Interim financial report third quarter 2014 Investor presentation. Koen Van Gerven, CEO Pierre Winand, CFO

Transcription

1 Interim financial report third quarter 204 Investor presentation Koen Van Gerven, CEO Pierre Winand, CFO Brussels November, 4th 204

2 Investor presentation - Interim financial report 3Q4 2 Financial Calendar More on (7:45 CET) Results first 0 months Ex-dividend date (interim dividend) Dividend payment date (7:45 CET) Annual results FY (7:45 CET) Quarterly results Q Ordinary General Meeting of Shareholders Ex-dividend date Payment date of the dividend (7:45 CET) Quarterly results 2Q (7:45 CET) Quarterly results 3Q (7:45 CET) Results first 0 months 205 Disclaimer This presentation is based on information published by bpost in its Third Quarter 204 Interim Financial Report, made available on November, 3 rd at 5.45pm CET on This information forms regulated information as defined in the Royal Decree of 4 November The information in this document may include forward-looking statements, 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. as defined among others under the U.S. Private Securities Litigation Reform Act of 995

3 3 Highlights of 3Q4 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% (-4.9% in H4) helped in part by one-off mailings by some customers but still impacted by trends already observed in e-substitution and advertising mail sales, resulting in -4.7% year-to-date. Reported decline for the quarter stood at -4.6% (the underlying figure eliminates the impact of one less working day in the quarter). Domestic parcels volume up 0.3% (+5.2% in H4) helped by strong performance of e-commerce customers, first signs of recovery in C2C and some one-off actions. International parcels grew solidly by 0.6m, bringing total organic parcels growth to 3m. Slight organic growth in Additional sources of revenues of.4m. Costs (excluding transport) down 7.2m organically compared to 3Q3. Underlying FTE reduction of 840, in line with expectations. EBITDA margin stable versus 3Q3 at 04.4m or 8.3%, in line with expectations, impacted by non-operational items such as lower building sales and restructuring charges. Net profit of bpost S.A./N.V. under BGAAP for the first 9 months at 28.m.

4 4 3Q4 EBITDA in line with outlook. Lower gains on building sales compared to 3Q3 when one sizeable property was sold Normalized, million +0.2m +0.4m / +0.4% EBITDA 3Q3 Scope Domestic Mail Parcels Additional sources of revenues Corporate Costs EBITDA 3Q4 00% acquisition of Gout, BEurope, Ecom and Starbase by Landmark Global Inc. Total operating income (revenues) Of which building sales -7.7m (last year included one sizeable property for.4m in 3Q3) Normalized figures are neither audited nor have been subject to a limited review

5 5 Scope elements affecting results: small bolt-on acquisitions relating to international parcels activities Topic Description High-level impact Changes in scope Acquisition of Gout International BV and BEurope Acquisition of Ecom In Jan. 204, Landmark Global Inc. acquired 00% of the shares of Gout and BEurope both based in the Netherlands Both companies offer import services for customers looking to sell their products in Europe. This includes customs clearance services, warehousing, pick & pack and last mile delivery Landmark Global Inc. acquired 00% of the shares of Ecom Ltd in February 204 Import services for goods in UK Additional operating income of.7m and additional operating expenses of.5m in 3Q4 Additional operating income of 0.5m and additional operating expenses of 0.5m in 3Q4 Acquisition of Starbase Landmark Global Inc. acquired 00% of the shares of Starbase in February 204 (based in US) Import services for goods in the US Additional operating income of 0.3m and additional operating expenses of 0.3m in 3Q4

6 6 Summary of key financials 3Q4 million Reported Normalized 3Q3 3Q4 3Q3 3Q4 % change Total operating income (revenues) % Operating expenses % EBITDA % Margin (%) 8.3% 8.3% 8.3% 8.3% EBIT % Margin (%) 4.4% 4.6% 4.4% 4.6% Profit before tax % Income tax expense Net profit % FCF (2.5) (38.5) (2.5) (38.5) - bpost S.A./N.V. net profit (BGAAP) % Net Debt/ (Net cash), at 30 September (535.4) (645.9) (535.4) (645.9) 20.6% Normalized figures are neither audited nor have been subject to a limited review

7 7 Total operating income (revenues) of 569.2m in 3Q4, stable on an organic basis. 3Q3 revenues included disposal proceeds of.4m for one large property. Normalized, million 3Q3 Scope² Organic 3Q4 % Org Domestic mail Parcels Additional sources of revenues Transactional mail % Advertising mail % Press % Domestic parcels³ % International parcels % Special logistics % International mail % Valued added services % Banking and financial % Others % Corporate % TOTAL % Normalized figures are neither audited nor have been subject to a limited review ² Scope including Gout International BV, Beurope, Ecom and Starbase ³ Defined as domestic and Belgian in- and outbound

8 8 Better Domestic Mail underlying volume decline at -4.3% helped by some one-off actions from customers and no new aggressive e-substitution measures. Normalized total operating income (revenues), million 3Q Working day impact Volume business working day less (affecting transactional mail) Underlying volume decline at -4.3%. Transactional mail remained affected by e-substitution (although we did not see additional customers implementing aggressive measures) and cost reduction measures by customers. Some oneoff mailings impacted positively the volume evolution. Advertising mail remained weak. Reported Underlying² Q4 2Q4 3Q4 YTD4 Q4 2Q4 3Q4 YTD4 Transactional mail -5.3% -5.2% -5.% -5.2% -5.3% -5.9% -4.7% -5.3% Advertising mail -2.7% 2.0% -3.7% -.3% -2.7% -3.6% -3.7% -3.3% Price/Mix 7.3 Press -3.2% -2.9% -2.5% -2.9% -3.2% -2.9% -2.5% -2.9% Domestic Mail -4.6% -3.6% -4.6% -4.2% -4.6% -5.% -4.3% -4.7% Price increase in line with policy. 3Q Normalized figures are neither audited nor have been subject to a limited review 2 2Q4 was impacted by elections. In 3Q4 we have business working day less and in 4Q4 we will have business working day more compared to 203.

9 9 Continued growth of international parcels. Strong volume performance in domestic parcels. Normalized total operating income (revenues), million 3Q Scope.9 3Q3 before organic evolution Domestic Parcels Volume increase in 3Q4 of +0.3%, showing improvement vs. H4. Volume growth as the result of strong performance of e-commerce, first signs of recovery in the C2C parcels and a one-off action of a customer (0.6% of the 0.3% growth). Slighty positive price/mix effect. International Parcels 0.6 Continued growth on lanes from US ( +5.7m) with higher growth than 2Q4; from China ( +2.2m) in line with 2Q4 growth and shipments to China still growing slightly ( +.4m). Special Logistics -.0 Turnaround of activities implemented: revenues decreased as a result of discontinuing the activities in distribution & warehousing. 3Q Normalized figures are neither audited nor have been subject to a limited review 2 Defined as domestic and Belgian in- and outbound

10 0 International mail & VAS performing well, partly offset by Banking & Financial. Normalized total operating income (revenues), million 3Q Scope 0.6 3Q3 before organic evolution 46.9 International Mail 3.0 Good international mail performance VAS 0.6 Contribution of solutions thanks to European license plates, Car Registration Cards and digital printing of magazines. Banking & Financial -.3 Mainly driven by phasing ( -0.6m) and lower volumes ( -0.3m) of financial transactions managed on behalf of the Belgian State. Others -0.9 Lower sales of physical products sold in post offices. 3Q Normalized figures are neither audited nor have been subject to a limited review

11 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, Normalized, million 3Q Scope 3Q3 before organic evolution Payroll & Interim Transport costs Reported FTE reduction of,092 FTE ( -3.3m) However, delays in holiday taking impacted costs ( +2.9m provisioned). The underlying reduction of FTE is therefore estimated at 840 FTE. Mix impact of +0.2m due to lesser use of students and higher use of interims. Price effect negative at +3.3m, mainly due to merit increases, other premiums and CLA impact ( +2.0m as announced). Other effects relating to restructuring charges ( +3.m) and employee benefits ( +.8m). million Q4 2Q4 3Q4 Volume (#FTE, underlying) -,037 -, Volume Mix effect Price effect Other Restructuring 3. Total Other SG&A -3.2 Other costs -4.8 Increase in transport costs mainly volume driven (increase in international activities), including one-offs for +.5m. Decrease in rental costs (fleet), other goods, energy delivery and publicity costs, partly compensated by the increase in maintenance & repairs (fleet and facilities). 3Q Mainly decrease in other operating charges (impacted by oneoff costs in September 203 related to real estate and local taxes), favourable impact of movements on provisions and decrease in material costs. Normalized figures are neither audited nor have been subject to a limited review

12 2 Operating free cash flow of -38.5m in 3Q4 million 3Q3 3Q4 Delta Cash flow from operating activities Cash flow from investing activities Operating free cash flow Financing activities Net cash movement Capex Improved results of operating activities ( +4.2m) Negative evolution of the working capital vs. 3Q3 ( -24.2m) mainly due to the announced reversal of the positive phasing effect recorded in Q4 relating to terminal dues Higher capital expenditure in 3Q4 ( -3.7m) related to Vision 2020 and in particular the extensions of the sorting centres and the installation of new sorting machines for mixed/large format mail Lower proceeds sale of buildings ( -4.5m) mainly due to LY sale of a large property Operating free cash flow = cash flow from operating activities + cash flow from investing activities, excludes the impact of the 203 repayment of prior compensation, following the 202 EU ruling and deposits received from 3rd parties.

13 3 Strong balance sheet structure million Assets Equity and liabilities Cash & cash equivalents, , Interest-bearing loans & borrowings Provisions, , Other assets Investments in associates Trade & other payables Trade & other receivables Inventories Employee benefits PPE & intangible assets Total equity Dec 3, 203 Sep 30, 204 Dec 3, 203 Sep 30, 204

14 4 Based on bpost SA/NV year to date results, shareholder remuneration should be higher than last year Dividend Policy Dividends Dividend policy: pay-out of minimum 85% of BGAAP reported net profit (unconsolidated) Annual dividend payment Interim in December of financial year based on 0-month results Final in May of year following financial year The dividend payment is constrained by the net results of a given year + distributable reserves Distributable reserves are being built gradually as from 203 First nine months results of bpost SA/NV (BGAAP) are already at the level reached after 0 months in 203 (corrected for the exceptional tax charge). As a result, the Board of Directors expects to declare a higher dividend based on 204 results. million bpost SA/NV - results first 9 months (BGAAP) Exceptional tax charge 7.6 NA Total bpost SA/NV - results October (BGAAP) 25.2 Results of first 0 months corrected for exceptional tax charge 28.3 Other shareholders returns Exceptional dividends and share buy-backs are constrained by the level of distributable reserves under BGAAP ( 36.7m end 203 of which 4.5m untaxed). Distributable reserves are currently being built primarily to safeguard the dividend level if bpost were to incur exceptional costs. Capital reduction/repayment is constrained by the level of capital of bpost SA/NV ( 363.9m end of 203). There is no mechanism under Belgian corporate law to create additional distributable reserves or capital in the specific circumstances of bpost. Given bpost s net cash position and significant borrowing capacity, cash is not a constraint to shareholders returns even taking into account capex and potential acquisitions.

15 5 Outlook for 204 We reiterate our confidence to be able to report operating results (EBITDA and EBIT) in line with last year for the 4Q4 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. Revenues should be stable or slightly above last year. Unchanged underlying volume trends in Domestic Mail partly helped by a better 3Q4 make us return to our initial volume decline outlook of around 5% for the full year. In domestic parcels, we remain confident that full year growth should be above the one achieved in the first half. International parcels growth is expected to be in line with the first half of the year for routes into Europe. Traffic to China related to milk powder is expected to decline. Taking the phasing of the productivity improvement initiatives into account, the FTE reduction for 204 is still expected to be at the low end of the reference range of 800 to,200 FTE/year. We do not anticipate any material exceptional cash outflows for the remainder of the year which means that cash generation should follow the normal seasonality. Net capex is expected to be below 90m.

16 Key contacts 6 Pierre Winand CFO, Service Operations and ICT pierre.winand@bpost.be Direct: + 32 (0) Mobile: +32 (0) Address: bpost, Centre Monnaie, 000 Brussels, Belgium Paul Vanwambeke Director Investor Relations paul.vanwambeke@bpost.be Direct: + 32 (0) Mobile: +32 (0) Address: bpost, Centre Monnaie, 000 Brussels, Belgium Saskia Dheedene Manager Investor Relations saskia.dheedene@bpost.be Direct: + 32 (0) Mobile: +32 (0) Address: bpost, Centre Monnaie, 000 Brussels, Belgium