Q3-13 results. Investor presentation. Brussels November, 8th 2013

Transcription

1 Q3-3 results Investor presentation Brussels November, 8th 203

2 Disclaimer This presentation contains a summary of the informations published in the Third quarter interim financial report 203 issued by the company on November, 7 th at 6pm (CET) available on which forms regulated Information as defined in the Royal Decree of 4 November The information in this document may include forward-looking 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. as defined among others under the U.S. Private Securities Litigation Reform Act of 995

3 Business overview Total operating income (revenues) increased by 7.2m to reach millions in the third quarter. Organic revenue growth amounted to 4.2m driven by the proceeds of the announced buildings disposal programme (.4m due to a single building). Underlying Domestic Mail volume decline stabilized in Q3-3 (-3.7%), very marginally below expectations but in line with Q2-3. Continuing strong performance in parcels with an organic revenue growth of 9.8m, domestic parcels revenues up 5% and volumes up by +7.7% (vs. +6.4% in H-3) with a focus on capturing the major customers to benefit from e-commerce growth. Costs and productivity improvement programs delivered slightly ahead of expectations with a further organic cost reduction of 7.3m and a FTE reduction of 974 FTE vs Q3-2 EBITDA margin for the quarter improving to 8.3% (+2.8 percentage points vs. Q3-2) to reach 03.9m on a normalized basis; EBIT at 8.5m for the quarter. Excluding phasing and scope impacts and the proceeds from sale of a single building of.4m, EBITDA and EBIT still grew respectively by 9.9m (+.6%) and 8.8m (+3.8%) 2

4 Business overview Belgian GAAP net profit of the parent company amounts 44.9 millions for the quarter (improvement of 2.8m vs. last year), bringing the total year-to-date to 75.5m (+ 4.7m vs. YTD-2). Dividend policy and compensation of pre-listing exceptional tax charge confirmed. 3

5 Strong Q3-3 EBITDA performance thanks to parcels growth, productivity improvements and the announced buildings disposal programme EBITDA, Normalized, EUR million Total operating income (revenues) EBITDA Q3-2 Scope SGEI Domestic Mail Parcels Other sources of growth Corporate Costs EBITDA Q3-3 Includes 0.8m positive phasing impact ( working day more in Q3-3) Includes 0.6m negative phasing impact (slower settlement terminal dues) Includes sales of buildings (.4m for one sizeable building) Excluding the proceeds from sales of a building for.4m, phasing and scope impacts, EBITDA still grew 9.9m or.6% in Q3-3 4

6 Summary of key financials Q3-3 Solid improvement of the margin and bpost s net profit, only partly driven by the proceeds of the announced buildings disposal programme EUR million Q3-3, EUR millions Reported/Normalized % change Total opera:ng income (revenues) % Opera:ng expenses % EBITDA % Margin (%) 5.5% 8.3% EBIT % Margin (%).6% 4.4% Profit before tax % Income tax expense Net profit % Normalized FCF % bpost S.A/N.V. net profit (BGAAP) % Normalized figures are neither audited nor have been subject to a limited review 2 Operating free cash flow = cash flow from operating activities + cash flow from investing activities 5

7 Key events and scope elements affecting results Topic Description High-level impact Sale of Certipost Q3-3 figures exclude any revenue as well as cost related to Certipost activities sold in January 203 Decrease of 2.0m in operating income and decrease of 2.2m in operating expenses vs. Q3-2 Changes in scope Consolidation of Landmark Global Following the acquisition of Landmark Global in December 202, related operating income and operating expenses are consolidated in 203 financials Additional operating income of 8.9m and additional operating expenses of 8.2m in Q3-3 Change in State Compensation (SGEI) 5 th Management Contract leads to a change in methodology for the determination of the State Compensation, from Fully Distributed Cost to Net Avoided Cost Overall SGEI decrease of 3.9m in Q3-3, expected yearly amount of 20m Decrease of Domestic Mail related SGEI (esp. Press) compensated by introduction of compensation for the Retail Network SGEI Major building sale Q3-3 figures include the sale of one sizeable building. Last year bpost sold another sizeable building in the first half of the year, which negatively affected the half-year results comparables in H-3. This quarter s sale more than offsets that impact. Proceeds of sales of.4 millions in Q3-2. This more than compensated the delay of 4.3 millions in H-3. Activity of business documents exchange (e.g., invoices, orders, ) through electronic communication platform or partially on paper 6

8 Total operating income (revenues) organic growth of 4.2m to reach 566.6m in Q3-3 Normalized, EUR million 202 Scope SGEI Organic 203 Organic Transactional mail % Domestic mail Advertising mail % Press % Parcels % Additional sources of growth and retail network International mail % Valued added services % Banking and finance % Others % Corporate % TOTAL % As announced, Q3-3 revenues include the proceeds from the announced buildings disposal programme (.4m for a single building). Excluding this item still leaves organic revenues growth in positive territory for the quarter. Including phasing impacts, see further 7

9 Underlying Q3 domestic mail volumes confirming Q2 recovery excluding working day impact and elections in 202 Normalized total operating income (revenues), EUR million Q SGEI -24.5! SGEI domestic mail revenue decline due to transfer to other products and overall reduction of remuneration Q3-2 before organic evolution 352.8! Impact of elections (September 202) of -3.m, affecting advertising mail! working day more 2 in Q3-3 vs. Q3-2, estimated impact of +0.8m Elections Phasing Volume -.2 Price/Mix ! Underlying 3 volume decline stabilized at -3.7% ( -.2m) in Q3-3 in line with Q2-3. Q Q2 Q3 YTD Transactional mail -4.5% -3.0% -2.6% -3.4% Advertising mail -0.9% -6.2% -2.2% -9.7% Press -2.3% -5.5% -.0% -2.8% Domestic Mail -5.6% -3.8% -4.4% -4.7% Domestic Mail underlying trend 3-4.8% -3.8% -3.7% -4.% Q ! Overall price increase slightly above inflation, in line with policy. Normalized figures are neither audited nor have been subject to a limited review 2 H2 203 will be equal to H2 202 in terms of number of working days 3 Excluding impact of less working days and elections held in September 202 8

10 Continuing strong performance in parcels in Q3-3 Normalized total operating income (revenues), EUR million Q Scope (Landmark) 8.9! Landmark performing as expected and in line with previous quarters taking seasonality into account. Q3-2 before organic evolution Domestic & Inbound Parcels ! 7.7% volume increase in Q3-3 as results of the increase of volumes in e-commerce (6.4% in H-3). Revenues up 5% with some unfavorable product and price mix as some customers growing in size can benefit better tariffs and some big customers increase their overall share in our business. International Parcels 9.2! 60% of the growth due to outbound parcels to China (stable vs. H-3). Other lanes also showing strong growth. Special Logistics -0.8! Lower sprinter volumes and churn of customers Q Normalized figures are neither audited nor have been subject to a limited review 2 Including Domestic Parcels, Inbound Parcels & Solutions 9

11 Other sources of growth mix of good results from solutions (VAS) and pressure on International mail and Banking revenues Normalized total operating income (revenues), EUR million Q Scope & SGEI 8.7! Sale of certain activities of Certipost ( -2.0m impact) and SGEI compensation changes ( 20.6m, mainly due to compensation for the Retail network) Q3-2 before organic evolution International Mail ! Stable revenues from International Inbound Mail (+0.2m, price increases compensate for the volume decline).! Continued churn in International Business Mail due to price increase (impact of EUR -3.3m) VAS +2.3! Good performance of solutions (f.i. new contract for digital printing of magazines) Banking -2.7! Lower commissions due to lower growth (compared to last year) of production in banking products, partly compensated by higher sales bpaid (prepaid credit card). Others +.0! Philately and other products Q

12 Our continued cost discipline resulted in lower organic operating expenses of 7.3m in spite of new local taxes Operating expenses excl. depreciation and amortization, Normalized, EUR million Q Scope 6.0! Sale of Certipost activities in 202 resulting in cost decrease of EUR 2.2m, and consolidation of Landmark in 203 resulting in cost increase of EUR 8.2m Q3-2 before organic evolution Payroll & Interim -9.2 SG&A (excl. Interim) -.9! Headcount reduction of 974 FTE ( -2.0m) and positive mix impact -2.2m due to more auxiliary postman more than offsets salary increase ( +5.8m) mainly driven by inflation and merit! Lower consultancy costs Other costs 3.9! Increase is mainly due to the provision for the first 9 months ( 3.5m) of new local taxes due to new project of law. Monthly impact going forward : 0.4m/month Q Normalized figures are neither audited nor have been subject to a limited review

13 Operating free cash flow of EUR -2.5 million in Q3 203 well ahead of last year Normalized, EUR million Q3 202 Q3 203 Delta Cash flow from operating activities Cash flow from investing activities Operating free cash flow Financing activities Net cash movement Capex Sales of PPE: 9.5 m (of which one sizeable building for 7.0m) Lower Capex : 7.3 m Better cash flow from operating activities compensated by higher income tax prepayments Operating free cash flow = cash flow from operating activities + cash flow from investing activities; excludes the impact of the 202 repayment of prior compensation, following the 202 EU ruling 2 Financing activities included deposits received from third parties 2

14 Strong balance sheet structure EUR million Assets Equity and liabilities Cash & cash equivalents 2, ,993.8 Interest-bearing loans & borrowings Provisions 2, , Other assets Investments in associates Trade & other payables Trade & other receivables Inventories Employee benefits PPE & intangible assets Total equity Dec 3, 202 restated Sep 30,203 Cash & cash equivalents decreased mainly due to the capital reduction and exceptional dividend (EUR 98m) and the repayment of the overcompensation by the State for the SGEI (EUR 23.m), partially compensated by the normalized operating free cash flow (EUR 236.5m) restated for IAS9R applied as from January 203. Dec 3, 202 restated Sep 30, 203 Decrease provisions due to settlements SGEI overcompensation. 3

15 bpost S.A./N.V. net profits (BGAAP) increased by 2.8m (+39.7%) in the third quarter, slightly ahead of EBIT growth. The total BGAAP net profits YTD amount 75.5m bpost S.A./N.V. EAT (BGAAP) Group EBIT (IFRS) +2.7% +3.3% +39.7% % Q3 YTD Q3 YTD

16 The board of directors confirmed the dividend payout of 85% and decided to compensate for the exceptional tax charge of 7.6m in the dividend payment Interim dividend Final dividend Payment date 2/2/203 22/05/204 Bpost S.A./N.V. EAT (BGAAP) Compensation for exceptionnal tax charge Dividend payment Jan-Oct/203 Nov-Dec/ m 0 2 ( + 2) x 85% + 3 x 85% 5

17 Key takeaways Solid result improvement in the thirds quarter Strong performance in parcels Moderation of the volume decline in domestic mail Proceeds from buildings disposal programme as announced Continued cost discipline Dividend policy confirmed, interim dividend of December will compensate for the 7.6m exceptional tax charge. Belgian GAAP net profit of the parent company amounts EUR 75.5m year to date. 6

18 Outlook confirmed Management expects Domestic Mail volume decline to be between 4% and 4.5%. Taking this into account as well as strong results in parcels, we confirm our previously communicated outlook (H-3): revenues should remain stable in the entire year versus last year. We are also confident to be able to at least maintain operating results (EBITDA and EBIT) and operating margins on a normalized basis (202 had been impacted by non-recurring expenses). We do not anticipate any material exceptional cash outflows during the rest of the year which means that cash generation should follow the normal seasonality. Net capex is still expected at 90m. 7

19 Appendix 8

20 Summary of key financials YTD-3 EUR million Reported Normalized % change Total opera:ng income (revenues),778.7,802.2,778.7, % Opera:ng expenses,362.,372.4,383.2, % EBITDA % Margin (%) 23.4% 23.9% 22.2% 23.2% 203: gain of EUR 4.6m from sale of Certipost divisions In EBIT / EBITDA 202: gain of EUR 2.m from partial curtailment of an employee benefit plan EBIT % Margin (%) 9.8% 20.2% 8.6% 9.5% Profit before tax % Income tax expense Net profit % FCF 2 bpost S.A/N.V. net profit (BGAAP) % Normalized figures are neither audited nor have been subject to a limited review 2 Operating free cash flow = cash flow from operating activities + cash flow from investing activities; normalization excludes the impact of the 202 repayment of prior compensation, following the 202 EU ruling 9

21 Total operating income (revenues) of EUR,787.7m stable on an organic basis YTD Normalized, EUR million 202 Scope SGEI Organic 203 Organic Transactional mail % Domestic mail Advertising mail % Press % Parcels % Additional sources of growth and retail network International mail % Valued added services % Banking and finance % Others % Corporate % TOTAL, , % Expected full year SGEI effect of ~EUR -20 million, of which EUR -.5 million YTD 20

22 Operating free cash flow of EUR million in YTD 203 EUR million YTD 202 YTD 203 Delta Cash flow from operating activities Cash flow from investing activities Operating free cash flow Financing activities Net cash movement Capex EUR +5. m from the sale of Certipost EUR m from capital increase of bpost bank EUR -4.0 m MSI shares purchase EUR m from sale of PPE EUR 6.9 m from lower Capex Cash flow generation mitigated by : EUR -37.4m from payment of fine for the competition claim EUR -20.0m from Q 202 flattered by late payment of Terminal Dues by some other postal operators EUR -.5m from lower SGEI compensation (5th Management Contract) Operating free cash flow = cash flow from operating activities + cash flow from investing activities; excludes the impact of the 202 repayment of prior compensation, following the 202 EU ruling 2 Financing activities included repayment of SGEI overcompensation and deposits received from third parties 2

23 IFRS/BGAAP reconciliation IN MILLION EUR 202 Q3 202 Q3 203 YTD 202 YTD 203 IFRS net profit (reported) Results of subsidiaries Movements on investments Differences in depreciation and impairment Differences in recognition of provisions Effects of IAS Effects of ESOP % profit appropriation Deferred taxes Other BGAAP net profit (reported) Pending litigation provision Provisions relating to the decision of the Eu Tax expense from use of legal reserves BGAAP net profit (normalized)