Investor presentation. Fourth quarter 2017

Transcription

1 Investor presentation Fourth quarter 207 March 208

2 Investor presentation fourth quarter 207 Contents bpost at a glance Highlights 4Q7 4 Outlook Overview 6 Products 7 Strategy 8 Domestic Mail: volume & revenue 9 Domestic Mail: regulation 0 Domestic Parcels International Parcels 2 & 3 Additional sources of revenues 4 M&A strategy 5 Radial 6-20 DynaGroup 2 Ubiway 22 Transformation 23 Vision & 25 Productivity 26 Hybrid network 27 Stakeholders 28 CSR strategy 29 Dividend policy 30 Summary of key financials FY7 3 Balance sheet 32 Disclaimer Relationship with State 33 Management 34 More detail on 4Q7 EBITDA bridge 36 Key financials 37 Revenues 38 Domestic Mail 39 Parcels 40 Additional sources of revenues 4 Costs 42 Cash flow 43 Additional Info EBITDA bridge FY7 45 Revenues FY7 46 Domestic Mail FY7 47 Parcels FY7 48 Additional sources of revenues FY7 49 Costs FY7 50 Cash flow FY7 5 European mail market 52 Key contacts 53 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 2Q8 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 2

3 bpost at a glance

4 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

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 costs and productivity) 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

6 Belgium s leading postal operator Built on strong foundations and with ambitious targets 3.0bn revenues 598.0m 9.8% EBITDA 50.6m 6.6% EBIT 329.3m 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.m letters handled every day 90,000 parcels handled every day post offices 5 sorting centres franchised post points 26,906 average # FTE & interims 207 figures (normalized) 6

7 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, the Netherlands, Germany, Spain, Poland, China, HK, Singapore, Australia and New Zealand 3,024m revenues 207 Domestic Mail,353m 45% Parcels 796m 26% Additional sources of revenues 832m 27% Transactional mail 808m 27% Advertising mail 253m 8% Press 293m 0% Domestic 224m 7% International 223m 7% Logistic Solutions 349m 2% International mail 60m 5% Value added services 02m 3% Banking and finance 83m 6% Distribution 98m 3% Retail & Other 2 289m 0% 45% Domestic Mail, 26% Parcels, 27% Additional sources of revenues and % Corporate revenue 2 Including a.o. SGEI compensation for the retail network, philately and retailer products 7

8 Focused strategy to create value and reward shareholders We are mail We grow We are lean, agile & flexible We 8

9 We are mail - 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 (+.7% in 207, forecast 208: +.8%) 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, home, 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. 33) Invoices sent directly to the editors Source: bpost commissioned market research, 206 (,05 face to face interviews) 2 Services of General Economic Interest 9

10 We are mail - we continue to focus on core mail business Regulatory aspects New Postal Law into force since 0 February 208 Designated provider of the Universal Service Obligation until end 2023 Collection, sorting, transport and distribution of postal items up to 2kg and single piece postal packages up to 0kg Collect and deliver 5x per week Cover full territory of Belgium for collection and delivery of items belonging to universal service Apply uniform tariffs and an identical service across the territory Fully liberalized market since 20 with clear licensing conditions 3 operational licensing conditions (geographical coverage, frequency of distribution and uniform pricing over entire territory) removed Employ contractual workers maintained Stable & predictable mail pricing regulation For single piece mail & USO parcels falling within small user basket : 5 criteria to comply with, i.e. () affordability, (2) non-discrimination, (3) transparency, (4) uniformity and (5) cost orientation Volume and operational discounts allowed for other USO products (bulk) New price cap formula to check affordability & cost orientation Price cap = inflation - (volume evolution + cost reduction factor x efficiency gains sharing factor) Price increases done in practice on a yearly basis: +4.7% on average in 208 on all domestic mail items 0

11 We grow Domestic Parcels We have an established position in domestic parcels 206 parcel market 00% =,285m CAGR , % B2C B2C ~5% C2C C2C ~5% B2B B2B 0-4% 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) 52 parcel lockers in B (>450 Cubee lockers by end 208), 6 de Buren lockers in NL Click & Collect Non-exclusive partnership with DPDHL for B2C parcel delivery into Belgium Source: Effigy

12 We grow International Parcels bpost has a global footprint through Landmark Global and a nation-wide coverage in the US through Radial Strategic locations in countries Asset-light business model 2

13 We grow International Parcels 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 3

14 We grow 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 (license plates, decoder swap, bclose) Solutions tailored to specific needs decoder swap bclose Fines Permit Check 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 4

15 We grow 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 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 accelerate the expansion of our e-commerce logistics business Acquisition of US-based ~5-20% Omnichannel technology Optimizing efficiency of order management, ship-fromstore and in-store pick up Payment, tax & fraud protection services Processing global payments, maximizing successful authorization and reconciling tax districts and global duties Warehouse management ~70-75% & fulfillment services Adapting warehouse management and parcels preparation to e-commerce with pragmatic automation Transport management & last-mile delivery and returns Managing a large network of carriers for a seamless customer experience Customer Care Services ~0% & Technology Having a single view of customer s history and profile combined with leading self-service tech Key data Sales 207: $,082m Normalized EBITDA 207: $ 57m 6,200 FTEs 24 fulfillment centers (of which 2 in Europe) 00% acquisition of the shares Enterprise Value: $ 820m Financed with a bridge facility at closing (6 November 207) Financial ambitions Annual sales growth e: 6 to 8% p.a. Expected total integration costs in 208 & 9: $ 35m to $ 40m, frontloaded in 208 Capex: $ 35 to $ 40m/year Losses carried forward in the next 3 years % based on normalized 207 revenues 6

17 Radial: Why integrated e-commerce logistics? Integrated e-commerce logistics solutions provide access to a large and more attractive profit pool 20% p.a. Global e-commerce sector is expected to grow at 20% p.a., with cross-border e-commerce growing at >25% p.a. Close to bpost s current capabilities (e.g. cross-border trade lanes with Landmark Global, FDM, AppleExpress, return logistics with DynaGroup) Beyond last mile and cross-border services, offer simple E2E solutions to mid-market e-commerce players and an accelerated roll-out/ scale-up of their e-commerce operations Offer a seamless and high-quality experience to consumers and have access to a larger and more attractive profit pool 7

18 Why Radial? Radial brings a distinctive set of capabilities that would otherwise take years to develop Build a significant presence in the advanced US e-commerce logistics sector with proven client base, IT and infrastructure Inject new expertise and capabilities along the e-commerce logistics value chain e.g. omnichannel technology, fulfilment, payment, tax & fraud protection and customer care, which are critical to scale the EU e-commerce logistics business Build on track record in successfully stitching together different parts of the e-commerce logistics value chain to accelerate development of e-commerce logistics business Scale bpost s e-commerce logistics capabilities in the Benelux and Europe 8

19 Radial: Why the US? Radial offers access to the advanced US e-commerce logistics sector and allows to tap into transatlantic flows bpost has a proven track record of doing business in the US through Landmark Global The US is an advanced e-commerce market that will continue to grow fast, offering the ideal opportunity to accelerate the development in the EU e-commerce logistics market, and gain a competitive edge A meaningful presence in the US provides a gateway to a global market, allowing Belgian consumers to shop online for US brands and retailers, and Belgian companies to benefit from transatlantic trade flows and export globally 20% Presence in US taps into the origin of EU e-commerce as it represents ~20% of export flows 9

20 Radial: market dynamics and competitive landscape Online revenue e-tailers, US Addressable e-commerce logistics sector $ 27-37bn addressable e-commerce logistics $ 2,000m $ 20m Radial s target audience ($ 20m 2bn revenues) Mid-market segment ($ m online revenue) Enterprise segment ($ m) Some selected key accounts ($ 600m-$ 2bn) Radial s target audience e-commerce revenue $ 50-55bn Competitive landscape E2E integrated players ~$ 460bn total US online Retail e-commerce (*) (*) $ 460bn expected US online retail revenue in 207 Value chain specialists Insourcing Source: Forrester Data, Online Retail Forecast, 207 (*) Not exhaustive examples 20

21 We grow 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 Sales 207: 32.2m 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 2

22 We grow Acquisition of (30 November 206) Convenience & Proximity Retail Non- Press Logistics Retail (220 shops) Convenience distribution & diversification 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 Accelerate product diversification in order to enhance profitability Footprint expansion (30 to 45 new stores in the next 3 to 5 years) and remodeling Grow in line with convenience & proximity retail market 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) Purchase price: 8.3m (incl. 44.5m cash) Sales 207: 28.7m Fully cash financed 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 22

23 Continuous improvement is in our DNA. We have a 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 207 Launch New Brussels X sorting facility 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 23

24 and we have plans for further productivity gains with Vision H H Centralize & Automate Preparation Install additional MSMs in 5 sorting centres (23 installed to date) Automate & Centralize preparation activities Parcels Sorting Complete building Install PSM & migrate parcel sorting Increase Parcel sorting capacity Distribution Network Reorganize distribution offices around 60 Mail Centres (~230 currently) 24

25 New Brussels X Sorting Centre fully operational Total surface: 03,000 m² Working area: 80,000 m² Letter sorting hall: 50,000 m² (2 floors) Parcel sorting hall: 25,000 m² Parking on the roof: 25,000 m² Offices: 5,800 m²,500 FTEs high-tech parcel sorting machine (PSM) Operational 24/7 with 30 high-tech machines Capacity: 300,000 parcels/day & 2,500,000 letters/day

26 We are leveraging the age pyramid to optimize the FTE mix bpost significantly reduced # FTEs through cost improvements across the entire organization. Recent uplift in FTEs is driven by acquisitions and high growth in parcels Historic FTE evolution Average FTEs, % p.a The age pyramid allows bpost to optimize the FTE mix replacing mainly statutory workers by auxiliary postmen Age pyramid Headcount per age, ,699 7,233 9,453 37% of bpost s employees are above 50 years old* Non pay-scale contractuals Pay-scale contractuals Civil servants * Natural attrition of c.,200 FTE p.a. being replaced to capture parcels growth which outpaces productivity improvements. Most of these replacements are at a lower cost (auxiliary postmen cost c. 30% less than bpost average payroll cost/fte) 26

27 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 DynaGroup High-end deliveries (same day, time slot, 2XL) Parcify B/C2Me Highly specific Urgent items No packaging or label Home delivery Large volume weekdays Saturday standard format PUDO > 2,200 points 52 parcel lockers open networks External partners Sunday delivery Evening delivery (6-9pm) Urgent items Volume peaks 2-man delivery, CityDepot/Bubble Post City centers Mobility Green Euro-Sprinters 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 27

28 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: C (C is average score) Customer satisfaction 2 Percent Committed employer Commitment & well-being Work accidents -2.5% Recognize experience 247 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, 207 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 28

29 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 29

30 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 ( 72m end 207) +6% * Final gross DPS ( ) Interim gross DPS ( ) * Proposed final gross dividend per share to be approved by General Meeting of May 9,

31 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 amortization on intangible assets (purchase price allocation PPA Ubiway, Dynagroup & de Buren) Tax impact of PPA on amortization of 2.5m 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 3

32 Supported by a strong balance sheet million Assets Equity and liabilities Employee benefit liabilities 3, ,223.3 Deferred tax asset Cash, cash equivalents & investment securities Other assets Investments in associates 2, Interest-bearing loans & borrowings, bank overdrafts Provisions Trade & other payables 2, , ,35.0 Termination (early retirement) Post retirement 50.7 (family 6.6 allowance, transport, 08.2 bank, ) Other long term benefits (disability annuities) 6.5 Trade & other receivables Inventories PPE & intangible assets ,620.8 Employee benefits Total equity Long term benefits Pension savings days Quota days Part-time work No pension liabilities Dec 3, 206 Dec 3, 207 Dec 3, 206 Dec 3, 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 32

33 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 Shareholder Belgian State # shares 02,075,649 bpost provides SGEIs on behalf of the State bpost provides a range of public services 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 (actual amount: 270.0m), 257.6m in 208, 252.6m in 209 and 245.6m in 2020 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) Free float 97,925,295 SGEI stands for Services of General Economic Interest 2 All amounts need to be adjusted for inflation on a cumulated yearly basis 33

34 bpost s management team and organization Marc Huybrechts Director Mail & Retail Solutions Kurt Pierloot Director International & Parcels Nico Cools CIO Koen Van Gerven CEO Dirk Tirez CLO Henri de Romrée CFO Philippe Dubois Director Mail Services Operations Mark Michiels CHRO 34

35 Current Trading 4Q7

36 4Q7 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 sources of revenues Corporate Costs EBITDA Radial EBITDA 4Q7 incl. Radial Positive one-off 4Q7 EBITDA 4Q7 Reported total operating income (revenues) Consolidated as of 6 Nov. 207, EBITDA includes transaction costs 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 36

37 4Q7 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 amortization on intangible assets (purchase price allocation PPA Ubiway, Dynagroup & de Buren) Tax impact of PPA on amortization of 2.5m Positive tax impact of Deltamedia liquidation 22.2m Normalized figures are not audited 37

38 4Q7 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 38

39 4Q7 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 39

40 4Q7 Excellent domestic parcels volume growth driven by year-end peak; Logistic Solutions driven by Radial and DynaGroup 4Q6 comparable Radial 4Q6 rebased comparable Domestic Parcels International parcels Logistic Solutions 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. 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. 40

41 4Q7 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 -0.6 VAS Banking & Financial Distribution Retail & Other Q 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 4

42 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 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 42

43 4Q7 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 43

44 Additional info

45 FY7 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 45

46 FY7 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 46

47 FY7 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

48 FY7 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 48

49 FY7 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

50 FY7 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 27.8, FY7, ,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 50

51 FY7 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 5

52 European mail market A relatively resilient mail market vs. other European operators Addressed mail volume per capita 207 operator level* CAGR for addressed mail volumes as reported by major incumbent European postal operators, percent CH 259 () -2.0 DE 5 0 UK 208 () -3. CH (2) 5 DE AU AU BE 8 3 SW 83 () -4.2 SW 3 (2) 2 FR UK 0 (2) EU FR 2 8 BE EU 4 NL 9-9. NL 4 6 DK 65 () -9.4 IT 7 (2) 7 IT 58 () -2.5 DK 6 (2) 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 () 206 data (2) data 52

53 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 53

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