bpost SA/NV

Earnings Release • Nov 9, 2016

Third quarter 2016 results

Analyst call

Koen Van Gerven, CEO Koen Beeckmans, CFO

Investor presentation - Interim financial report 3Q16

Financial Calendar

More on corporate.bpost.be/investors

05.12.2016 (17:45 CET) Interim dividend 2016 announcement

08.12.2016 Ex-dividend date (interim dividend)

12.12.2016 Dividend payment date

08.03.2017 (17:45 CET) Annual results FY2016 03.05.2017 (17:45 CET) Quarterly results 1Q17

10.05.2017 Ordinary General Meeting of Shareholders

15.05.2017 Ex-dividend date

17.05.2017 Payment date of the dividend 07.08.2017 (17:45 CET) Quarterly results 2Q17

08.11.2017 (17:45 CET) Quarterly results 3Q17

04.12.2017 (17:45 CET) Interim dividend 2017 announcement

Disclaimer

This presentation is based on information published by bpost in its Third Quarter 2016 Interim Financial Report, made available on November, 9th 2016 at 5.45pm CET on corporate.bpost.be/investors. This information forms regulated information as defined in the Royal Decree of 14 November 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.

-5.9%

€ 538.1m

+12.7%

+ € 4.1m

- € 8.5m

€ 110.1m

€ 50.5m

Highlights of 3Q16

Revenues down 2.3%

• Solid growth in Parcels revenues offset by the anticipated lower SGEI compensation and Domestic Mail

Underlying Domestic Mail volume decline

• Continued strong performance in advertising offset by transactional & press

Continued growth in both domestic and international parcels

• Domestic: volume growth driven by e-commerce and C2C; improved price/mix effect of -1.8%
• International: positive contribution from acquisitions, continued volume loss to China

Cost savings on track

• Normalized costs down, fully absorbing salary indexation and new CLA
• Underlying average FTE reduction of 6041 for the quarter

Excluding SGEI, normalized EBITDA up € 2.9m demonstrating that our operating model continues to work

Normalized BGAAP result of bpost SA/NV down only € 0.8m

Outlook reconfirmed: on track and confident to deliver our FY guidance

¹ i.e. excluding 948 additional FTEs and interims for higher parcels & solutions volumes, Deltamedia integration and new subsidiaries leading to a reported average increase of FTEs and interims of 344.

Parcels growth and cost savings offset by anticipated reduced SGEI compensation and domestic mail

4

Normalized1, € million

Summary of key financials 3Q16

€ million

	Reported		1 Normalized
	3Q15	3Q16	3Q15	3Q16	% Δ
Total operating income (revenues)	550.5	538.1	550.5	538.1	-2.3%
Operating expenses	491.0	428.0	436.5	428.0	-2.0%	Alpha social plan provision of
EBITDA	59.5	110.1	114.0	110.1	-3.4%	€ 54.5m
Margin (%)	10.8%	20.5%	20.7%	20.5%	-
EBIT	37.1	87.8	91.6	87.8	-4.2%
Margin (%)	6.7%	16.3%	16.6%	16.3%	-
Profit before tax	37.6	89.0	92.1	89.0	-3.4%
Income tax expense	11.6	28.2	30.0	28.2	-
Net profit	26.0	60.8	62.1	60.8	-2.1%
FCF	(29.5)	(71.9)	(29.5)	(71.9)	-
bpost S.A./N.V. net profit (BGAAP)	15.2	50.5	51.3	50.5	-1.6%
Net Debt/ (Net cash), at 30 Sept.		(690.6) (657.7) (690.6) (657.7)			-4.8%

Total operating income (revenues)

€ million

		3Q15	SGEI	∆	3Q16	% ∆
	Transactional mail	202.8	-	-12.2	190.6	-6.0%
Domestic mail	Advertising mail	56.1	-	-0.4	55.7	-0.8%
	Press	71.0	-1.7	-0.4	68.9	-0.6%
	Domestic parcels1	37.8	-	3.8	41.6	10.0%
Parcels	International parcels	38.1	-	4.1	42.3	10.9%
	Special logistics	2.4	-	-0.5	1.9	-19.1%
	International mail	40.0	-	-2.8	37.2	-7.0%
Additional sources	Value added services	23.3	-	1.0	24.3	4.2%
of revenues	Banking and financial	50.6	-2.9	-1.7	46.1	-3.3%
	Other	26.7	-2.3	0.7	25.1	2.4%
	Corporate	1.6	-	2.8	4.4	167.8%
TOTAL		550.5	-6.8	-5.6	538.1	-1.0%

Domestic mail underlying volume trend at -4.5% YTD in line with our full year guidance

Total operating income (revenues), € million

¹ 3Q16 had 1 working day less vs. 3Q15 except for stamps which had the same number of business working days as 3Q15

² FY15 corrected for requalification of advertising mail to administrative mail

Continued growth in both domestic and international parcels

Total operating income (revenues), € million

• Continued double-digit reported volume growth of +12.7% driven by e-commerce and continued growth in C2C parcels sales (online product offering).
• Excluding calendar effects, equal volume trend over the 3 quarters of 2016 at +14.5%.
• Improved price/mix of -1.8% fully mix-related (product & client mix).
• Growth driven by positive contribution from acquisitions, continued volume loss to China, flows from US continue to suffer from strong USD which decreases price competitiveness of US e-tailers.
• Mainly due to lower revenues from Sprint activities.

Additional sources of revenues driven by Value Added Services

Total operating income (revenues), € million

Cost savings on track

Operating expenses excl. depreciation and amortization, normalized1, € million

FCF impacted by terminal dues payment, tax prepayments and negative working capital evolution mainly due to phasing elements

€ million	3Q15	3Q16	Delta
Cash flow from operating activities	-6.0	-64.2	-58.2
Cash flow from investing activities	-23.5	-7.8	+15.7
Operating free cash flow1	-29.5	-71.9	-42.5
Financing activities	-0.2	-0.1	+0.2
Net cash movement	-29.7	-72.0	-42.3
Capex	-24.9	-11.3	+13.6

• Alpha pay-outs: € +2.5m
• Terminal dues payment, mainly phasing as costs were booked in previous years in transport cost: € -16.8m
• Higher tax prepayment in 3Q16 (phasing): € -10.0m
• Excluding Alpha pay-outs/provision2, the terminal dues payment and the higher tax prepayment:
• Results of operating activities: € -4.3m, in line with evolution of normalized EBITDA
• Working capital evolution: € -29.6m, mainly due to phasing elements: Social Security payments (€ -8.0m), payment of commissions on banking products (€ -7.5m) and evolution in outstanding balances with suppliers
• Higher proceeds sale of buildings: € +2.1m
• Lower capex: € +13.6m

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

² 3Q15 Alpha provision amounted to € 54.5m of which € 7.6m was incorporated in 'employee benefits' provisions and € 46.9m in working capital (social debts)

Strong balance sheet structure

€ million

Assets			Equity and liabilities
Cash & cash equivalents	2,112.0 615.7	2,167.9 724.4	Interest-bearing loans & borrowings Provisions	2,112.0 65.8 64.2	2,167.9 66.3 46.6
Other assets Investments in associates	58.5 375.0	57.7 398.2	Trade & other payables	940.9	796.1
Trade & other receivables Inventories	413.5 11.1	328.7 11.6	Employee benefits	346.2	360.8
PPE & intangible assets	638.1	647.3	Total equity	694.8	898.2
	Dec 31, 2015	Sep 30, 2016		Dec 31, 2015	Sep 30, 2016

Sep 30, 2016

Outlook for 2016¹

Top line

• Underlying Domestic Mail volume decline around 5%²
• Compensation for SGEI: € 26.8m lower than in 2015 excluding inflation and volume impact
• Domestic Parcels: double digit volume growth
• International Parcels: continued growth supported by acquisitions

Costs

• Productivity improvements: low end of 800 to 1,200 FTE/year range excluding impact of Deltamedia integration.
• Strong focus on all cost items and factor cost levers (e.g. abolishment of Saturday compensation, tax shift).

Recurring EBITDA and dividend payment at least at the same level as 2015

FCF

• Gross capex: c. € 80.0m
• Cash generation from operating activities will be negatively impacted by lower compensation and changed payment terms for SGEI (€ -36.8m), the Alpha pay-outs and a settlement on terminal dues with another postal operator.

¹ Outlook 2016 excludes the impact of the acquisition of the Belgian activities of Lagardère Travel Retail

² 4Q16 will count 1 day less vs. same quarter of 2015.

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 92 23 43 Address: bpost, Centre Monnaie, 1000 Brussels, Belgium •