Investor presentation Fourth quarter 2018 March - April 2019
2 Investor presentation fourth quarter 2018 Contents Financial Calendar Domestic Mail – 46 Parcels – 47 Highlights & guidance More on corporate.bpost.be/investors Radial – 48 4Q18 Highlights – 4 Additional sources of revenues – 49 02.05.2019 FY18 Highlights – 5 Costs – 50 New Business Unit structure – 6 (17:45 CET) Cash flow – 51 2018 restated in new BU structure – 7 Quarterly results 1Q19 Balance sheet – 52 Outlook 2019 – 8 08.05.2019 Current trading FY18 bpost at a glance EBITDA bridge – 54 Ordinary General Meeting of Shareholders Investment rationale – 10 Key financials – 55 Dividend policy – 11 Revenues – 56 15.05.2019 Overview – 12 Domestic Mail – 57 Dividend payment date Transformation – 13 Parcels – 58 Vision & strategy – 14 & 15 Additional sources of revenues – 59 07.08.2019 Management – 16 Costs – 60 Sustainability – 17 Cash flow – 61 (17:45 CET) Mail & Retail – 18-26 Quarterly results 2Q19 Parcels & Logistics Eur & Asia – 27-34 Additional Info Parcels & Logistics N. America – 35-41 2018 restated in new BU structure – 63-66 IFRS16 – 67-68 Current trading 4Q18 Relationship with State – 69 EBITDA bridge – 43 USO & SGEI – 70 Key financials – 44 European mail market – 71 Revenues – 45 Key contacts – 72 Disclaimer This presentation is based on information published by bpost in its Fourth Quarter 2018 Interim Financial Report and in its 2018 Annual Report, both made available on March, 19 th 2019 at 5.45pm CET and in its Capital Markets Day presentation of June, 21 st 2018 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
Highlights 4Q/FY18 Guidance 2019
4Q18 4 Highlights of 4Q18 Total operating income up 18.5% € 1,131.6m Driven by acquisitions, strong organic domestic and international parcels growth and • nearly stable domestic mail revenues Underlying Domestic Mail volume evolution -6.2% Impacted by continued e-substitution, rationalization and competitive advertising • market Continued strong parcels growth despite strikes impact; Radial in line with expectations +15.8% Domestic: double-digit organic volume growth driven by strong e-commerce growth • but impacted by strikes; price/mix effect of -3.3% fully mix related + € 117.0m Logistic Solutions: mainly driven by Radial (€ +111.6m) in line with expectations. • Good peak management, both in Belgium as in the US Favorable organic cost evolution - € 1.4m Total opex increase of € +121.4m driven by opex from acquisitions (€ +133.7m incl. • (organic opex decrease) Radial). € 206.4m Back-end loaded EBITDA generation as planned Proposed total dividend per share equal to last year as guided € 1.31 € 1.06 already paid in December 2018 and € 0.25 to be proposed at the Annual gross General Meeting in May 2019
FY18 5 Highlights FY18 – Results in line with expectations € million Topic Results Last outlook for 2018 Low end of the Group EBITDA FY18: € 571.1m (-4.5%, - € 26.9m) € 560-600m range Stable EBITDA Radial EBITDA FY18: € 25.7m (+ € 8.8m) contribution vs. 2017 (i.e. € 16.9m) Domestic Mail FY18: -5.8% (underlying volume) Up to -7% Parcels FY18: +23.3% (domestic volumes) Double digit Total gross dividend of € 1.31 per share proposed At least the same level as 2017 Dividend Interim dividend already paid: € 1.06 • Final dividend of € 0.25 (i.e. € 1.31) •
New business unit structure 6 New business unit structure - Reminder
New business unit structure 7 New business unit structure – 2018 key financials in € million 1 PaLo PaLo 2018 restated M&R Eurasia N. Am. Corp Eliminations Group External operating income 1,951.7 757.0 1,104.8 36.8 3,850.2 Internal operating income 159.6 35.3 9.6 358.2 (562.7) - Total operating income 2,111.3 792.3 1,114.4 395.0 (562.7) 3,850.2 Operating expenses 1,727.6 735.5 1,068.5 309.8 (562.3) 3,279.1 EBITDA 383.6 56.8 45.9 85.2 (0.4) 571.1 Margin (%) 18.2% 7.2% 4.1% 21.6% 14.8% Depreciation & Amortization 50.5 18.1 35.0 43.3 146.8 2 EBIT 333.2 38.7 10.9 41.9 (0.4) 424.3 Margin (%) 15.8% 4.9% 1.0% 10.6% 11.0% Average # FTEs and interims 22,214 3,087 9,093 1,715 36,109 Note: an Excel download of restated financials is available under the Q4 caption on the website: https://corporate.bpost.be/investors/results-reports-and-presentations/quarterly-results/2018 Details per segment per quarter in appendix 1 2 Excluding exceptional items, Corporate segment is expected to be EBIT neutral.
Outlook FY19 8 Outlook for 2019 Low single digit % decline in Mail & Retail total operating income • Underlying Domestic Mail volume decline up to -7% • Mail & Retail Average price increase of +4.4% in Domestic Mail • % EBIT margin between 11-13% • High single digit % growth in Parcels & Logistics Europe & Asia total • Parcels & Logistics operating income of which mid-teens for Parcels Belgium-Netherlands (BeNe) Europe & Asia % EBIT margin between 6%-8% • Low single digit % decline in Parcels & Logistics North America total • operating income mainly explained by the FY impact of the 2018 client Parcels & Logistics churn and repricing at Radial. On track for 2022 guidance as presented at North America the CMD. Break-even at EBIT level • Stable total operating income incl. proceeds from building sales • Group Normalized EBIT above € 300m 1 • Gross capex around € 150m • Dividend At least 85% of 2019 BGAAP net profit of bpost SA/NV • 1 Corporate EBIT is expected to be neutral
bpost at a glance
bpost at a glance 10 bpost offers a strong investment rationale bpost aims at being a responsible company, delivering a sustainable dividend to its shareholders What? We continue to transform the mail and proximity business in the home market to sustain solid cashflows We develop sustainable activities in the high growth e-commerce logistics & parcels business in our Be-Ne home market and key geographies in Europe and North America How? Multiple levers for transformation of the legacy business : natural attrition, alternative delivery model, stable and predictable regulation, network optimization,… Experienced management team with embedded financial discipline and a strong business transformation track record High growth in e-commerce logistics & parcels: aspired sizeable share of revenues by 2022 A solid balance sheet with single 'A' credit rating
bpost at a glance 11 We create value for shareholders Dividend Policy Annual dividend of at least 85% of BGAAP net profit (unconsolidated) Interim in December 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 2018) 1.31 1.31 1.31 1.29 1.26 1.13 0.25* 0,25 0,25 0.24 0,22 0,20 1,05 1,06 1,06 1,06 1,04 0,93 Final gross DPS (€) Interim gross DPS (€) 2013 2014 2015 2016 2017 2018 Pay-out 91% 85% 90% 85% 90% 100% ratio * Proposed final gross dividend per share to be approved by General Meeting of May 8, 2019
bpost at a glance 12 A diversified mail operator with a footprint in e-commerce logistics Revenues % of total Transactional mail € 772m 20% Advertising mail € 244m 6% Mail & € 3,850.2m 1 Retail revenues Press € 350m 9% € 1,952m 51% Proximity and convenience € 571.1m € 480m 12% retail network 14.8% EBITDA Value added services € 105m 3% € 424.3m Parcels & 11.0% Parcels BeNe € 339m 9% Logistics EBIT Europe & E-commerce logistics € 128m 3% Asia € 290.4m € 757m net profit Cross-border € 290m 8% 20% 36,109 Parcels & Logistics average E-commerce logistics € 1,018m 26% # FTE & interims North America International € 87m 2% € 1,105m 29% 2018 figures (normalized) 1 51% Mail & Retail, 20% Parcels & Logistics Europe & Asia, 29% Parcels & Logistics North America and 1% Corporate revenue
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