Fourth quarter 2023 results Analyst call

Chris Peeters, CEO Philippe Dartienne, CFO

March 1st, 2024

Investor presentation

Interim financial report 4Q23

Financial Calendar

21.03.2024 Annual report 2023

03.05.2024 (07:00 CET) Quarterly results 1Q24

08.05.2024 Ordinary General Meeting of Shareholders

Ex-dividend date Payment date

15.05.2024 17.05.2024

Disclaimer

This presentation is based on information published by bpost group in its Fourth Quarter 2023 Interim Financial Report, made available on March 1 st , 2024 at 07.00am CET on bpostgroup.com/investors. This information forms regulated information as defined in the Royal Decree of November 14th , 2007. The information in this document may include forwardlooking statements¹ , 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.

The joint statutory auditors, EY Bedrijfsrevisoren/Réviseurs d'Entreprises and PVMD Bedrijfsrevisoren/Réviseurs d'Entreprises have confirmed that their audit procedures, which have been substantially completed, have not revealed any material adjustments. The complete audit report related to the audit of the consolidated financial statements will be shown in the annual report 2023 that will be published in March 2024.

¹ as defined among others under the U.S. Private Securities Litigation Reform Act of 1995

Highlights of FY23 FY23

bpostgroup delivers annual results in line with both initial and reinstated guidance. Performance driven by parcel volume development, pricing levers and enhanced productivity, despite North American market headwinds and compliance reviews impacts

Group operating income

€ 4,272.2m (€ -125.3m)

Group adjusted EBIT

€ 248.5m (€ -30.0m) 5.8% EBIT margin

Capex € 154.7m

Dividend

€ 0.13 gross per share¹ (40% pay-out ratio)

Belgium incl. €-10m of repricing services to the State²

€ 183.1m (€ -15.2m) 8.1% EBIT margin

Total operating income at € 2,265.7m (+3.3%)³
- o underlying mail volume decline of -8.4% offset by positive price/mix impact
- o parcels volumes +6.3% and price/mix impact of +4.8%
Adj. OPEX increase (+4.2%)⁴ reflecting annual impact of 7 salary indexations and stable FTEs

E-Logistics Eurasia

€ 37.9m (€ +10.4m) 5.7% EBIT margin

Total operating income at € 668.3m (+8.8%)
- o continued expansion of Radial EU and Active Ants (+15.1%)
- o higher cross-border sales mainly reflecting growth from existing and new customers in Asia
Higher OPEX (+6.4%) from (i) higher transport costs in line with volume development and mix, (ii) higher salary costs

E-Logistics N. Am.

€ 65.2m (€ -21.7m) 4.5% EBIT margin

Total operating income at € 1,438.4m (-10.7% excl. FX), reflecting lower volumes at Radial and Landmark US (Amazon insourcing)
Lower OPEX (-11.3% excl. FX) from lower variable costs including continued strong labor management and productivity gains

Highlights of 4Q23

Successful peak execution and productivity gains across businesses drive resilience amid revenue pressures in North America. Strong Asian volumes mitigate soft market backdrop in Belgium and Eurasia.

Group operating income	Belgium incl. €-2.5m of repricing services to the State1	E-Logistics Eurasia	E-Logistics N. Am.
€ 1,217.2m (€ -84.4m)	€ 36.7m (€ -4.9m)	€ 13.3m (€ +7.8m)	€ 34.4m (€ -8.7m)
-6.5% vs. 4Q22	6.1% EBIT margin	7.1% EBIT margin	7.5% EBIT margin
	•	•	•
	Total operating income at	Total operating income at	Total operating income at
	€ 603.0m (+3.0%)	€ 187.5m (+8.2%)	€ 459.5m (-14.2% excl. FX),
	o	o	reflecting lower volumes at
	underlying mail volume	continued expansion of Radial	Radial and Landmark US
Group adjusted EBIT € 74.1m (€ -2.9m) 6.1% EBIT margin Operationally flat y/y when excl. repricing services to the State1	decline of -8.1% offset by positive price/mix impact o parcels volumes +3.4% and price/mix impact of +3.2% • OPEX increase (+3.5%) mainly driven by salary indexations	EU and Active Ants (+12.7%) o higher cross-border sales reflecting growth from existing and recent customer wins in Asia • Higher OPEX (+2.8%) from (i) higher transport costs in line with volume development and mix, (ii) lower salary costs	• Lower OPEX (-15.9% excl. FX) from lower variable costs including continued strong labor management and productivity gains during peak

4Q23

¹ See disclosure "Update on bpostgroup compliance reviews", dated 22 September 2023

Key financials 4Q23

€ million		Reported		Adjusted1
	4Q22	4Q23	4Q22	4Q23	D %
Total operating income	1,301.6	1,217.2	1,301.6	1,217.2	-6.5%
Operating expenses	1,158.5	1,063.6	1,155.9	1,063.6	-8.0%
EBITDA	143.2	153.6	145.7	153.6	5.4%
Depreciation & Amortization	72.2	82.7 1	68.8	79.6 1	15.7%
EBIT	71.0	70.9	77.0	74.1	-3.7%
Margin (%)	5.5%	5.8%	5.9%	6.1%
Financial result	14.8	-28.0 2	14.8	-28.0 2	-
Profit before tax	85.8	43.0	91.8	46.1	-49.8%
Income tax expense	8.0	10.5	8.8	11.6	30.9%
Net profit	77.8	32.4	83.0	34.6	-58.3%
FCF	287.5	110.4 3	241.1	75.9 3	-68.5%
Net Debt at Dec. 31	437.8	420.5 4	437.8	420.5 4	-3.9%
Capex	51.4	48.1	51.4	48.1	-6.5%
Average # FTEs and interims	42,469	39,374	42,469	39,374	-7.3%

Amortization and impairments of intangibles recognized during PPA are adjusted, leading to increase in EBIT (€ +3.2m) and income tax (€ +1.8m)

Decrease in financial results reflecting last year's (i) development of non -cash financial results related to IAS 19 employee benefits (one -off steep increase in discount rates LY), and (ii) reassessment of remaining shares of a subsidiary 13 Adjusted FCF excludes the cash

Radial receives on behalf of its customers for performing billing services
4 Including € 643.9m of lease liabilities

¹Unaudited figures

Parcel volume growth and beneficial Price Mix across mail and parcels

Belgium revenues, € million

Domestic Mail

Stable revenues from:

€ -25.1m volume (-8.1% underlying volume decline against -7.5% in 4Q22)
€ +24.7m price/mix impact

Parcels Belgium

Parcels Belgium revenues up € +8.9m (+6.6%):

• Parcels volume growth of +3.4% against high comps of 4Q22 and reflecting phasing out of Commercial Hunting Plan 2022

Negative volume trend from market slowdown in December

• Price/mix of +3.2%

Proximity and convenience retail network

Revenues up € +2.6m (+3.5%) mainly from indexation of Mgt. Contract

Value added services

Stable revenues from fines solution

2 4

¹ Domestic mail is the sum of Transactional, Advertising and Press

Strong domestic and inbound parcels, stable FTEs and productivity during peak mitigate inflation of payroll costs

€ million

Belgium	4Q22	4Q23	D %
Transactional	184.5	189.6	2.7%
Advertising	48.7	48.6	-0.2%
Press	94.6	89.2	-5.7%
Parcels Belgium	134.9	143.8	6.6%
Proximity and convenience retail network	73.6	76.2	3.5%
Value added services	33.5	33.5	-0.2%
Intersegment and other	15.6	22.2	42.1%
Total operating income	585.4	603.0	3.0%
Operating expenses	525.3	543.7	3.5%
EBITDA	60.1	59.3	-1.4%
Depreciation & Amortization	18.7	22.7	21.7%
Reported EBIT	41.4	36.6	-11.8%
Margin (%)	7.1%	6.1%
Adjusted EBIT	41.6	36.7	-11.8%
Margin (%)	7.1%	6.1%
Additional KPIs
Underlying Mail volume trend	-7.5%	-8.1%
Transactional	-6.7%	-9.2%
Advertising	-11.6%	-8.7%
Press - excl. Aldipress	-5.4%	-11.2%
Parcels volume trend	+1.5%	+3.4%

Key takeaways 4Q23

Higher intersegment revenues from inbound cross-border volumes handled in the domestic network, and € -2.5m impact (other revenue) of repricing the services to the State
Operating expenses (incl. adjusted D&A) increased by € 22.5m (+4.1%) mainly driven by higher salary cost per FTE (+4.0% from 3 salary indexations y/y) and stable FTEs despite higher parcel volumes

Strong cross-border revenue growth from recent customer wins and IMX, and continued momentum in e-com fulfilment 4Q23 – E-Log. Eurasia

E-Logistics Eurasia revenues, € million

E-commerce logistics

Revenues up € +4.3m (+5.7%):

Radial Europe and Active Ants revenue growth of +12.7% reflecting higher sales from new customer onboardings in existing sites, international expansion and upselling from existing customers
Lower volumes across all Dyna lines, only partially mitigated by price indexations

Cross-border

Revenues up € +9.4m (+10.3%) mainly from:

New customers and continued growth from recent customer wins in Asia
Growth at IMX; partly offset by
Continued adverse UK market conditions

Improved profitability fueled by favorable mix at cross-border and productivity gains 4Q23 – E-Log. Eurasia

€ million E-Logistics Eurasia 4Q22 4Q23 D % E-commerce logistics 75.1 79.4 5.7% Cross-border 91.2 100.6 10.3% Intersegment and other 7.0 7.5 7.0% Total operating income 173.3 187.5 8.2% Operating expenses 160.7 165.2 2.8% EBITDA 12.6 22.3 76.9% Depreciation & Amortization 8.2 9.9 21.1% Reported EBIT 4.4 12.4 179.8% Margin (%) 2.6% 6.6% Adjusted EBIT 5.4 13.3 144.0% Margin (%) 3.1% 7.1%

Key takeaways 4Q23

Total operating income up € +14.2m (+8.2%)
Operating expenses (incl. adjusted D&A) increased by € 6.4m (+3.8%), reflecting:
- ‐ higher volume driven transport costs with favorable mix tied to volumes with destination Belgium
- ‐ lower salary costs, with inflationary pressures offset by lower FTEs and improved automation and productivity

Revenue pressure in a North American market that remains difficult

E-Logistics N. America revenues, € million

E-commerce logistics

Revenues down € -105.7m (-18.8% or -14.6% at constant exchange rate)

Lower revenues at Radial (-16.5% excl. FX) resulting from:

lower sales from existing customers, and
contribution of new customers partially mitigating revenue churn from terminated contracts announced in 2022 and 2023

Lower revenues at Landmark US reflecting general competitive pressure and Amazon's insourcing

U.S. domestic market trend

4Q23 – E-Log. N. Am.

Resource alignment and productivity gains in all businesses protect margins in challenging market conditions

€ million
E-Logistics North America			4Q22	4Q23	D %
E-commerce logistics			561.2	455.5	-18.8%
Intersegment and other			1.9	4.0	112.4%
Total operating income			563.1	459.5	-18.4%
Operating expenses			498.9	398.8	-20.1%
EBITDA			64.2	60.7	-5.5%
Depreciation & Amortization			25.9	28.5	9.9%
Reported EBIT			38.3	32.2	-15.8%
Margin (%)			6.8%	7.0%
Adjusted EBIT			43.1	34.4	-20.2%	at Radial
Margin (%)			7.7%	7.5%
Additional KPIs, adjusted
Radial North America revenue, \$m			479.6	400.5	-16.5%
Radial North America EBITDA, \$m			51.2	46.7	-8.8%
Radial North America EBIT, \$m			31.9	23.3	-26.9%
Radial North America adj. EBITDA margin1 evolution FY19 –			FY23	FY23
FY19 3,1%	7,4%	8,1%	9,6%	10,2%		expansion

Key takeaways 4Q23

Total operating income down € -103.6m (-18.4%, or -14.2% excl. FX)
Operating expenses (incl. adjusted D&A) down € -94.8m (-18.2% or -14.0% excl. FX) reflecting:
- ‐ lower variable opex in line with revenue development
- ‐ continued strong variable labor management and productivity gains, resulting in improved (+5% y/y) variable contribution margin at Radial
Preserved EBIT margin amid adverse market conditions and revenue pressures, driven by enhanced efficiency across all subsidiaries
Radial's structural efficiency gains and improved peak execution translating into 5 consecutive years of steady EBITDA margin

¹ excluding one-offs as disclosed in quarterly results presentations: € -9.2m EBIT impact from ransomware attack in 4Q20; € +6.6m from cyber insurance recovery in 3Q/4Q21; € +5.2m EBIT uplift from a one-time concession from a vendor; € -7.1m provision reflecting dispute with terminated customer

Continued FTE reduction mitigates the cost pressures

€ million

Corporate	4Q22	4Q23	D %
External operating income	4.4	1.0	-76.3%
Intersegment and other	98.8	112.2	13.6%
Total operating income	103.2	113.3	9.7%
Operating expenses	97.0	101.9	5.1%
EBITDA	6.3	11.4	82.0%
Depreciation & Amortization	19.4	21.6	11.3%
Reported EBIT	-13.2	-10.2
Margin (%)	-12.8%	-9.0%
Adjusted EBIT	-13.2	-10.2
Margin (%)	-12.8%	-9.0%

Key takeaways 4Q23

External revenues down € -3.3m mainly from building sales
Lower net operating expenses (€ -6.3m, incl. D&A) after intersegment, reflecting:
- ‐ inflationary pressure on payroll costs (+4.0% from 3 salary indexations) mitigated by continued efforts on overhead reduction (-4.4% FTEs),
- ‐ actuarial gains on IAS19 Employee Benefits from fewer salary indexations than initially expected; partially offset by
- ‐ compliance reviews related costs and consultancy costs tied to group transformation
Adjusted EBIT up € +2.9m at € -10.2m

Net cash outflow reflects working capital returning to normal seasonality and bank loan repayment

€ million - Adjusted

	4Q22	4Q23	D
Cash flow from operating activities before Δ in WC and provisions	140.6	122.3	1 -18.2
Change in working capital and provisions	147.1	3.4	-143.7 2
Cash flow from operating activities	287.7	125.8	-161.9
Cash flow from investing activities	-46.6	-49.8	-3.3 3
Free cash flow	241.1	75.9	-165.2
Cash flow from financing activities	-47.5	-203.9	4 -156.4
Net cash movement	193.6	-128.0	-321.6
Capex	51.4	48.1	-3.3

Adjusted vs. Reported Cash Flow Statement in appendix

CF from operating activities

€ +7.9 higher EBITDA and higher corporate income taxes prepayment (€ -18.7m)
€ -143.7m variation in working capital evolution and provisions mainly from:
- last year' shift in payment schedule of SGEI compensation (€ +136.0m in 4Q22, € +40.4m in 4Q23)
- deferral of 4Q22 payments of withholding tax on payroll (€ 30.6m), a measure granted by the Belgian government in the context of the energy crisis

CF from investing activities 3

€ -5.0m lower proceeds from building sales in 4Q23
CAPEX of € 48.1m in 4Q23 (€ -3.3m y/y) mainly spent on international e-commerce logistics and on domestic fleet, operational infrastructure and parcels capacity

CF from financing activities

Mainly driven by (i) repayment of \$ 185m Term Loan maturing on 29 Dec. 2023, and (ii) stable payments related to lease liabilities and interests on borrowings

Initial observations underpin the need for a large-scale transformation of the company in order to address the challenges posed by managing a declining historic business which is currently insufficiently compensated by recent diversification efforts.

Ambition to become:

a regional leader in the parcel-size logistics market
- in Belgium leading the B2C and parcel-sized B2B logistics, and
- internationally as a leading Third-Party Logistics (3PL) player,
focused on defendable high value market segments
while managing the historical business for profit

This ambition will be further developed in the coming months. The vision for bpostgroup and the strategy to be pursued will be validated with the Board of Directors in the coming months and communicated by year-end.

Selected key strategic initiatives have been activated in the Management meantime

Management continues to execute on existing priorities and has also already activated selected key strategic initiatives in light of the vision that is emerging for the group.

Group

Portfolio restructuring, including M&A ambitions, to reallocate resources towards logistics activities of higher value and enabling higher synergies
Complete and reinforce bpostgroup leadership team (incl. digital and commercial roles)
Implement a leadership model across the group to support the transformation agenda

Belgium

Develop commercial offers for future press distribution
Clarify the future operating model (network design, organizational and social models) in view of latest volume projections
Defend mail through registered mail enhanced experience
Develop PUDO and parcel lockers strategy
Pilot the B2B parcel-logistic market
Develop quality management program

E-Logistics Eurasia and North America

Continue topline growth for Radial and Active Ants in Europe
Radial US: differentiate positioning and offering (click-to-door) with a focus on mid-sized growing brands, to mitigate overcapacity in the market
Cross border: pursue activities expansion by developing new lanes and building strategic partnerships

Financial outlook 2024 –Underlying parameters

Outlook FY24

Group EBIT guidance pending operational and financial outcomes of ongoing commercial discussions with involved press stakeholders

Belgium

Slightly higher total operating

income, excl. press revenues¹ , notably driven by

Mail (excl. Press): volume decline of 6-8% mitigated by 4-5% price / mix
Parcel: high single digit % volume growth and low single digit % price/mix

6-8% adjusted EBIT margin prior to any Press impact. Margin range to be confirmed once further clarity is obtained on future press distribution

Higher costs due to salary indexation and cost inflation, partly offset by continued ambition in productivity gains and cost reduction initiatives

E-Logistics Eurasia

Low double digit % growth in total operating income driven by

Continued growth of Radial Europe and Active Ants
Continued growth of Cross-Border Commercial activities incl. development of new lanes

5-7% adjusted EBIT margin

Strong productivity gains at Radial Europe and Active Ants mitigating negative mix effect at Cross-Border, higher FTEs and cost inflation

E-Logistics N. Am.

High single digit % decline in total operating income² reflecting

Radial US net volume loss from client churn and client concessions in the context of adverse market conditions
New Cross-Border lanes and customer wins at Landmark Global

4-6% adjusted EBIT margin

Topline pressure mitigated by continued VCM rate improvements and substantial efforts to further reduce SG&A and other costs

Group

Stable total operating income1,2

Group adj. EBIT guidance pending outcome of ongoing commercial discussions with press stakeholders

Including EBIT decline at Corporate from discontinuation of building sales and higher opex from compliance and strategic initiatives

Gross capex around € 180m

¹ Press revenues of € 349.6m in FY23, of which € 255.1m tied to Press concession (incl. € 163.4 from Belgian State) and € 94.5m from AMP and Aldipress. On December 12, 2023 the Belgian State decided to withdraw the future concession and to extend the current concession until June 30, 2024 with a budget of € 75.0m.

² assuming EUR/USD at 1.09 for 2024

FY23

Key financials FY23

€ million		Reported		Adjusted1
	FY22	FY23	FY22	FY23	D %
Total operating income	4,397.5	4,272.2	4,397.5	4,272.2	-2.9%
Operating expenses	3,844.9	3,794.4	3,842.4	3,719.4	-3.2%
EBITDA	552.6	477.8	555.1	552.8	-0.4%
Depreciation & Amortization	289.3	317.0 1	276.6	304.3 1	10.0%
EBIT	263.3	160.8	278.5	248.5	-10.8%
Margin (%)	6.0%	3.8%	6.3%	5.8%
Financial result	30.3	2 -41.6	30.3	2 -41.6	-
Profit before tax	292.5	119.2	308.9	206.9	-33.0%
Income tax expense	60.8	54.5	63.9	59.0	-7.7%
Net profit	231.7	64.8	245.0	147.9	-39.6%
FCF	403.2	223.8 3	397.4	220.7 3	-44.5%
Net Debt at Dec. 31	437.8	420.5 4	437.8	420.5 4	-3.9%
Capex	164.4	154.7	164.4	154.7	-5.9%
Average # FTEs and interims	39,285	37,782	39,285	37,782	-3.8%

FY23

Amortization and impairments of intangibles recognized during PPA are adjusted, leading to increase in EBIT (€ +12.7m) and income tax (€ +4.5m) 1
Decrease in financial results reflecting last year's development of non -cash financial results related to IAS 19 employee benefits (one -off steep increase in discount rates LY), whereas slight decrease in 2023 leads to y/y impact € -65.6m 23 Adjusted FCF excludes the cash
Radial receives on behalf of its customers for performing billing services
4 Including € 643.9m of lease liabilities

Topline driven by strong parcel volumes and Mail pricing offsetting volume decline