I nvestor presentation Third quarter 2 0 1 7 Novem ber – Decem ber 2 0 1 7
I nvestor presentation third quarter 2 0 1 7 Contents Financial Calendar bpost at a glance Summary of key financials FY16 – 33 More on corporate.bpost.be/ investors Balance sheet – 34 Highlights 3Q17 – 4 Relationship with State – 35 0 4 .1 2 .2 0 1 7 Outlook 2017 – 5 Management – 36 Overall guidance 2016-2020 – 6 ( 1 7 :4 5 CET) Overview – 7 Interim dividend 2017 announcement More detail on 3 Q1 7 Products – 8 Strategy – 9 EBITDA bridge – 38 0 7 .1 2 .2 0 1 7 Domestic Mail: volume & revenue – 10 Key financials – 39 Ex-dividend date (interim dividend) Domestic Mail: regulation – 11 Revenues – 40 Domestic Parcels – 12 Domestic Mail – 41 1 1 .1 2 .2 0 1 7 International Parcels – 13 & 14 Parcels – 42 Additional sources of revenues – 15 Additional sources of revenues – 43 Dividend payment date M&A strategy – 16 Costs – 44 Radial – 17-21 Cash flow – 45 1 3 .0 3 .2 0 1 8 DynaGroup – 22 ( 1 7 :4 5 CET) Additional I nfo Ubiway – 23 Annual results FY2017 International parcels acquisitions – 24 EBITDA bridge YTD17 – 47 Transformation – 25 Key financials YTD17 – 48 0 2 .0 5 .2 0 1 8 Productivity – 26 Revenues YTD17 – 49 Vision 2020 – 27 & 28 Cash flow YTD17 – 50 ( 1 7 :4 5 CET) Hybrid network – 29 European mail market – 51 Quarterly results 1Q18 Stakeholders – 30 Key contacts – 52 CSR strategy – 31 Dividend policy – 32 Disclaim er This presentation is based on information published by bpost in its Third Quarter 2017 Interim Financial Report, made available on November, 8 th 2017 at 5.45pm CET on corporate.bpost.be/investors. This information forms regulated information as defined in the Royal Decree of 14 November 2007. The information in this document may include forward- looking statements 1 , 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. 1 as defined among others under the U.S. Private Securities Litigation Reform Act of 1995 2
bpost at a glance
bpost at a glance Highlights of 3 Q1 7 Revenues up 2 0 .4 % € 6 4 7 .6 m • Driven by very strong growth in Parcels and acquisitions partly offset by lower Domestic Mail revenues in line with guidance Dom estic Mail underlying evolution as expected -5 .3 % • Continued e-substitution but overall underlying volume trend in line with guidance Very strong parcels perform ance • Domestic: very strong reported volume increase driven by strong + 3 2 .8 % e-commerce growth and C2C; price/ mix effect of -7.1% fully mix related • International: mainly driven by increase in flows from Asia + € 9 .1 m Organic cost evolution on track • Opex influenced by acquisitions (€ + 103.3m) + € 1 0 9 .3 m • Increase in transport cost in line with international business evolution € 1 1 0 .3 m EBI TDA perfectly in line w ith last year and guidance € 5 2 .0 m BGAAP net profit of bpost SA/ NV up € 1 .5 m 2 0 1 7 outlook reconfirm ed 4
bpost at a glance Outlook for 2 0 1 7 – reconfirm ed Recurring EBI TDA and dividend paym ent at the sam e level as 2 0 1 6 Revenues Operating expenses Increase driven by: Increase driven by: • Growth in dom estic parcels: volume double • Increase in transport cost (reflecting growth in digit, around -5% price/ mix effect International Parcels) • Continued growth in international parcels • Consolidation of acquired businesses supported by newly acquired businesses • Salary indexation confirmed as of July 2017 • Growing Ubiw ay Retail revenues • Partly compensated by continued productivity Partly offset by decrease in dom estic m ail 1 : • improvements and optimized FTE mix, and volume between -5% and -6% , average • Continued cost optimization domestic mail price increase of 1.5% Capex • Recurring and Vision 2020 investments ~ € 90m • Business development investments: Ubiway < € 10m 1 4Q17 1 less on franking machines and 1 more on stamps vs. the same quarters of 2016 5
bpost at a glance Overall guidance 2 0 1 6 -2 0 2 0 as issued at CMD on 1 5 Novem ber 2 0 1 6 W e confirm our long term am bition of at least € 6 2 0 m 1 EBI TDA by 2 0 2 0 Revenue Operating expenses Increase driven by: Increase driven by: • Growth in dom estic parcels: volum e + 7 5 % • Increase in transport cost (reflecting growth in at least (vs. 2015), -2 to -3% price/ mix effect International) • Growth in international parcels: revenue x2 • Integration of acquired businesses at least (vs. 2015) • Inflation • Decrease in dom estic m ail: volum e up to • Partly compensated by up to 4 % FTE & interim -6 % productivity increase p.a. at current scope and • Optimized FTE mix Capex • Further Vision 2020 investments in 2 0 1 7 -1 8 : ~ € 9 0 m p.a. excluding Ubiway capex • Maintenance capex level in 2 0 1 9 -2 0 : ~ € 6 0 m p.a. excluding Ubiway capex Maintenance of dividend policy At least 8 5 % pay-out of BGAAP net profit M&A on top of overall 2 0 2 0 EBI TDA guidance Accretive contribution supported by strong balance sheet. Any decision must be evaluated on 5 criteria (cfr. p. 16). 1 including acquisitions of FDM, Apple Express, Ubiway, Parcify and de Buren 6
bpost at a glance Belgium ’s leading postal operator Built on strong foundations and w ith am bitious targets Leading m arket position in the 8 .6 m € 2 .4 bn resilient Belgian m ail m arket with a letters handled every day revenues balanced regulatory framework 1 4 8 ,0 0 0 Focused m ail and parcels business € 5 8 6 .9 m parcels handled every day with a proven strategy for profitable 2 4 .2 % growth EBITDA 6 6 2 6 7 5 Scope for continued cost post franchised im provem ents offices post points € 4 9 6 .5 m 2 0 .5 % Strong financial perform ance 5 EBIT supporting a high level of cash flow sorting centres generation and dividends € 3 2 4 .1 m 2 4 ,8 5 0 Proven perform ance track record net profit average # FTE & interims 2016 figures (normalized) 7
bpost at a glance A m odern and diversified m ail operator Revenues % of total One integrated Transactional m ail € 873m 36% Dom estic dom estic Mail distribution Advertising m ail € 248m 10% € 1,414m netw ork for mail and 58% parcels Press € 293m 12% I nternational player Dom estic € 182m 8% Parcels hubs in London LHR and I nternational € 190m 8% Brussels € 379m 16% strategically located Special Logistics € 8m 0% facilities in US, Canada, Poland, China, HK, Singapore, the Netherlands, Australia I nternational m ail € 162m 7% Additional and New Zealand sources of Value added services € 103m 4% revenues € 2 ,4 2 5 m 1 Banking and finance € 192m 8% € 600m normalized revenues 2016 25% Other 2 € 143m 6% 1 58% Domestic Mail, 16% Parcels, 25% Additional sources of revenues and 1% Corporate revenue 2 I ncluding a.o. SGEI compensation for the retail network, philately, retailer products and Ubiway since 1 December 2016 (1 month) 8
bpost at a glance Focused strategy to create value and rew ard shareholders W e are W e W e are W e are m ail grow lean, agile & flexible @core 9
bpost at a glance W e are m ail - w e continue to focus on core m ail business Volum e & revenue drivers Transactional m ail e-substitution mainly in administrative mail; however, 7 9 % satisfaction level for the paper channel • (vs. 54% on average for digital channels) 1 • General cost cutting on all categories • Mix effect : shift towards cheaper products or reduced weight of mail items I llustration for search, number of times considered important per 100 purchases, Advertising m ail end-to-end • Strongly linked to GDP grow th (+ 1.2% in 2016, forecast 2017: + 1.7% ) • Marketing m ix is more balanced betw een different channels • Focus on 6 key segm ents 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. 35) • Invoices sent directly to the editors 1 Source: bpost commissioned market research, 2016 (1,015 face to face interviews) 2 Services of General Economic I nterest 10
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