality negative on the first quarter, that normally normalize throughout the year. What I'm trying to say with all of this that we should expect some investment in working capital given this underlying dynamic of shifting the profile of revenues to Express & Parcels and then becoming the most the most contributor to the overall revenues, but nothing dramatically. And hopefully, this year will be more predictable the working capital than we saw here. On financial services, maybe João Sousa can.

Yes. So thank you, Guy. Thank you very much, Joao, for your question. So what we saw right now the -- the digital app, it counts 5% of the value and almost 10% of the subscriptions because like I told you in the presentation, what we are feeling or felt in the app is we are bringing new guys, new segments, more young to the app. In that way, we see 5% of the share in value and 10% in subscriptions. Saying this, we don't have already the open -- the customer cannot open the account in the app. We felt that we're going to have that in the coming weeks and we're going to see an increasing of that app in after we have also the service in the app.

We will now take our next question from Joaquin Garcia-Quiros from JB Capital.

Sorry to come back on working capital, just to see if I understood it correctly, we saw a very big reversal in the fourth quarter of the year, more than you previously guided before, I remember in the previous call, you guided to around negative EUR 10 million for the year. You ended close to EUR 30 million positive. So we shouldn't see any reversal during this year, right? This is just now normalized levels, and we should see just a small working capital consumption in line with what we were previously expecting due to the growth of the business, right? Just that. And then during -- on the Cacesa deal, you said everything was going in track. So my question here is regarding guidance. The more than EUR 100 million at the recurring EBIT I assume that's without Cacesa or DHL, is it safe to assume that without those deals, the guidance is more towards the low end of the range of the EUR 100 million to EUR 120 million and then more towards the mid to high end of the range once the -- we include Cacesa.

I will start with working capital. What I tried to explain, it was the dynamics. We are expecting some investment, not a reversal, but some investment in working capital as we continue to grow with some meaning in the Express & Parcels division, that has a profile in terms of collections. In terms of guidance, I don't know, João, do you want to?

Yes, I would confirm your assumption, Joaquin. In fact, we -- so how you are suggesting a guidance for the Cacesa's contribution. But yes, overall, that is a good assumption. Provided that we will have the deal approved according to our expectation.

Our next question from Filipe Leite from CaixaBank BPI.

So I have 3 questions, if I may. First one, if you can confirm what will be the mail price increase for this year and if it was already applied? Second one on CapEx, just to confirm if you are reiterating your expectations in terms of CapEx for this year of between EUR 40 million and EUR 45 million. And last one is related with profitability of Express & Parcels because you mentioned that you are expecting some margin expansion for this unit with the expected volume increase. My question is -- if you can detail from your current organic recurring EBIT guidance of more than EUR 100 million, what is the level of EBIT margin that you are targeting or assuming in this guidance for E&P? Or perhaps if you can guide us that last year from this target from this guidance, what should be the contribution of financial services and what should be the contribution of logistics and the bank?

Thank you, Filipe. I can start with the pricing. It is actually in the press release. But yes, they have been already applied from the 1st of February, and they are overall of 6.9%. Then this is an overall regarding a volume distribution expectation, then it is applied to our product list, meaning that some products have higher prices, and others are lower. So that the expected combination provides a 6.9%. But yes, they have been already applied from the 1st of February.

Regarding CapEx, we will be -- our guidance is the EUR 40 million to EUR 45 million because we continue to grow a lot and we need to invest in capacity. It will be skewed to the high end because it's for good reasons, but with the growth on revenues that we saw above 40% in Express & Parcels last year. And obviously, with the underlying volume growth, we continue to invest in our network in capacity, namely on mechanization of centers, and that will continue throughout this year in order to be able to cope with volumes in the end of the year that we expect that high seasonality that we saw. In terms of guidance and margins, what I can share is the above EUR 100 million organic, it's driven by Express & Parcels and Financial Services, mainly. We continue to see the Bank and the Mail contributing also to growth but in a lower scale, if you want, Express & Parcels, we stick to our guidance of high single-digit margins. It's what we saw. We expect that with the seasonality of the year to continue to expand, although there is some seasonality that you can observe on last year and obviously, excluding Cacesa because Cacesa has another kind of margins that will contribute positively to the overall business unit, but high single digit. On Financial Services, we are not guiding for a specific target. What we can share is we are expecting placements to be on the EUR 4.5 billion to EUR 5 billion range. That is what we consider normality that we saw on the last quarter of last year, but that was not there for the beginning of 2024. And on the opposite side, it was exploding on 2023. So we see the business segment, resuming the kind of profile it had in 2021. The bank will continue its parcels growth, although it's a year of investment in capacity and both in CapEx and OpEx to reinforce commercial capabilities that, in our view, will fund a next wave of growth throughout the next years. On Mail, we see some small upside in recovering some profitability with the declines between 6% and 8% that we consider it's the normal rate of decline for this division, coupled with the endless process that we have in that division of finding more efficiency and continuing with cost-cutting measures. All of that should contribute to the growth that we are guiding. Then you need to have your own assumptions on the closing of the deals that we see things aligned to the commitments in terms of timing that we shared, but it's something obviously not in our full control.

[Operator Instructions] We'll take our next question from António Seladas from A|S Independent Research.

Your performance on Express & Parcels has been very, very strong. So I don't know if you can share with us how you are performing. So I think you mainly explained that where we are outperforming, so in terms of market share, if you can provide some color on this. And I noticed that the blended prices per item has been stable, which is interesting. So I guess that is mainly outside Europe e-commerce that is providing your growth. So I don't know what you can share about it with us to understand the reasons of your performance.

So António, thank you very much for your question. What we are seeing is a growth in Spain like you talk -- like you say, but also in Portugal because like we have been saying in the last years, Iberia is one of the areas that e-commerce is growing more. And fortunately, for us, when we are winning these customers, these big customers, we are winning for Iberia, not just for Spain and Portugal. What happened is Spain is bigger. So in that way, we see -- and our market share over there is not so big like we have in Portugal. We are not seeing this path of growth, but we are growing in both geographies. For the pricing, fortunately, we are in a tough job, we are trying to maintain our pricing, but we also are doing value-added service. As you know, we have customers experience in Spain for package that comes from out of Europe for Portugal and Spain, and that will also help us to maintain our pricing. We see a positive outlook maintaining these customers -- growing in the same customers, but also grabbing new ones. And in a nutshell, I think that is the resume that we are seeing here in Express & Parcels.

You're going to provide to mention your market share in Spain, for instance, I think in the past, you mentioned it, I guess that because the market is not growing so fast as you are growing. So I guess that you are taking market share. How is the competitive environment -- from where are you gaining market share? I don't know if you can provide more color on this, please.

Let's see, as always, the numbers on these markets because it's mainly a B2B market, there is not a lot of data out there. But our estimates that in B2C, that is where we focus more. We are just under the 9% market share in Spain and above 45% in Portugal. For us, it's increasingly more difficult to follow the split of the markets as our customers are moving more to Iberia, big customers, even volumes delivered in Lisbon are given to us in Spain. That's why we stopped splitting the markets because in the end, it's more a mathematical exercise than other thing. The competitive dynamic, obviously, we capture a trend that we use very well in terms of cross-border dynamics. It's a volume that we are very suited in terms of operations to serve more than our customers that are mainly focused on B2B, so multi-parcel heavy stuff to networks. But obviously, this kind of growth has some appetite -- increased appetite from our competitors, although we didn't see any crazy movements, but we see some competition during this year in terms of pricing. We have been able to complement our unit prices with value-added services, namely custom clearance. And as such, that's where we see Cacesa acquisition playing a significant role in order to differentiate ourselves in terms of services, quality and also complementing our pricing scheme.

The feeling we have and because of the feedback of the customer because after every peak season, we do feedback meetings with the customers is, we know that our competitors try to grab this kind of traffic, but the customer is locking with us because of the quality, because of this value proposition for Iberia and also because of this value-added service. In fact, some of them already are challenging us even for more volumes for the next peak season. So that's -- in that way, we know that the competitor is going to try to grab a big part of this traffic, but I think we are in a good role to maintain the customers and even with this profile grabbing the new ones that try to work in Iberia.

Just to confirm, you mentioned 9% in Spain, yes, is that right?

Yes, B2C market share and more than 45% in Portugal.

And as there are no further questions at this time, I would like to hand the call back over to Mr. João Bento, CEO, for any addition of our closing remarks.

Thank you. Well, I will just thank you again for coming to our results webcast. We remain available through our IR team to further clarifications that you may need. I would conclude, as I started by stating that this was a great year, very much in line with our equity story and our ambition to become market leaders for e-commerce logistics in Iberia. Thank you for coming. Good morning.