I nvestor presentation Third quarter 2 0 1 8 Novem ber - Decem ber 2 0 1 8
2 I nvestor presentation third quarter 2 0 1 8 Contents Financial Calendar bpost at a glance More detail on 3 Q1 8 More on corporate.bpost.be/ investors Highlights 3Q18 – 4 EBITDA bridge – 51 0 3 .1 2 .2 0 1 8 Outlook 2018 – 5 Radial 3Q18 – 52 Outlook 2019-22 – 6 & 7 Key financials – 53 ( 1 7 :4 5 CET) Dividend policy – 8 Revenues – 54 Interim dividend 2018 announcement Capex 2019-22 – 9 Domestic Mail – 55 FCF 2018-22 – 10 Parcels – 56 0 6 .1 2 .2 0 1 8 Investment rationale – 11 Additional sources of revenues – 57 Ex-dividend date Overview – 12 Costs – 58 (interim dividend) Transformation – 13 Cash flow – 59 Vision & strategy – 14 & 15 1 0 .1 2 .2 0 1 8 Business segments – 16 Mail & Retail – 17-27 Additional I nfo Dividend payment date Parcels & Logistics Eur & Asia – 28-36 EBITDA bridge YTD18 – 61 Parcels & Logistics N. America – 37-44 1 9 .0 3 .2 0 1 9 Key financials YTD18 – 62 Summary of key financials FY17 – 45 Revenues YTD18 – 63 ( 1 7 :4 5 CET) Balance sheet – 46 Cash flow YTD18 – 64 Annual results FY18 Relationship with State – 47 USO & SGEI – 65 Management – 48 Pro forma 2017 financials – 66 Sustainability – 49 European mail market – 67 Key contacts – 68 Disclaim er This presentation is based on information published by bpost in its Third Quarter 2018 Interim Financial Report, made available on November, 7 th 2018 at 5.45pm CET, in its 2017 Annual Report and in its Capital Markets Day presentation of June, 21 st available 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
bpost at a glance
bpost at a glance 4 Highlights of 3 Q1 8 Total operating incom e up 3 4 .9 % € 8 7 3 .7 m • Driven by acquisitions, excellent domestic parcels growth and stable domestic mail revenues Underlying Dom estic Mail volum e evolution -6 .4 % • Impacted by continued e-substitution, rationalization and competitive advertising market; increased monthly volatility Continued strong parcels grow th and Radial in line w ith expectations • Domestic: continued double-digit organic volume growth driven by strong + 2 5 .5 % e-commerce development; price/ mix effect of -5.5% fully mix related • Logistic Solutions: mainly driven by Radial acquisition (€ + 184.2m) in line with + € 1 8 8 .8 m expectations. Preliminary PPA of Radial is included in the financial statements Organic costs im pacted by grow th and cost inflation • Opex from acquisitions (€ + 212.2m) + € 2 5 7 .5 m • Excluding one-offs (€ + 17.2m), organic cost base impacted by growth of domestic parcels (€ + 8.5m), transport cost (€ + 11.2) linked to evolution of international activities and cost inflation (€ + 8.3m) in core business € 7 8 .9 m Low er EBI TDA as expected im pacted by higher organic costs € 2 9 .3 m BGAAP net profit of bpost SA/ NV 2 0 1 8 outlook, dividend and back-loaded trajectory confirm ed
bpost at a glance 5 Outlook for 2 0 1 8 1 as issued on May 2 , 2 0 1 8 – m aintained Norm alized EBI TDA at the low end of the € 5 6 0 -6 0 0 m range 2 Dividend paym ent at least at the sam e level as 2 0 1 7 Revenues Operating expenses Increase driven by: Increase driven by: • Growth in dom estic parcels: volume double • Increase in transport cost (reflecting growth in digit, price/ mix effect between -3% and -6% International Parcels & Mail) • Continued growth in international parcels • Consolidation of acquired businesses • Partly offset by volume decline in dom estic • Salary indexation effective as of October 2018 m ail 3 up to -7% , average domestic mail • Partly compensated by continued productivity price/ mix effect of + 4% im provem ents and optim ized FTE m ix and • Continued decline in Banking & Financial • Continued cost optim ization revenue • Radial EBI TDA impacted by phase out • Radial revenues impacted by client churn w ebstore business and higher than expected opex (medical benefits & inflation) not fully compensated by productivity improvements Capex • Recurring and business development investments for new subsidiaries (Radial, Ubiway and Dynagroup) for an estimated total amount of ~ € 140m 1 Outlook for 2018 includes the acquisitions of Radial, Bubble Post, Leen Menken, I mex, M.A.I .L., I nc. and Active Ants 2 EBI T range of € 400m to € 440m as communicated at CMD of June 21 st 3 4Q18 will count 2 working days more on franking machines vs. the same quarter of 2017.
bpost at a glance 6 Guidance over 2 0 1 9 -2 2 Norm alized 1 EBI T and EBI TDA €m Low end Equivalent to EBITDA 3 guidance of € 5 6 0 - € 540-600m; 2019 expected to 6 0 0 m be the low end of the range guidance 2 598 587 584 572 537 EBI T guidance € 3 9 0 m - € 4 4 0 m ; 2019 expected to be the low end of EBITDA the range Equivalent to EBIT of € 400-440m 497 502 494 480 EBIT 436 2013 14 15 16 17 18 19 20 21 2022 Actuals 2 0 1 8 CMD Guidance guidance 2 0 1 9 -2 0 2 2 1 Normalized EBI T(DA) definition unchanged and excludes non-recurring items of €20m or more, all profits or losses on disposal of activities whatever the amount, non-cash Purchase Price Allocation (PPA) accounting impacts related to acquisitions, reversals of provisions whose addition had been normalized from income (regardless of the amount they represent) 2 As per 1Q18 guidance on 2 May 2018 3 Excluding impact of I FRS16 as of January 2019
bpost at a glance 7 Key param eters underlying this plan Mail & Retail Parcels & Logistics Europe and Asia Parcels & Logistics North America • Mail volum e decline from up to 7% in • Double digit yearly volum e increase • 7 -9 % revenue grow th in 2018 to up to 9 % by 2 0 2 2 for BeNe last-mile e-com m erce logistics from 2017- 2022 (from 2019 for Radial) • Price/ m ix offsetting ~ 5 0 % of mail • Price/ m ix ranging from -3 to -6 % p.a. • volume decline over 2018-2022 Radial EBI TDA expected to evolve • ~ 10% organic revenue grow th in from ~ $ 20m in 2018 to $ 1 0 0 - • Revenue from proxim ity and e-com m erce logistics in line with $ 1 2 0 m by 2 0 2 2 convenience retail netw ork increasing sector by 1 -2 % p.a. • Parcels allocated operational FTEs in • Renew al of key contracts with the State, Belgium to increase in line w ith including reset of efficiency gains revenue evolution • Mail allocated operational FTEs to decrease by ~ 5 % p.a. • Alternative operating m odel w ith flexible, differentiated offering ( D+ 1 and D+ 2/ 3) Operating expenses • W age increase of ~ 2% (mainly driven by automatic indexation) for 1/ 3 rd com pensated by favorable em ployee m ix effect in Belgium • Other FTEs bpost SA/ NV to decrease by ~ 3 -4 % p.a. partly offset by SG&A increase due to outsourcing plans Macro-economics indicators • I nflation of 1 .6 % p.a. on average; similar fuel price evolution • Exchange rate of ~ 1 .2 USD/ EUR • Statutory Belgian corporate tax rate progressively decreasing from 33.99% in 2017 to 29.58% in 2018-19, and to 25% as of 2020 M&A • Organic plan
bpost at a glance 8 W e create value for shareholders Dividend Policy Annual dividend of m inim um 8 5 % of BGAAP net profit ( unconsolidated) I nterim in Decem ber of financial year based on 10-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 2013, primarily to safeguard the dividend level in case of exceptional costs (€ 173m end 2017) Management to deliver Dividend earnings to at least at be in a the same position to as in sustain + 1 6 % 2017 dividends 1 .3 1 1 .3 1 1 .2 9 1 .2 6 1 .1 3 0.25 0.25 0.24 0.22 0.20 1.04 1.05 1.06 1.06 0.93 Final gross DPS (€) Interim gross DPS (€) 2013 2014 2015 2016 2017 2018 2019-22 Pay-out 9 1 % 8 5 % 9 0 % 8 5 % 9 0 % > 8 5 % ratio
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