bpost SA/NV

Earnings Release • May 3, 2017

Investor presentation - Interim financial report 1Q17

Financial Calendar

More on corporate.bpost.be/investors

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

07.12.2017 Ex-dividend date (interim dividend)

11.12.2017

Payment date of the interim dividend

Disclaimer

This presentation is based on information published by bpost in its First Quarter 2017 Interim Financial Report, made available on May, 3rd 2017 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.

Highlights of 1Q17

Revenues up 26.4%

• Driven by excellent parcels growth and acquisitions; supported by resilient Domestic Mail

Resilient underlying Domestic Mail evolution

• Driven by strong and positive advertising mail volume trend

Excellent parcels performance

• Domestic: double-digit volume growth driven by e-commerce and C2C; price/mix effect of -3.4% fully mix related
• International: positive contribution from acquisitions, increase in flows from China and the US, continued volume loss to China

Organic cost evolution on track

• Opex influenced by acquisitions (€ +153.0m)
• Increase in transport cost in line with positive international business evolution

3

-4.7%

€ 764.0m

+24.5%

+ € 11.4m

+ € 158.4m

EBITDA growth driven by excellent parcels performance and supported by acquisitions and resilient mail

€ million

Total operating income (revenues)

Summary of key financials 1Q17

€ million

	1Q16	1Q17	% Δ
Total operating income (revenues)	604.5	764.0	26.4%
Operating expenses	428.7	587.1	37.0%
EBITDA	175.9	176.9	0.6%
Margin (%)	29.1%	23.2%
EBIT	153.9	154.2	0.2%
Margin (%)	25.5%	20.2%
Profit before tax	149.3	150.3	0.7%
Income tax expense	53.4	54.2
Net profit	95.9	96.1	0.2%
FCF	245.9	166.2	-32.4%
bpost S.A./N.V. net profit (BGAAP)	90.0	94.3	4.8%
Net Debt/ (Net cash), at 31 March	(792.2)	(659.1)	-16.8%

Total operating income (revenues)

€ million

		1Q16 comparable	∆	1Q17	% ∆
	Transactional mail	223.7	-9.6	214.2	-4.3%
Domestic mail	Advertising mail	65.1	2.2	67.4	3.4%
	Press	72.9	2.2	75.0	3.0%
	Domestic parcels1	43.9	8.5	52.4	19.4%
Parcels	International parcels	41.9	11.4	53.3	27.3%
	Logistic solutions	2.6	31.3	34.0	-
	International mail	39.2	2.9	42.1	7.5%
Additional sources	Value added services	25.5	0.5	26.0	2.0%
of revenues	Banking and financial	48.5	-2.0	46.6	-4.1%
	Distribution	-	68.7	68.7	-
	Retail & Other	23.8	46.9	70.7	197.1%
	Corporate	17.4	-3.6	13.7	-21.0%
TOTAL		604.5	159.5	764.0	26.4%

6

1Q17

Domestic mail underlying volume trend at -4.7% driven by positive advertising mail trend

Total operating income (revenues), € million

• Very good performance against a tough comparable base at -4.0% for 1Q16.
• Transactional Mail: shift towards cheaper products and continued e-substitution.
• Advertising Mail: strong performance across all focus segments and specific campaigns, positive impact from timing of Christmas holiday and Easter (2Q17 vs. 1Q16).
• Press: Slightly lower volume trend mainly due to periodicals.

	Reported		Underlying1
	FY16	1Q17	1Q16	2Q16	3Q16	4Q16	FY16	1Q17
Transactional mail	-5.9%	-6.0%	-5.3%	-4.8%	-7.4%	-6.4%	-5.9%	-7.0%
Advertising mail	-3.0%	2.7%	0.1%	-2.2%	-1.2%	-7.8%	-3.0%	2.3%
Press	-2.8%	-3.1%	-2.6%	-0.3%	-4.2%	-4.1%	-2.8%	-3.1%
Domestic Mail	-5.0%	-3.9%	-4.0%	-3.8%	-5.9%	-6.4%	-5.0%	-4.7%

• Impacted by regulatory decision on small user basket pricing.

Excellent parcels performance, growth in Logistic Solutions driven by DynaGroup

Total operating income (revenues), € million

¹ Defined as domestic and Belgian in- and outbound

² New category, previously called Special Logistics

Additional sources of revenues driven by the acquisition of Ubiway

Total operating income (revenues), € million

Organic cost evolution on track. Opex influenced by acquisitions (€ +153.0m). Increase in transport cost in line with positive international business evolution.

Operating expenses excl. depreciation and amortization, € million

• 2016 benefited from a positive impact from the increase of the recoverable VAT from 2016 vs. 2015 (EUR +4.0m) in other costs.
• Increase driven by acquisitions. Excluding scope change, increase driven by growth in the international business and lower favorable settlements in previous year's terminal dues.
• Average reported FTE & interim increase of 1,586 leading to € +20.9m additional costs and explained by the integration of new subsidiaries.
• Favourable FTE mix of € -3.9m thanks to the recruitment of auxiliary postmen (€ -2.8m) and the reduction of management level FTE (€ -1.0m).
• Negative price effect of € +3.7m explained by salary indexation, CLA and merit increases partly compensated by tax shift.
• Increase driven by acquisitions. Excluding scope change, increase of rent and rental, maintenance and energy costs (linked to increased fuel price), almost compensated by the decrease of consultancy costs and third party remuneration.
• Increase driven by acquisitions.

Decrease in operating FCF1 mainly driven by acquisitions and phasing in working capital evolution

€ million	1Q16	1Q17	Delta
Cash flow from operating activities	+281.1	+255.6	-25.5
Cash flow from investing activities	-35.1	-89.3	-54.2
Operating free cash flow	+245.9	+166.2	-79.7
Financing activities	-2.1	-0.3	+1.8
Net cash movement	+243.9	+165.9	-77.9
Capex	-12.4	-13.0	-0.6
• Lower income tax paid relating to previous years: € Alpha pay-outs: € +10.9m •	+5.9m
Excluding the above: • • Results of operating activities: € Working capital evolution: € • in suppliers and Social Security payments	+0.6m -42.8m, mainly explained by a negative phasing
Mainly due to: Lower proceeds from sale of buildings: € • • Purchase of 24.5% remaining shares in LGI: € • DynaGroup acquisition: € -50.2m FDM (Australia) acquisition cash outflow in 1Q16 vs. earn-out in 1Q17: € •	-1.2m -11.0m		+8.6m

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

Strong balance sheet structure

€ million

2,290.3 550.9	2,448.4 717.0	Interest-bearing loans & borrowings Provisions	2,290.3 58.0 58.7	2,448.4 57.7 56.0
58.4 373.7	55.1 347.7	Trade & other payables	1,037.5	1,129.1
484.6 36.7	399.7 39.5	Employee benefits	356.7	355.7
786.0	889.4	Total equity	779.3	849.9
				Equity and liabilities

Mar 31, 2017 Dec 31, 2016

Mar 31, 2017 Dec 31, 2016

13

Outlook for 2017 – maintained

Recurring EBITDA and dividend payment at the same level as 2016

Revenues

Increase driven by:

• Growth in domestic parcels: volume double digit, around -3% price/mix effect
• Continued growth in international parcels supported by newly acquired businesses
• Growing Ubiway Retail revenues
• Partly offset by decrease in domestic mail¹: volume between -5% and -6%, average domestic mail price increase of 1.5%

Operating expenses

Increase driven by:

• Increase in transport cost (reflecting growth in International Parcels)
• Integration of acquired businesses
• Salary indexation expected as of July 2017
• Partly compensated by continued productivity improvements and optimized FTE mix, and
• Continued cost optimization

Capex

• Recurring and Vision 2020 investments ~€ 90m
• Business development investments: Ubiway < € 10m

¹ 2Q17 will count 2 working days less, 3Q17 1 less on franking machines and 2 less on stamps and 4Q17 1 less on franking machines and 1 more on stamps vs. the same quarters of 2016.

Overall guidance 2016-2020 as issued at CMD on 15 November 2016

We confirm our long term ambition of at least € 620m¹ EBITDA by 2020

Revenue

Increase driven by:

• Growth in domestic parcels: volume +75% at least (vs. 2015), -2 to -3% price/mix effect
• Growth in international parcels: revenue x2 at least (vs. 2015)
• Decrease in domestic mail: volume up to -6%

Operating expenses

Increase driven by:

• Increase in transport cost (reflecting growth in International)
• Integration of acquired businesses
• Inflation
• Partly compensated by up to 4% FTE & interim productivity increase p.a. at current scope and
• Optimized FTE mix

Capex

• Further Vision 2020 investments in 2017-18: ~€ 90m p.a. excluding Ubiway capex
• Maintenance capex level in 2019-20: ~€ 60m p.a. excluding Ubiway capex

Maintenance of dividend policy

At least 85% pay-out of BGAAP net profit

M&A on top of overall 2020 EBITDA guidance

Accretive contribution supported by strong balance sheet. Any decision must be evaluated on 5 criteria

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 •