Slide 1: Investor presentation First quarter 2015
Investor presentation First quarter 2015 May – June 2015
Slide 2: Contents, Financial Calendar and Disclaimer
2 Investor presentation first quarter 2015 Contents Financial Calendar bpost at a glance More detail on 1Q15 More on www.bpost.be/ir Highlights 1Q15 – 4 Outlook 2015 – 5 EBITDA bridge – 22 Key financials – 23 13.05.2015 Ordinary General Meeting of Overview – 6 Revenues – 24 Shareholders Products – 7
Slide 3: bpost at a glance
bpost at a glance
Slide 4: Highlights of 1Q15
bpost at a glance 4 Highlights of 1Q15 Revenues down 1.6% € 616.6m • strong parcels performance offset by softness in mail and lower SGEI compensation Sharper volume decline of domestic mail • weakness in advertising mail sales and ongoing e-substitution -5.3% Strong growth in parcels • solid domest
Slide 5: Outlook for 2015
bpost at a glance 5 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
Slide 6: Belgium's leading postal operator
bpost at a glance 6 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 7: A modern and diversified mail operator
bpost at a glance 7 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 8: Focused strategy to create value and reward shareholders
bpost at a glance 8 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 9: Continue to focus on core mail business
bpost at a glance 9 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 10: Innovate/grow within core competencies (1/2)
bpost at a glance 10 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. S
Slide 11: Innovate/grow within core competencies (2/2)
bpost at a glance 11 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 • Dedica
Slide 12: Transformation journey
bpost at a glance 12 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 13: … and we have plans for further productivity gains
bpost at a glance 13 … and we have plans for further productivity gains Historic FTE evolution Average FTEs, ‘000 2013 to 39 14: bpost has a systematic, -974 well-rounded approach -4.1% to identify and capture p.a. 25 cost improvements across the entire organization 2003 2004 2005 2006 2007 2008 200
Slide 14: Vision 2020 will drive substantial productivity improvements by 2017
bpost at a glance 14 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 15: We want to keep stakeholders on board…
bpost at a glance 15 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 Committed employer Percen
Slide 16: Reward shareholders
bpost at a glance 16 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 (€ 67.1m end 2014). • Interim
Slide 17: Summary of key financials FY14
bpost at a glance 17 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 18: Supported by a strong balance sheet
bpost at a glance 18 Supported by a strong balance sheet € million Assets Equity and liabilities Employee benefit liabilities 2,329.3 2,329.3 Deferred tax asset 75.4 2,121.8 Interest-bearing 2,121.8 65.4 loans & borrowings 75.6 307.1 61.5 64.8 Provisions Cash & cash 860.9 562.3 equivalents Other lon
Slide 19: bpost's long term relationship with the State
bpost at a glance 19 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 20: bpost's management team and organization
bpost at a glance 20 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 21: Current Trading 1Q15
“Gurrent Trading 1Q15 og, bpom take @ of it
Slide 22: Growth in parcels and further cost control resulted in stable EBITDA
1Q15 22 Growth in parcels and further cost control resulted in stable EBITDA despite a soft start in mail and the reduction of SGEI compensation € million € +4.0m / +2.3% +173.0 +172.7 -4.2 +9.9 -4.1 -0.4 -13.2 +11.7 EBITDA SGEI Domestic Mail Parcels Additional Corporate Costs EBITDA 1Q14 compensati
Slide 23: Summary of key financials 1Q15
1Q15 23 Summary of key financials € million Reported 1Q14 1Q15 %∆ Total operating income (revenues) 626.7 616.6 -1.6% Operating expenses 453.7 443.9 -2.2% EBITDA 173.0 172.7 -0.2% Margin (%) 27.6% 28.0% EBIT 152.0 151.6 -0.3% Margin (%) 24.3% 24.6% Profit before tax 153.6 149.0 -3.0% Income tax expe
Slide 24: Total operating income lower by €6.0m on an organic basis
1Q15 24 Total operating income (revenues) lower by € 6.0m on an organic basis € million 1Q14 Reclassifi- 1Q14 2 SGEI Organic 1Q15 % Org reported cations comparable Transactional mail 238.9 0.9 239.7 - -7.1 232.6 -3.0% Domestic mail Advertising mail 70.2 -0.2 70.0 - -5.3 64.7 -7.5% Press 77.7 - 77.7
Slide 25: Domestic mail volume decrease of -5.3%
1Q15 25 Domestic mail volume decrease of -5.3% due to weak advertising mail sales and continued e-substitution Total operating income (revenues), € million 1Q14 387.5 comparable • Underlying volume decline at -5.3% • Transactional mail: continuing trends of e-substitution SGEI -3.0 and reduction of
Slide 26: Continued growth of international parcels, solid domestic parcels volume
1Q15 26 Continued growth of international parcels, solid volume performance in domestic parcels Total operating income (revenues), € million 1Q14 71.6 comparable • Solid volume growth in 1Q15 of 10.2% driven by e-commerce growth and positive C2C parcels sales (new product offering). A negative mix a
Slide 27: Additional sources of revenue affected by curtailment of wholesale international mail
1Q15 27 Additional sources of revenue mainly affected by the curtailment of very low margin wholesale international mail activities Total operating income (revenues), € million 1Q14 155.9 comparable SGEI -1.1 1Q14 before • Excluding lower one-off settlements relating to last year 154.8 organic evolu
Slide 28: Costs remained well under control and were down €9.9m
1Q15 28 Costs remained well under control and were down € 9.9m Operating expenses excl. depreciation and amortization, € million • Total FTE reduction of 681 FTE (€ -7.9m) • Positive mix impact of € -2.9m mainly thanks to the 1Q14 453.7 recruitment of auxiliary postmen (€ -1.8m), reinforced by a sma
Slide 29: Operating free cash flow of €298.1 in 1Q15
1Q15 29 Operating free cash flow1 of € 298.1 in 1Q15 € million € million 1Q14 1Q15 Delta Cash flow from operating activities +384.6 +306.6 -78.0 Cash flow from investing activities -17.3 -8.5 +8.8 1 Operating free cash flow +367.4 +298.1 -69.3 Financing activities -0.6 -0.2 +0.4 Net cash movement +3
Slide 30: Key contacts
30 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 31: bpost
og, bpost