Investor presentation. Fourth quarter 2016

Transcription

1 Investor presentation Fourth quarter 206 March 207

2 Investor presentation fourth quarter 206 Contents bpost at a glance Highlights 4Q6 4 Highlights FY6 5 Outlook Overall guidance Overview 8 Products 9 Strategy 0 Domestic Mail: volume & revenue Domestic Mail: regulation 2 Domestic Parcels 3 International Parcels 4 & 5 M&A strategy 6 DynaGroup 7 Ubiway 8 International parcels acquisitions 9 Additional sources of revenues 20 Transformation 2 Productivity 22 Vision Hybrid network 24 CSR 25 Dividend policy 26 Summary of key financials FY6 27 Disclaimer Balance sheet 28 Relationship with State 29 Management 30 More detail on 4Q6 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 FY6 4 Revenues FY6 42 Domestic Mail FY6 43 Parcels FY6 44 Additional sources of revenues FY6 45 Costs FY6 46 Cash flow FY6 47 European mail market 48 Key contacts 49 Financial Calendar More on corporate.bpost.be/investors (7:45 CET) Quarterly results Q Ordinary General Meeting of Shareholders Payment date of the dividend (7:45 CET) Quarterly results 2Q7 This presentation is based on information published by bpost in its Fourth Quarter 206 Press Release and 206 Annual Report, made available on March, 8 th 206 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 4Q6 Normalized revenues up 7.4% Excellent Parcels revenues and positive impact of consolidation of Ubiway ( month) compensating Domestic Mail evolution Underlying Domestic Mail volume decline Tough comparables for transactional and advertising mail against very strong 4Q5. Stable full year trend at -5.0%. Excellent parcels performance driven by end of year sales Domestic: driven by e-commerce, very strong trend in the online C2C and first visible results of non-exclusive DPDHL B2C partnership; price/mix effect of -3.4% International: positive contribution from acquisitions, increase in flows from US, continued volume loss to China Costs slightly down and well under control Productivity improvement of 699 FTE & interims for the quarter 690.7m -6.4% +2.7% + 3.m - 0.4m Normalized EBITDA up +4.4m 4.5m Proposed total dividend per share up.6%.06 already paid in December 206 and 0.25 to be proposed at the Annual General Meeting in May gross i.e. reported average increase of FTEs and interims is 675 including,375 additional FTEs and interims for higher parcels & solutions volumes, Deltamedia integration and new subsidiaries. 4

5 Highlights FY6 Results in line with expectations Normalized, million Topic Results Last outlook for 206 EBITDA EBIT FY6: FY6: 586.9m (+0.6%, + 3.3m) 496.5m (+0.4%, + 2.m) at least at the same level as 205 Domestic Mail FY6: -5.0% (underlying volume) Around -5% Parcels FY6: +7.% (domestic volumes) Double digit Dividend Total gross dividend of.3 per share proposed Interim dividend already paid:.06 (+ 0.0) Final dividend of 0.25 (+ 0.0) at least.29 Normalized figures are not audited 5

6 Outlook for 207 Recurring EBITDA and dividend payment at the same level as 206 Revenues Increase driven by: Growth in domestic parcels: volume double digit, around -3% price/mix effect Continued growth in international parcels supported by newly acquired businesses Growing Ubiway Retail revenues Decrease in domestic mail 2 : volume between -5% and -6%, price increase small user basket uncertain Operating expenses Increase, driven by: Increase in transport cost (reflecting growth in International Parcels) Continued productivity improvements and optimized FTE mix Salary indexation expected as of July 207 Integration of acquired businesses Continued cost optimization Capex Recurring and Vision 2020 investments ~ 90m Business development investments: Ubiway < 0m including acquisitions of FDM, Apple Express, Ubiway, DynaGroup, Parcify and de Buren 2 Q7 will count 2 working days more, 2Q7 2 less, 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

7 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% (vs. 205), -2 to -3% price/mix effect Growth in international parcels: revenue x2 (vs. 205) Decrease in domestic mail: volume up to -6% Operating expenses Increase, driven by: Increase in transport cost (reflecting growth in International) Up to 4% FTE & interim productivity increase p.a. at current scope Optimized FTE mix Integration of acquired businesses Inflation 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. 6) including acquisitions of FDM, Apple Express, Ubiway, Parcify and de Buren 7

8 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) 8

9 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) 9

10 Focused strategy to create value and reward shareholders We are mail We grow We are lean, agile & flexible We 0

11 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: +.4%) 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

12 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 Price-cap formula for single piece mail & USO parcels falling within small user basket (inflation + quality bonus + unused credit) 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. 2

13 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) >2,000 pick-up & drop-off points (incl. 750 open access Kariboo! points) 50 bpost parcel lockers, 5 De Buren lockers (NL: 50, B: ambition: NL: 000, B: 500) Click & Collect Non-exclusive partnership with DPDHL for B2C parcel delivery into Belgium 3

14 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 4

15 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 5

16 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 Earnings accretive Maintain sustainable dividend policy Maintain financial solidity 6

17 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) 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 7

18 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 (750 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 > 2,000 points across Belgium) Transaction details Sales 205: 43.0m Normalized EBITDA 205: 4.0m (c. 3.3% margin) Fully cash financed (initial purchase price: 84.5m) Fully accretive as of 207 Preliminary synergy estimate of 4-5m annually after full integration Total capex planned < 0m/year 8

19 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 9

20 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 20

21 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 2

22 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 22

23 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. 7 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 23

24 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 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-Sprinter PUDO,250 bpost points 50 bpost 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 24

25 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 # work accidents 3-2% Recognize experience 24 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, 206 figure not yet available 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 figure not yet available 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 ( ) * Proposed final gross dividend per share to be approved by General Meeting of May 0,

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 Other assets Investments in associates Trade & other receivables Inventories PPE & intangible assets 2, , Interest-bearing loans & borrowings 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 Dec 3, 205 Dec 3, 206 Dec 3, 205 Dec 3, 206 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 >50% shares bpost s board is composed of 6 board members and CEO appointed by the Belgian State and 5 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 4Q6

32 4Q6 EBITDA uplift of +4.4m driven by excellent parcels performance compensating domestic mail volume decline Normalized, million +5.2m / +3.8% EBITDA 4Q5 SGEI Compensation EBITDA Ubiway Domestic Mail Parcels Additional sources of revenues Corporate Costs (excl. Ubiway) EBITDA 4Q6 Total operating income (revenues) Lower impact due to higher volumes and adjustment for inflation Consolidated as of Dec. 206, EBITDA includes integration costs Higher gain from building sales Normalized figures are not audited 32

33 4Q6 Summary of key financials 4Q6 million Reported 4Q5 4Q6 4Q5 4Q6 % Δ Normalized Total operating income (revenues) % Operating expenses % EBITDA % Margin (%) 24.4% 20.5% 2.3% 20.5% EBIT % Margin (%) 20.8% 7.% 7.6% 7.% 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 Positive tax impact of Deltamedia liquidation 22.2m Normalized figures are not audited 33

34 4Q6 Total operating income (revenues) Normalized, million 4Q5 SGEI 4Q6 % 3 Domestic mail Parcels Additional sources of revenues Transactional mail % Advertising mail % Press % Domestic parcels² % International parcels % Special logistics % International mail % Value added services % Banking and financial % Other (Incl. Ubiway) % Corporate TOTAL % Normalized figures are not audited 2 Defined as domestic and Belgian in- and outbound 3 % excluding SGEI impact 34

35 4Q6 FY6 domestic mail underlying volume trend in line with guidance at -5.0% Total operating income (revenues), million 4Q SGEI 3.4 4Q5 before organic evolution Working day impact Volume -26. Price/Mix 7. 4Q Tough comparables for transactional (-4.7% 4Q5) and advertising mail (-.2% 4Q5) against best quarter of 205. Transactional: shift towards cheaper products and continued e-substitution Advertising: continued good performance in unaddressed; frontloaded spend in 206 (more campaigns in H6 vs. 2H6) and phasing impact towards Q7 (due to timing of Christmas holiday). Press: periodicals keeping up well, low renewal rate on newspaper subscriptions contracted in 2H5. Reported Underlying Q6 2Q6 3Q6 4Q6 FY6 Q6 2Q6 3Q6 4Q6 FY6 Transactional mail -5.6% -3.5% -7.8% -7.2% -5.9% -5.3% -4.8% -7.4% -6.4% -5.9% Advertising mail 0.% -2.2% -.2% -7.8% -3.0% 0.% -2.2% -.2% -7.8% -3.0% Press -2.0% -0.3% -4.2% -4.% -2.8% -2.0% -0.3% -4.2% -4.% -2.8% Domestic Mail -4.% -3.0% -6.% -7.0% -5.0% -3.9% -3.8% -5.9% -6.4% -5.0% -2. 4Q6 had working day less vs. 4Q5 35

36 4Q6 Excellent domestic and international parcels performance driven by end of year sales Total operating income (revenues), million Domestic Parcels 4Q Best reported volume growth ever of +2.7% driven by boosting e-commerce and very strong trend in the online C2C product offering. First visible results in December of non-exclusive DPDHL B2C partnership. Price/mix of -3.4%: price increase fully offset by product & client mix effect. International Parcels 3. Growth driven by positive contribution from acquisitions and increase in flows from US boosted by end of year sales, continued volume loss to China. Special Logistics -0.3 Mainly due to lower revenues from Sprint activities. 4Q Defined as domestic and Belgian in- and outbound 36

37 4Q6 Additional sources of revenues driven by VAS and financial revenues Total operating income (revenues), million 4Q SGEI -4.2 Ubiway 43.8 Consolidated as of December 206 4Q5 before organic evolution 92.0 International Mail VAS Banking & Financial Continued decline in mail volumes and wholesales business. Driven by Speos (document management services), Citydepot and European licence plates Higher prepaid credit card and ATM revenue, stable revenue from bpost bank Other Q

38 4Q6 Costs (excluding Ubiway) slightly down and well under control Operating expenses excl. depreciation and amortization, million Ubiway operating expenses including integration costs 4Q Excluding Ubiway, increase in transport costs is linked to growth in international parcels Transport Payroll & Interim Other SG&A Average reported FTE & interim increase of 675 leading to +9.2m higher costs, productivity improvement is 699. Favourable FTE mix of -4.4m thanks to the recruitment of auxiliary postmen ( -2.8m) and the reduction of management level FTE ( -2.m). Negative price effect of +3.8m explained by salary indexation and new CLA partly offset by tax shift, lower layoff costs and lower provisions for bonuses. Positive settlement of social charges ( -3.3m) partially offset by increase in employee benefit costs ( +.6m). Other costs 4Q Excluding Ubiway, mainly driven by decrease in third party ( -2.2m), publicity ( -2.2m), other services ( -2.0m) and maintenance & repair costs ( -.7m), partly offset by increased consultancy costs ( +.5m)

39 4Q6 FCF generation mainly impacted by Ubiway acquisition million 4Q5 4Q6 Delta Cash flow from operating activities Cash flow from investing activities Operating free cash flow Financing activities Net cash movement Capex Additional SGEI compensation following indexation in 4Q6: +0.9m Alpha pay-outs +7.4m lower than amount paid out in 4Q5 Lower tax prepayment in 4Q6: +20.0m bpost bank dividend received in 4Q5 (phasing): -5.0m Excluding these elements: Results of operating activities: +3.4m, in line with evolution of normalized EBITDA Working capital evolution: +33.0m, mainly due to the phasing in Social Security payments ( +29.3m) Lower proceeds from sale of buildings: -30.5m (4Q5 includes sale of a major building for 37.4m) Higher capex in 4Q6: -9.7m Investment securities in 4Q6: -2.0m Acquisition of the Polish subsidiary in 4Q5 ( +2.7m) vs. Ubiway in 4Q6 ( -39.9m, subject to changes) and first earn-out paid for Apple Express Canada in 4Q6 ( -3.7m) Investment in the Citie digital platform in 4Q6 ( -0.8m) Higher interim dividend in 4Q6: -2.0m Operating free cash flow = cash flow from operating activities + cash flow from investing activities 39

40 Additional info

41 FY6 EBITDA increased 3.3m thanks to strong parcels growth and cost savings Normalized, million +26.2m / +4.7% EBITDA FY5 SGEI Compensation EBITDA Ubiway Domestic Mail Parcels Additional sources of revenues Corporate Costs (excl. Ubiway) EBITDA FY6 Total operating income (revenues) Lower impact due to higher volumes and adjustment for inflation Consolidated as of Dec. 206, EBITDA includes integration costs Higher gain from building sales Normalized figures are not audited 4

42 FY6 Total operating income (revenues) Normalized, million FY5 SGEI FY6 % 3 Domestic mail Parcels Additional sources of revenues Transactional mail % Advertising mail % Press % Domestic parcels² % International parcels % Special logistics % International mail % Value added services % Banking and financial % Other (Incl. Ubiway) % Corporate % TOTAL 2, , % Normalized figures are not audited 2 Defined as domestic and Belgian in- and outbound 3 % excluding SGEI impact 42

43 FY6 Domestic mail underlying volume trend in line with guidance at -5.0% Total operating income (revenues), million FY5,464.2 SGEI FY5 before organic evolution Volume Price/Mix FY6-2.5, , Underlying volume decline at -5.0%. Transactional Mail: continued e-substitution and shift towards cheaper products Advertising Mail: significantly improved trend from -4.9% for FY5 to -3.0% driven by focus on growth segments. Advertising spend was front-loaded towards H6 due to Euro 206 in June. Press: stable volume trend at -2.8%, identical to FY4 and FY5. Reported Underlying Q6 2Q6 3Q6 4Q6 FY6 Q6 2Q6 3Q6 4Q6 FY6 Transactional mail -5.6% -3.5% -7.8% -7.2% -5.9% -5.3% -4.8% -7.4% -6.4% -5.9% Advertising mail 0.% -2.2% -.2% -7.8% -3.0% 0.% -2.2% -.2% -7.8% -3.0% Press -2.0% -0.3% -4.2% -4.% -2.8% -2.0% -0.3% -4.2% -4.% -2.8% Domestic Mail -4.% -3.0% -6.% -7.0% -5.0% -3.9% -3.8% -5.9% -6.4% -5.0% 4Q6 had working day less vs. 4Q5 43

44 FY6 Accelerated domestic parcels growth and positive contribution from M&A in international parcels Total operating income (revenues), million FY5 Domestic Parcels Further acceleration in volume growth at 7.%, driven by continued e-commerce catch-up and strong positive trend in C2C (online product offering). Price/mix effect of -3.2% (fully product and customer mix related). International Parcels 9.5 Growth driven by positive contribution from acquisitions, partly offset by volume loss to China due to price increase on last mile in 2Q6 Special Logistics -.6 Mainly due to lower revenues from Sprint activities FY Defined as domestic and Belgian in- and outbound 44

45 FY6 Additional sources of revenues impacted by international mail, but partly compensated by growth in VAS Total operating income (revenues), million FY SGEI Ubiway 43.8 Consolidated as of December 206 FY5 before organic evolution International Mail Loss of wholesales business as a result of price increases to safeguard reasonable profit margins. VAS 6.8 Positive contribution of Speos ( +2.8m) and solutions, mainly European licence plates ( +.2m), decoder swap (.2m) and Citydepot (.m) Banking & Financial -2.4 Other -3.0 Lower revenue from bpost bank savings accounts due to low interest rate environment, lower revenue from financial transactions managed on behalf of the Belgian State as well as lower volumes of financial transactions in post offices FY Mainly lower sales of retailer products ( -.8m) and decreasing volumes in philately ( -0.4m) 45

46 FY6 Cost savings on track and delivering 29.5m Operating expenses excl. depreciation and amortization, normalized, million Ubiway operating expenses including integration costs FY5,824.0 Excluding Ubiway, increase in transport costs is linked to growth in international parcels Transport Payroll & Interim Other SG&A Average reported FTE & interim increase of 47 leading to +5.7m higher costs, productivity improvement is 686. Favourable FTE mix of -9.7m thanks to the recruitment of auxiliary postmen ( -8.0m) and the reduction of management level FTE ( -2.2m). Negative price effect of +4.9m explained by salary indexation and new CLA partly offset by tax shift, lower layoff costs and lower provisions for bonuses. Positive settlement of social charges was higher in 205 ( +.0m) and increase in employee benefit costs ( +4.m). Other costs Excluding Ubiway, decrease of all expenses except rental, consultancy and other goods FY6, , Excluding Ubiway, positive evolution of provisions, mainly settlement on terminal dues; absence of last year s earn-out for Gout ( -2.0m) and higher increase of recoverable VAT (from 4% in 205 to ~9% in 206) for 206 expenses ( -3.0m) Normalized figures are not audited 46

47 FY6 Operating free cash flow of 93.9m in 206 million FY5 FY6 Delta Cash flow from operating activities Cash flow from investing activities Operating free cash flow Financing activities Net cash movement Capex Lower SGEI compensation: -35.9m Alpha pay-outs: -8.3m Terminal dues payment, mainly phasing as costs were booked in previous years in transport cost: -6.8m bpost bank dividend received in 4Q5 (phasing): -5.0m Lower tax prepayment: +0.0m and lower income tax paid relating to previous years: +2.m Excluding these elements: Results of operating activities: +6.m Working capital evolution: +0.3m Lower proceeds from sale of buildings: -22.2m (FY5 included sale of a major building for 37.4m) Higher capex: -4.0m Investment securities in FY6: -2.0m Acquisition of subsidiaries and earn-outs: -75.4m Higher final and interim dividends: resp. -4.0m and -2.0m Dividend to minority interests: -2.0m Operating free cash flow = cash flow from operating activities + cash flow from investing activities 47

48 European mail market A relatively resilient mail market vs. other European operators Addressed mail volume per capita 205 operator level* CAGR for addressed mail volumes as reported by major incumbent European postal operators, percent CH DE 5 0 UK AU 5 DE 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 48

49 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 49

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