Slide 1: Investor presentation Fourth quarter 2014
Investor presentation Fourth quarter 2014 March – April 2015
Slide 2: Contents, Financial Calendar and Disclaimer
2 Investor presentation fourth quarter 2014 Contents Financial Calendar bpost at a glance Current trading: 4Q14 More on www.bpost.be/ir Overview – 4 Products – 5 Highlights 4Q14 – 20 Highlights FY14 – 21 06.05.2015 (17:45 CET) Strategy – 6 EBITDA bridge – 22 1Q15 results Domestic Mail – 7 Key financ
Slide 3: bpost at a glance
bpost at a glance
Slide 4: Belgium's leading postal operator
bpost at a glance 4 Belgium’s leading postal operator Built on strong foundations and with ambitious targets Leading market position in the € 2.5bn resilient Belgian mail market with a 9.6m revenues letters handled every day balanced regulatory framework Focused mail and parcels business 112,000 € 5
Slide 5: A modern and diversified mail operator
bpost at a glance 5 A modern and diversified mail operator Revenues % of total One integrated Transactional mail € 943m 38% domestic Domestic distribution Mail Advertising mail € 271m 11% network for mail and € 1,523m parcels 62% Press € 308m 13% International player Domestic € 151m 6% • hubs in Lon
Slide 6: Focused strategy to create value and reward shareholders
bpost at a glance 6 Focused strategy to create value and reward shareholders E-substitution Continue Innovate/ Generate Value to focus grow continued creation & on core + + within core productivity rewarding of E-commerce mail competencies gains shareholders business Keep stakeholders on board Servi
Slide 7: Continue to focus on core mail business
bpost at a glance 7 Continue to focus on core mail business • While being impacted by e-substitution mail remains important… 80% of consumers prefer paper to receive administrative information1 79% satisfaction level for the paper channel (vs. 47% on average for digital channels)1 … and we run marke
Slide 8: Innovate/grow within core competencies (1/2)
bpost at a glance 8 Innovate/grow within core competencies (1/2) bpost has an established position in parcels… Domestic parcels Unique selling proposition B2C/C2X1: ~€ 150-200m B2B1: ~€ 750-800m Others Offer best last mile and Others broadest delivery options • At home delivery 6 days/week (incl. Sa
Slide 9: Innovate/grow within core competencies (2/2)
bpost at a glance 9 Innovate/grow within core competencies (2/2) … and other sources of revenues besides mail and parcels International mail What? • Mail originating from foreign countries and delivered to other countries • Asset-light business model and fully variable costs Business model • Dedicat
Slide 10: Transformation journey
bpost at a glance 10 Continuous improvement is in our DNA. We have a 10-year proven transformation track record… 2004 2009 2011-2017 Transformation journey • Building of new Implemen- New strategic ‘Vision 2020’ sorting centres tation of new program in mail service • Transformation of distribution o
Slide 11: Plans for further productivity gains
bpost at a glance 11 … and we have plans for further productivity gains Historic FTE evolution Average FTEs, ‘000 2013 to 39 14: bpost has a systematic, -1,052 well-rounded approach -4.1% to identify and capture p.a. 25 cost improvements across the entire organization 2003 2004 2005 2006 2007 2008 2
Slide 12: Vision 2020 will drive substantial productivity improvements by 2017
bpost at a glance 12 Vision 2020 will drive substantial productivity improvements by 2017 Declining Improved operational platform mail volumes Five specialized New central parcels industrial mail centres sorting facility for letters automatically (Brussels) with increased sorting all formats (large
Slide 13: We want to keep stakeholders on board
bpost at a glance 13 We want to keep stakeholders on board… Distribution quality Environment Percentage letters1 in D+1 2014 #1 Carbon 2013 #1 disclosure 95² 1st project +10 on the IPC 2012 #2 Environmental 90/100 Ranking 85 2011 #8 2009 #14 2003 2014 Customer satisfaction3 Engaged employer Percent
Slide 14: Reward shareholders
bpost at a glance 14 Reward shareholders Dividend Policy Other shareholders returns • Annual dividend of minimum 85% of BGAAP • Exceptional dividends and share buy-backs reported net profit (unconsolidated) constrained by the level of distributable reserves under BGAAP (€ 36.7m end 2013 of which • I
Slide 15: Summary of key financials FY14
bpost at a glance 15 Summary of key financials FY14 € million Reported 1 Normalized FY13 FY14 FY13 FY14 %∆ Total operating income (revenues) 2,443.2 2,464.7 2,428.6 2,464.7 1.5% Operating expenses 1,891.7 1,892.6 1,891.7 1,892.6 0.0% 2013: gain of EBITDA 551.4 572.0 536.9 572.0 6.6% € 14.6m from sal
Slide 16: Supported by a strong balance sheet
bpost at a glance 16 Supported by a strong balance sheet € million Assets Equity and liabilities Employee benefit liabilities 2,121.8 2,121.8 Deferred tax asset 75.6 1,929.2 1,929.2 64.8 Interest-bearing 307.1 61.5 loans & borrowings 86.9 562.3 62.6 Cash & cash Provisions 448.2 equivalents Other lon
Slide 17: bpost's long term relationship with the State
bpost at a glance 17 bpost’s long term relationship with the State State as a long term bpost provides SGEIs1 on State as important shareholder behalf of the State customer • Belgian State has >50% • bpost provides a range of public • State is a key commercial shares services primarily under a clien
Slide 18: bpost's management team and organization
bpost at a glance 18 bpost’s management team and organization Kurt Pierloot Marc Huybrechts Mail Services Mail & Retail Solutions Operations & International Koen Van Gerven CEO & Parcels Mark Michiels Human Resources & Organization Pierre Winand CFO, Service Operations & ICT
Slide 19: Current Trading 4Q14
“Gurrent Trading 4Q14 og, bpom take @ of it
Slide 20: Highlights of 4Q14 – Expectations exceeded
4Q14 20 Highlights of 4Q14 – Expectations exceeded Revenues up 2.2% (+1.7% organically) € 655.3m • partially helped by higher building sales (EUR +3.8m) Volume decline of domestic mail better than previous 3 quarters -3.7% • improved advertising and transactional mail, but still impacted by e-substi
Slide 21: Highlights FY14
4Q14 21 Highlights FY14 Normalized1, € million Topic Results Last outlook for 2014 Total operating Stable or slightly FY14: € 2,464.7m (+1.5%) income (Revenues) above LY EBITDA FY14: € 572.0m (+6.6%) Stable for 4Q14 and keep advance booked EBIT FY14: € 480.2m (+10.1%) in first 9 months Domestic Mail
Slide 22: 4Q14 EBITDA grew solidly thanks to Parcels
4Q14 22 4Q14 EBITDA grew solidly thanks to Parcels, domestic mail volume decline better than previous quarters at -3.7% and costs under control taking into account growth of transport costs Normalized1, € million € +9.1m / +7.5% -2.0 +131.0 +3.7 +0.8 +121.6 +11.7 +0.4 -5.1 EBITDA Scope Domestic Mail
Slide 23: Summary of key financials 4Q14
4Q14 23 Summary of key financials 4Q14 € million Reported 1 Normalized 4Q13 4Q14 4Q13 4Q14 %∆ Total operating income (revenues) 640.9 655.3 640.9 655.3 2.2% Operating expenses 519.4 524.3 519.4 524.3 0.9% EBITDA 121.6 131.0 121.6 131.0 7.8% Margin (%) 19.0% 20.0% 19.0% 20.0% EBIT 86.8 102.8 86.8 102
Slide 24: Total operating income of €655.3m in 4Q14
4Q14 24 Total operating income (revenues) of € 655.3m in 4Q14, increase of € 11.1m on an organic basis Normalized1, € million 2 4Q13 Scope Organic 4Q14 % Org Transactional mail 259.6 - -0.4 259.2 -0.2% Domestic mail Advertising mail 74.0 - -2.4 71.5 -3.3% Press 80.7 - -2.3 78.5 -2.8% 3 Domestic parc
Slide 25: Domestic Mail underlying volume decline at -3.7%
4Q14 25 Domestic Mail underlying volume decline at -3.7% as a result of lower volume decline both in transactional mail and advertising mail Normalized1 total operating income (revenues), € million 4Q13 FY13 414.3 1,551.3 • 1 business working day more. • Underlying volume decline at -3.7% from both
Slide 26: Continued growth of international parcels
4Q14 26 Continued growth of international parcels, solid volume performance in domestic parcels Normalized1 total operating income (revenues), € million 4Q13 FY13 76.0 249.6 Scope 2.4 • Solid volume growth in 4Q14 of 7.1% driven by 8.1 e-commerce growth, despite weak November month (especially fashi
Slide 27: Additional sources of revenues holding well
4Q14 27 Additional sources of revenues holding well Normalized1 total operating income (revenues), € million 4Q13 FY13 156.5 602.2 Scope 0.8 2.3 4Q13 before 157.3 604.5 organic evolution • Excluding lower one-off settlements relating to last year (€ -0.7m) and positive FX impact (€ +1.8m), Internati
Slide 28: Costs remained well under control
4Q14 28 Costs remained well under control and were down € 9.9m on an underlying basis (excl. one-offs, phasing and transport) Operating expenses excl. depreciation and amortization, Normalized1, € million FY13 4Q13 519.4 1,891.7 • Terminal dues one-offs (€ +4.1m) and phasing Scope 2.9 impact (€ +2.7
Slide 29: Operating free cash flow of €+48.4m in 4Q14
4Q14 29 Operating free cash flow1 of € +48.4m in 4Q14 € million € million 4Q13 4Q14 Delta Cash flow from operating activities +46.4 +71.8 +25.4 Cash flow from investing activities -33.9 -23.4 +10.5 1 Operating free cash flow +12.5 +48.4 +35.9 Financing activities -195.3 -217.7 -22.4 Net cash movemen
Slide 30: Outlook for 2015
4Q14 30 Outlook for 2015 • After a very strong 2014 which allowed us to report historically high numbers, we will be facing some headwind in 2015: • We expect mail volumes to remain under substantial pressure from e-substitution. As a consequence we plan for mail a volume decline of over -5%. This h
Slide 31: Additional info
e ue Additiona og, bpost takes care af it
Slide 32: FY14 EBITDA grew solidly thanks to parcels and additional revenues
FY14 32 FY14 EBITDA grew solidly thanks to solid revenue growth both in parcels and additional sources of revenues along with continued cost savings Normalized1, € million € +34.4m / +6.4% +572.0 +8.6 +8.0 -3.5 +536.9 +0.8 +49.6 -28.3 EBITDA Scope Domestic Mail Parcels Additional Corporate Costs EBI
Slide 33: Changes in scope
FY14 33 Scope elements affecting results: small bolt-on acquisitions relating to international parcels activities Topic Description High-level impact • In Jan. 2014, Landmark Global Inc. • Additional operating income of acquired 100% of the shares of Gout and € 2.1m and additional operating Acquisit
Slide 34: Total operating income of €2,464.7m in FY14
FY14 34 Total operating income (revenues) of € 2,464.7m in FY14, increase of € 25.8m on an organic basis Normalized1, € million 2 FY13 Scope Organic FY14 % Org Transactional mail 961.3 - -18.0 943.2 -1.9% Domestic mail Advertising mail 275.9 - -4.5 271.4 -1.6% Press 314.1 - -5.8 308.4 -1.8% 3 Domest
Slide 35: Operating free cash flow of €+373.5m in 2014
FY14 35 Operating free cash flow1 of € +373.5m in 2014 € million € million FY13 FY14 Delta Cash flow from operating activities +329.7 +451.7 +122.0 Cash flow from investing activities -80.7 -78.2 +2.5 1 Operating free cash flow +249.0 +373.5 +124.5 2 Financing activities -513.8 -259.5 +254.3 Net cas
Slide 36: Key contacts
36 Key contacts • Email: pierre.winand@bpost.be Pierre Winand • Direct: + 32 (0)2 276 22 35 • Mobile: +32 (0) 494 566 348 CFO, Service Operations and ICT • Address: bpost, Centre Monnaie, 1000 Brussels, Belgium • Email: paul.vanwambeke@bpost.be Paul Vanwambeke • Direct: + 32 (0)2 276 28 22 • Mobile:
Slide 37: bpost
og, bpost