Earnings Release • Nov 7, 2013
Earnings Release
Open in ViewerOpens in native device viewer
bpost recorded solid result improvement in the third quarter, mainly driven by continuing growth in parcels, by continued productivity improvement, by a contained mail volume decline in line with what was already observed in the second quarter and by the proceeds of the announced buildings disposal programme. Net profit in the quarter grew solidly year-on-year on an organic basis. Dividend pay-out and outlook confirmed.
Page 1 of 11
| Q3#13,&EUR&millions | |||
|---|---|---|---|
| Reported/Normalized1 | |||
| 2012 | 2013 | %+change | |
| Total&operating&income&(revenues) | 549.4 | 566.6 | 3.1% |
| Operating&expenses& | 464.0 | 462.7 | #0.3% |
| EBITDA+ | 85.4 | 103.9 | 21.7% |
| Margin'(%) | 15.5% | 18.3% | |
| EBIT+ | 64.0 | 81.5 | 27.4% |
| Margin''(%) | 11.6% | 14.4% | |
| Profit+before+tax | 53.3 | 80.6 | 51.1% |
| Income&tax&expense | 17.2 | 26.9 | |
| Net+profit | 36.2 | 53.8 | 48.7% |
| Normalized+FCF2 | D25.7 | D2.5 | 90.1% |
| bpost+S.A/N.V.+net+profit+(BGAAP) | 32.1 | 44.9 | 39.7% |
Group revenues evolved positively in the third quarter (+3% to € 566.6m) notwithstanding the lower compensation for SGEI's as the result of the application of the 5th management contract with the Belgian State. Excluding the SGEI impact and scope changes, revenues grew by €14.2 millions on an organic basis in the third quarter (+2.6% organic growth) driven by (i) the continuing moderate volume decline of domestic mail, (ii) the good performance of parcels and the (iii) proceeds from the announced buildings disposal programme. Year to date, the revenues are in line with last year on an organic basis, which confirms our outlook.
The domestic mail volumes decreased by 4.4% nominally in the third quarter. Taking into account the impact of Belgian municipal elections held in September 2012 and one working day more in
Page 2 of 11
bpost, naamloze vennootschap van publiek recht / bpost, société anonyme de droit public
Muntcentrum, 1000 Brussel / Centre Monnaie, 1000 Bruxelles | BTW / TVA BE 0214.569.464 | RPR Brussel / RPM Bruxelles IBAN BE94 0000 0000 1414 | BIC BPOTBEB1
1 Normalized figures are neither audited nor have been subject to a limited review
2 Operating free cash flow = cash flow from operating activities + cash flow from investing activities
Q3-13, the underlying volume decline in the third quarter was 3.7%, a figure in line with the second quarter of this year. Management views the mail volume figure as a confirmation of the recovery of volumes observed in the second quarter, compared to the first quarter of the year. Price increases slightly above inflation and mix improvement of domestic mail compensated for most of the organic volume decline.
Parcels revenues grew significantly in the third quarter from € 39.3 millions to € 58.0 millions, of which € 9.8 millions was organic growth (+25.0%), driven mainly by growth in international parcels, while at the same time the domestic parcels volumes grew by a solid 7.7% organically, above volume performance observed in the first half of the year (6.4% in H1-13). Domestic parcels revenues were up by 5% with some unfavorable product mix and price effects as some customers growing in size can obtain better tariffs and some big customers increase their overall share in our business. Revenues in the quarter also include the effect of the acquisition of Landmark Global, which contributed to parcels revenues with € 25.8 millions year-to-date and € 8.9 millions in the third quarter.
Revenues of the other activities of bpost are still being affected by decreasing sales in international mail, as in the first half of the year (€ -3.1 millions in the third quarter and € -12.7 millions year-to-date) and in the Banking & Finance activities (€ -2.7 millions in the third quarter, due to lower growth of production than last year in banking while other products as prepaid credit card continued to grow).
Productivity improvement initiatives delivered ahead of expectations, the average number of FTE for the quarter decreased by 974 vs. last year generating payroll and interim costs savings of € 9.2 millions. Continuing efforts on the others cost lines bring an additional reduction in SG&A costs of € 1.9 millions (excluding interim costs). The third quarter was affected by new local taxes as the government will revoke bpost's exemptions in accordance with the agreement with the European Union. The estimated cost of these taxes for the first 9 months of the year was accrued in the third quarter for an amount of € 3.5 millions. Overall, operating expenses decreased by € 7.3 millions on an organic basis, which is excluding the consolidation of the Landmark subsidiary and the sale of Certipost activities.
Page 3 of 11
The Board of Directors has confirmed its intention to pay an interim dividend in December calculated as 85% of the sum of (i) net profit of bpost N.V./S.A. for the first 10 months of 2013 plus (ii) an amount of €17.6m compensating for a exceptional pre-listing tax charge. The final decision regarding the amount of the interim dividend will be made and communicated on 4 December 2013 in accordance with the financial calendar.
The Board of Directors also confirms its intention to declare a final dividend corresponding to 85% of the net profit of bpost N.V./S.A. for the last 2 months of 2013.
Management expects revenues to remain stable in the entire year 2013. Although it is too early to confirm signs of recovery of the economy and their impact on bpost's business, the stabilization of the domestic mail volume decline and the strong results in parcels support the outlook given previously. The mail volumes decline should be between 4% and 4.5% for the year. With the continuation of the trends observed in the last quarter, the full year EBITDA and EBIT should come in at least at the level of last year on a normalized basis (the 2012 figures had been affected by non-recurring costs). Management does not anticipate any material exceptional cash outflows during the rest of the year which means that cash generation should follow the normal seasonality. Net capex is still expected at € 90m.
Johnny Thijs, CEO declared: "The strong performance recorded in the third quarter in parcels confirms that bpost is well positioned to benefit from the growth of e-commerce in Belgium and abroad. The domestic mail volumes had been severely hit in the first months of 2013 and I'm happy that the moderation of the volume decline observed in the second quarter has been confirmed in the third quarter. Our productivity initiatives continue to deliver well and are slightly ahead of our plans. Combining those three trends we have been able to slightly increase the margin, proving that our strategy is delivering results. Finally, I'm pleased that we can confirm our dividend policy as the solid results booked to date will allow to reward our shareholders by an interim dividend in December".
| Year-to-date | 3rd quarter | ||||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| In million EUR | |||||
| Turnover | 1,766.7 | 1,763.0 | 552.6 | 546.9 | |
| Other operating income | 35.6 | 15.7 | 14.0 | 2.5 | |
| Total operating income | 1,802.2 | 1,778.7 | 566.6 | 549.4 | |
| Materials cost | (22.9) | (25.7) | (7.7) | (9.1) | |
| Services and other goods | (434.9) | (426.0) | (143.4) | (143.1) | |
| Payroll costs | (911.9) | (901.2) | (305.1) | (310.6) | |
| Other operating expenses | (2.7) | (9.1) | (6.6) | (1.2) | |
| Depreciation, amortization | (66.0) | (64.2) | (22.4) | (21.4) | |
| Total operating expenses | (1,438.4) | (1,426.3) | (485.1) | (485.4) | |
| Profit from operating activities (EBIT) | 363.9 | 352.4 | 81.5 | 64.0 | |
| Financial income | 2.9 | 5.5 | 1.7 | 1.4 | |
| Financial cost | (9.4) | (32.7) | (4.5) | (10.2) | |
| Share of profit of associates | 14.1 | 3.6 | 1.9 | (1.8) | |
| Profit before tax | 371.4 | 328.8 | 80.6 | 53.3 | |
| Income tax expense | (136.1) | (116.7) | (26.9) | (17.2) | |
| Profit for the period | 235.2 | 212.1 | 53.8 | 36.2 | |
| Attributable to: | |||||
| Owners of the Parent | 233.7 | 211.4 | 53.5 | 35.9 | |
| Non-controlling interests | 1.5 | 0.7 | 0.2 | 0.2 |
Page 5 of 11
| As of 30 September |
As of 31 December |
As of 31 December |
|
|---|---|---|---|
| 2013 | 2012 | 2012 | |
| In million EUR | Restated* | ||
| Assets | |||
| Non-current assets | |||
| Property, plant and equipment | 560.7 | 588.5 | 588.5 |
| Intangible assets | 96.1 | 95.5 | 95.5 |
| Investments in associates | 351.0 | 351.6 | 351.6 |
| Investment properties | 11.0 | 15.2 | 15.2 |
| Deferred tax assets | 46.3 | 64.2 | 61.0 |
| Trade and other receivables | 1.7 | 0.9 | 0.9 |
| 1,066.8 | 1,115.9 | 1,112.8 | |
| Current assets | |||
| Assets held for sale | 0.2 | 0.3 | 0.3 |
| Inventories | 8.1 | 7.0 | 7.0 |
| Income tax receivable | 0.3 | 0.1 | 0.1 |
| Trade and other receivables | 287.3 | 394.6 | 394.6 |
| Cash and cash equivalents | 631.1 | 713.2 | 713.2 |
| 927.0 | 1,115.3 | 1,115.3 | |
| Total assets | 1,993.8 | 2,231.2 | 2,228.1 |
| Equity and liabilities | |||
| Equity attributable to equity holders of the | |||
| Parent | |||
| Issued capital | 364.0 | 508.5 | 508.5 |
| Treasury shares | 0.0 | 0.0 | 0.0 |
| Reserves | 116.6 | 214.6 | 225.5 |
| Retained earnings | 235.2 | 3.7 | 3.7 |
| 715.8 | 726.8 | 737.7 | |
| Non-controlling interests | 0.0 | (0.0) | (0.0) |
| Total equity | 715.8 | 726.8 | 737.7 |
| Non-current liabilities | |||
| Interest-bearing loans and borrowings | 85.7 | 82.7 | 82.7 |
| Employee benefits | 340.1 | 378.1 | 364.1 |
| Trade and other payables | 79.7 | 83.1 | 83.1 |
| Provisions | 38.4 | 42.0 | 42.0 |
| Deferred tax liabilities | 1.3 | 1.3 | 1.3 |
| 545.2 | 587.1 | 573.1 |
Page 6 of 11
| Total Equity and liabilities | 1,993.8 | 2,231.2 | 2,228.1 |
|---|---|---|---|
| Total liabilities | 1,278.1 | 1,504.4 | 1,490.4 |
| 732.9 | 917.3 | 917.3 | |
| Trade and other payables | 647.6 | 760.7 | 760.7 |
| Income tax payable | 62.8 | 4.6 | 4.6 |
| Provisions | 12.8 | 140.5 | 140.5 |
| Bank overdrafts | 0.2 | 0.3 | 0.3 |
| Interest-bearing loans and borrowings | 9.4 | 11.2 | 11.2 |
| Current liabilities |
* restated for IAS19R
Page 7 of 11
| Year-to-date | 3rd Quarter | |||
|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | |
| In Million EUR | ||||
| Operating activities | ||||
| Profit from operating activities (EBIT) | 363.9 | 352.4 | 81.5 | 64.0 |
| Depreciation and amortization | 66.0 | 64.2 | 22.4 | 21.5 |
| Impairment on bad debts | 0.2 | 0.7 | 0.4 | (0.7) |
| Gain on sale of property, plant and equipment | (15.4) | (7.9) | (12.4) | (0.6) |
| Gain on the sale of Certipost activities | (14.6) | 0.0 | 0.0 | 0.0 |
| Change in employee benefit obligations | (31.5) | (86.0) | (10.6) | (12.3) |
| Interest received | 2.9 | 5.5 | 1.7 | 1.4 |
| Interests paid | (5.8) | (6.0) | (3.2) | (1.3) |
| Dividends received | 0.0 | 0.0 | 0.0 | 0.0 |
| Income tax paid | (62.0) | (55.9) | (60.9) | (55.4) |
| Cash flow from operating activities before | ||||
| changes in working capital and provisions | 303.7 | 267.0 | 18.9 | 16.5 |
| Decrease/(increase) in trade and other receivables | 70.7 | 72.2 | 2.3 | (4.4) |
| Decrease/(increase) in inventories | (1.1) | 1.3 | (0.7) | 1.1 |
| Increase/(decrease) in trade and other payables | (81.9) | 2.0 | (23.1) | (19.4) |
| Deposits received from third parties | (0.0) | 2.0 | 0.0 | 2.1 |
| Repayment of SGEI overcompensation | (123.1) | (300.8) | 0.0 | 0.0 |
| Increase/(decrease) in provision related to the SGEI overcompensation |
0.0 | 0.0 | 0.0 | 0.0 |
| Increase/(decrease) in other provisions | (8.2) | 4.9 | (4.0) | 0.3 |
| Net Cash from operating activities | 160.1 | 48.5 | (6.7) | (3.8) |
| Investing activities | ||||
| Proceeds from sale of property, plant and equipment | 24.2 | 9.9 | 20.1 | 0.6 |
| Disposal of subsidiaries, net of cash disposed of | 15.1 | 0.0 | 0.0 | 0.0 |
| Acquisition of property, plant and equipment | (31.4) | (32.4) | (9.4) | (13.7) |
| Acquisition of intangible assets | (10.6) | (16.2) | (3.7) | (6.6) |
| Acquisition of subsidiaries, net of cash acquired | (6.6) | 0.0 | (2.8) | 0.0 |
Page 8 of 11
| 712.9 712.9 630.9 630.9 |
1,142.1 1,142.1 1,143.7 1,143.7 |
||
|---|---|---|---|
| (82.0) | 1.6 | (2.6) | (31.1) |
| (195.3) | (7.9) | (0.1) | (7.5) |
| (0.1) | (0.3) | (0.0) | (0.1) |
| (53.5) | 0.0 | 0.0 | 0.0 |
| 2.8 | (0.4) | (0.1) | (0.1) |
| (144.5) | 0.0 | 0.0 | 0.0 |
| 0.0 | (7.3) | 0.0 | (7.3) |
| (46.8) | (39.0) | 4.1 | (19.8) |
| (37.5) | 0.0 | 0.0 | 0.0 |
| (0.0) | (0.3) | 0.0 | (0.2) |
Page 9 of 11
The third quarter interim financial report 2013 and additional information available at www.bpost.be/ir
Journalists wanting to participate to the conference call are kindly requested to call : +32 2 746 00 55 pin code 47138268#
For more information:
Press Piet Van Speybroeck M. +32 477 68 47 12 | T. +32 2 276 2185 [email protected]
Paul Vanwambeke T. +32 2 276 2822 www.bpost.be/ir [email protected]
The information in this document may include forward-looking statements3 , 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
3 as defined among others under the U.S. Private Securities Litigation Reform Act of 1995
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.
Page 11 of 11
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.