Slide 1: Investor presentation Third quarter 2014
Investor presentation Third quarter 2014 November - December 2014
Slide 2: Contents, Financial Calendar and Disclaimer
2 Investor presentation third quarter 2014 Contents Financial Calendar bpost at a glance Current trading: 3Q14 More on www.bpost.be/ir Overview – 4 Transformation – 5 Highlights – 20 EBITDA bridge – 21 08.12.2014 Ex-dividend date Products – 6 Key financials – 22 (interim dividend) Strategy – 7 Reven
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 K Company description Key figures • One integrated network for domestic mail and parcels 4.7m 669 674 • International mail and parcels through hubs in households served post offices franchised post London LHR and Brussels and strategically locate
Slide 5: Transformation journey: continuous profitability improvement
bpost at a glance 5 Transformation journey: continuous profitability improvement from loss making in 2003 2004 2009 2011-2017 Transformation journey • Building of new Implemen- New strategic ‘Vision 2020’ sorting centers tation of new program in mail service • Transformation of distribution operatio
Slide 6: bpost product and service offering
bpost at a glance 6 bpost product and service offering Normalized1, 2013 Product line Revenues % of total Main direct competitors Transactional mail € 961m 40% License obtained in 2013 Domestic Mail Advertising mail € 276m 11% For unaddressed mail only € 1,551m 64% Press € 314m 13% Domestic € 142m 6
Slide 7: Focused strategy as an answer to observed trends
bpost at a glance 7 Focused strategy as an answer to observed trends Continue Innovate Generate E-substitution to focus /grow continued on core within productivity mail core gains business competencies Leading to value creation & E-commerce rewarding of shareholders Keep stakeholders on board Servic
Slide 8: Continue to focus on core mail business
bpost at a glance 8 Continue to focus on core mail business • While being impacted by e-substitution mail remains important… 90% of customers check their mail box every working day 73% with internet connection prefer paper … and we run marketing programs to defend the value of mail • bpost has the a
Slide 9: Innovate/grow within core competencies (1/2)
bpost at a glance 9 Innovate/grow within core competencies (1/2) bpost has an established position in parcels… Unique selling proposition B2C/C2X segment B2B segment Offer the best last mile and Others Others broadest delivery options through: • Flexible at home delivery 6 Domestic days/week (incl.
Slide 10: Innovate/grow within core competencies (2/2)
bpost at a glance 10 Innovate/grow within core competencies (2/2) … and several other sources of revenues besides mail and parcels International What? • Mail originating from foreign countries and delivered to other countries mail • Asset-light business model and fully variable costs Business model
Slide 11: Proven track record and plans for further productivity gains
bpost at a glance 11 bpost has a proven track record and plans for further productivity gains Historic FTE evolution End of year FTEs, ‘000 2012 to 40 13: bpost has a systematic, -1,090 well-rounded approach -4.7% to identify and capture p.a. 25 cost improvements across the entire organization 2003
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 mail volumes Improved operational platform Five specialized industrial New central parcels sorting mail centers for letters facility (Brussels) with automatically sorting all increased capacity mergin
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 2012 to 13: +2 2013 #1 Carbon 962 disclosure 1st 2012 #2 project 85 + 11 on the IPC Environmental 2011 #8 81/100 Ranking 2009 #14 2003 2013 Customer satisfaction3 Engaged employer
Slide 14: Reward shareholders: total dividend of €1.13/share
bpost at a glance 14 Reward shareholders: total dividend of € 1.13/share gross based on 2013 results • Dividend policy: pay-out of minimum 85% of BGAAP reported net profit (unconsolidated) Dividend • Annual dividend payment Policy • Interim in December of financial year based on 10-month results • F
Slide 15: Summary of key financials FY13
bpost at a glance 15 Summary of key financials FY13 € million 1 Reported Normalized 2013: gain of 2012 2013 2012 2013 %∆ € 14.6m from sale of Total operating income (revenues) 2,415.7 2,443.2 2,415.7 2,428.6 0.5% Certipost divisions Operating expenses 1,994.8 1,891.7 1,913.7 1,891.7 1.1% EBITDA 421.
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 2,194.0 2,194.0 Deferred tax asset 85.2 55.2 1,929.2 Interest-bearing 1,929.2 290,8 54,3 loans & borrowings 86.9 731.6 62.6 Cash & cash Provisions 448.2 equivalents 861.0 Oth
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% shares • bpost provides a range of public • State is a key commercial client services primarily under
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 3Q14
“Gurrent Trading 3Q14 og, bpom take @ of it
Slide 20: Highlights of 3Q14
3Q14 20 Highlights of 3Q14 • Operating income (revenues) at € 569.2m, stable organically versus last year but negatively impacted by building sales being € 7.7m lower than the same quarter last year during which a sizeable property was sold. • Improved underlying Domestic Mail volume decline at -4.3
Slide 21: 3Q14 EBITDA in line with outlook
3Q14 21 3Q14 EBITDA in line with outlook. Lower gains on building sales compared to 3Q13 when one sizeable property was sold Normalized1, € million € +0.2m € +0.4m / +0.4% +1.4 -7.9 +2.5 +104.4 +103.9 +13.0 +0.3 -2.3 -6.5 EBITDA Scope Domestic Mail Parcels Additional Corporate Costs EBITDA 3Q13 sour
Slide 22: Summary of key financials 3Q14
3Q14 22 Summary of key financials 3Q14 € million Reported 1 Normalized 3Q13 3Q14 3Q13 3Q14 %∆ Total operating income (revenues) 566.6 569.2 566.6 569.2 0.5% Operating expenses 462.7 464.7 462.7 464.7 -0.4% EBITDA 103.9 104.4 103.9 104.4 0.6% Margin (%) 18.3% 18.3% 18.3% 18.3% EBIT 81.5 82.9 81.5 82.
Slide 23: Total operating income (revenues) of €569.2m in 3Q14
3Q14 23 Total operating income (revenues) of € 569.2m in 3Q14, stable on an organic basis. 3Q13 revenues included disposal proceeds of € 11.4m for one large property. Normalized1, € million 3Q13 Scope² Organic 3Q14 % ∆ Org Transactional mail 212.5 - -3.1 209.3 -1.5% Domestic mail Advertising mail 60
Slide 24: Domestic Mail revenues 3Q14
3Q14 24 Better Domestic Mail underlying volume decline at -4.3% helped by some one-off actions from customers and no new aggressive e-substitution measures. Normalized1 total operating income (revenues), € million YTD13 3Q13 Comments on 3Q14 1,137.0 348.4 • 1 business working day less (affecting tra
Slide 25: Continued growth of international parcels
3Q14 25 Continued growth of international parcels. Strong volume performance in domestic parcels. Normalized1 total operating income (revenues), € million YTD13 3Q13 58.0 Comments on 3Q14 173,6 Scope 1.9 5,6 Before Volume increase in 3Q14 of +10.3%, showing improvement 59.9 • 179,3 organic evolution
Slide 26: Additional sources of revenues
3Q14 26 International mail & VAS performing well, partly offset by Banking & Financial. Normalized1 total operating income (revenues), € million YTD13 3Q13 146.3 Comments on 3Q14 445.7 Scope 0.6 1.4 Before 146.9 447.2 organic evolution International Mail 3.0 • Good international mail performance 4.2
Slide 27: Cost savings in other OPEX offset by transport costs
3Q14 27 Cost savings in other OPEX offset by increase in transport costs. Personnel costs impacted by one off elements and delays in holiday taking. Operating expenses excl. depreciation and amortization, Normalized1, € million Comments on 3Q14 Reported FTE reduction of 1,092 FTE (€ -13.3m) YTD13 •
Slide 28: Operating free cash flow of €-38.5m in 3Q14
3Q14 28 Operating free cash flow of € -38.5m in 3Q14 € million 3Q13 3Q14 Delta Cash flow from operating activities -6.7 -16.7 -10.1 Cash flow from investing activities +4.1 -21.7 -25.9 1 Operating free cash flow -2.5 -38.5 -36.0 Financing activities -0.1 -0.5 -0.4 Net cash movement -2.6 -38.9 -36.4
Slide 29: Shareholder remuneration should be higher than last year
3Q14 29 Based on bpost SA/NV 9-month results, shareholder remuneration should be higher than last year • First nine months results of bpost SA/NV (BGAAP) are already at the level reached after 10 months in 2013 (corrected for the exceptional tax charge). € million 2013 2014 bpost SA/NV - results fir
Slide 30: Outlook for 2014
3Q14 30 Outlook for 2014 • We reiterate our confidence to be able to report operating results (EBITDA and EBIT) in line with last year for the 4Q14 and consequently to keep the advance booked in the first nine months. • As a result, the level of the dividend should be higher than last year. • Revenu
Slide 31: Additional info
e ue Additiona og, bpost takes care af it
Slide 32: EBITDA bridge YTD14 (9 months)
Additional info 32 EBITDA bridge YTD14 (9 months) Normalized1, € million € +0.4m € +25.3m / +6.1% +441.0 +10.7 +7.3 -7.3 +7.1 +415.3 -6.6 +37.9 -23.2 EBITDA Scope² Domestic Mail Parcels Other sources Corporate Costs EBITDA YTD 13 of revenues YTD 14 100% acquisition of Gout, Total operating income (r
Slide 33: Changes in scope
Additional info 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 € 1.7m and additional operati
Slide 34: Summary of key financials YTD14 (9 months)
Additional info 34 Summary of key financials YTD14 (9 months) € million Reported 1 Normalized YTD13 YTD14 YTD13 YTD14 %∆ Total operating income (revenues) 1,802.2 1,809.4 1,787.7 1,809.4 1.2% Operating expenses 1,372.4 1,368.3 1,372.4 1,368.3 0.3% EBITDA 429.9 441.0 415.3 441.0 6.2% Margin (%) 23.9%
Slide 35: Total operating income (revenues) YTD14 (9 months)
Additional info 35 Total operating income (revenues) YTD14 (9 months) Normalized1, € million YTD13 Scope² Organic YTD14 % ∆ Org Transactional mail 701.7 - -17.6 684.1 -2.5% Domestic mail Advertising mail 202.0 - -2.1 199.9 -1.0% Press 233.4 - -3.5 229.9 -1.5% Domestic parcels³ 102.9 - 7.5 110.4 7.3%
Slide 36: Operating free cash flow of €325.2m YTD14
Additional info 36 Operating free cash flow of € 325.2m YTD14 (9 months) € million, normalized1 YTD13 YTD14 Delta Cash flow from operating activities +283.8 +379.9 +96.6 Cash flow from investing activities -46.8 -54.8 -8.0 2 Operating free cash flow +236.5 +325.2 +88.7 Financing activities -318.5 -4
Slide 37: Key contacts
37 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 38: bpost
og, bpost