Investor presentation. Second quarter 2017

Transcription

1 Investor presentation Second quarter 207 August - September 207

2 Investor presentation second quarter 207 Contents bpost at a glance Highlights 2Q7 4 Outlook Overall guidance Overview 7 Products 8 Strategy 9 Domestic Mail: volume & revenue 0 Domestic Mail: regulation Domestic Parcels 2 International Parcels 3 & 4 M&A strategy 5 DynaGroup 6 Ubiway 7 International parcels acquisitions 8 Additional sources of revenues 9 Transformation 20 Productivity 2 Vision Hybrid network 23 Stakeholders 24 CSR strategy 25 Dividend policy 26 Summary of key financials FY6 27 Balance sheet 28 Relationship with State 29 Management 30 More detail on 2Q7 EBITDA bridge 32 Key financials 33 Revenues 34 Domestic Mail 35 Parcels 36 Additional sources of revenues 37 Costs 38 Cash flow 39 Additional Info EBITDA bridge H7 4 Key financials H7 42 Revenues H7 43 Cash flow H7 44 European mail market 45 Key contacts 46 Financial Calendar More on corporate.bpost.be/investors (7:45 CET) Quarterly results 3Q (7:45 CET) Interim dividend 207 announcement Payment date of the interim dividend Disclaimer This presentation is based on information published by bpost in its Second Quarter 207 Interim Financial Report, made available on August, 7 th 207 at 5.45pm CET on corporate.bpost.be/investors. This information forms regulated information as defined in the Royal Decree of 4 November The information in this document may include forwardlooking statements, which are based on current expectations and projections of management about future events. By their nature, forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside the control of the Company. Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements. Accordingly, no assurance is given that such forward-looking statements will prove to have been correct. They speak only as at the date of the Presentation and the Company undertakes no obligation to update these forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements. This material is not intended as and does not constitute an offer to sell any securities or a solicitation of any offer to purchase any securities. as defined among others under the U.S. Private Securities Litigation Reform Act of 995 2

3 bpost at a glance

4 Highlights of 2Q7 Revenues up 8.2% Driven by acquisitions and excellent parcels growth 699.6m Underlying Domestic Mail evolution Transactional Mail impacted by tough comparables and e-substitution Strong positive advertising mail volume trend Outstanding parcels performance Domestic: highest ever double-digit volume growth driven by e-commerce and C2C; price/mix effect of -6.6% fully mix related International: positive contribution from acquisitions, increase in flows from Asia and Europe Organic cost evolution on track Opex influenced by acquisitions ( +07.5m) Increase in transport cost in line with international business evolution -6.7% +25.5% + 3.m m EBITDA perfectly in line with last year and guidance BGAAP net profit of bpost SA/NV 59.3m 76.5m 207 outlook maintained 4

5 Outlook for 207 maintained Recurring EBITDA and dividend payment at the same level as 206 Revenues Increase driven by: Growth in domestic parcels: volume double digit, around -4% price/mix effect Continued growth in international parcels supported by newly acquired businesses Growing Ubiway Retail revenues Partly offset by decrease in domestic mail : underlying volume between -5% and -6%, average domestic mail price increase of.5% Operating expenses Increase driven by: Increase in transport cost (reflecting growth in International Parcels) Consolidation of acquired businesses Salary indexation confirmed as of July 207 Partly compensated by continued productivity improvements and optimized FTE mix, and Continued cost optimization Capex Recurring and Vision 2020 investments ~ 90m Business development investments: Ubiway < 0m 3Q7 less on franking machines and 2 less on stamps and 4Q7 less on franking machines and more on stamps vs. the same quarters of

6 Overall guidance as issued at CMD on 5 November 206 We confirm our long term ambition of at least 620m EBITDA by 2020 Revenue Increase driven by: Growth in domestic parcels: volume +75% at least (vs. 205), -2 to -3% price/mix effect Growth in international parcels: revenue x2 at least (vs. 205) Decrease in domestic mail: volume up to -6% Operating expenses Increase driven by: Increase in transport cost (reflecting growth in International) Integration of acquired businesses Inflation Partly compensated by up to 4% FTE & interim productivity increase p.a. at current scope and Optimized FTE mix Capex Further Vision 2020 investments in 207-8: ~ 90m p.a. excluding Ubiway capex Maintenance capex level in : ~ 60m p.a. excluding Ubiway capex Maintenance of dividend policy At least 85% pay-out of BGAAP net profit M&A on top of overall 2020 EBITDA guidance Accretive contribution supported by strong balance sheet. Any decision must be evaluated on 5 criteria (cfr. p. 5). including acquisitions of FDM, Apple Express, Ubiway, Parcify and de Buren 6

7 Belgium s leading postal operator Built on strong foundations and with ambitious targets 2.4bn revenues 586.9m 24.2% EBITDA 496.5m 20.5% EBIT 324.m net profit Leading market position in the resilient Belgian mail market with a balanced regulatory framework Focused mail and parcels business with a proven strategy for profitable growth Scope for continued cost improvements Strong financial performance supporting a high level of cash flow generation and dividends Proven performance track record 8.6m letters handled every day 48,000 parcels handled every day post offices 5 sorting centres franchised post points 24,850 average # FTE & interims 206 figures (normalized) 7

8 A modern and diversified mail operator Revenues % of total One integrated domestic distribution network for mail and parcels International player hubs in London LHR and Brussels strategically located facilities in US, Canada, Poland, China, HK, Singapore, the Netherlands, Australia and New Zealand 2,425m normalized revenues 206 Domestic Mail,44m 58% Parcels 379m 6% Additional sources of revenues 600m 25% Transactional mail 873m 36% Advertising mail 248m 0% Press 293m 2% Domestic 82m 8% International 90m 8% Special Logistics 8m 0% International mail 62m 7% Value added services 03m 4% Banking and finance 92m 8% Other 2 43m 6% 58% Domestic Mail, 6% Parcels, 25% Additional sources of revenues and % Corporate revenue 2 Including a.o. SGEI compensation for the retail network, philately, retailer products and Ubiway since December 206 ( month) 8

9 Focused strategy to create value and reward shareholders We are mail We grow We are lean, agile & flexible We 9

10 We continue to focus on core mail business Volume & revenue drivers Transactional mail e-substitution mainly in administrative mail; however, 79% satisfaction level for the paper channel (vs. 54% on average for digital channels) General cost cutting on all categories Mix effect: shift towards cheaper products or reduced weight of mail items Advertising mail Illustration for search, number of times considered important per 00 purchases, end-to-end Strongly linked to GDP growth (+.2% in 206, forecast 207: +.6%) Marketing mix is more balanced between different channels Focus on 6 key segments with growth potential: retail & distribution (food + non-food), automotive, FMCG (food), retail fashion, travel & leisure, SMEs Press Distribution of newspapers and periodicals are both part of the SGEIs 2 Revenues consist of: Compensation from the Belgian State: agreed in the newspapers and periodicals contracts (cfr. p. 29) Invoices sent directly to the editors Source: bpost commissioned market research, 206 (,05 face to face interviews) 2 Services of General Economic Interest 0

11 We continue to focus on core mail business Regulatory aspects Designated provider of the Universal Service Obligation until end of 208 Collection, sorting, transport and distribution of postal items up to 2kg and postal packages up to 0kg Collect and deliver 5x per week Cover full territory of Belgium Apply uniform tariffs and an identical service across the territory Fully liberalized market since 20 with clear licensing conditions Cover 80% of the territory of the 3 regions within 5 years Deliver 2x per week within 2 years Uniform pricing over entire territory Employ contractual workers Mail pricing regulation For single piece mail & USO parcels falling within small user basket : 5 criteria to comply with, i.e. () affordability measured through the price-cap formula (inflation + quality bonus + unused credit), (2) non-discrimination, (3) transparency, (4) uniformity and (5) cost orientation Volume and operational discounts allowed for other USO products (bulk) Price increases done in practice on a yearly basis ( January): +.5% on average in 207 Quality bonus = [Average quality 90%]^2 /,000; unused credit = cumulated price increases allowed under cap but not applied for last 3 years.

12 We innovate/grow within core competencies We have an established position in domestic parcels Current parcel market 00% =,075m B2C CAGR , % B2C ~0-2% C2C C2C 0-3% B2B B2B 0-3% Ambition: We want to capture e-commerce growth and realize profitable volume growth of at least +75% by 2020 (vs. 205) Unique selling proposition Offer best last mile and broadest delivery options, supported by acquisitions and partnerships: Home delivery 7/7 & evening delivery, including high-end deliveries (2-man) >2,200 pick-up & drop-off points (incl.,000 open access Kariboo! points) 50 parcel lockers in B, 5 de Buren lockers in NL (ambition for +500 lockers in Belgium) Click & Collect Non-exclusive partnership with DPDHL for B2C parcel delivery into Belgium 2

13 We innovate/grow within core competencies We have a strong footprint in international parcels through Landmark Global Strategic locations in countries Asset-light business model 3

14 We innovate/grow within core competencies We enable global e-commerce through Landmark Global Unique selling proposition Support mid-sized e-tailers to expand their business beyond their national borders Provide additional services enabling customers to reach new markets at a reasonable cost without disruption Fulfillment services as an absolute differentiator Full range of e-commerce and end-to-end solutions Ambition We want to at least double international parcels revenues by 2020 (vs. 205) through a continued focus on cross border parcel shipments: North America and Australia: we will continue profitable growth Europe: we aim to become a stronger leader in parcels Asia: we want to gain a substantial footprint Offer services to more complex developing markets (e.g. Mexico and Brazil) Enablers to realize our strategy Further leverage our state of the art technology system Mercury Acquisitions and partnerships are key Proprietary technology Web-based, carrier-neutral platform Easy integration with clients, vendors and new acquisitions 4

15 We innovate/grow within core competencies We also support growth through selective and targeted M&A Rationale M&A strategy Illustrations Respond to and anticipate market trends Fast growing e-commerce Growing demand for convenience and proximity Leverage combination of mail and digital solutions Leverage our strong balance sheet Small bolt-on acquisitions to be the strategic partner of choice for our customers Diversify in growing and profitable markets linked to our core competencies Leverage and monetize our know-how in successful transformation of a postal company Create an even stronger operator in a globalizing market Cross-border postal consolidation to create a stronger domestic and international operator Close to our core business Improve our proximity and convenience product offering Not realized Strict investment criteria Maintain sustainable dividend policy Maintain financial solidity 5

16 We innovate/grow within core competencies Acquisition of (6 January 207) Rationale: support growth strategy of parcels E-commerce related high-end deliveries requiring nonstandard, non-bulk transport with added value activities Anytime: same-day, next day, weekend Any size: S to 2XL (2man delivery with installation) Safe & secure: ID verification & authentication Anywhere: active through 7 locations throughout Benelux Repair of e.g. smartphones, coffee machines, etc. We want to broaden the value chain in e-commerce We will further build out our hybrid network by adding capabilities to offer high-end deliveries We want to extend our footprint in The Netherlands with a strong player with an excellent track record. DynaGroup is market leader on the 2XL market segment. Supply chain services for banks and insurance companies: e.g. sensitive document handling, ID verification Sales 205: 88.5m Normalized EBITDA 205: 6.8m (7.7% margin) Initial purchase price: 5.0m Financial ambitions EPS & DPS accretive Double digit sales growth for coming years By 2020: sales x2, low double-digit EBITDA margin Total capex planned 2-3m/year 6

17 We innovate/grow within core competencies Acquisition of (30 November 206) Convenience & Proximity Retail Non- Press Logistics Retail (220 shops) Convenience distribution Pre-paid services (Alvadis) Impulse products (Burnonville) Parcels & Logistic Services (,000 pick-up drop-off points) Rationale for bpost Diversify into the growing proximity & convenience distribution Grow in line with convenience & proximity retail market (4-6% annually ) Footprint expansion (30 to 45 new stores in the next 3 to 5 years) and remodeling Accelerate product diversification in order to enhance profitability Press Logistics Press distribution to 5,345 POS Newspaper Magazines International press Further enable domestic parcels growth strategy Improve delivery options and increase coverage (network of > 2,200 points across Belgium) Transaction details Sales 205: 338m Normalized EBITDA 205: 4m (4.% margin) Fully cash financed (purchase price: 8.4m) Fully accretive as of 207 Preliminary synergy estimate of 4-5m annually after full integration Total capex planned < 0m/year 43m disclosed in closing press release of Dec. 206, restated to 338m under accounting policies of bpost Group and IAS 8 Revenue 7

18 We innovate/grow within core competencies Bolt-on acquisitions in international parcels SPE (Poland) Logistics, distribution and fulfillment across Europe for US e-tailers 00% acquisition in Nov. 205, full consolidation as of Dec. 205 Key figures FDM (Australia) Third Party Logistics (3PL), warehousing, transport & distribution for US e-tailers 00% acquisition in March 206, full consolidation as of April 206 Key figures Apple Express (Canada & US) Last mile delivery, transportation and fulfillment for clients in Canada & US 00% acquisition in June 206, full consolidation as of July 206 Key figures Purchase price: 3.5m + earn-outs Purchase price: 4.4m + earn-outs Purchase price: 2.5m + earn-outs Sales 204: US$ 3.4m Sales 205: c. 24.0m Sales 08/ 5-07/ 6: c. 26.m EBITDA 204: NA EBITDA 205: c. 2.4m EBITDA: c. 2.m Rationale for bpost Support our international e-commerce cross-border parcels strategy Offer complete service range to international e-commerce customers (including fulfillment) Further build out the US market through a complete service offering Economize on last mile distribution In-house last mile distribution vs. use of incumbent postal operators or alternative distributors 8

19 We innovate/grow within core competencies bpost has other sources of revenues besides mail and parcels International mail What? Business model Mail originating from foreign countries and delivered to other countries Asset-light business model and fully variable costs Dedicated sorting centre and hub in Brussels Active in the US, Europe and Asia Value added services Customer specific solutions which leverage our key assets: last mile, retail network and financial backbone Collect and handling services for mail Services at the front door (gaz, water, electricity) Solutions tailored to specific needs decoder swap Banking & finance Agent of bpost bank ~50% of revenue (commissions) Associate 50/50 with BNP Paribas Fortis (bpost is sole retail agent) Direct offering ~50% of revenue Payment services, cash at the counter, public finance solutions 9

20 Continuous improvement is in our DNA. We have a 0-year proven transformation track record Transformation journey Building of new sorting centres Transformation of the network Start of continuous optimization of delivery rounds 2007 Automated round sorting and mail sequencing 2009 Implementation of new distribution structure with reduced number of buildings Strategic Vision 2020 program in mail service operations to further increase efficiency Key events 2003 New management & start of the transformation period 2006 CVC and Danish Post enter into the capital for 50%- share (split 50/50), government holds 50%+ share 2008 Danish Post sells its stake to CVC 203 IPO in June at 4.5/share CVC sells 30% in IPO and remaining 20% in December Normalized EBIT Normalized figures are not audited 20

21 and we have plans for further productivity gains supported by our natural attrition rate Historic FTE evolution Average FTEs, 000 bpost has a systematic, well-rounded approach to identify and capture cost improvements across the entire organization -3.7% p.a bpost has plans for further productivity gains supported by natural attrition and Vision 2020 Age pyramid Headcount per age, ,3 7,487 9,565 38% of bpost s employees are above 50 years old* Non pay-scale contractuals Pay-scale contractuals Civil servants * Natural attrition of c.,600 FTE p.a. of which > 50% is replaced as auxiliary postmen which cost c. 30% less than bpost average payroll cost/fte 2

22 Vision 2020 will drive substantial productivity improvements in the field 207 2H H Centralize & Automate Preparation Install additional MSMs in 5 sorting centres (target 30 vs. 23 installed to date) Centralize Mail Bag Preparation New BX Parcels Sorting Complete building Install PSM & migrate parcel sorting Distribution Network Reorganize distribution offices around 60 Mail Centres (~240 currently) Transition to new distribution model 22

23 High performance hybrid network We will play an architect role defining which network is best suited to handle each type of parcel Standard Specific Our integrated mail distribution and retail networks bringr Parcify B/C2Me Highly specific Urgent items No packaging or label CityDepot/Bubble Post City centers Mobility Green Home delivery Large volume weekdays Saturday standard format External partners Sunday delivery Evening delivery (6-9pm) Urgent items Volume peaks 2-man delivery, Euro-Sprinters PUDO > 2,200 points 50 parcel lockers open networks DynaGroup High-end deliveries (same day, time slot, 2XL) Urgent items Non-standard format Technical intervention We will capitalize on high density and synergy of our integrated network We will start using an ecosystem of networks in complementary ways 23

24 We want to keep stakeholders on board Distribution quality Environment Percentage letters in D st on the IPC Environmental Ranking CO 2 reduction objective: -45% by 2020 (vs. 2007) Carbon disclosure project: B (C is average score) Customer satisfaction 2 Percent 88 Committed employer Commitment & well-being Frequency rate work accidents -5% Recognize experience 243 people graduated Note: more information regarding bpost s Corporate Social Responsibility is available on the website: D+ delivery of domestic single piece items up to 2 kg, stamped at Prior tariff 2 Satisfied customers (score of 5 or above on a scale from to 7 on the question: Overall, how satisfied are you about bpost? ) based on bpost commissioned survey by Ipsos-Synovate 24

25 We will achieve sustainable growth through our 3-pillar CSR strategy linked to Employee health & safety Employee training and talent development Ethics & diversity Social dialogue People we care about our employees and engage them Shared Value Creation Planet we strive to reduce our impact on the environment Green fleet Green buildings Waste management Continuity of our business Employee satisfaction and engagement Customer satisfaction Proximity we are close to the society To our community To our suppliers To our customers through our services 25

26 We create value for shareholders Dividend Policy Annual dividend of minimum 85% of BGAAP net profit (unconsolidated) Interim in December of financial year based on 0-month results Final in May of year following financial year Constrained by the net results of a given year + distributable reserves Distributable reserves built gradually as from 203, primarily to safeguard the dividend level in case of exceptional costs ( 44m end 206) % +2% +2% Final gross DPS ( ) Interim gross DPS ( ) 26

27 Summary of key financials FY6 million Reported Normalized FY5 FY6 FY5 FY6 % Δ Total operating income (revenues) 2, , , , % Operating expenses,878.5,838.4,824.0, % EBITDA % Margin (%) 22.8% 24.2% 24.2% 24.2% EBIT % Margin (%) 9.2% 20.5% 20.5% 20.5% Profit before tax % Income tax expense Net profit % FCF bpost S.A./N.V. net profit (BGAAP) % Net Debt/ (Net cash), at 3 December (549.5) (492.7) (549.5) (492.7) -0.3% Gain from sale of sizeable building 26.m Alpha social plan provision of 54.5m Positive tax impact of Deltamedia liquidation 22.2m Note: an Excel download of detailed financials per quarter is available on the website: Normalized figures are not audited 27

28 Supported by a strong balance sheet million Assets Equity and liabilities Employee benefit liabilities Cash, cash equivalents & investment securities Other assets Investments in associates Trade & other receivables Inventories PPE & intangible assets 2, , Interest-bearing loans & borrowings, bank overdrafts Provisions Trade & other payables Employee benefits Total equity 2, , , Termination (early retirement) Post 4. retirement 82. (family allowance, transport, bank, ) 07.7 Deferred tax asset Other long term benefits (disability annuities) 62.8 Long term benefits Pension savings days Quota days Part-time work No pension liabilities 48.4 Dec 3, 206 Jun 30, 207 Dec 3, 206 Jun 30, 207 Mostly unfunded (no investment risk) Volatility mainly through the discount rate bpost has no pension deficit: as is customary in Belgium all pensions are paid as part of national social security 28

29 bpost s long term relationship with the Belgian State State as a long term shareholder Belgian State has 5% shares bpost s board is composed of 5 board members and CEO appointed by the Belgian State and 6 independent directors Belgian State supports a regular dividend policy bpost provides SGEIs on behalf of the State bpost provides a range of public services. 205 Fifth Management Contract (covering 203-5) Compensation of ~ 288m in 205 based on Net Avoided Cost State as important customer State is a key commercial client to bpost Several other agreements in place with the State, such as European license plates (won by bpost through tender) Shareholder Belgian State Free float # shares 02,075,649 97,925, press distribution contracts (newspapers & periodicals) Sixth management contract for other SGEIs Contractual amounts (excl. inflation 2, volume impact & sharing of efficiency gains) of 26.0m in 206 (actual amount: 264.9m), 260.8m in 207, 257.6m in 208, 252.6m in 209 and 245.6m in 2020 SGEI stands for Services of General Economic Interest 2 All amounts need to be adjusted for inflation on a cumulated yearly basis 29

30 bpost s management team and organization Marc Huybrechts Director Mail & Retail Solutions Kurt Pierloot Director International & Parcels Koen Van Gerven CEO Mark Michiels CHRO Koen Beeckmans CFO Philippe Dubois Director Mail Services Operations 30

31 Current Trading 2Q7

32 2Q7 EBITDA in line with guidance driven by outstanding parcels performance, acquisitions and strict organic cost control million -0.m / -0.% EBITDA 2Q6 Domestic Mail Parcels Additional sources of revenues Corporate Costs EBITDA 2Q7 Total operating income (revenues) 32

33 2Q7 Summary of key financials 2Q7 million 2Q6 2Q7 % Δ Total operating income (revenues) % Operating expenses % EBITDA % Margin (%) 26.9% 22.8% EBIT % Margin (%) 23.% 9.4% Profit before tax % Income tax expense Net profit % FCF (4.6) bpost S.A./N.V. net profit (BGAAP) % Net Debt/ (Net cash), at 30 June (729.9) (596.2) -8.3% 33

34 2Q7 Total operating income (revenues) million 2Q6 comparable 2Q7 % Domestic mail Parcels Additional sources of revenues Transactional mail % Advertising mail % Press % Domestic parcels % International parcels % Logistic solutions International mail % Value added services % Banking and financial % Distribution Retail & Other % Corporate % TOTAL % Defined as domestic and Belgian in- and outbound 34

35 2Q7 Domestic mail underlying volume trend at -6.7% due to tough comparables and e-substitution Total operating income (revenues), million 2Q6 Working day impact Despite a tough comparable base at -3.8% for 2Q6, H7 came out at -5.7% perfectly in line with guidance. Transactional Mail: shift towards cheaper products and increased e-substitution. Advertising Mail: strong performance with positive volume trend driven by focus segments and indirect channels. Press: Slightly lower volume trend mainly due to phasing. H Volume -2. Price/Mix 3.6 Reported Underlying FY6 Q7 2Q7 H7 FY6 Q7 2Q7 H7 Transactional mail -5.9% -6.0% -.0% -8.4% -5.9% -7.0% -9.9% -8.4% Advertising mail -3.0% 2.7% 4.5% 3.3% -3.0% 2.3% 4.5% 3.3% Press -2.8% -3.% -5.0% -4.0% -2.8% -3.% -5.0% -4.0% Domestic Mail -5.0% -3.9% -7.4% -5.6% -5.0% -4.7% -6.7% -5.7% Impacted by regulatory decision on small user basket pricing. 2Q H Q7 had 2 working days less than 2Q6 for stamps and franking machines. 35

36 2Q7 Outstanding parcels performance, growth in Logistic Solutions driven by DynaGroup Total operating income (revenues), million 2Q6 comparable Domestic Parcels Reported volume growth of +25.5% driven by e-commerce, new customers and the online C2C product offering. Price/mix of -6.6%: price increase fully offset by product & client mix effect. H6 comparable International Parcels 3. Growth driven by positive contribution from acquisitions and increase in flows from Asia and Europe Logistic Solutions Consolidation of DynaGroup as of January Q H Defined as domestic and Belgian in- and outbound 2 New category, previously called Special Logistics 36

37 2Q7 Additional sources of revenues driven by Ubiway acquisition Total operating income (revenues), million 2Q6 comparable 37.7 H6 comparable International Mail 0.4 Positive trend in Europe business mail. 3.3 VAS -2. Mainly explained by lower revenues from customized solutions (decoder swap) and Data. -.6 Banking & Financial 0.0 Lower revenues from financial transactions managed on behalf of the Belgian State compensated by more revenues from bpost bank and ATM Distribution 24.2 Consists of Ubiway press distribution as well as convenience distribution through Alvadis (pre-paid services) and Burnonville (impulse products) Retail & Other 48. Consists of Ubiway proximity and convenience retail as well as other revenues Q H New category

38 2Q7 Organic cost evolution on track. Opex influenced by acquisitions ( +07.5m). Increase in transport cost in line with positive international business evolution. Operating expenses excl. depreciation and amortization, million FDM, Apple Express, Ubiway, DynaGroup, Parcify and de Buren 2Q Excluding acquisitions, increase driven by growth in the international business. H Transport 8.5 Payroll & Interim Other SG&A Other costs Average reported FTE & interim increase of,499 leading to +2.5m additional costs and explained by the integration of new subsidiaries. Favourable FTE mix of -3.3m driven by the recruitment of auxiliary postmen, less interims and more students. Price effect and others of -0.5m mainly salary indexation, CLA, merit increases and some phasing elements compensated by tax shift and employee benefits. Excluding acquisitions, decrease of third party remuneration (last year strategic projects) and insurance costs, partly offset by an increase in rent and rental costs and energy costs (linked to increased fuel price) Q Excluding acquisitions, delta explained by the evolution of provisions last year. H ,

39 2Q7 Increase in operating FCF driven by lower cash outflows for investment activities million 2Q6 2Q7 Delta Cash flow from operating activities Cash flow from investing activities Operating free cash flow Financing activities Net cash movement Capex Primarily working capital evolution: -7.7m, mainly explained by the increased recoverable VAT in 206 Mainly due to: Proceeds from sale of buildings: -2.5m Lower capex: +0.4m Price adjustment Ubiway acquisition: +3.m Cash outflow Apple Express and CityDepot in 206: resp. +.4m and +0.2m Investment securities: +2.0m Increased final dividend in 207: -2.0m Operating free cash flow = cash flow from operating activities + cash flow from investing activities 39

40 Additional info

41 H7 Domestic mail volume decline compensated by excellent parcels performance, acquisitions and organic cost savings million +.0m / +0.3% EBITDA H6 Domestic Mail Parcels Additional sources of revenues Corporate Costs EBITDA H7 Total operating income (revenues) 4

42 H7 Summary of key financials H7 million H6 H7 % Δ Total operating income (revenues),96.5, % Operating expenses 86.2, % EBITDA % Margin (%) 28.0% 23.7% EBIT % Margin (%) 24.3% 20.4% Profit before tax % Income tax expense Net profit % FCF % bpost S.A./N.V. net profit (BGAAP) % Net Debt/ (Net cash), at 30 June (729.9) (596.2) -8.3% 42

43 H7 Total operating income (revenues) million H6 comparable H7 % Domestic mail Parcels Additional sources of revenues Transactional mail % Advertising mail % Press % Domestic parcels % International parcels % Logistic solutions International mail % Value added services % Banking and financial % Distribution² Retail & Other % Corporate % TOTAL, , % Defined as domestic and Belgian in- and outbound 2 While the purchase price allocation for the Ubiway acquisition has not been finalized yet, this exercise has led to some alignments of the accounting policies of Ubiway and hence some restatements of the figures reported during Q7. Some revenues which had been booked in Q7 under the principal model have been restated to the agent model in order to be in line with the accounting policies of the bpost Group and with IAS 8 Revenue. This also necessitates no further rework under IFRS 5 revenue from contracts with customers which will become applicable as of January st, 208. As a consequence certain sales and cost of sales are now being presented on a net basis, this led to a decrease of revenues and materials costs of 42.5m for Q7, within the MRS operating segment but didn t have an impact on the EBITDA, EBIT or net result. 43

44 H7 Decrease in operating FCF mainly driven by acquisitions and phasing in working capital evolution million H6 H7 Delta Cash flow from operating activities Cash flow from investing activities Operating free cash flow Financing activities Net cash movement Capex Mainly due to: Alpha pay-outs: +6.m Working capital evolution : -50.6m, mainly explained by a negative phasing in suppliers, the increased recoverable VAT in 206 and Social Security payment terms Mainly due to: Proceeds from sale of buildings: -3.7m M&A activities: -37.6m Investment securities: +2.0m Payment of a dividend to minority interest in 206: +2.0m compensated by higher final dividend in 207: -2.0m Operating free cash flow = cash flow from operating activities + cash flow from investing activities 44

45 European mail market A relatively resilient mail market vs. other European operators Addressed mail volume per capita 206 operator level* CAGR for addressed mail volumes as reported by major incumbent European postal operators, percent CH DE 5 5 DE AU 0 UK CH AU BE 9 3 SW SW 3 2 FR UK 0 EU FR 2 8 BE EU 4 NL NL 4 6 DK IT 7 7 IT DK 6 Note: definition of addressed mail may differ by operator Includes addressed mail 2 Includes addressed mail 3 Includes addressed mail 4 Includes addressed mail 5 Includes mail communication and dialogue marketing 6 Includes addressed mail 7 Includes addressed mail (publishers services excl.) 8 Includes addressed mail excluding press 9 Includes all domestic mail SOURCE: Company information; Annual reports; Investor presentations; IPC; Eurostat 0 Includes inland addressed mail Includes letter mail and addressed direct mail / media post * Excludes domestic competitors 45

46 Key contacts Baudouin de Hepcée Director External Communication, Investor Relations & Public Affairs Direct: +32 (0) Mobile: +32 (0) Address: bpost, Centre Monnaie, 000 Brussels, Belgium Saskia Dheedene Manager Investor Relations saskia.dheedene@bpost.be Direct: +32 (0) Mobile: +32 (0) Address: bpost, Centre Monnaie, 000 Brussels, Belgium 46

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