AGM Information • May 10, 2018
AGM Information
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bpost Limited liability company under public law Centre Monnaie/Muntcentrum, 1000 Brussels Enterprise no. 0214.596.464 (RLE Brussels) ("bpost SA/NV" or the "Company")
The ordinary general meeting of shareholders (the "Meeting") opens at 10 AM under the chairmanship of Mr. François Cornelis, chairperson of the Board of Directors.
Mr. Dirk Tirez is named secretary of the Meeting.
The chairperson proposes not to appoint a scrutineer given that an electronic voting system is used. which is provided by LUMI.
The chairperson and the secretary constitute the executive of the Meeting.
The chairperson sees that the Meeting approves the composition of the executive.
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This agenda item does not require a Shareholders' Meeting resolution.
$2.$ Statutory Auditors Report on the financial year closed on December 31, 2017.
This agenda item does not require a Shareholders' Meeting resolution.
This agenda item does not require a Shareholders' Meeting resolution.
Proposed resolution: the Meeting resolves to approve bpost SA/NV's statutory annual accounts relating to the financial year closed on December 31, 2017, the allocation of the profits reflected therein and the distribution of a gross dividend of EUR 1.31 per share. After deduction of the interim dividend of EUR 1.06 gross paid on December 11, 2017, the balance of the dividend will amount to EUR 0.25 gross, payable as of May 17, 2018.
Proposed resolution: the Meeting resolves to approve the remuneration report for the financial year closed on December 31, 2017.
Proposed resolution: the Meeting resolves to grant discharge to the Directors for the exercise of their mandate during the financial year closed on December 31, 2017.
Proposed resolution: the Meeting resolves to grant discharge to the Statutory Auditors for the exercise of their mandate during the financial year closed on December 31, 2017.
Mr. Luc Lallemand, Mr. Laurent Levaux and Mrs. Caroline Ven were appointed by the Belgian State by Royal Decree following a deliberation in the Council of Ministers of February 2, 2012. Their mandate expired on January 16, 2018. In the interest of bpost, in order to ensure the continuity of the Board of Directors of bpost, and in accordance with company law rules, they continued to carry out their functions until this Shareholders' Meeting.
The Belgian State requested bpost to postpone the appointment of 3 directors to be proposed by the Belgian State in accordance with its nomination right under Article 21, §2 of the Articles of Association
As from this Shareholders' Meeting, the mandate of Mr. Ray Stewart and of Mr. Michael Stone will expire. Upon recommendation of the Remuneration and Nomination Committee, the Board of Directors proposes to renew the mandate of (i) Mr. Ray Stewart as independent director for a term of 4 years and (ii) Mr. Michael Stone as independent director for a term of 4 years.
The information available to the Company shows that Mr. Ray Stewart and Mr. Michael Stone still meet the independence criteria stipulated by Article 526ter of the Belgian Companies Code and the applicable corporate governance rules.
The curriculum vitae and, where applicable, other information on the proposed Board members are available on bpost's website: http://corporate.bpost.be/investors/shareholdersmeetings/2018.
The mandate of Ernst & Young Bedrijfsrevisoren - Réviseurs d'Entreprises and of PVMD Bedrijfsrevisoren – Réviseurs d'Entreprises expires at this Shareholders' Meeting.
Proposed resolution: the Meeting reappoints (i) Ernst & Young Bedrijfsrevisoren - Réviseurs d'Entreprises SC SCRL/BC CVBA (0446.334.711), with registered seat at De Kleetlaan 2. 1831 Diegem, and (ii) PVMD Bedrijfsrevisoren - Réviseurs d'Entreprises SC SCRL/BC CVBA (0471.089.804), with registered seat at Tweekerkenstraat 44, 1000 Brussel, as Statutory Auditors for a renewable three-year term ending after the Ordinary General Meeting of 2021.
Ernst & Young Bedrijfsrevisoren - Réviseurs d'Entreprises SC SCRL/BC CVBA has appointed Mr. Romuald Bilem as its permanent representative.
PVMD Bedrijfsrevisoren - Réviseurs d'Entreprises SC SCRL/BC CVBA has appointed Mrs. Caroline Baert as its permanent representative.
The Meeting resolves that the aggregate remuneration of both Statutory Auditors amounts to EUR 285,000.00 per year.
Proposed resolution: the Meeting resolves, in accordance with Article 556 of the Companies Code, to approve and, to the extent required, ratify, the provision 8.2 (Change of control) of the Revolving Facility Agreement dated 11 October 2017 between bpost SA/NV and Belfius Bank SA/NV, BNP Paribas Fortis SA/NV, ING Belgium SA/NV, KBC Bank SA/NV ("Revolving Facility Agreement") as well as any other provision of the Revolving Facility Agreement that may result in an early termination of the Revolving Facility Agreement in the event of a change of control of the borrower, bpost.
Pursuant to article 8.2 of the Revolving Facility Agreement, "control" means the power (whether through the ownership of voting capital, by contract or otherwise) to exercise a decisive influence on the appointment of the majority of the members of the board of directors or managers of that person or on the orientation of the management of that person. and the existence of "control" will be determined in accordance with Articles 5 et seq. of the Companies Code.
Article 8.2 of the Revolving Facility Agreement provides that in case a person or group of persons acting in concert gains control of bpost, (i) a Lender shall not be obliged to fund a Loan (except for a rollover loan) and (ii), upon request of a Lender, this may also lead to the cancellation of the Commitment of that Lender and the declaration of the participation of that Lender in all outstanding Loans, together with accrued interest, and all other amounts accrued under the Finance Documents (including any Ancillary Outstandings) immediately due and payable, whereupon the Commitment of that Lender will be cancelled and all such outstanding Loans and amounts will become immediately due and payable.
The Meeting resolves to grant a special proxy to Mr. Dirk Tirez, Mr. Francois Soenen and Mrs. Hélène Mespouille, acting alone and with power of substitution, to fulfill all formalities required under Article 556 of the Companies Code.
In accordance with Article 533, §2 of the Company Code ("BCC") and Article 37 of the Articles of Association, the convening notices and the agenda were circulated and published in due time.
This convocation was made by announcements on April 6, 2018 in:
A press release was sent to Belga. It was also published on the Company's website and spread in the market through Euronext and Euroclear.
The convening notices were also sent per letter to registered shareholders and the Statutory Auditors on April 5, 2018. The members of the Board of Directors renounced the formalities of convocation.
Moreover, any shareholder, upon presentation of his instrument or a certificate, could obtain a copy of the reports and annual accounts mentioned in the agenda of the Meeting free of charge at the registered office of the Company.
In accordance with Article 533bis, §2 BCC, all documents mentioned in the convening notice were made available to the shareholders on the Company's website on April 6, 2018.
A copy of the newspapers and online publications of the convening notice and the convening letter, together with copies of the reports and annual accounts mentioned in the agenda of the Meeting, were made available with the executive and were attached to these minutes.
In accordance with Article 36, §3 of the Law of March 21, 1991 reforming certain economic stateowned companies, the economic and financial information was given to the Joint Committee held
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on April 19, 2018. No objection was made. An extract of the minutes was attached to the file and made available to the executive.
The shareholders present or represented completed the admission formalities provided for by Article 536 of the Company Code and Article 38 of the Articles of Association in order to participate to this Meeting.
The shareholders present or represented were recorded on the attendance list, which is attached to the minutes of this Meeting. The attendance list is executed by the present or represented shareholders before the start of the Meeting, in accordance with Article 38, §4 of the Articles of Association. The proxies and the forms to vote by correspondence are also attached to the minutes in accordance with the applicable legal provisions.
The attendance list attested that the shareholders present or represented, represented 139.298.058 shares, each with a voting right, on a total of 200,000,944 shares issued by the Company.
The following directors are present and waive the convening formalities and -deadlines:
The following auditors are present and waive the convening formalities and -deadlines:
Consequently, this Meeting is validly constituted. Bearing in mind that no special quorum is required to deliberate upon the points on the agenda, the Meeting is able to validly deliberate on the points of the agenda. Since no item on the agenda requires a qualified majority, the required majorities will in principle be calculated on the basis of 139.298.058 shares.
After listening to the speech of Mr. Koen Van Gerven, CEO and director, and Mr. Henri de Romrée, Chief Financial Officer ("CFO"), the presentations of which are attached to these minutes, the Meeting acknowledges the agenda.
The chairperson refers to the speech of Mr. Koen van Gerven, CEO and director, and Mr. Henri de Romrée, CFO.
The Meeting excuses the chairperson from reading the management report of the Board of Directors.
The management report of the Board of Directors on the financial year closed on December 31, 2017 has been made available to the shareholders and was sent by mail to the registered shareholders so that they could take note of the report prior to this Meeting.
The Meeting excuses the chairperson from reading the report of the Statutory Auditors.
The report of the Statutory Auditors on the financial year closed December 31, 2017 had been made available to the shareholders and was sent by post to the registered shareholders so that they could take note of the report prior to this Meeting.
The chairperson refers to the presentation of the CFO, who summarized the Company's performances during 2017 and the consolidated results at bpost Group level.
The Meeting excuses the chairperson from reading the management report of the Board of Directors and the report of the Statutory Auditors on the consolidated annual accounts of the Company per December 31, 2017.
The chairperson refers to the presentation of the CFO, who, in the course of his presentation, provided more details on the results for the financial year closed on December 31, 2017 as well as the proposed allocation of the result with regard to the Company's dividend policy.
The chairperson, as chairperson of the Remuneration and Nomination Committee, briefly presents the remuneration report drawn up by the Company in accordance with the applicable legal provisions and which was unanimously approved by the Board of Directors, upon proposal of the Remuneration and Nomination Committee.
The report explains in detail the remuneration principles and amounts applicable to the members of the Board of Directors, the CEO and the other members of the Group Executive Committee.
The objective of the remuneration policy is to propose a fair remuneration that is competitive on the Belgian reference market. To that effect, a comparison of the various elements of remuneration is regularly carried out on the median segment of the reference market which is composed of companies comparable to the Company. In addition, in order to promote the Company's profitable, sustainable growth, the performance of the CEO and of the members of the Group Executive Committee is rewarded both collectively and individually.
The chairperson specifies that the remuneration package of the CEO and the members of the Group Executive Committee is composed of (i) a base remuneration, (ii) a variable remuneration, (iii) a pension contribution and (iv) various other benefits. The variable remuneration system is a percentage of the base remuneration and aims to reinforce the performance-based managerial culture. The base amount of the variable remuneration actually allocated varies depending on (i) the corporate objectives and (ii) individual targets:
The chairperson presents to the Meeting the proposal to grant discharge to the members of the Board of Directors for the exercise of their mandate during the financial year closed on December 31, 2017.
The chairperson presents to the Meeting the proposal to grant discharge to the Statutory Auditors for the exercise of their mandate during the financial year closed on December 31, 2017.
The mandates of Mr. Luc Lallemand, Mr. Laurent Levaux and Mrs. Caroline Ven expired on January 16, 2018. In the interest of bpost, in order to ensure the continuity of the Board of Directors of bpost, and in accordance with company law rules, they continued to carry out their functions until this Shareholders' Meeting.
The Belgian State requested bpost to postpone the appointment of 3 Directors to be proposed in accordance with its nomination right under Article 21, §2 of the Articles of Association. Consequently, Mr. Luc Lallemand, Mr. Laurent Levaux and Mrs. Caroline Ven will not be renewed for the time being.
In addition, as from this Shareholders' Meeting, the mandates of Mr. Ray Stewart and of Mr. Michael Stone, as independent directors, also expire.
Upon recommendation of the Remuneration and Nomination Committee, the Board of Directors proposes to renew the mandates of Mr. Ray Stewart of Mr. Michael Stone as independent directors for a term of 4 years.
The information available to the Company shows that Mr. Ray Stewart and Mr. Michael Stone still meet the independence criteria stipulated by Article 526ter of the Belgian Companies Code and the applicable corporate governance rules.
The chairperson presents to the Meeting the proposal to reappoint, upon proposal of the Board of Directors and upon recommendation by the Audit Committee, (i) Ernst & Young Bedrijfsrevisoren - Réviseurs d'Entreprises SC SCRL/BC CVBA (0446.334.711), with registered seat at De Kleetlaan 2, 1831 Diegem, legally represented by Mr. Romuald Bilem and (ii) PVMD Bedrijfsrevisoren - Réviseurs d'Entreprises SC SCRL/BC CVBA (0471.089.804), with registered seat at Tweekerkenstraat 44, 1000 Brussel legally represented by Mrs. Caroline Baert, as Statutory Auditors for a renewable three-year term ending after the Ordinary General Meeting of 2021. The aggregate remuneration of both Statutory Auditors amounts to EUR 285,000.00 per year.
The chairperson presents to the Meeting the proposal, in accordance with Article 556 of the Companies Code, to approve and, to the extent required, ratify, the provision 8.2 (Change of control) of the Revolving Facility Agreement dated 11 October 2017 between bpost SA/NV and Belfius Bank SA/NV, BNP Paribas Fortis SA/NV, ING Belgium SA/NV, KBC Bank SA/NV ("Revolving Facility Agreement") as well as any other provision of the Revolving Facility Agreement that may result in an early termination of the Revolving Facility Agreement in the event of a change of control of the borrower, bpost.
Furthermore, the chairperson presents to the Meeting the proposal to grant a special proxy to Mr. Dirk Tirez, Mr. François Soenen and Mrs. Hélène Mespouille, acting alone and with power of substitution, to fulfill all formalities required under Article 556 of the Companies Code.
Before inviting the shareholders to vote on the proposed resolutions as stated in the agenda, the chairperson invites the participants who wish to do so, to ask questions relating to the agenda items or the reports and annual accounts mentioned in the agenda.
Two questions have been submitted in writing by the shareholders prior to the Meeting. Mr. Koen Van Gerven, CEO, answers these questions.
The Meeting then handles the oral questions of the shareholders. The questions and the summary of answers given are attached to these minutes.
The chairperson then states that the debates is closed and proposes to the Meeting to vote on the proposed resolutions.
The voting takes place electronically. The vote of the shareholders voting by correspondence has already been inserted into the databank of this electronic system and is automatically added to the votes expressed during the session. The total number of votes is mentioned in the minutes. The result is determined on the basis of a simple majority calculated on the votes 'for' and 'against'.
Points 1 to 3 on the agenda do not require a vote.
The chairperson submits to the vote of the shareholders, the proposal regarding the approval of the annual accounts for the financial year closed on December 31, 2017. including the allocation of the result.
The allocation of the result is proposed as follows:
| Profit to be appropriated | 434.470.330,58 EUR | |
|---|---|---|
| Transfer to the reserves | $0.00$ EUR | |
| Profit to be carried forward | 172.469.093.94 EUR | |
| Dividends | 262.001.236,64 EUR |
The gross dividend for 2017 was 1.31 EUR per share. An advance on the dividend of 1.06 EUR had already been paid on December 11, 2017. The gross balance of 0.25 EUR per share will be paid as from May 17, 2018. The ex-dividend date is set on May 15, 2018, the registration date on May 16, 2018.
139.298.058 votes are recorded with regard to 139.298.058 shares, representing 69.65% of the capital.
| FOR | 139.239.277 | 99,97 % |
|---|---|---|
| AGAINST | 47.860 | 0,03% |
| ABSTAIN | 10.921 |
The Meeting resolves to approve the statutory annual accounts relating to the financial year closed on December 31, 2017, the allocation of the profits reflected therein and the distribution of a gross dividend of 1.31 EUR per share. After deduction of the interim dividend of 1.06 EUR gross paid on December 11, 2017, the balance of the dividend will amount to 0.25 EUR gross, payable as of May 17, 2018.
The chairperson submits the remuneration report to the vote of the shareholders.
139.298.058 votes are recorded with regard to 139.298.058 shares, representing 69.65% of the capital.
| FOR | 107.014.573 | 78,16 % |
|---|---|---|
| AGAINST | 29.896.476 | 21,84 % |
| ABSTAIN | 2.387.009 |
The Meeting resolves to approve the remuneration report for the financial year closed on December 31, 2017.
The chairperson submits to the vote of the shareholders the proposal to grant discharge to the directors for the performance of their duties during the financial year closed on December 31, 2017.
139.298.058 votes are recorded with regard to 139.298.058 shares, representing 69,65% of the capital.
| FOR. | 138.932.642 | 99,82% |
|---|---|---|
| AGAINST | 249.939 | 0,18% |
| ABSTENTION | 115.477 |
The Meeting resolves to grant discharge to the Directors for the exercise of their mandate during the financial year closed on December 31, 2017.
The chairperson submits to the vote of the shareholders the proposal to grant discharge to the statutory auditors for the performance of their duties during the financial year closed on December 31, 2017.
139.298.058 votes are recorded with regard to 139.298.058 shares, representing 69,65% of the capital.
| FOR. | 138.934.062 | 99,82% |
|---|---|---|
| AGAINST | 248.619 | 0,18% |
| ABSTAIN | 115.377 |
The Meeting resolves to grant discharge to the Statutory Auditors for the exercise of their mandate during the financial year closed on December 31, 2017.
The Meeting takes note of the end of the performance of the duties as directors by Mr. Luc Lallemand and Mrs. Caroline Ven as from the close of this Meeting of May 9, 2018. The chairperson thanks them for the services rendered.
The chairperson submits to the vote of the shareholders the renewal of the mandate of Mr. Ray Stewart as independent director of the Company for a term of four years until the close of the annual Shareholders' Meeting of 2022.
The chairperson explains that, based on the information made available to the Company, Mr. Ray Stewart still qualifies as an independent director according to the independence criteria provided for by Article 526ter of the Belgian Companies Code and the applicable corporate governance rules.
The chairperson explains the Board of Director's proposal that the mandate will be remunerated on the same basis as that of the other directors.
139.298.058 votes are recorded with regard to 139.298.058 shares, representing 69,65% of the capital.
| FOR | 136.875.598 | 99,12% |
|---|---|---|
| AGAINST | 1.219.785 | 0,88% |
| ABSTAIN | 1.202.675 |
The Meeting renews the mandate of Mr. Ray Stewart as director for a term of four years until the close of the annual Shareholders' Meeting of 2022. The Meeting acknowledges that, based on the information made available to the Company, Mr. Ray Stewart still qualifies as an independent director according to the independence criteria provided for by Article 526ter of the Belgian Companies Code and the applicable corporate governance rules and appoints him as independent director. The Meeting resolves that the mandate will be remunerated on the same basis as that of the other directors.
The chairperson submits to the vote of the shareholders the renewal of the mandate of Mr. Michael Stone as independent director of the Company for a term of four years until the close of the annual Shareholders' Meeting of 2022.
The chairperson explains that, based on the information made available to the Company, Mr. Michael Stone still qualifies as an independent director according to the independence criteria provided for by Article 526ter of the Belgian Companies Code and the applicable corporate governance rules.
The chairperson explains the Board of Director's proposal that the mandate will be remunerated on the same basis as that of the other directors.
139,298,058 votes are recorded with regard to 139,298,058 shares, representing 69,65% of the capital.
| FOR. | 138.037.510 | 99,12 % |
|---|---|---|
| AGAINST | 1.220.010 | 0,88% |
| ABSTAIN | 40.538 |
The Meeting renews the mandate of Mr. Michael Stone as director for a term of four years until the close of the annual Shareholders' Meeting of 2022. The Meeting acknowledges that, based on the information made available to the Company, Mr. Michael Stone still qualifies as an independent director according to the independence criteria provided for by Article 526ter of the Belgian Companies Code and the applicable corporate governance rules and appoints him as independent director. The Meeting resolves that the mandate will be remunerated on the same basis as that of the other directors.
Given the resolutions above, the Board of Directors will be composed of the following persons as from the close of this Meeting:
Extract of the Articles of Association:
The company is validly represented in all its acts and in legal proceedings by:
1° the chairperson of the board of directors and the chief executive officer, acting jointly, or by one of them and another director, acting jointly;
2° the chief executive officer alone, within the limits of the daily management and the other powers delegated to him/her:
3° by every other person, acting within the limits of the mandate granted to him/her by the board of directors, the executive committee or the chief executive officer, as the case may be."
The chairperson submits to the vote of the shareholders the proposal to, upon proposal of the Board of Directors and upon recommendation by the Audit Committee, reappoint (i) Ernst & Young Bedrijfsrevisoren - Réviseurs d'Entreprises SC SCRL/BC CVBA (0446.334.711), with registered seat at De Kleetlaan 2, 1831 Diegem, legally represented by Mr. Romuald Bilem and (ii) PVMD Bedrijfsrevisoren - Réviseurs d'Entreprises SC SCRL/BC CVBA (0471.089.804), with registered seat at Tweekerkenstraat 44, 1000 Brussel legally represented by Mrs. Caroline Baert, as Statutory Auditors for a renewable three-year term ending after the Ordinary General Meeting of 2021. The aggregate remuneration of both Statutory Auditors amounts to EUR 285,000.00 per year.
139.298.058 votes are recorded with regard to 139.298.058 shares, representing 69,65% of the capital.
| FOR | 136.790.216 | $99,33\%$ |
|---|---|---|
| AGAINST | 929.452 | 0.67% |
| ABSTAIN | 1.578.390 |
The Meeting reappoints (i) Ernst & Young Bedrijfsrevisoren - Réviseurs d'Entreprises SC SCRL/BC CVBA (0446.334.711), with registered seat at De Kleetlaan 2, 1831 Diegem, and (ii) PVMD Bedrijfsrevisoren - Réviseurs d'Entreprises SC SCRL/BC CVBA (0471.089.804), with registered seat at Tweekerkenstraat 44, 1000 Brussel, as Statutory Auditors for a renewable three-year term ending after the Ordinary General Meeting of 2021.
Ernst & Young Bedrijfsrevisoren - Réviseurs d'Entreprises SC SCRL/BC CVBA has appointed Mr. Romuald Bilem as its permanent representative.
PVMD Bedrijfsrevisoren - Réviseurs d'Entreprises SC SCRL/BC CVBA has appointed Mrs. Caroline Baert as its permanent representative.
The Meeting resolves that the aggregate remuneration of both Statutory Auditors amounts to EUR 285,000.00 per year.
The chairperson submits to the vote of the shareholders the proposal, in accordance with Article 556 of the Companies Code, to approve and, to the extent required, ratify, the provision 8.2 (Change of control) of the Revolving Facility Agreement dated 11 October 2017 between bpost SA/NV and Belfius Bank SA/NV, BNP Paribas Fortis SA/NV, ING Belgium SA/NV, KBC Bank SA/NV ("Revolving Facility Agreement") as well as any other provision of the Revolving Facility Agreement that may result in an early termination of the Revolving Facility Agreement in the event of a change of control of the borrower, bpost.
Furthermore, the chairperson presents to the Meeting the proposal to grant a special proxy to Mr. Dirk Tirez, Mr. François Soenen and Mrs. Hélène Mespouille, acting alone and with power of substitution, to fulfill all formalities required under Article 556 of the Companies Code.
139.298.058 votes are recorded with regard to 139.298.058 shares, representing 69,65% of the capital.
| FOR | 139.256.324 | 99,97 % |
|---|---|---|
| AGAINST | 39.369 | 0,03% |
| ABSTAIN | 2.365 |
The Meeting resolves, in accordance with Article 556 of the Companies Code, to approve and, to the extent required, ratify, the provision 8.2 (Change of control) of the Revolving Facility Agreement dated 11 October 2017 between bpost SA/NV and Belfius Bank SA/NV, BNP Paribas Fortis SA/NV, ING Belgium SA/NV, KBC Bank SA/NV ("Revolving Facility Agreement") as well as any other provision of the Revolving Facility Agreement that may result in an early termination of the Revolving Facility Agreement in the event of a change of control of the borrower, bpost.
Pursuant to article 8.2 of the Revolving Facility Agreement, "control" means the power (whether through the ownership of voting capital, by contract or otherwise) to exercise a decisive influence on the appointment of the majority of the members of the board of directors or managers of that person or on the orientation of the management of that person, and the existence of "control" will be determined in accordance with Articles 5 et seq. of the Companies Code. Article 8.2 of the Revolving Facility Agreement provides that in case a person or group of persons acting in concert gains control of bpost, (i) a Lender shall not be obliged to fund a Loan (except for a rollover loan) and (ii), upon request of a Lender, this may also lead to the cancellation of the Commitment of that Lender and the declaration of the participation of that Lender in all outstanding Loans, together with accrued interest, and all other amounts accrued under the Finance Documents (including any Ancillary Outstandings) immediately due and payable, whereupon the Commitment of that Lender will be cancelled and all such outstanding Loans and amounts will become immediately due and payable.
Furthermore, the Meeting resolves to grant a special proxy to Mr. Dirk Tirez, Mr. Francois Soenen and Mrs. Hélène Mespouille, acting alone and with power of substitution, to fulfill all formalities required under Article 556 of the Companies Code.
Since all the points on the agenda of the Meeting have been covered, the chairperson asks the Meeting, which agrees, to excuse the secretary from reading the minutes, which appropriately reflect the content of the debates today. The meeting unanimously approves the minutes.
The secretary states that the minutes would be published on the website of the Company within the applicable legal timeframes.
The chairperson closed the Meeting.
The Meeting was closed at 12h15.
The minutes were signed by the members of the executive.
Dirk Virez Secretary
François Cornelis Chairperson
Koen Van Gerven (CEO): It is clear to everyone that letter volumes are under pressure. We are now seeing that decline accelerating. In Belgium this acceleration is leading to a situation where users are becoming increasingly accustomed to digital solutions replacing paper invoices and other documents. Major senders, such as insurance companies, telecom companies and electricity companies, tell us the same thing. bpost has a clear idea of how to deal with this. Various factors play a role here.
So we are well aware of what we need to work on. These measures can more or less offset a 6% fall in volume. In a situation where the volume falls more than 6%, which is now the case, additional measures must be envisaged. Clearly, we will continue to give a lot of attention to further cost cutting, but we also have to think about a number of new things, such as reviewing our range. Should we introduce a service with a longer delivery term for letters alongside our next-day service? Customers are telling us that nextday delivery of letters is now less important than it was a few years ago, because there are (electronic) alternatives for urgent mail.
bpost is currently examining and developing solutions. Other countries are already ahead of us, including Italy, Denmark and the Netherlands. Given the current fall in volume, we think that it is time to seriously consider this for Belgium. If we want to implement this in one to two years' time, we have to make a start now. We want to do this in consultation with all stakeholders in order to create the largest possible support base in society. This development is a consequence of the changing world in which we operate and we will have to step outside our comfort zone.
Koen Van Gerven (CEO): The Banking business is not declining as such. The contribution from banking depends however on interest rates, which are particularly low at the moment. As long as interest rates remain low, the contribution of banking commissions will also be limited. This situation is not unique to bpost bank. It affects all banking institutions. The clientele naturally changes, with some leaving and others arriving, but I can confirm that the market share of bpost bank remains stable.
Koen Van Gerven (CEO): The new postal law has established a specific framework and provides for bpost increasing the stamp price once per year, at the beginning of the year, provided that it is in line with the new legally established formula (which takes account of cost orientation among other things). The regulator (IBPT) oversees the application of this formula.
Koen Van Gerven (CEO): We need to distinguish (i) the operational part of Radial, which is performing very well and already proved itself at the end of 2017, and (ii) the commercial engine of the company, which needs to be improved.
We have carried out a diagnostic and identified the actions needed to strengthen the commercial activity (attracting new customers and retaining existing customers), which should allow us to achieve our original business plan within one or two years.
At the same time, the bpost board has decided to assess the transaction as such. It is still too early to say anything about the results of this assessment or any action that may be taken as a consequence.
Henri de Romrée (CFO): There are two separate factors relating to the fall in the share price.
Koen Van Gerven (CEO): We have given our guidance for 2018 and will present our longer-term guidance on our Capital Markets Day (21 June 2018).
Koen Van Gerven (CEO): As stated above, we have audited Radial and identified action points, including the development and improvement of the commercial activity. We remain convinced that Radial can become one of bpost's growth drivers. Mail is under pressure: remember that a 1% fall in volume equates to a EUR 13 million reduction in turnover on an annual basis. So the estimated 7% drop in 2018 could cost us EUR 90 million. That means it is vital that we find a company with a relatively fixed cost structure. We are not lacking in solutions and are taking all necessary measures.
Henri de Romrée (CFO): The 2017 accounts include three large acquisitions: (i) Ubiway, (ii) Dynagroup and (iii) Radial. The revenues of Radial are actually high for the last six weeks of 2017 (around EUR 200 million). However, the seasonality of Radial's activities does need to be taken into account, as well as the fact that the last six weeks of the year make an exceptional contribution to bpost revenues, compared to the normal situation.
Henri de Romrée (CFO): The dividend is based on net profit, in accordance with Belgian accounting standards.
This year we made a profit of EUR 291 million, in accordance with Belgian accounting standards, and on that basis we propose distributing a dividend of EUR 262 million (90% pay-out ratio).
Due to retained profit from other years and the 2017 figures, we can retain EUR 172.5 million in profit. which can serve as a distributable reserve for the future.
Koen Van Gerven (CEO): Cubee is not a new service. bpost had already deployed - and continues to deploy - a parcel locker network in both Belgium (around 170 to 180 lockers) and the Netherlands (around 70 lockers). In 2017 we opened up these facilities to other operators, such as GLS and DPD in Belgium, and DHL and UPS in the Netherlands. The use of these lockers quadrupled in 2017. This is a service that customers really appreciate due to its 24/7 accessibility. Lockers are found everywhere (train stations, companies, supermarkets, universities). Sites are selected based on customer demand.
Koen Van Gerven (CEO): Thank you for your suggestion, which we take good note of. At bpost we are aware of our ecological impact; we make a lot of efforts in this domain and achieve good results.
Koen Van Gerven (CEO): bpost already has ATMs. In Britain this is a service subsidised by the state, which is of the opinion that accessibility to cash is especially important. bpost is certainly disposed to providing these services, bearing in mind that it has the infrastructure, but this requires adequate financing (government, banks).
Koen Van Gerven (CEO): Our core business is under pressure. bpost needs growth platforms to create future prospects for the company, bpost has been working on this since 2012, by developing ecommerce logistics, including the acquisition of Landmark Global. Those activities continue to grow well. That being said, the fall of the dollar hit us somewhat in the first quarter. E-commerce logistics is a big market with a huge potential for growth. After completing a number of small acquisitions, it was time for a big transaction. Radial was identified as a potential new growth platform securing a future for bpost. Radial operates in a big market in the United States where scale and competence are key requirements. There is no reason to suppose that that business will not come over to Europe. We want to be ready to become a big player in Europe in that business, too. So there are no plans to sell off our US activities. On the contrary, the knowledge we acquire in the United States through Radial will help us to grow in Europe. Incidentally, a very large number of other postal operators are active in the United States, including UPS and La Poste.
The strategic rationale is very clear and will create value for the company in the long term. It is too early to evaluate this type of acquisition after four months. This is a long-term investment.
Lastly, Mr. Pierre Winand had already been working at bpost for two years in the United States as CEO of Landmark Global. I asked him to assume the role of CEO of Radial.
Koen Van Gerven (CEO): We did consider barbecues and large parcels five years ago when we selected the machines. However, the ratio of large parcels to small ones is different to what it was five years ago. The machines can handle both categories. We have to make adjustments to the machines because we handle more large parcels than we could have anticipated five years ago.
Koen Van Gerven (CEO): bpost has an obligation to follow a public tendering process for all procurement. To this end, bpost works with very detailed specifications. The machines we procured are used by a large proportion of postal companies. There were intense preparations before the purchase, including a working visit to DHL.
$\blacktriangleright$ Around a month after we started using the machines, articles began appearing in the press stating that New Brussels X was working at full capacity. As a result, contrary to what was formerly intended as a cost-optimising measure, parcel sorting is not centralised at New Brussels X. Antwerp X and Charleroi X remain open, and Ghent X and Liege X will be added at a later date. The purpose of that centralisation was to cut costs. How does this tally with the cost-cutting you have in mind?
Koen Van Gerven (CEO): The fact that the maximum capacity of new Brussels X has been achieved earlier than expected is good news. It means that growth is stronger than expected. Secondly, our customer expectations rate "late in" as increasingly important. That requires a large central capacity so that our customers can drop off parcels late into the night and we are able to fine-sort them in time for delivery next morning. That does mean, however, that all our capacity has to be centralised at the one site. Due to the explosive growth of parcels we are probably going to need sorting capacity at multiple sites. That's why Antwerp X and Charleroi X are remaining open. Over the next few months we are going to look at how we can further increase our capacity to enable us to handle the ever faster growing parcel volumes.
Koen Van Gerven (CEO): I agree that we still have a lot of hard work to do to achieve our ambition to become a big player in e-commerce logistics in Europe. However, we have already achieved a number of things. We are active in a number of high-potential personalised logistics activities. We have also invested in the delivery of foodstuffs. That has a lot of potential, too. This investment is part of a wider strategy to get bpost ready for when this market opens up, as is the case in the United Kingdom and the United States. We have learned from our earlier attempts to enter that market.
Koen Van Gerven (CEO): I think this is linked to a combination of various aspects. We invest in new companies, start-ups, where we target innovation because the expectations of our customers are changing too. We also invest in companies that are a little bigger, such as DynaGroup and Ubiway. Some of them require some work and others are performing well. But the price we pay is always based on what we acquire.
Koen Van Gerven (CEO): I am unable to talk about specific contracts or customers.
Koen Van Gerven (CEO): We acquired de Buren because it has a good technological solution that is much cheaper than the one we had. So in itself, switching to de Buren is a business decision and it gives us in addition a platform to expand further.
Koen Van Gerven (CEO): I fear the General Meeting is not the proper forum to provide explanations on this subject. It would lead to a highly technical and detailed discussion. Several times in the past bpost has shown that it is well aware of how to complete a technological transformation. A transformation like that needs to be regularly adjusted. Round preparation is an example of an aspect that needs to be adjusted. But we are on track to raise the efficiency, quality and productivity of delivery.
$\blacktriangleright$ How has the Belgian state, as the majority shareholder, responded to the fall in the share price?
Koen Van Gerven (CEO): You will have to ask the Belgian state about that.
$\triangleright$ Will the bpost share dividend remain relatively steady?
Koen Van Gerven (CEO): bpost is a value share and we will provide more information on the Capital Markets Day on 21 June.
$\triangleright$ I wanted to make a suggestion and support the plans of the CEO concerning the delivery of letters. Customers do not always expect next-day letter delivery from bpost. Depending on the message and the target group, delivery within three days or a week is perfectly acceptable. First and foremost, customers expect a flexible approach with a flexible price. More thought has to go into additional services that postmen and women can provide. bpost's strength lies in the fact that postmen and women pass by the frontdoor of every Belgian resident every day.
Koen Van Gerven (CEO): Thank you for your contribution.
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