Fourth quarter 2017 results Analyst call. Koen Van Gerven, CEO Henri de Romrée, CFO

Transcription

1 Fourth quarter 207 results Analyst call Koen Van Gerven, CEO Henri de Romrée, CFO Brussels March 4, 208

2 Investor presentation - Interim financial report 4Q7 2 Financial Calendar More on corporate.bpost.be/investors (7:45 CET) Quarterly results Q Ordinary General Meeting of Shareholders Ex-dividend date Payment date of the dividend (7:45 CET) Quarterly results 2Q (7:45 CET) Quarterly results 3Q (7:45 CET) Interim dividend 208 announcement Ex-dividend date Dividend payment date Disclaimer This presentation is based on information published by bpost in its Fourth Quarter 207 Press Release and 207 Annual Report, made available on March, 3 th 208 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

3 4Q7 3 Highlights of 4Q7 Revenues up 38.3% Driven by excellent growth in Parcels and by acquisitions (Radial consolidation as from mid-november) partly offset by lower Domestic Mail revenues Domestic Mail underlying evolution Accelerated e-substitution in transactional mail partly compensated by volume growth in advertising mail, full year underlying volume trend in line with guidance Strong parcels performance Domestic: excellent reported volume increase driven by strong e-commerce growth and C2C during year-end peak season; continued price/mix effect of -6.9% fully mix related Logistic Solutions: mainly driven by Radial & DynaGroup acquisitions Cost evolution Opex influenced by acquisitions ( m) and year-end peak season Increase in transport cost in line with international business evolution 955.m -6.4% +30.8% m m EBITDA +9.9m above last year mainly driven by new acquisitions Proposed total dividend per share equal to last year.06 already paid in December 207 and 0.25 to be proposed at the Annual General Meeting in May m.3 gross

4 FY7 4 Highlights FY7 Results slightly below guidance million Topic Results Last outlook for 207 EBITDA FY7: 598.0m (+.9%, +.m) EBITDA excl. Radial FY7: 58.m (-.0%, - 5.8m) at the same level as 206 Domestic Mail FY7: -5.8% (underlying volume) Between -5% and -6% Parcels FY7: +28.2% (domestic volumes) Double digit Dividend Total gross dividend of.3 per share proposed Interim dividend already paid:.06 Final dividend of 0.25 at the same level as 206 (i.e..3)

5 4Q7 5 EBITDA impacted by SUB price refusal not compensated by M&A contribution as well as transition to new Brussels sorting centre million Small user basket price increase refusal ( -5.0m) not compensated by M&A EBITDA contribution Includes -5.9m NBXrelated costs (rent & startup) and -.2m Ubiway restructuring charge EBITDA 4Q6 Domestic Mail Parcels Additional Corporate Costs EBITDA sources of Radial revenues Reported total operating income (revenues) EBITDA 4Q7 incl. Radial Consolidated as of 6 Nov. 207, EBITDA includes transaction costs Positive one-off 4Q7 EBITDA 4Q7 Reversal on earn-out DynaGroup booked in Retail & Other of Additional Sources of Revenues Including -5.4m accounting restatement on Ubiway Distribution revenue and materials costs in 4Q6

6 4Q7 6 Summary of key financials 4Q7 million Reported Normalized 4Q6 4Q7 4Q6 4Q7 % Δ Total operating income (revenues) % Operating expenses % EBITDA % Margin (%) 20.5% 5.9% 20.5% 5.9% EBIT % Margin (%) 7.% 2.% 7.% 3.0% Profit before tax % Income tax expense Net profit % FCF 34.5 (576.6) 34.5 (576.6) bpost S.A./N.V. net profit (BGAAP) % Net Debt/ (Net cash), at 3 December (492.7) (492.7) m linked to depreciation on intangible assets (purchase price allocation PPA Ubiway, Dynagroup & de Buren) Tax impact of PPA on depreciation of 2.5m Positive tax impact of Deltamedia liquidation 22.2m Normalized figures are not audited

7 4Q7 7 Total operating income (revenues) million Domestic mail Parcels Additional sources of revenues TOTAL 4Q6 comparable 4Q7 % Transactional mail % Advertising mail % Press % Domestic parcels % International parcels % Logistic solutions International mail % Value added services % Banking and financial % Distribution Retail & Other Corporate % % Defined as domestic and Belgian in- and outbound 2 Contains Dynagroup consolidated as of January 207 and Radial consolidated as of 6 November Contains Ubiway consolidated as of December 206; 4Q6 Ubiway Distribution revenues restated for 5.4m in order to be in line with the accounting policies of the bpost Group and with IAS 8 Revenue and to be comparable with 4Q7

8 4Q7 8 Domestic mail underlying volumes impacted by accelerated e-substitution in Transactional Mail Total operating income (revenues), million 4Q6 Working day impact Volume Price/mix Transactional Mail: accelerated e-substitution mainly in banking and telco sectors combined with growing acceptance of electronic documents by end users. Advertising Mail: positive volume trend driven by focus on growth segments (especially Retail & Distribution) and indirect channels. Press: volume trend driven by periodicals benefitting from volume shift from 3Q7 towards 4Q7, newspapers impacted by 2 distribution days less (not corrected in underlying). Reported Underlying Q7 2Q7 3Q7 4Q7 FY7 Q7 2Q7 3Q7 4Q7 FY7 Transactional mail -6.0% -.0% -7.3% -9.2% -8.3% -7.0% -9.9% -6.5% -8.9% -8.% Advertising mail 2.7% 4.5% -.6% 0.5%.5% 2.3% 4.5% -.6% 0.5%.5% Press -3.% -5.0% -4.3% -2.6% -3.7% -3.% -5.0% -4.3% -2.6% -3.7% Domestic Mail -3.9% -7.4% -5.9% -6.6% -5.9% -4.7% -6.7% -5.3% -6.4% -5.8% 4Q Impacted by regulatory decision on small user basket pricing and shift towards lower priced products Q7 had working day less on franking machines and more on stamps vs. 4Q6

9 4Q7 9 Excellent domestic parcels volume growth driven by year-end peak; Logistic Solutions driven by Radial and DynaGroup 4Q6 comparable 22.3 Radial 4Q6 rebased comparable 20.9 Domestic Parcels.7 International parcels Consolidation of Radial as of 6 November 207 (revenues are reported under Logistic Solutions). Reported volume growth of +30.8% driven by strong e-commerce growth and the online C2C product offering. Price/mix of -6.9%: price increase fully offset by product & client mix effect. Growth in flows from Asia and Europe. Flows from the US negatively impacted by FX (weaker USD in 4Q7 vs. 4Q6) and phasing on booking of Apple Express revenues 3. Excluding these 2 impacts, flows from US are stable vs. LY. Logistic Solutions Consolidation of DynaGroup as of January Q Defined as domestic and Belgian in- and outbound 2 New category, previously called Special Logistics 3 In 4Q6 5 months of revenues were booked vs. 3 months in 4Q7.

10 4Q7 0 Additional sources of revenues driven by the acquisition of Ubiway Total operating income (revenues), million 4Q6 comparable Radial Consolidation of Radial as of 6 November 207 (revenues are reported under Retail & Other). One-off 4Q6 rebased comparable International mail Banking & Financial Distribution Retail & Other 4Q VAS Reversal on DynaGroup earn-out was recognized as other operating income in Retail & Other. Continued volume decline partly compensated by price increases. Mainly driven by management of cross-border fines on behalf of the Belgian State. Mainly bpost bank, i.e. lower commissions received and lower revenues from savings accounts due to low interest rate environment; lower revenue from financial transactions managed on behalf of the State. Consists of Ubiway press distribution as well as convenience distribution through Alvadis (pre-paid services) and Burnonville (impulse products). Consists of Ubiway proximity and convenience retail as well as other revenues. New category, contains Ubiway consolidated as of December 206

11 4Q7 Opex influenced by acquisitions ( m) and year-end peak. Increase in transport cost in line with growth in international business. Operating expenses excl. depreciation and amortization, million FDM, Apple Express, Ubiway, DynaGroup, Parcify, de Buren, Bubble Post, Radial incl. transaction costs 4Q6 comparable Excluding scope change, increase driven by growth in the international business. Transport 9. Payroll & Interim Other SG&A Other costs Average reported FTE & interim increase of 3,654 leading to +93.5m additional costs explained by the integration of new subsidiaries. Favourable FTE mix of -3.0m mainly driven by the recruitment of auxiliary postmen. Negative price effect of +5.5m explained by salary indexation, CLA and merit increases. Excluding scope change, decrease of third party remuneration fees and maintenance & repairs partly offset by increase in rent and rental costs (new Brussels sorting centre). 4Q Excluding scope change, phasing on recoverable VAT (increase of rate in 207 vs. 206) and decrease of provisions for local and property taxes related to the previous years m = 549.2m reported lowered with 5.4m relating to accounting restatement without EBITDA impact on 4Q6 Ubiway materials costs

12 4Q7 2 Lower operating FCF due to acquisitions and phasing in working capital evolution million 4Q6 4Q7 Delta Cash flow from operating activities Cash flow from investing activities Operating free cash flow Financing activities Net cash movement Capex Deterioration in working capital as a result of peak sales season at Radial combined with lower outstanding trade payables: -77.2m Proceeds from sale of buildings: +3.5m Investment securities: +2.0m Higher capex: -2.4m Cash outflows related to acquisitions: m, out of which Radial: -58.5m net of cash acquired Ubiway and Apple Express in 4Q6: resp m and +3.7m Bridge loan for Radial acquisition: +69.6m Operating free cash flow = cash flow from operating activities + cash flow from investing activities

13 4Q7 3 Final gross dividend of 0.25/share will be proposed to reach a total gross dividend payment of.3/share Based on the communicated dividend policy, taking into account the interim dividend paid and subject to Board and Shareholders meeting approval, we propose a gross final dividend of 0.25/share (same as FY6). The pay-out ratio for the total proposed gross dividend was increased to 90.0%. Interim dividend paid in December 207 (, gross per share).06 Proposed final dividend payment (, gross per share) 0.25 Total proposed dividend for Dividend bpost S.A./N.V. net profits after tax November to December 207 (BGAAP) 42.m Pay-out ratio 9% Proposed final dividend 50.0m Dividend payment, gross per share 0.25

14 4Q7 4 Strong balance sheet structure million Assets Equity and liabilities 3, ,223.3 Cash, cash equivalents & investment securities Other assets Investments in associates Trade & other receivables Inventories 2, ,620.8 Interest-bearing loans & borrowings Provisions Trade & other payables Employee benefits 2, , , PPE & intangible assets Total equity Dec 3, 206 Dec 3, 207 Dec 3, 206 Dec 3, 207

15 4Q7 5 Outlook for 208 Recurring EBITDA in the range of 560 to 600m Dividend payment at least at the same level as 207 Revenues Increase driven by: Growth in domestic parcels: volume double digit, price/mix effect between -3% and -6% Continued growth in international parcels supported by newly acquired businesses Stable Radial revenues Partly offset by volume decline in domestic mail 2 up to -7%, average domestic mail price/mix effect of +4% Continued decline in Banking & Financial revenue Operating expenses Increase driven by: Increase in transport cost (reflecting growth in International Parcels & Mail) Consolidation of acquired businesses Salary indexation expected as of November 208 Radial costs impacted by phase out webstore business and higher than expected opex (medical benefits & inflation) not fully compensated by productivity improvements Partly compensated by continued productivity improvements and optimized FTE mix and Continued cost optimization Capex Recurring & Vision 2020 investments and business development investments for new subsidiaries (Radial, Ubiway and Dynagroup) for an estimated total amount of ~ 40m Outlook for 208 includes the acquisitions of Radial, Bubble Post, Leen Menken, Imex and Mail Inc. 2 Q8 will count working day less on franking machines, 2Q8 will count working day less on stamps, 3Q8 will count working day more on franking machines and 2 more on stamps and 4Q8 will count 2 working days more on franking machines vs. the same quarters of 207.

16 Appendix: Full year 207 figures Brussels March 4, 208

17 FY7 7 EBITDA mainly impacted by SUB price refusal not fully compensated by M&A contribution as well as transition to new Brussels sorting centre million Small user basket price increase refusal not compensated by M&A EBITDA contribution (net: - 0.2m) +.5 Includes -0.6m NBXrelated costs (rent & startup) and -.2m Ubiway restructuring charge EBITDA FY6 Domestic Mail Parcels Additional sources of revenues Corporate Costs EBITDA Radial EBITDA FY7 incl. Radial Positive one-offs FY7 EBITDA FY7 Reported total operating income (revenues) Consolidated as of 6 Nov. 207, EBITDA includes transaction costs 7.9m DynaGroup earnout reversal and 5.3m IAS9 non-cash profit related to termination of transport benefit Including -5.4m accounting restatement on Ubiway Distribution revenue and materials costs in 4Q6

18 FY7 8 Summary of key financials FY7 million Reported Normalized FY6 FY7 FY6 FY7 % Δ Total operating income (revenues) 2, , , , % Operating expenses, ,425.9, , % EBITDA % Margin (%) 24.2% 9.8% 24.2% 9.8% EBIT % Margin (%) 20.5% 6.3% 20.5% 6.6% Profit before tax % Income tax expense Net profit % FCF 93.9 (485.8) 93.9 (485.8) bpost S.A./N.V. net profit (BGAAP) % Net Debt/ (Net cash), at 3 December (492.7) (492.7) m linked to depreciation on intangible assets (purchase price allocation PPA Ubiway, Dynagroup & de Buren) Tax impact of PPA on depreciation of 2.5m Positive tax impact of Deltamedia liquidation 22.2m Normalized figures are not audited

19 FY7 9 Total operating income (revenues) million Domestic mail Parcels Additional sources of revenues TOTAL FY6 comparable FY7 % Transactional mail % Advertising mail % Press % Domestic parcels % International parcels % Logistic solutions International mail % Value added services % Banking and financial % Distribution Retail & Other Corporate % 2, , % Defined as domestic and Belgian in- and outbound 2 Contains Dynagroup consolidated as of January 207 and Radial consolidated as of 6 November Contains Ubiway consolidated as of December 206; 4Q6 Ubiway Distribution revenues restated for 5.4m in order to be in line with the accounting policies of the bpost Group and with IAS 8 Revenue and to be comparable with 4Q7

20 FY7 20 Domestic mail underlying volume trend in line with guidance at -5.8% Total operating income (revenues), million FY6 Working day impact -2.3,44.4 Transactional Mail: increased e-substitution mainly towards the end of the year. Advertising Mail: volume growth of +.5% vs. -3.0% for FY6 driven by focus on growth segments and indirect channels. Press: corrected for distribution days (3 less FY7 vs. FY6) total press volumes decline by 3.3% vs. -2.8% for FY6. Volume Price/mix Reported Underlying FY6 4Q7 FY7 FY6 4Q7 FY7 Transactional mail -5.9% -9.2% -8.3% -5.9% -8.9% -8.% Advertising mail -3.0% 0.5%.5% -3.0% 0.5%.5% Press -2.8% -2.6% -3.7% -2.8% -2.6% -3.7% Domestic Mail -5.0% -6.6% -5.9% -5.0% -6.4% -5.8% FY7, Impacted by regulatory decision on small user basket pricing and shift towards cheaper products. Q7 had 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 206.

21 FY7 2 Robust domestic and international parcels performance; Logistic Solutions driven by positive contribution from M&A Total operating income (revenues), million FY6 comparable Radial 20.9 Consolidation of Radial as of 6 November 207 (revenues are reported under Logistic Solutions). FY6 rebased comparable Domestic Parcels Reported volume growth of +28.2% driven by e-commerce growth and the online C2C product offering. Price/mix of -5.8%: price increase fully offset by product & client mix effect. International parcels 30.3 Growth driven by positive contribution from acquisitions and increase in flows from Asia. Logistic Solutions² 36.2 Consolidation of DynaGroup as of January 207. FY Defined as domestic and Belgian in- and outbound 2 New category, previously called Special Logistics

22 FY7 22 Additional sources of revenues driven by the acquisition of Ubiway Total operating income (revenues), million FY6 comparable 575. Radial.2 Consolidation of Radial as of 6 November 207 (revenues are reported under Retail & Other). One-off 7.9 Reversal on DynaGroup earn-out was recognized as other operating income in Retail & Other. FY6 rebased comparable International mail.2 Driven by higher revenues from inbound mail. VAS Banking & Financial Distribution Retail & Other Mainly driven by management of cross-border fines on behalf of the Belgian State. Mainly lower revenues from bpost bank (lower commissions received & lower revenue from savings accounts) and from financial transactions managed on behalf of the State. Consists of Ubiway press distribution as well as convenience distribution through Alvadis (pre-paid services) and Burnonville (impulse products). FY Consists of Ubiway proximity and convenience retail as well as other revenues New category, contains Ubiway consolidated as of December 206

23 FY7 23 Organic cost evolution on track. Opex influenced by acquisitions ( m). Increase in transport cost in line with positive international business evolution. Operating expenses excl. depreciation and amortization, million FDM, Apple Express, Ubiway, DynaGroup, Parcify, de Buren, Bubble Post, Radial incl. transaction costs FY6 comparable One-offs -5.3,823.0 IAS9 non-cash profit related to termination of transport benefit in payroll & interim. FY6 comparable excl. one-offs Transport Payroll & Interim Other SG&A Other costs FY7,846.9, ,425.9 Excluding scope change, increase driven by growth in the international business and lower favorable settlement of previous year s terminal dues. Average reported FTE & interim increase of 2,057 leading to +55.8m additional costs explained by the integration of new subsidiaries. Favourable FTE mix of -3.m. Price effect & others for an impact of +5.2m explained by salary indexation, CLA and merit increases partly compensated by tax shift and employee benefits. Excluding scope change, mainly decrease of third party remuneration partly offset by increase in rent and rental (mainly new Brussels sorting centre) and energy costs (increased fuel price & growing fleet) ,823.0m =,838.4m reported lowered with 5.4m relating to accounting restatement without EBITDA impact on 4Q6 Ubiway materials costs

24 FY7 24 Decrease in operating FCF mainly driven by acquisitions and phasing in working capital evolution million FY6 FY7 Delta Cash flow from operating activities Cash flow from investing activities Operating free cash flow Financing activities Net cash movement Capex Alpha pay-outs: +8.7m Terminal dues payment, phasing in 3Q6: +6.8m Working capital evolution: -2.m, mainly driven by peak sales season at Radial combined with lower outstanding trade payables Proceeds from sale of buildings: -3.2m Higher capex: -36.3m M&A activities: m Investment securities: +24.0m Bridge loan for Radial acquisition: +69.6m Operating free cash flow = cash flow from operating activities + cash flow from investing activities

25 Key contacts 25 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