bpost SA/NV

Investor Presentation • Aug 6, 2015

Interim financial report second quarter 2015

Investor presentation

Koen Van Gerven, CEO

Investor presentation - Interim financial report 2Q15

Financial Calendar

More on www.bpost.be/ir

05.11.2015 (17:45 CET) Quarterly results 3Q15

03.12.2015 (17:45 CET) Results first 10 months 2015 08.12.2015 Ex-dividend date (interim dividend)

10.12.2015 Payment date of the interim dividend

Disclaimer

This presentation is based on information published by bpost in its Second Quarter 2015 Interim Financial Report, made available on August, 6th at 5.45pm CET on www.bpost.be/ir. This information forms regulated information as defined in the Royal Decree of 14 November 2007. The information in this document may include forward-looking 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.

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

Highlights of 2Q15

Revenues down 2.6%

• due to 2014 elections, lower SGEI compensation, management decision to curtail some International Mail activities but also a bad performance in Advertising Mail. However, very strong parcels growth

Underlying Domestic Mail volume decline

• due to Advertising Mail

Strong growth in Parcels

• domestic: driven by strong e-commerce growth and continued positive trend in C2C. Negative price/mix effect of -3% but to a lesser extent than 1Q15
• international: driven by organic growth from US, positive FX contribution and good milk powder volumes to China

Cost control and strong productivity improvement

• costs (excl. one-offs and transport) down, with average FTE reduction of 829

EBITDA down € 3.8m

• of which € -4.6m from elections in 2014 and € -4.2m SGEI compensation, while our operating model continues to work

BGAAP net profit of bpost SA/NV down by only € 0.4m € 83.8m

Outlook

• ambition confirmed to maintain stable recurring EBIT(DA) and dividend versus high level of 2014

-6.1%

€ 597.6m

+12.6%

€ +9.3m

€ -14.0m

€ 159.8m

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Strong parcels growth & cost control compensated weak domestic mail

€ million

€ +0.3m / +0.2%

Summary of key financials

€ million

	Reported/Normalized
	2Q14	2Q15	% ∆
Total operating income (revenues)	613.5	597.6	-2.6%
Operating expenses	449.9	437.9	-2.7%
EBITDA	163.6	159.8	-2.3%
Margin (%)	26.7%	26.7%
EBIT	142.3	138.3	-2.9%
Margin (%)	23.2%	23.1%
Profit before tax	135.5	139.2	2.8%
Income tax expense	42.3	48.1
Net profit	93.2	91.2	-2.1%
FCF	(4.0)	(21.3)	-
bpost S.A./N.V. net profit (BGAAP)	84.2	83.8	-0.4%
Net Debt/ (Net cash), at 30 June	(684.3)	(720.3)	5.3%

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Total operating income (revenues) lower by € 11.7m on an organic basis

€ million

		2Q14 reported	Reclassifi cations2	2Q14 comparable	SGEI	Organic	2Q15	% Org
	Transactional mail	235.8	0.6	236.5	-	-7.6	228.8	-3.2%
Domestic mail	Advertising mail	71.4	-0.2	71.2	-	-9.8	61.4	-13.7%
	Press	77.9	-	77.9	-3.0	-1.1	73.8	-1.4%
	Domestic parcels1	37.0	-0.9	36.1	-	3.3	39.4	9.3%
Parcels	International parcels	30.8	-0.7	30.0	-	9.3	39.4	31.0%
	Special logistics	3.1	-0.3	2.8	-	-0.3	2.5	-11.6%
	International mail	49.6	-1.2	48.4	-	-6.4	42.1	-13.1%
Additional sources	Value added services	24.1	-0.9	23.2	-	0.2	23.4	0.9%
of revenues	Banking and financial	52.0	-0.0	51.9	-0.1	-0.1	51.7	-0.2%
	Other	25.6	3.6	29.2	-1.0	0.0	28.2	0.1%
	Corporate	6.3	-	6.3	-	0.6	6.9	10.2%
TOTAL		613.5	0.0	613.5	-4.2	-11.7	597.6	-1.9%

¹ Defined as domestic and Belgian in- and outbound

² Some intercompany eliminations mainly related to international activities previously reported in Other revenues are now being reported under their corresponding product lines.

Following a correction of the allocation of cash sales (stamps and franking machines) to products as of January 1, 2015 some revenues are shifting from Domestic parcels to Transactional mail.

Excluding elections, domestic mail volume decreased by -6.1% driven by bad performance in advertising mail

Total operating income (revenues), € million

• Underlying volume decline at -6.1%
• Negative impact of elections € -4.6m
• Transactional mail: no worsening trend in e-substitution, evolution in line with 1Q15
• Advertising mail: bad performance partially due to a sluggish advertising market
• Press: slightly higher volume decline mostly due to tough environment for periodicals

	Reported					Underlying1,2
	FY14	1Q15	2Q15	1H15	FY14	1Q15	2Q15	1H15
Transactional mail	-4.7%	-5.0%	-5.8%	-5.4%	-5.0%	-5.3%	-5.3%	-5.3%
Advertising mail	-1.9%	-6.9%	-15.4%	-11.2%	-3.0%	-5.9%	-9.9%	-7.9%
Press	-2.8%	-3.1%	-4.0%	-3.5%	-2.8%	-3.1%	-4.0%	-3.5%
Domestic Mail	-3.9%	-5.3%	-7.6%	-6.5%	-4.4%	-5.3%	-6.1%	-5.7%

¹ In terms of working days for 2015, 1Q15, 2Q15 and 4Q15 will be equal to same quarters of 2014. In 3Q15 will have 1 business working day more.

² Corrected for elections, requalification of advertising mail to administrative mail.

Strong growth in domestic parcels and continued growth of international parcels

Total operating income (revenues), € million

• Very strong volume growth of 12.6% driven by excellent e-commerce growth and continued positive trend in C2C parcels sales (new product offering). A negative price/mix of -3.0% (faster growth of large e-tailer customers with high volumes and lower prices than the smaller customers) affected revenues growth but to a lesser extent than 1Q15.
• Continued growth on lanes from US (€ +8.9m) including FX impact of strong \$/€ rate (€ +5.5m).
• From China (€ +0.5m) combined with good milk powder volume to China (€ +1.2m).
• Revenues decreased as a result of discontinued activities (€ -0.5m) partly compensated by growth in the remaining activities (€ +0.2m).

Additional sources of revenue in line with LY, except for the curtailment of low margin international mail activities

Total operating income (revenues), € million

2Q15

Costs remain perfectly under control with strong productivity improvement

Operating expenses excl. depreciation and amortization, € million

• One-off positive settlement of social charges (€ -5.7m) in payroll • Increase in provisions (€ +3.7) and other operating charges with Gout earn-out (€ +2.0m)
• Total FTE reduction of 829 FTE (€ -10.0m)
• Positive mix impact of € -3.1m mainly thanks to the recruitment of auxiliary postmen (€ -1.7m), reinforced by a smaller number of managers due to the Alpha project and the related hiring freeze (€ -1.5m).
• Positive price effect of € -0.8m due to phasing effect in 2Q14 (recording 2 quarters of CLA impact) in part offset by normal salary and merit increases.
• Other effects relating mainly to the holiday arrears (€ -1.3m) partly offset by a slight increase of employee benefits costs (€ +0.8m).
• FX (€ +6.1m), terminal dues (€ +2.2m) and growth in international parcels impacting transport costs negatively partially compensated by curtailment of international mail.
• Mainly related to the increase in rent & maintenance costs (€+ 0.8m) and other SG&A (€ +0.6m; limited increase at several cost lines was noted).

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Operating free cash flow1 of € -21.3m in 2Q15

€ million

€ million	2Q14	2Q15	Delta
Cash flow from operating activities	+11.8	-3.3	-15.2
Cash flow from investing activities	-15.8	-17.9	-2.1
Operating free cash flow1	-4.0	-21.3	-17.3
Financing activities	-40.5	-44.2	-3.7
Net cash movement	-44.5	-65.5	-20.9
Capex	+18.9	+12.3	-6.5

• Lower results from operating activities (€ -3.1m)

• Negative evolution of the working capital vs. 2Q14 (€ -12.1m) influenced by a change in the payment terms for social security charges for statutory personnel (€ -8.6m – phasing element) and a deterioration in payments of State entities (€ -4.2m)

• Deterioration mainly due to Landmark and Gout earn outs paid in 2Q15 (€ -10.9m) partially compensated by less capital expenditure (€ +6.5m) and higher proceeds sale of buildings (€ +2.3m) in 2Q15

• Higher dividends paid (€ -4.0m)

Strong balance sheet structure

€ million

Assets			Equity and liabilities
Cash & cash equivalents	2,121.8 562.3	2,218.3 795.9	Interest-bearing loans & borrowings Provisions	2,121.8 75.6 64.8	2,218.3 75.2 65.9
Other assets Investments in associates	74.4 416.5	64.3 382.6	Trade & other payables	931.4	935.3
Trade & other receivables Inventories	400.8 12.5	326.2 10.7	Employee benefits	368.6	353.7
PPE & intangible assets	655.2	638.5	Total equity	681.4	788.2

Jun 30, 2015 Dec 31, 2014

Dec 31, 2014 Jun 30, 2015

Outlook for 2015

We expect mail volumes to remain under substantial pressure. As a consequence we plan for an underlying Domestic Mail volume decline of around -6%.

The compensation for the SGEI (management contract) will be € 16.5m lower than in 2014 as the government has decided to reduce the compensation above and beyond the already lower contractual cap.

We now expect high single digit growth in Domestic Parcels in spite of the intensification of competition. We also expect continued growth in the US and Asia parcels segment.

Productivity improvements are on track and will deliver as expected at the low end of our 800 to 1,200 FTE/year range.

In spite of the lower Domestic Mail volume guidance, we will maintain recurring EBIT(DA) at the high level achieved in 2014 thanks to the partial effects of the Alpha plan and a continued focus on costs. Alpha restructuring cost should be recorded in 3Q15.

We confirm our ambition to achieve the same level of dividend payment.

Cash generation should follow normal seasonality and net capex is expected at around € 90m. Working capital evolution will be negatively affected by the favorable phasing on terminal dues payment in 2014 and tax payments relating to 2013.

Interim financial report Half year 2015

Investor presentation

Koen Van Gerven, CEO

Brussels – August, 7 2015

Organic EBITDA increased with € 4.2m thanks to increase in parcels and further cost control, despite the negative impact of 2014 elections. Total EBITDA down € 4.1m due to SGEI reduction € million

Summary of key financials

€ million

	Reported/Normalized
	1H14	1H15	% ∆
Total operating income (revenues)	1,240.2	1,214.2	-2.1%
Operating expenses	903.6	881.7	-2.4%
EBITDA	336.6	332.5	-1.2%
Margin (%)	27.1%	27.4%
EBIT	294.4	289.8	-1.5%
Margin (%)	23.7%	23.9%
Profit before tax	289.0	288.2	-0.3%
Income tax expense	97.0	100.5
Net profit	192.1	187.7	-2.3%
FCF1	363.4	276.8	-23.9%
bpost S.A./N.V. net profit (BGAAP)	171.5	171.1	-0.2%
Net Debt/ (Net cash), at 30 June	(684.3)	(720.3)	5.3%

Total operating income (revenues) lower by € 17.7m on an organic basis

€ million

		1H14 reported	Reclassifi cations2	1H14 comparable	SGEI	Organic	1H15	% Org
	Transactional mail	474.7	1.5	476.2	-	-14.8	461.4	-3.1%
Domestic mail	Advertising mail	141.6	-0.4	141.2	-	-15.1	126.1	-10.7%
	Press	155.6	-	155.6	-6.1	-1.8	147.7	-1.2%
	Domestic parcels1	75.2	-1.9	73.3	-	5.6	78.9	7.6%
Parcels	International parcels	62.2	-1.2	61.0	-	19.6	80.6	32.1%
	Special logistics	6.8	-0.6	6.2	-	-1.2	5.0	-18.8%
	International mail	99.9	-2.1	97.8	-	-10.5	87.3	-10.7%
Additional sources	Value added services	48.7	-1.8	47.0	-	0.8	47.7	1.6%
of revenues	Banking and financial	104.4	-0.1	104.3	-0.2	-0.6	103.4	-0.6%
	Other	53.1	6.6	59.6	-2.0	-0.0	57.6	-0.0%
	Corporate	18.1	-	18.1	-	0.3	18.3	1.5%
TOTAL		1,240.2	-	1,240.2	-8.3	-17.7	1,214.2	-1.4%

¹ Defined as domestic and Belgian in- and outbound

² Some intercompany eliminations mainly related to international activities previously reported in Other revenues are now being reported under their corresponding product lines.

Following a correction of the allocation of cash sales (stamps and franking machines) to products as of January 1, 2015 some revenues are shifting from Domestic parcels to Transactional mail.

Underlying domestic mail volume down 5.7% driven by bad advertising mail performance

Total operating income (revenues), € million

•	Underlying volume decline at -5.7%
---	------------------------------------	--	--	--	--

• Negative impact of elections € -4.6m
• Transactional mail: no worsening trend in e-substitution observed since 2 quarters
• Advertising mail: bad performance mainly from catalogue sellers and banking sector and partially due to a sluggish advertising market
• Press: e-substitution and tough environment for periodical

			Reported		Underlying1,2
	FY14	1Q15	2Q15	1H15	FY14	1Q15	2Q15	1H15
Transactional mail	-4.7%	-5.0%	-5.8%	-5.4%	-5.0%	-5.3%	-5.3%	-5.3%
Advertising mail	-1.9%	-6.9%	-15.4%	-11.2%	-3.0%	-5.9%	-9.9%	-7.9%
Press	-2.8%	-3.1%	-4.0%	-3.5%	-2.8%	-3.1%	-4.0%	-3.5%
Domestic Mail	-3.9%	-5.3%	-7.6%	-6.5%	-4.4%	-5.3%	-6.1%	-5.7%

¹ In terms of working days for 2015, 1Q15, 2Q15 and 4Q15 will be equal to same quarters of 2014. In 3Q15 will have 1 business working day more.

² Corrected for Elections, Requalification of advertising mail to administrative mail

Solid volume growth in domestic parcels and strong development in international parcels

Total operating income (revenues), € million

• Solid volume growth of 11.4% driven by e-commerce growth and positive trend in C2C parcels sales (new product offering). A negative price/mix of -3.4% affected revenue growth (faster growth of large e-tailer customers with high volumes and lower prices than the smaller customers).
• Continued growth on lanes from US (€ +19.0m) including the positive effect of stronger \$/€ exchange rate (€ +10.7m) and from China (€ +2.0m) while shipments to China decreased (€ -0.7m)
• Revenues decreased as a result of discontinued activities (€ -1.8m) partly compensated by growth in the remaining activities (€ +0.6m).

Additional sources of revenue mainly affected by the curtailment of very low margin wholesale international mail activities

Total operating income (revenues), € million

• International mail sales were impacted by the curtailment of very low margin UK and US wholesale activities (€ -9.9m) combined with lower inbound mail volumes (€ -0.6m). The variance includes lower one-off settlements relating to last year (€ -0.5m).
• Solutions revenues evolving positively.
• Growth in prepaid credit cards and Western Union sales offset by lower commission from bpost bank and volume decline in cash and payment transactions.

Cost savings thanks to payroll & interim in part offset by the increase in transport costs and other costs

Operating expenses excl. depreciation and amortization, € million

• Total FTE reduction of 755 FTE (€ -17.9m)
• Positive mix impact of € -6.0m mainly thanks to the recruitment of auxiliary postmen (€ -3.5m), reinforced by a smaller number of managers due to the Alpha project and the related hiring freeze.
• Negative price effect of € +0.3m.
• Other effects relating mainly to the holiday arrears (€ -1.3m), a one-off positive settlement of social charges (€ -5.7m) and a slight decrease of the costs of the employee benefits (€ -0.8m).
• FX (€ +12.0m), terminal dues (€ +2.6m) and growth in international parcels impacting transport costs negatively partially compensated by the curtailment of international mail.
• Decrease in rental costs, publicity costs, insurance costs, other goods, consultancy costs and energy delivery in part offset by the increase in other services and 3rd party costs.
• Increase in provisions (€ +6.0m) and other operating charges (e.g. lower increase of the recoverable VAT, the impact of the Gout earn-out) in part compensated by the decrease in bad debt and material costs.

Operating free cash flow1 of € 276.8m in 1H15

€ million

€ million	1H14	1H15	Delta
Cash flow from operating activities	+396.4	+303.2	-93.2
Cash flow from investing activities	-33.1	-26.4	+6.6
Operating free cash flow1	+363.4	+276.8	-86.5
Financing activities	-41.2	-44.4	-3.3
Net cash movement	+322.2	+232.4	-89.8
Capex	+30.1	+23.7	-6.4
Lower results from operating activities (€ -3.2m) • • Income taxes paid on 2013 results (€ -42.0m) Negative evolution of the working capital vs. 1H14 (€ -48.2m) influenced by • terminal dues due to the earlier settlement LY with 2 postal operators (€ -24.8m), due to a change in the payment terms for social security charges for statutory personnel (€ -8.6m – phasing element), due to a lower SGEI compensation (€ -5.4m) and due to a negative phasing impact VAT (€ -4.1m)
Paid earn outs in 1H15 (€ acquired subsidiaries (€ +8.7m) Lower capital expenditure (€ (€ +2.5m) in 1H15		-10.9m) were partially counterbalanced by LY +6.4m) and higher proceeds from sale of buildings

¹ Operating free cash flow = cash flow from operating activities + cash flow from investing activities

Key contacts

Baudouin de Hepcée Director External Communication, Investor Relations & Public Affairs	• Email: baudouin.dehepcee@bpost.be Direct: +32 (0) 2 276 22 28 • Mobile: +32 (0) 476 49 69 58 • • Address: bpost, Centre Monnaie, 1000 Brussels, Belgium
Saskia Dheedene Manager Investor Relations	• Email: saskia.dheedene@bpost.be Direct: +32 (0) 2 276 76 43 • • Mobile: +32 (0) 477 922 343 Address: • bpost, Centre Monnaie, 1000 Brussels, Belgium

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