Earnings Release • Nov 3, 2020
Earnings Release
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Jean-Paul Van Avermaet, CEO of bpost group: "I'm proud to announce excellent third quarter results of bpost group where operating profit nearly doubled from last year. This is in the first place thanks to our fully committed employees worldwide, who have contributed in the most outstanding manner and who also today in very difficult circumstances bring out daily the best of themselves for our customers worldwide. In light of this continued positive earnings momentum we can raise our full year 2020 group adjusted EBIT guidance to at least EUR 270m. The world is changing at an astonishing pace, where COVID-19 has boosted e-commerce affinity and adoption and fuelled strong performance in our European and North American Parcels and Logistics divisions. Parcels & Logistics Europe and Asia EBIT nearly tripled while being positive in North America for the second consecutive quarter, resulting in a higher combined contribution of these business units to the group EBIT than Mail & Retail. This demonstrates that our business transformation is the right way forward for a viable and sustainable future."
"We continue to invest in additional capacity with a new fulfilment site announced in the US, 2 additional parcel sorting machines installed over the summer and now fully operational in Belgium as well as plans to expand Active Ants in our home country over 2021. As we continue to navigate the unknown with the second wave of the pandemic and new lockdown measures taken, we at bpost group are fully ready for the end of year peak to successfully meet our customers' expectations during the most important season of the year. Of course, our key priority is to protect the health and safety of our employees and customers."
"Since early this year, I've been working with the executive management team on the future strategic directions for bpost group. We'll be happy to present the outcome of this exercise to you on December 8th, 2020."
bpost group continues to develop its activities in E-commerce logistics
Active Ants inaugurated in Roosendaal its second site in the Netherlands. Deploying the most innovative technologies, the new site will process millions of packages per year for several hundreds of webshops. bpost group also plans on opening a first Active Ants center in Belgium in 2021.
To respond to growing E-commerce driven client demand, Radial North America will invest USD 40m, mainly over 2020 and 2021, in a new fulfilment center based in Locust Grove, Georgia, thereby creating 344 permanent fulltime jobs.
In the third quarter, bpost group confirmed its strong commitment to reducing the impact of its activities on the climate and mobility:
To better respond to customer expectations, bpost group develops and integrates new tools to substantially improve the customer experience.
The group adjusted EBIT for 2020 can be revised upwards to at least EUR 270m, including the estimated financial impact of the ransomware attack at Radial North America. Due to the second wave of the pandemic and lockdown measures taken, the visibility for the fourth quarter is however limited.
The contribution per Business Unit will differ from the initial outlook issued on March 17, 2020.
Gross capex will amount to EUR 150m maximum, compared to up to EUR 200m pre-COVID-19.
The updated capital allocation framework, including new dividend policy, will be communicated to the market on December 8th, 2020.
For more information: Saskia Dheedene T. +32 2 276 7643 (IR) corporate.bpost.be/investors
Barbara Van Speybroeck T. +32 476 517929 (Media) [email protected]
| 3rd quarter (in million EUR) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Reported | Adjusted | |||||||||
| 2019 | 2020 | 2019 | 2020 | % Δ | ||||||
| Total operating income | 881.5 | 972.9 | 880.9 | 972.9 | 10.4% | |||||
| Operating expenses (excl. D&A) | 783.0 | 840.1 | 783.0 | 840.1 | 7.3% | |||||
| EBITDA | 98.5 | 132.8 | 97.9 | 132.8 | 35.7% | |||||
| Depreciation and amortization | 64.2 | 67.8 | 59.6 | 63.3 | 6.3% | |||||
| EBIT | 34.3 | 65.1 | 38.3 | 69.5 | 81.5% | |||||
| Margin (%) | 3.9% | 6.7% | 4.3% | 7.1% | ||||||
| Profit before tax | 27.1 | 59.2 | 31.1 | 63.6 | 104.7% | |||||
| Income tax expense | 13.8 | 14.8 | 14.0 | 15.1 | ||||||
| Net profit | 13.4 | 44.4 | 17.0 | 48.6 | 184.9% | |||||
| FCF | (15.8) | (9.1) | (9.7) | 33.0 | ||||||
| Net Debt/ (Net cash) at 30 September | 751.3 | 597.6 | 751.3 | 597.6 | -20.5% | |||||
| CAPEX | 47.6 | 41.4 | 47.6 | 41.4 | -12.8% |
| Reported | Adjusted | ||||
|---|---|---|---|---|---|
| 2019 | 2020 | 2019 | 2020 | % Δ | |
| Total operating income | 2,724.0 | 2,960.2 | 2,723.4 | 2,960.2 | 8.7% |
| Operating expenses (excl. D&A) | 2,312.7 | 2,554.5 | 2,312.7 | 2,554.5 | 10.5% |
| EBITDA | 411.3 | 405.7 | 410.7 | 405.7 | -1.2% |
| Depreciation and amortization | 184.7 | 199.3 | 169.1 | 185.6 | 9.8% |
| EBIT | 226.6 | 206.4 | 241.6 | 220.1 | -8.9% |
| Margin (%) | 8.3% | 7.0% | 8.9% | 7.4% | |
| Profit before tax | 201.3 | 190.1 | 216.3 | 203.9 | -5.8% |
| Income tax expense | 74.4 | 54.3 | 75.6 | 55.1 | |
| Net profit | 126.9 | 135.9 | 140.7 | 148.8 | 5.7% |
| FCF | 174.9 | 298.3 | 204.2 | 323.3 | |
| Net Debt/ (Net cash) at 30 September | 751.3 | 597.6 | 751.3 | 597.6 | -20.5% |
| CAPEX | 89.0 | 86.8 | 89.0 | 86.8 | -2.4% |
1 Adjusted (previously called "Normalized") figures are not audited. Change of terminology "Adjusted" in order to align the label of this APM to the ESMA guidelines, definition and approach remain unchanged.
Compared to last year, total external operating income increased by EUR +91.4m to EUR 972.9m.
Operating expenses including depreciation and amortization increased by EUR -60.6m, mainly driven by higher payroll, interims and transport costs driven by volume growth at Parcels & Logistics Europe & Asia and North America, partially offset by the lower material costs from Ubiway Retail including the impact of the deconsolidation of Alvadis.
EBIT and adjusted EBIT nearly doubled and respectively increased by EUR +30.7m and EUR +31.2m compared to last year. The strong margin improvement is driven by stellar growth in parcel volumes at Parcels & Logistics Eurasia handled through the mail network and by the operating leverage in E-commerce logistics within Parcels & Logistics North America.
Net financial result increased by EUR +0.9m compared to last year mainly due to lower non-cash financial charges related to IAS 19 employee benefits, partially offset by unfavourable exchange results.
Share of profit of associates and joint ventures slightly increased by EUR +0.5m compared to last year.
Income tax expense slightly increased by EUR +1.1m compared to last year mainly due to the higher profit before tax partly offset by the lower statutory tax rate in Belgium.
Group net profit stood at EUR 44.4m.
Compared to last year, total external operating income increased by EUR 236.1m to EUR 2,960.2m.
Operating expenses including depreciation and amortization increased by EUR -256.3m, mainly driven by higher payroll, interims and transport costs driven by volume growth at Parcels & Logistics Europe & Asia and North America and additional costs due to COVID-19. These were partially offset by the lower material costs from Ubiway Retail including the impact of the deconsolidation of Alvadis.
As a result EBIT and adjusted EBIT decreased respectively by EUR -20.2m and EUR -21.5m compared to last year.
Net financial result increased by EUR +4.9m mainly due to lower non-cash financial charges related to IAS 19 employee benefits, partially offset by the increase of the contingent liability for the remaining shares of Anthill and unfavourable exchange result.
Share of profit of associates and joint ventures increased by EUR +4.2m compared to last year due to the increase of the result of bpost bank. This increase was mainly due to the profit realised on the partial sale of the bond portfolio in the first quarter of 2020, partly offset by the COVID-19 impact.
Income tax expense decreased by EUR +20.1m compared to last year mainly due to the lower profit before tax and to the lower statutory tax rate in Belgium.
Adjusted contribution of the different business units for 2020 amounted to:
| Year-to-date | 3rd quarter | |||||
|---|---|---|---|---|---|---|
| In million EUR (adjusted) | Total operating income |
EBIT | Margin (%) |
Total operating income |
EBIT | Margin (%) |
| Mail & Retail | 1,431.8 | 136.9 | 9.6% | 463.7 | 35.7 | 7.7% |
| Parcels & Logistics Europe & Asia | 771.5 | 79.0 | 10.2% | 263.1 | 29.7 | 11.3% |
| Parcels & Logistics North America | 911.1 | 18.8 | 2.1% | 295.9 | 8.7 | 2.9% |
| Corporate | 273.9 | (14.7) | -5.4% | 90.4 | (4.7) | -5.2% |
| Eliminations | (428.2) | (140.2) | ||||
| Group | 2,960.2 | 220.1 | 7.4% | 972.9 | 69.5 | 7.1% |
Evolution of the EBIT contribution of the different business units was as follows: 3rd quarter:
First nine months:
| Mail & Retail | Year-to-date | 3rd quarter | ||||
|---|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % |
2019 | 2020 | Change % |
| External operating income | 1,410.3 | 1,279.6 | -9.3% | 444.5 | 414.3 | -6.8% |
| Transactional mail | 551.7 | 532.3 | -3.5% | 168.8 | 168.3 | -0.3% |
| Advertising mail | 171.9 | 131.2 | -23.7% | 50.8 | 45.9 | -9.7% |
| Press | 257.7 | 250.6 | -2.8% | 82.1 | 78.7 | -4.1% |
| Proximity and convenience retail network | 350.7 | 288.9 | -17.6% | 116.9 | 96.2 | -17.7% |
| Value added services | 78.3 | 76.6 | -2.2% | 25.9 | 25.2 | -2.6% |
| Intersegment operating income | 124.6 | 152.3 | 22.2% | 41.6 | 49.4 | 18.8% |
| TOTAL OPERATING INCOME | 1,534.9 | 1,431.8 | -6.7% | 486.0 | 463.7 | -4.6% |
| Operating expenses | 1,267.8 | 1,230.9 | -2.9% | 426.9 | 405.8 | -4.9% |
| EBITDA | 267.1 | 200.9 | -24.8% | 59.1 | 57.8 | -2.2% |
| Depreciation, amortization | 63.0 | 65.7 | 4.4% | 20.7 | 22.7 | 9.9% |
| PROFIT FROM OPERATING ACTIVITIES (EBIT Reported) |
204.2 | 135.2 | -33.8% | 38.5 | 35.1 | -8.6% |
| Margin (%) | 13.3% | 9.4% | 7.9% | 7.6% | ||
| PROFIT FROM OPERATING ACTIVITIES (EBIT Adjusted) |
205.9 | 136.9 | -33.5% | 38.4 | 35.7 | -7.1% |
| Margin (%) | 13.4% | 9.6% | 7.9% | 7.7% | ||
| Average FTE & Interims | 22,329 | 23,090 | 3.4% | 23,070 | 24,092 | 4.4% |
Total operating income in the third quarter 2020 declined by EUR -22.3m or -4.6% compared to the same period of 2019. The decrease of the external operating income amounted to EUR -30.1m or -6.8% and was partly compensated by the higher – volume driven – intersegment operating income (EUR +7.8m) to PaLo Eurasia.
Revenues from Domestic Mail (i.e. Transactional, Advertising and Press combined) decreased by EUR -8.7m to EUR 293.0m. Underlying volume decline amounted to -8.2% (versus -7.9% full year 2019 underlying volume decline and -17.7% in the second quarter of 2020). Transactional mail volumes showed good resistance and noted an underlying decline of -8.3% for the quarter (versus -9.2% full year 2019 underlying volume decline). The volume decline was driven by the known structural trends of continued e-substitution by big senders and SMEs, higher acceptance of e-documents at the receivers' side and digitization of C2B communication through smartphone apps. Advertising mail realized an underlying volume decrease of -9.4% for the quarter (versus -4.7% full year 2019 underlying volume decline) driven by the continued recovery in unaddressed advertising mail aimed at driving traffic to the store, while Direct Mail sales was impacted by ongoing limited visibility due to COVID-19 uncertainties. Press2 volume decreased on an underlying basis by -5.4% (versus -6.5% full year 2019 underlying volume decline) driven by e-substitution and rationalization. Total Domestic Mail volume decline impacted revenues by EUR -20.9m, partly compensated by the net improvement in price and mix amounting to EUR +12.1m.
2 Following the merger of AMP with Burnonville the distribution of non-food to point of sales are reported as 'Press'. Revenue of the comparable period have been restated to reflect this change.
| Mail & Retail | Year-to-date | 3rd quarter | ||
|---|---|---|---|---|
| Evolution underlying Mail volumes | 2019 | 2020 | 2019 | 2020 |
| Domestic mail | -8.8% | -12.2% | -7.8% | -8.2% |
| Transactional mail | -9.9% | -11.5% | -9.2% | -8.3% |
| Advertising mail | -6.6% | -18.4% | -6.5% | -9.4% |
| Press | -6.7% | -6.2% | -3.4% | -5.4% |
Proximity and convenience retail network decreased by EUR -20.7m to EUR 96.2m. This decrease was mainly driven by reduced footfall from COVID-19 impacting Ubiway Retail, especially in travel environments, the deconsolidation of Alvadis (EUR -5.4m) as of September 2019 and lower banking & finance revenues.
Value added services amounted to EUR 25.2m and showed a decrease of EUR -0.7m versus last year due lower revenues from data and document management partly compensated by higher revenues from European license plates.
Operating expenses (including D&A) declined by EUR +19.0m. Higher operating expenses from payroll and interim driven by (1) increased headcount mainly from higher parcel volumes and absenteeism and (2) higher price from regular salary indexation, together with specific COVID-19 operating expenses (EUR -1.6m, incl. bad debt), were more than compensated by lower material costs from Ubiway Retail including the impact from the deconsolidation of Alvadis, increased sorting expenses transferred to PaLo Eurasia driven by growth in parcel volumes handled through the mail network, lower project related costs and lower use of sub-contractors.
As a result, reported EBIT amounted to EUR 35.1m with a margin of 7.6% and decreased by EUR -3.3m compared to the same period of 2019. Adjusted EBIT amounted to EUR 35.7m with a margin of 7.7% and showed a decrease of EUR -2.7m compared to previous year.
Total operating income declined by EUR -103.1m or -6.7% compared to last year. The decrease of the external operating income amounted to EUR -130.8m or -9.3% and was partly compensated by higher – volume driven – intersegment operating income (EUR +27.7m) to PaLo Eurasia.
Revenues from Domestic Mail (i.e. Transactional, Advertising and Press combined) decreased by EUR -67.3m to EUR 914.1m. Underlying volume decline amounted to -12.2%, with March 2020 to May 2020 at -20.1% due to COVID-19. Transactional mail noted an underlying volume decline of -11.5% for the year of which -16.7% from March to May 2020. During this period the COVID-19 lockdown negatively impacted all mail categories, in particular smaller administrative mail volume and registered letters. Excluding COVID-19, underlying mail volumes resisted rather well and are subject to the known trends of ongoing e-substitution and digitization. Advertising mail realized an underlying volume decrease of -18.4% for the year of which -36.2% from March to May 2020, mainly impacted by cancelled campaigns from the COVID-19 lockdown of all nonessential retail from March 18, 2020 through May 10, 2020 and a ban on promotions through April 3, 2020. Press volume decreased on an underlying basis by -6.2%, driven by e-substitution and rationalization.
Total Domestic Mail volume decline impacted revenues by EUR -101.0m and elections by EUR -3.7m. These effects were only partly compensated by the net improvement in price and mix amounting to EUR +36.1m and working days differences by EUR +1.4m.
Proximity and convenience retail network decreased by EUR -61.8m to EUR 288.9m. Excluding the impact of the deconsolidation of Alvadis as from September 2019 (EUR -20.9m), the decrease amounted to EUR -40.9m driven by lower Ubiway Retail revenues as a result of the COVID-19 related partial closure of the network and lower banking & finance revenues.
Value added services amounted to EUR 76.6m and showed a slight decrease of EUR -1.7m versus last year.
Operating expenses (including D&A) declined by EUR +34.1m. Higher operating expenses from payroll and interim driven by (1) increased headcount from higher parcel volumes and absenteeism and (2) price from COVID-19 premium and regular salary indexation, together with specific COVID-19 operating expenses, were more than compensated by lower material
costs from Ubiway Retail including the impact from the deconsolidation of Alvadis, higher recoverable VAT, increased sorting expenses transferred to PaLo Eurasia driven by growth in parcel volumes handled through the mail network and lower project related costs.
Reported EBIT amounted to EUR 135.2m with a margin of 9.4% and showed a decrease of EUR -69.0m compared to 2019. Adjusted EBIT amounted to EUR 136.9m and also showed a decline of EUR -69.0m compared to previous year.
COVID-19 impacted EBIT by an estimated EUR -51.4m over the first half 2020. This is explained by the top-line development on domestic mail and retail as well as additional costs: COVID-19 premium, health and safety, increase in absenteeism and additional bad debt risk. The COVID-19 impact of the third quarter 2020 is no longer separately disclosed since disentangling its effects from the observed business developments has become increasingly artificial and therefore less meaningful.
| Parcels & Logistics Europe & Asia | Year-to-date | 3rd quarter | ||||||
|---|---|---|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % |
2019 | 2020 | Change % |
||
| External operating income | 583.3 | 762.1 | 30.7% | 195.1 | 259.5 | 33.1% | ||
| Parcels BeNe | 272.8 | 379.8 | 39.2% | 94.4 | 125.6 | 33.1% | ||
| E-commerce logistics | 92.5 | 126.5 | 36.7% | 32.3 | 40.8 | 26.5% | ||
| Cross-border | 218.0 | 255.8 | 17.3% | 68.4 | 93.0 | 36.0% | ||
| Intersegment operating income | 13.2 | 9.5 | -28.6% | 3.2 | 3.6 | 11.1% | ||
| TOTAL OPERATING INCOME | 596.5 | 771.5 | 29.3% | 198.3 | 263.1 | 32.7% | ||
| Operating expenses | 531.9 | 678.2 | 27.5% | 183.5 | 228.2 | 24.4% | ||
| EBITDA | 64.7 | 93.3 | 44.3% | 14.8 | 34.9 | - | ||
| Depreciation, amortization | 16.3 | 16.5 | 0.9% | 5.1 | 5.9 | 14.8% | ||
| PROFIT FROM OPERATING ACTIVITIES (EBIT Reported) |
48.3 | 76.8 | 58.9% | 9.7 | 29.0 | - | ||
| Margin (%) | 8.1% | 10.0% | 4.9% | 11.0% | ||||
| PROFIT FROM OPERATING ACTIVITIES (EBIT Adjusted) |
51.9 | 79.0 | 52.1% | 10.4 | 29.7 | - | ||
| Margin (%) | 8.7% | 10.2% | 5.2% | 11.3% | ||||
| Average FTE & Interims | 3,171 | 3,596 | 13.4% | 3,230 | 3,507 | 8.6% |
Total operating income increased by EUR +64.8m or 32.7%, driven by the increase of the external operating income. External operating income in the third quarter 2020 amounted to EUR 259.5m and showed an increase of EUR +64.5m or 33.1% compared to the same period of 2019.
Parcels B2X revenue were up by 45.3%, driven by Parcels B2X3 volume growth of 49.0% fuelled by continued strong Ecommerce development accelerated by COVID-19. Total revenues of Parcels BeNe amounted to EUR 125.6m and excluding last year's positive effect of the reversal of the contingent consideration of Dynagroup (EUR -1.7m), revenues increased by EUR +32.9m (or +34.9%). Dilution of the revenue growth % vs. parcels B2X revenue growth is explained by flattish yearover-year revenue development of business not captured in Parcels B2X, driven among others by last year's closure of nonprofitable businesses.
| Parcels & Logistics Europe & Asia | Year-to-date | 3rd quarter | ||||
|---|---|---|---|---|---|---|
| 2019 | 2020 | 2019 | 2020 | |||
| Evolution parcels volumeError! Bookmark not defined. | +18.5% | +51.5% | +21.1% | +49.0% |
E-commerce logistics operating income in the third quarter 2020 amounted to EUR 40.8m, an increase of EUR +8.5m compared to the same period of 2019. This increase was mainly driven by Active Ants growth at existing customers as well as the integration of MCS Fulfilment as of from October 1st, 2019, the growth of the Radial UK business driven by existing and new clients and the opening of a new fulfilment site in Poland.
3 Since 3Q20, the volume growth percentage consists of B2X, not including Euro-Sprinters, CityDepot, Future Lab and Dynagroup. Restated 1Q20 and 2Q20 are respectively at +25.2% and +79.3%, leading to 51.5% YTD20. Restated 3Q19 and YTD19 are respectively at +21.1% and +18.5%.
The revenue increase within Cross-border amounted to EUR +24.6m or +36.0%. The strong revenue development was driven by continued exponential growth of Asian parcel volumes, with revenues more than tripling year-over-year linked to rail transport of containers as an alternative to air freight. This increase was partly offset by the declining cross-border postal business where growth in inbound parcels could not fully compensate the decline in both inbound and outbound mail volumes.
Operating expenses (including D&A) increased by EUR -45.5m, mainly explained by higher volume-linked variable costs translating into increased payroll, interim and transport costs across all business lines. PaLo Eurasia also recorded higher intersegment operating expenses from M&R driven by solid parcels growth in the integrated last-mile mail and parcels network.
Reported EBIT and adjusted EBIT nearly tripled and respectively amounted to EUR 29.0m and EUR 29.7m, with a margin of respectively 11.0% and 11.3%. Excluding last year's contingent consideration reversal on Dynagroup, adjusted EBIT was up by EUR +21.0m. The steep margin improvement was explained by stellar growth in parcel volumes handled through the mail network.
Total operating income increased by EUR +175.0m, mainly driven by the increase of the external operating income. External operating income amounted to EUR 762.1m in 2020 and showed an increase of EUR +178.8m or 30.7% compared to 2019.
Parcels BeNe increased by EUR +107.0m driven by parcels B2X volume growth of +51.5%3 from thriving online sales during COVID-19 lockdown (March to May volumes up by 63.2%). COVID-19 revenue impact is estimated at EUR +44.7m over the first half 2020.
E-commerce logistics amounted to EUR 126.5m, an increase of EUR +34.0m compared to 2019. This increase was mainly driven by Radial Europe, Active Ants and DynaFresh. Further revenue growth driven by the integration of MCS Fulfilment (part of Active Ants) as from October 1st, 2019, contributing EUR 8.8m year-to-date. COVID-19 revenue impact is estimated at EUR +11.3m over the first half 2020.
Cross-border increased by EUR +37.8m to EUR 255.8m. This was driven by a gradual ramp-up in Asian parcel volumes since May, evolving exponentially as of June, resulting from rail transport as an alternative to air freight. This increase was partly offset by COVID-19 linked revenues losses on other international parcels volumes (UK and Rest of Europe) and lower inand outbound mail volumes, as well as the unfavourable year-over-year evolution of terminal dues settlements (EUR -3.4m). COVID-19 revenue impact is estimated at EUR +9.7m over the first half 2020.
Operating expenses (including D&A) increased by EUR -146.5m, mainly explained by higher volume-linked variable costs translating into increased payroll, interim and transport costs across all business lines, the unfavourable impact of terminal dues settlements (EUR -3.0m) and the year-over-year VAT recovery (EUR -2.5m), as well as specific COVID-19 operating expenses consisting of the premium to operational staff, increased absenteeism, health and safety measures, higher use of subcontractors and additional bad debt provisions. PaLo Eurasia also recorded higher intersegment operating expenses from M&R driven by solid parcels growth in the integrated last-mile mail and parcels network.
As a result reported EBIT amounted to EUR 76.8m and showed an increase of EUR +28.5m (+58.9%) compared to 2019 with a margin of 10.0% and adjusted EBIT amounted to EUR 79.0m and showed an increase of EUR +27.1m (+52.1%) compared to 2019 with a margin of 10.2%.
COVID-19 had an estimated EBIT impact of EUR +11.3m over the first half 2020, from the COVID-19 driven operating income increase in all business lines partly offset by the aforementioned specific COVID-19 additional operating expenses. The COVID-19 impact of the third quarter 2020 is no longer separately disclosed since disentangling its effects from the observed business developments has become increasingly artificial and therefore less meaningful.
| Parcels & Logistics North America | Year-to-date | 3rd quarter | ||||
|---|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % |
2019 | 2020 | Change % |
| External operating income | 705.0 | 906.7 | 28.6% | 239.9 | 294.9 | 22.9% |
| E-commerce logistics | 638.6 | 842.5 | 31.9% | 218.4 | 273.4 | 25.2% |
| International mail | 66.4 | 64.3 | -3.3% | 21.4 | 21.4 | 0.0% |
| Intersegment operating income | 4.0 | 4.4 | 10.7% | 1.5 | 1.0 | -31.5% |
| TOTAL OPERATING INCOME | 708.9 | 911.1 | 28.5% | 241.4 | 295.9 | 22.6% |
| Operating expenses | 678.9 | 838.3 | 23.5% | 229.7 | 269.2 | 17.2% |
| EBITDA | 30.1 | 72.8 | - | 11.6 | 26.7 | - |
| Depreciation, amortization | 53.5 | 63.7 | 19.2% | 20.2 | 21.1 | 4.2% |
| PROFIT FROM OPERATING ACTIVITIES (EBIT Reported) |
(23.4) | 9.1 | - | (8.6) | 5.6 | - |
| Margin (%) | -3.3% | 1.0% | -3.6% | 1.9% | ||
| PROFIT FROM OPERATING ACTIVITIES (EBIT Adjusted) |
(13.7) | 18.8 | - | (5.3) | 8.7 | - |
| Margin (%) | -1.9% | 2.1% | -2.2% | 2.9% | ||
| Average FTE & Interims | 7,131 | 8,648 | 21.3% | 7,059 | 9,102 | 28.9% |
Total operating income increased by EUR +54.5m or 22.6% (+28.9% at constant exchange rate4), driven by the increase of the external operating income. External operating income in the third quarter 2020 amounted to EUR 294.9m and showed an increase of EUR +55.0m or +22.9% (+29.3% at constant exchange rate4) compared to the same period of 2019.
E-commerce logistics increased by EUR +55.0m to EUR 273.4m or +25.2% (+31.6% at constant exchange rate4). Revenue increase was mainly driven by Radial North America benefitting from changing E-commerce shopping habits due to COVID-19 concerns. Growth mainly driven by existing customers (+34%) as well as clients launched in 2019, slightly offset by client churn. Cross-border activities (Landmark, Apple Express and FDM) benefitted from new client wins and increased E-commerce business overall, leading to higher sales from existing customers.
| Radial North America (*) | Year-to-date | 3rd quarter | |||||
|---|---|---|---|---|---|---|---|
| In million USD (Adjusted) | 2019 | 2020 | Change % |
2019 | 2020 | Change % |
|
| Total operating income | 581.7 | 794.2 | 36.5% | 195.3 | 261.8 | 34.0% | |
| EBITDA | 10.5 | 56.0 | 436.0% | 5.1 | 21.2 | 319.0% | |
| Profit from operating activities (EBIT) | (31.3) | 3.9 | - | (11.2) | 3.2 | - |
(*) Business unit performance expressed in USD of the consolidated Radial entities held by bpost North America Holdings Inc.
International mail in the third quarter 2020 is flat year-over-year and amounted to EUR 21.4m (+5.1% at constant exchange rate4) with lower volumes in the business mail segment compensated by higher domestic parcels revenues from new contract wins.
Operating expenses (including D&A) increased by EUR -40.3m or -16.1% (-22.1% at constant exchange rate4), resulting from volume-driven higher variable labour and transportation costs, higher fixed payroll and benefits, COVID-19 related expenses and increased D&A from additional fulfilment sites. This was partly compensated by higher productivity and benefits from our cost savings program as well as cost containment measures in general.
4 Constant Exchange Rate: The reported figures in local currency of the prior comparable period are converted with the exchange rates applied for the current reported period.
Adjusted EBIT in the third quarter 2020 amounted to EUR 8.7m and showed an increase of EUR +14.0m compared to the same period of 2019, driven by positive operating leverage in E-commerce logistics, in particular at Radial. Reported EBIT includes EUR 3.1m of amortization of intangible assets originating from the purchase price allocation and therefore amounted to EUR 5.6m with a margin of 1.9%. This was an increase of EUR +14.2m compared to the same period of 2019.
Total operating income increased by EUR +202.2m or 28.5% (+28.7% at constant exchange rate4) to EUR 911.1m, driven by the increase of the external operating income. External operating income amounted to EUR 906.7m and showed an increase of EUR +201.7m or +28.6% (+28.8% at constant exchange rate4) compared to 2019.
E-commerce logistics increased by EUR +203.9m or +31.9% to EUR 842.5m (+32.1% at constant exchange rate4). The revenue increase mainly driven by Radial North America recording significant growth of existing customers driven by COVID-19 as well as new clients launched in 2019, slightly offset by client churn. COVID-19 estimated impact on revenues stood at EUR +92.0m over the first half 2020.
International mail amounted to EUR 64.3m, a decrease of EUR -2.2m or -3.3% (-3.5% at constant exchange rate4), the initial drop-off in business mail segment as a result of COVID-19 was almost compensated by higher domestic parcels revenues. COVID-19 estimated impact on revenues stood at EUR -2.0m over the first half 2020 with the main negative impact seen in April 2020 and improving month by month thereafter.
Operating expenses (including D&A) increased by EUR -169.7m or -23.2% (-23.3% at constant exchange rate4), resulting from volume-driven higher variable labour and transportation costs, higher fixed payroll and benefits, bad debt, COVID-19 related expenses and increased D&A from additional fulfilment sites. This was partly compensated by higher productivity and benefits from our cost savings program as well as cost containment measures in general.
Adjusted EBIT and reported EBIT increased by EUR +32.5m and respectively amounted to EUR 18.8m and EUR 9.1m. This uplift was driven by positive operating leverage in E-commerce logistics, in particular at Radial.
COVID-19 impacted EBIT by an estimated EUR +16.2m over the first half of 2020, mainly related to additional E-commerce logistics volumes, partly offset by additional health and safety measures, increased transport costs relating to International Mail and bad debt. The COVID-19 impact of the third quarter 2020 is no longer separately disclosed since disentangling its effects from the observed business developments has become increasingly artificial and therefore less meaningful.
| Corporate | Year-to-date | 3rd quarter | ||||
|---|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % |
2019 | 2020 | Change % |
| External operating income | 25.4 | 11.8 | -53.5% | 2.2 | 4.2 | 92.9% |
| Intersegment operating income | 266.4 | 262.1 | -1.6% | 88.6 | 86.2 | -2.7% |
| TOTAL OPERATING INCOME | 291.8 | 273.9 | -6.1% | 90.8 | 90.4 | -0.4% |
| Operating expenses | 242.3 | 235.2 | -2.9% | 77.8 | 77.0 | -1.0% |
| EBITDA | 49.5 | 38.7 | -21.8% | 13.0 | 13.4 | 3.4% |
| Depreciation, amortization | 52.0 | 53.4 | 2.7% | 18.2 | 18.1 | -0.3% |
| PROFIT FROM OPERATING ACTIVITIES (EBIT Reported) |
(2.5) | (14.7) | - | (5.2) | (4.7) | - |
| Margin (%) | -0.9% | -5.4% | -5.7% | -5.2% | ||
| PROFIT FROM OPERATING ACTIVITIES (EBIT Adjusted) |
(2.5) | (14.7) | - | (5.2) | (4.7) | - |
| Margin (%) | -0.9% | -5.4% | -5.7% | -5.2% | ||
| Average FTE & Interims | 1,628 | 1,606 | -1.3% | 1,617 | 1,574 | -2.7% |
External operating income in the third quarter 2020 increased by EUR +2.0m to EUR 4.2m driven by higher building sales.
Operating expenses (including D&A) decreased by EUR +0.8m driven by lower demand for services from the different operational Business Units (EUR -2.4m intersegment operating income). Net of the intersegment operating income, operating expenses (including D&A) increased by EUR -1.6m mainly driven by higher provisions.
As a result reported EBIT and adjusted EBIT showed an increase of EUR +0.5m year-over-year to EUR -4.7m.
External operating income decreased by EUR -13.6m to EUR 11.8m driven by lower building sales, due to the sale in second quarter of 2019 of the headquarters Centre Monnaie building (EUR 19.9m gain on disposal). This was partly offset by higher building sales in the first and third quarter of 2020.
Operating expenses (including D&A) decreased by EUR +5.7m driven by lower demand for services from the operational business units (EUR -4.3m intersegment operating income). Net of intersegment operating income, the operating expenses (including D&A) decreased by EUR +1.4m due to lower project costs and cost containment, partly offset by negative yearover-year VAT recovery impact and higher provisions.
Reported EBIT and adjusted EBIT showed a decrease of EUR -12.2m mainly driven by lower external operating income (EUR -13.6m).
| Year-to-date | 3rd quarter | |||
|---|---|---|---|---|
| In million EUR | 2019 | 2020 | 2019 | 2020 |
| Net cash from operating activities | 206.7 | 370.3 | 31.8 | 28.4 |
| of which CF from operating activities before ∆ in WC & provisions |
299.5 | 366.5 | 85.6 | 93.6 |
| Net cash used in investing activities | (31.8) | (72.0) | (47.5) | (37.5) |
| Net cash from financing activities | (151.7) | (98.2) | (46.8) | (47.2) |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 23.1 | 200.0 | (62.5) | (56.4) |
| Free cash flow | 174.9 | 298.3 | (15.8) | (9.1) |
In the third quarter 2020, the net cash outflow decreased compared to the same period last year by EUR 6.1m to EUR 56.4m.
Free cash flow amounted to EUR -9.1m, whereas the adjusted free cash flow amounted to EUR +33.0m (i.e. when adjusting the free cash flow for the collected proceeds due to clients in Radial, which amounted to EUR -42.2m in the third quarter 2020).
Cash flow from operating activities compared to the same period last year slightly decreased by EUR 3.4m to EUR 28.4m. Cash flow from operating activities before change in working capital and provisions increased by EUR 8.0m as improved EBITDA (EUR +34.3m) was partially offset by tax prepayments (EUR -19.0m).
Outflow related to collected proceeds due to Radial's clients was EUR -36.2m higher (EUR 42.2m outflow in the third quarter 2020 compared to an outflow of EUR 6.0m in the same period last year). The balance of the variance in change in working capital (EUR +23.1m) was mainly explained by higher settlements of receivables as a result of the increased sales in the second quarter 2020, partially offset by higher outflow related to social security deferred to the third quarter 2020 and lower supplier balances.
Investing activities resulted in a cash outflow of EUR 37.5m in the third quarter 2020, compared to a cash outflow of EUR 47.5m for the same period last year. The evolution in the third quarter was mainly explained by the disposal of Alvadis in the third quarter 2019 (EUR -5.9m) more than offset by lower capex (EUR 6.1m) and lower spend on M&A activities (EUR 7.3m).
Capital expenditures stood at EUR 41.4m in the third quarter 2020 and was mainly spent on increasing capacity for parcels and E-commerce logistics at Radial North America, in Belgium (Parcels B2X) and the Netherlands (Active Ants).
In 2020 the cash outflow relating to financing activities amounted to EUR 47.2m approximately in line with last year.
In the first nine months 2020, the net cash flow increased compared to the same period last year by EUR 176.9m to EUR 200.0m.
Free cash flow amounted to EUR 298.3m.
Cash flow from operating activities compared to the same period last year increased by EUR 163.7m to EUR 370.3m.
Cash flow from operating activities before change in working capital and provisions increased by EUR 67.1m. This was partly explained by EBITDA excluding gain on HQ (EUR +14.3m, out of which EUR +19.9 related to the non-cash item). The first nine months 2020 benefited from a positive tax assessment on previous years (EUR +7.5m vs. EUR -13.8m in the first quarter 2019). Furthermore the lower tax prepayments had a positive impact on operating results (EUR +30.7m).
Change in working capital and provisions was positive in the first nine months of 2020 (EUR +3.8m vs. EUR -92.8m in 2019) leading to an improvement vs. the same period last year (EUR +96.6m). This was mainly explained by the positive impact of extended payment terms in payables due to some temporary initiatives set up in the context of the pandemic, which will be
unwound in the course of the first quarter next year and the increased cross border activities leading to increased terminal dues.
Investing activities resulted in a cash outflow of EUR 72.0m in the first nine months 2020, compared to a cash outflow of EUR 31.8m for the same period last year. This was mainly explained by the proceeds of building sales (EUR -43.6m) combined with disposal of Alvadis (EUR -5.9m) in 2019. This was partially compensated by lower spend on M&A activities (EUR +7.1m) and lower capital expenditures (EUR +2.2m). Capital expenditures amounted to EUR 86.8m compared to EUR 89.0m prior year, and were mainly spent on increasing capacity for parcels and E-commerce logistics at Radial North America, in Belgium (Parcels B2X) and the Netherlands (Active Ants).
In 2020 the cash outflow relating to financing activities amounted to EUR -98.2m compared to -151.7m last year, mainly explained by the absence of a dividend payment in 2020 (EUR +50.0m).
The bpost group Board of Directors has decided, following the recommendation of bpost's Remuneration Committee, to nominate Ilias Simpson as the new CEO of Radial US. He will succeed Henri de Romrée whose mandate ends on December 1st, 2020. Ilias will be member of the bpost group Executive Committee. Ilias Simpson (38) is senior vice president of Fulfilment Services for Radial and member of the Executive Leadership Team. He has been leading operations for Radial fulfilment centers, network optimization, engineering, continuous improvement and project management. Ilias has many years of experience in business development, lean implementation and growth strategies. Before joining Radial, he held leadership positions at Ryder, Pentair, Halliburton and Cintas. Ilias holds an MBA degree from the University of Dayton and a BA degree in Sociology from the University of North Texas. He is a member of the National Black MBA Association and is a decorated veteran of the U.S. Air Force. Henri de Romrée was Chief Financial Officer from 2018 until 2019 and headed the Mail & Retail business in Belgium before moving to the North-American activities in 2020. He is also member of the bpost group Executive Committee and CEO of Radial. Henri de Romrée will make a permanent return to Belgium for family reasons. He will stay at Radial until the end of the year to organize the hand-over and the end-of-year peak with Ilias Simpson.
On January 1, 2021 bpost will adjust its stamp tariffs. In line with previous years, the average tariff rise for all domestic mail products in 2021 will be about 6%. For domestic mail sent within Belgium there is a distinction between Prior and Non Prior. The Non Prior stamp will cost EUR 1.07 a piece per 10 or EUR 1.10 for a single stamp. The prior stamp will cost EUR 1.57 a piece per 10 or EUR 1.60 for a single stamp. The tariff for a standardized item to an address within Europe will be EUR 1.91 a piece and EUR 1.85 when at least five stamps are purchased. For items to an address outside Europe, the international tariff will be EUR 2.13 a piece and EUR 2.07 when at least five stamps are purchased.
04.11.2020 (10.00 CET) Analyst Conference Call
08.12.2020 (10.30 CET) Strategy update and capital allocation 08.02.2021 Start of quiet period ahead of FY20 results 09.03.2021 (17.45 CET) Announcement annual results FY20 10.03.2021 (10.00 CET) Analyst Conference Call 06.04.2021 Start of quiet period ahead of 1Q21 results 05.05.2021 (17.45 CET) Announcement 1Q21 results 06.05.2021 (10.00 CET) Analyst Conference Call 12.05.2021 Ordinary General Meeting of Shareholders 07.07.2021 Start of quiet period ahead of 2Q21 results 05.08.2021 (17.45 CET) Announcement 2Q21 and half-year results 06.08.2021 (10.00 CET) Analyst Conference Call 11.10.2021 Start of quiet period ahead of 3Q21 results 09.11.2021 (17.45 CET) Announcement 3Q21 results 10.11.2021 (10.00 CET) Analyst Conference Call 01.12.2021 (17.45 CET) Interim dividend 2021 announcement 06.12.2021 Ex-dividend date (interim dividend) 07.12.2021 Record date (interim dividend) 08.12.2021 Payment date of the interim dividend
| Interim Condensed Consolidated Income Statement (unaudited) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Year-to-date | 3rd quarter | |||||||
| In million EUR | Notes | 2019 | 2020 | 2019 | 2020 | |||
| Revenue | 8 | 2,678.3 | 2,929.9 | 871.0 | 964.1 | |||
| Other operating income | 45.7 | 30.3 | 10.6 | 8.8 | ||||
| TOTAL OPERATING INCOME | 2,724.0 | 2,960.2 | 881.5 | 972.9 | ||||
| Material costs | (183.5) | (149.7) | (62.7) | (51.1) | ||||
| Services and other goods | 9 | (1,004.0) | (1,218.5) | (343.9) | (395.9) | |||
| Payroll costs | (1,110.9) | (1,163.8) | (368.2) | (384.5) | ||||
| Other operating expenses | (14.4) | (22.4) | (8.2) | (8.5) | ||||
| Depreciation, amortization | (184.7) | (199.3) | (64.2) | (67.8) | ||||
| TOTAL OPERATING EXPENSES | (2,497.5) | (2,753.8) | (847.2) | (907.8) | ||||
| PROFIT FROM OPERATING ACTIVITIES (EBIT) | 226.6 | 206.4 | 34.3 | 65.1 | ||||
| Financial income | 5.2 | 4.8 | 3.1 | (0.4) | ||||
| Financial costs | (39.9) | (34.7) | (15.5) | (11.1) | ||||
| Share of results of associates and joint ventures | 9.5 | 13.7 | 5.2 | 5.7 | ||||
| PROFIT BEFORE TAX | 201.3 | 190.1 | 27.1 | 59.2 | ||||
| Income tax expense | (74.4) | (54.3) | (13.8) | (14.8) | ||||
| PROFIT OF THE PERIOD | 126.9 | 135.9 | 13.4 | 44.4 | ||||
| Attribuable to: | ||||||||
| Owners of the Parent | 126.5 | 135.6 | 13.0 | 44.5 | ||||
| Non-controlling interests | 0.3 | 0.3 | 0.3 | (0.1) |
| Year-to-date 3rd quarter |
||||
|---|---|---|---|---|
| In EUR | 2019 | 2020 | 2019 | 2020 |
| ►basic, profit for the year attributable to ordinary equity holders of the parent | 0.63 | 0.68 | 0.07 | 0.22 |
| ►diluted, profit for the year attributable to ordinary equity holders of the parent | 0.63 | 0.68 | 0.07 | 0.22 |
In accordance with IAS 33, diluted earnings per share amounts have to be calculated by dividing the net profit attributable to ordinary equity holders of the parent (after adjusting for the effects of all dilutive potential ordinary shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
As far as bpost is concerned, no effects of dilution affect the net profit attributable to ordinary equity holders and the weighted average number of ordinary shares.
The interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting
| Interim Condensed Consolidated Statement of Other Comprehensive Income (unaudited) | ||||||
|---|---|---|---|---|---|---|
| ------------------------------------------------------------------------------------ | -- | -- | -- | -- | -- | -- |
| Year-to-date | 3rd quarter | |||
|---|---|---|---|---|
| In million EUR | 2019 | 2020 | 2019 | 2020 |
| PROFIT FOR THE YEAR | 126.9 | 135.9 | 13.4 | 44.4 |
| OTHER COMPREHENSIVE INCOME | ||||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods: |
||||
| Change of other comprehensive income of associates | (12.1) | (14.0) | (4.8) | (2.1) |
| Gross change of other comprehensive income of associates | (17.0) | (20.4) | (6.4) | (2.8) |
| Income tax effect | 4.9 | 6.3 | 1.6 | 0.7 |
| Net gain/(loss) on hedge of a net investment | (6.4) | 5.2 | (5.7) | 5.6 |
| Net gain/(loss) on cash flow hedges | 1.3 | 1.4 | 0.4 | 0.5 |
| Gain/ (loss) on cash flow hedges | 1.7 | 1.9 | 0.6 | 0.6 |
| Income tax effect | (0.4) | (0.5) | (0.2) | (0.2) |
| Exchange differences on translation of foreign operations | 46.8 | (31.6) | 33.6 | (32.3) |
| NET OTHER COMPREHENSIVE INCOME/(LOSS) TO BE RECLASSIFIED TO PROFIT OR LOSS IN SUBSEQUENT PERIODS |
29.6 | (39.1) | 23.6 | (28.4) |
| Other comprehensive income not to be reclassified to profit or loss in subsequent periods: |
||||
| Remeasurement gain (losses) on defined benefit plans | 1.0 | 0.9 | 0.0 | 0.0 |
| Gross gain/ (loss) on defined benefit plans | 1.5 | 1.2 | 0.0 | 0.0 |
| Income tax effect | (0.5) | (0.3) | 0.0 | 0.0 |
| NET OTHER COMPREHENSIVE INCOME/(LOSS) NOT TO BE RECLASSIFIED TO PROFIT OR LOSS IN SUBSEQUENT PERIODS |
1.0 | 0.9 | 0.0 | 0.0 |
| OTHER COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR, NET OF TAX |
30.6 | (38.1) | 23.6 | (28.4) |
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX |
157.5 | 97.8 | 37.0 | 16.0 |
| Attributable to: | ||||
| Owners of the Parent | 157.2 | 97.5 | 36.7 | 16.1 |
| Non-controlling interest | 0.3 | 0.3 | 0.3 | (0.1) |
| Interim Condensed Consolidated Statement of Financial Position (unaudited) |
|---|
| ---------------------------------------------------------------------------- |
| In million EUR | Notes | As of 31 December 2019 |
As of 30 September 2020 |
|---|---|---|---|
| Assets | |||
| Non-current assets Property, plant and equipment |
10 | 1,133.6 | 1,109.6 |
| Intangible assets | 11 | 898.3 | 860.8 |
| Investments in associates and joint ventures | 12 | 239.5 | 239.1 |
| Investment properties Deferred tax assets |
5.0 27.3 |
3.3 28.1 |
|
| Trade and other receivables | 41.5 | 43.0 | |
| 2,345.1 | 2,284.0 | ||
| Current assets Inventories |
34.7 | 36.7 | |
| Income tax receivable | 8.1 | 8.1 | |
| Trade and other receivables | 13 | 717.6 | 595.1 |
| Cash and cash equivalents | 14 | 670.2 1,430.5 |
856.1 1,495.9 |
| Assets held for sale | 1.4 | 4.0 | |
| TOTAL ASSETS | 3,777.1 | 3,783.9 | |
| Equity and liabilities Issued capital |
364.0 | 364.0 | |
| Reserves | 252.3 | 256.7 | |
| Foreign currency translation | 34.0 | 7.5 | |
| Retained earnings Equity attributable to equity holders of the Parent |
30.7 680.9 |
135.9 764.1 |
|
| Equity attributable to non-controlling interests | 1.7 | 1.4 | |
| TOTAL EQUITY | 682.6 | 765.5 | |
| Non-current liabilities Interest-bearing loans and borrowings |
1,176.8 | 1,178.4 | |
| Employee benefits | 16 | 320.6 | 311.2 |
| Trade and other payables | 15 | 27.7 | 44.5 |
| Provisions Deferred tax liabilities |
16.2 7.0 |
17.7 6.4 |
|
| 1,548.2 | 1,558.2 | ||
| Current liabilities | |||
| Interest-bearing loans and borrowings Bank overdrafts |
272.7 0.5 |
275.1 0.0 |
|
| Provisions | 13.7 | 10.8 | |
| Income tax payable | 17 | 7.3 | 42.9 |
| Derivative instruments | 20 | 1.3 | 0.7 |
| Trade and other payables | 18 | 1,250.9 1,546.3 |
1,130.6 1,460.2 |
| TOTAL LIABILITIES | 3,094.5 | 3,018.5 | |
| TOTAL EQUITY AND LIABILITIES | 3,777.1 | 3,783.9 |
| ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT | ||||||||
|---|---|---|---|---|---|---|---|---|
| In million EUR | ISSUED CAPITAL AUTHORIZED & |
TREASURY SHARES |
RESERVES OTHER |
TRANSLATION CURRENCY FOREIGN |
EARNINGS RETAINED |
TOTAL | NON-CONTROLLING INTERESTS |
EQUITY TOTAL |
| AS PER 1 JANUARY 2019 | 364.0 | 0.0 | 271.4 | 12.7 | 51.6 | 699.7 | 2.5 | 702.3 |
| Profit for the year 2019 | 126.5 | 126.5 | 0.3 | 126.9 | ||||
| Other comprehensive income | 41.9 | 40.4 | (51.6) | 30.6 | 30.6 | |||
| TOTAL COMPREHENSIVE INCOME | 0.0 | 0.0 | 41.9 | 40.4 | 74.9 | 157.2 | 0.3 | 157.5 |
| Dividends (Pay-out) | (50.0) | 0.0 | (50.0) | 0.0 | (50.0) | |||
| Other | (1.6) | 0.3 | (1.2) | (1.3) | (2.6) | |||
| AS OF 30 SEPTEMBER 2019 | 364.0 | 0.0 | 261.7 | 53.1 | 126.9 | 805.7 | 1.5 | 807.2 |
| AS PER 1 JANUARY 2020 | 364.0 | 0.0 | 252.3 | 34.0 | 30.7 | 680.9 | 1.7 | 682.6 |
| Profit for the year 2020 | 135.6 | 135.6 | 0.3 | 135.9 | ||||
| Other comprehensive income | 19.0 | (26.4) | (30.7) | (38.1) | (38.1) | |||
| TOTAL COMPREHENSIVE INCOME | 0.0 | 0.0 | 19.0 | (26.4) | 105.0 | 97.5 | 0.3 | 97.8 |
| Other | (14.6) | 0.3 | (14.4) | (0.5) | (14.9) | |||
| AS OF 30 SEPTEMBER 2020 | 364.0 | 0.0 | 256.7 | 7.5 | 135.9 | 764.1 | 1.4 | 765.5 |
Equity increased by EUR 82.9, or 12.1%, to EUR 765.5m as of September 30, 2020 from EUR 682.6m as of December 31, 2019. The realized profit (EUR 135.9m), the effective part of a cash-flow hedge entered into to hedge the cash flow risk of the bond (EUR 1.4m) and the remeasurement gains on post-employment benefits (EUR 0.9m) were partially offset by the fair value adjustment in respect of bpost bank's bond portfolio (EUR 14.0m), the exchange differences on translation of foreign operations (EUR 26.4m) and the net impact of the integration of Active Ants International comprising the noncontrolling interests and the recognition of the contingent consideration for the purchase of the remaining shares (EUR 14.6m). The cash-flow hedge reserve will be reclassified to profit or loss over the 8 years after the issuance date of the bond.
| Year-to-date | 3rd quarter | ||||
|---|---|---|---|---|---|
| In million EUR | Notes | 2019 | 2020 | 2019 | 2020 |
| Operating activities | |||||
| Profit before tax | 201.3 | 190.1 | 27.1 | 59.2 | |
| Depreciation and amortization | 184.7 | 199.3 | 64.2 | 67.8 | |
| Impairment on bad debts | 2.6 | 15.0 | 1.6 | 2.2 | |
| Gain on sale of property, plant and equipment | (21.6) | (8.7) | (1.0) | (3.3) | |
| Gain on disposal of subsidiaries | (0.6) | 0.0 | (0.6) | 0.0 | |
| Other non-cash items | 16.4 | 23.0 | 5.7 | 6.3 | |
| Change in employee benefit obligations | 16 | 8.4 | (8.2) | 3.7 | (4.1) |
| Share of results of associates and joint ventures | 12 | (9.5) | (13.7) | (5.2) | (5.7) |
| Dividend received | 0.0 | 0.0 | 0.0 | 0.0 | |
| Income tax paid | (68.5) | (37.8) | (9.9) | (28.9) | |
| Income tax paid on previous years | (13.8) | 7.5 | 0.0 | 0.0 | |
| CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES | 299.5 | 366.5 | 85.6 | 93.6 | |
| IN WORKING CAPITAL AND PROVISIONS | |||||
| Decrease/(increase) in trade and other receivables | 92.6 | 107.3 | (78.3) | 7.4 | |
| Decrease/(increase) in inventories | 1.7 | (2.1) | (2.3) | (0.7) | |
| Increase/(decrease) in trade and other payables | (152.6) | (75.1) | 34.2 | (30.1) | |
| Increase/(decrease) in collected proceeds due to clients | (29.3) | (25.0) | (6.0) | (42.2) | |
| Increase/(decrease) in provisions | (5.1) | (1.2) | (1.4) | 0.3 | |
| NET CASH FROM OPERATING ACTIVITIES | 206.7 | 370.3 | 31.8 | 28.4 | |
| Investing activities | |||||
| Proceeds from sale of property, plant and equipment | 59.2 | 15.5 | 1.5 | 3.9 | |
| Disposal of subsidiaries, net of cash disposed of | 5.9 | 0.0 | 5.9 | 0.0 | |
| Acquisition of property, plant and equipment | 10 | (65.1) | (63.2) | (35.1) | (31.7) |
| Acquisition of intangible assets | 11 | (23.9) | (23.6) | (12.5) | (9.7) |
| Acquisition of other investments | 0.0 | 0.0 | (0.0) | (0.0) | |
| Acquisition of subsidiaries, net of cash acquired | 5-6 | (7.8) | (0.7) | (7.3) | 0.0 |
| NET CASH USED IN INVESTING ACTIVITIES | (31.8) | (72.0) | (47.5) | (37.5) | |
| Financing activities | |||||
| Proceeds borrowings | 578.9 | 730.6 | 243.6 | 262.4 | |
| Payments related to borrowings | (592.1) | (741.4) | (252.4) | (273.7) | |
| Payments related to lease liabilities | (88.4) | (87.4) | (38.1) | (36.0) | |
| Transactions with minorities | 0.0 | 0.0 | 0.0 | 0.0 | |
| Dividends paid | (50.0) | 0.0 | 0.0 | 0.0 | |
| NET CASH FROM FINANCING ACTIVITIES | (151.7) | (98.2) | (46.8) | (47.2) | |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 23.2 | 200.0 | (62.5) | (56.4) | |
| NET FOREIGN EXCHANGE DIFFERENCE | 6.0 | (13.7) | 9.7 | (9.7) | |
| Cash and cash equivalent less bank overdraft as of 1st January | 14 | 680.1 | 669.7 | ||
| Cash and cash equivalent less bank overdraft as of 30 September | 14 | 709.3 | 856.0 | ||
| MOVEMENTS BETWEEN 1ST JANUARY AND 30 SEPTEMBER | 29.1 | 186.4 | |||
The interim condensed consolidated financial statements of bpost for the first nine months ended September 30, 2020 were authorized for issue in accordance with a resolution of the Board of Directors on November 3, 2020.
bpost NV/SA and its subsidiaries (hereinafter referred to as "bpost") provide national and international mail and parcels services comprising the collection, transport, sorting and distribution of addressed and non-addressed mail, printed documents, newspapers and parcels.
bpost NV/SA, through its subsidiaries and business units, also sells a range of other products and services, including postal, parcels, banking and financial products, E-commerce logistics, express delivery services, proximity and convenience services, document management and related activities. bpost also carries out Services of General Economic Interest ("SGEI") on behalf of the Belgian State.
bpost NV/SA is a limited liability company under public law. bpost has its registered office at Muntcentrum-Centre Monnaie, 1000 Brussels. bpost shares are listed on the NYSE-Euronext Brussels since June 21, 2013 (share ticker BPOST).
These interim financial statements have not been subject to review by the independent auditor.
The interim condensed consolidated financial statements for the nine months ended September 30, 2020 have been prepared in accordance with IAS 34 Interim Financial Reporting.
The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with bpost's annual financial statements as at December 31, 2019.
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of bpost's annual financial statements for the year ended December 31, 2019, except for the adoption of new standards and interpretations effective as from January 1, 2020.
The following amendments to existing standards apply for the first time as from 2020:
These amendments have no impact on the consolidated financial statements, except for amendments to IFRS 3, which may impact how bpost accounts for a business combination.
The following standards, interpretations, amendments and revision issued but not yet effective or which are yet to become mandatory, have not been applied by bpost for the preparation of its interim condensed consolidated financial statements.
| Standard or interpretation | Effective for in reporting periods starting on or after |
|---|---|
| IFRS 16 – Amendments – Leases COVID-19 – Related Rent Concessions | 1 June 2020 |
| IAS 1 – Amendments (*) - Classification of Liabilities as Current or Non-current | 1 January 2022 |
| IFRS 3 - Amendments (*) - Reference to the Conceptual Framework | 1 January 2022 |
| IAS 16 - Amendments (*) - Proceeds before Intended Use | 1 January 2022 |
| IAS 37 - Amendments (*) - Onerous Contracts - Cost of Fulfilling a Contract | 1 January 2022 |
| Annual Improvements to IFRS Standards 2018-2020 (*) | 1 January 2022 |
| IFRS 17 (*) - Insurance Contracts | 1 January 2023 |
(*) Not yet endorsed by the EU as per date of this report
bpost has not early adopted any other standard, interpretation, or amendment that was issued but is not yet effective.
The spread of the COVID-19 virus has an unprecedented impact on economic activity and society in general. During such crisis, the daily presence of bpost close to the citizens and its customers is of vital importance. Therefore, bpost group has focused on the continuity of its universal postal service missions and its other national and international mail and parcels services while showing the utmost concern for the health and safety of its employees and customers.
The operational implications on bpost group were the following so far:
To limit the negative impact of COVID-19 on its results, bpost group has put targeted cost containment actions in place particularly in discretionary spending. bpost group is monitoring the evolution of COVID-19 and will continue to assess further impacts going forward. The main elements impacting the consolidated financial statements are mentioned hereunder:
The General Meeting of Shareholders held on May 13, 2020 decided to distribute a gross dividend per share on the results of full year 2019 of EUR 0.62. Since an interim dividend of EUR 0.62 gross per share was already paid on December 9, 2019, no further dividend on the results of full year 2019 was paid. Furthermore the Board will recommend to the Annual Shareholders' Meeting not to grant a dividend on the results of full year 2020 to shareholders. In the present exceptional circumstances, the Board wants to prioritize the strength of bpost group's balance sheet, cash reserves and capacity to invest on the long-term. In addition, early May the initial capex budget of EUR 200.0m was reduced to a maximum of EUR 150.0m.
Insights in the financing structure and the liquidity are disclosed in note 19 "financial assets and financial liabilities". At the end of September cash and cash equivalents amounted to EUR 856.1m, furthermore bpost has 2 undrawn revolving credit facilities for a total amount of EUR 375.0m and out of the external funding EUR 819.6m is long-term debt. Based upon the above and the net cash movement in the first nine months (cash inflow 200.0m), bpost considers it has sufficient resources to continue operations for the next 12 months. Furthermore Standard & Poor Global Ratings reaffirmed the long- and shortterm credit rating at A/A-1, with a stable outlook.
At reporting date, bpost group assessed if there was any indication of impairment and performed impairment testing of the goodwill as defined by IAS 36, which led to no impairment charges being recorded as of September 30, 2020.
COVID-19 and the lockdown had a positive impact on the economic performance of the CGU's (cash generating units) Parcels BeNe, E-commerce logistics North America and E-commerce logistics Europe and Asia, due to increasing revenue only partly offset by increasing operational expenses. The performance of Proximity and convenience retail network and International mail was negatively impacted by COVID-19, the lock down and the travel ban. Given the current uncertainty, the different scenarios, incorporating assumptions on the main key parameters, tested during previous interim reporting, were reviewed. In all scenarios, the recoverable amount remained higher than the carrying amount.
As in the annual impairment testing the recoverable amounts are based on the value in use with the EBITDA as the key assumption, EBITDA from the business plans and budget covering a period of 4 year used during year-end impairment testing were updated to incorporate the different scenarios. For the terminal value, management deemed the growth rate (Proximity and convenience retail network 0% and International mail 0%) still appropriate for the CGU's tested.
Management assessed if the discount rate (WACC), as applied during the annual impairment testing for the different cash generating units, increased and the likelihood that this increase would materially impact the value in use. Although differences are noticed in the different components of the discount rate, globally they are below the discount rates applied during the annual impairment testing except for the discount rate of the CGU's Parcels BeNe and E-commerce logistics Europe and Asia but without material impact on the value in use.
Similar worst case sensitivity testing analysis for the impairment testing (long term growth rate -1%, discount rate +0,5% and EBITDA margin -1% sensitivity testing) left sufficient headroom for the two CGU's tested.
COVID-19 had a negative impact on the net result of bpost bank. Beside the decrease in activities, 3.035 clients requested moratoria whereby the payment of the monthly instalments on their mortgage loans was suspended until the end of October 2020 (this deadline may be extended by two months) and for which bpost bank recognized a financial loss (impact after taxes at 50%) EUR 0.4m corresponding to the difference of the NPV of the contracts before and after the moratorium. Furthermore bpost bank made two additional provisions linked to a default risk due to COVID-19, EUR 0.4m (impact after taxes at 50%) due to a deterioration of macroeconomic conditions (higher unemployment and lower housing prices) and EUR 0.3m (impact after taxes at 50%) linked to an increase of probability of default of loans that are currently in moratorium for credit payments.
bpost recognizes an allowance for expected credit losses on all of its trade receivables based on the lifetime expected credit losses (ECL) model. In order to calculate the ECL rates, bpost uses a provision matrix based on adapted historical default rates per ageing category. Given the difficulty to assess the impact of COVID-19 on the ECL rates, bpost has made use of a post-model overlay based on customer credit rating provided by an external credit rating agency. This led to an additional provision for bad debt of EUR 3.6m in 2020.
bpost revenue and earnings are affected by several seasonal fluctuations.
Pursuant to the 6th-management contract, bpost is the provider of certain SGEIs. These consist among others of the maintenance of an extensive retail network and services such as the payment of pensions at home and the execution of financial postal services. In accordance with the Belgian State's commitment to the European Commission, the delivery of newspapers and periodicals is no longer part of the management contract. The Belgian State decided to award the contracts for distribution of newspapers and periodicals to bpost after a public consultation of the market. The compensation for SGEIs is based on a net avoided cost ("NAC") methodology and is being equally distributed over the four quarters. This methodology provides that compensation shall be based upon the difference in the net cost between bearing or not the provision of SGEI. The remuneration for the delivery of newspapers and periodicals consists of a flat amount (equally distributed over the four quarters) and a variable fee based upon the distributed volumes. This remuneration is subject to an ex-post calculation based upon the evolution of the cost base of bpost. During the year, calculations are made for the SGEI and the distribution of newspapers and periodicals to ensure the remuneration is in line with the amounts recorded.
The peak season beginning as of the month of December in Europe and around Thanksgiving in the US has a positive effect on the sales of Parcels BeNe and E-commerce logistics. For Radial North-America, part of the Parcels and Logistics North America segment and a leading US player in integrated E-commerce logistics and omnichannel technology, the fourth quarter is traditionally the quarter with the highest revenue and earnings.
On April 1st, 2020 Active Ants International BV was established in order to further expand the fulfilment business across Europe. bpost holds 75% of the shares for which bpost paid an amount of EUR 7.5m. Next to that the agreement foresees a call and put structure for the remaining shares (25%). The variable exercise price of the put has been recognized as a financial liability for a discounted amount of EUR 17.5m (corresponding to the maximum amount). Changes to the financial liability will be recognized in the income statement. Given the put option, the company was consolidated within the Parcels & Logistics Europe & Asia operating segment using the full-integration method.
On April 3rd, 2020 bpost acquired 100% of shares of the company Freight 4U Logistics BV. Freight 4U Logistics is a ground handler based in Brussels airport area with services including freight breakdown, sorting and processing of freight, import and export customs activities and freight forwarding. Revenues in 2019 amounted to EUR 2.8m. bpost paid an amount of EUR 0.2m for the acquisition of the shares of Freight 4U. In addition, the agreement foresees a contingent consideration based on the average EBITDA over the financial years 2021-2022, 2022-2023 or 2023-2024 which can amount up to EUR 0.8m maximum and for which no liability was foreseen. Transaction costs were expensed and are included in the operating expenses in 2020. The company was consolidated within the Parcels & Logistics Europe & Asia operating segment using the full-integration method as from April 2020.
The calculated goodwill is presented as follows:
| Fair value of the assets acquired and liabilities assumed in the acquired entity | In million EUR |
|---|---|
| Non-Current Assets | 0.1 |
| Property, plant and equipment | 0.1 |
| Current Assets | 0.5 |
| Trade and other receivables | 0.5 |
| Cash and cash equivalents | 0.0 |
| Non-Current Liabilities | 0.0 |
| Current Liabilities | (0.5) |
| Interest bearing loans and borrowings | (0.2) |
| Trade and other payables | (0.3) |
| FAIR VALUE OF NET ASSETS ACQUIRED | 0.0 |
| Goodwill arising on acquisition | 0.2 |
| PURCHASE CONSIDERATION TRANSFERRED | 0.2 |
| of which: | |
| - Cash paid | 0.2 |
| - Contingent consideration | 0.0 |
| Analysis of cash flows on acquisition | In million EUR |
| Net cash acquired with the subsidiary | 0.0 |
| Cash paid | (0.2) |
| NET CASH OUTFLOW | (0.2) |
The fair value of the current and non-current trade receivables amounted to EUR 0.5m and it is expected that the full contractual amounts can be collected.
In 2020 Freight 4U contributed to EUR 0.3m of revenue and EUR -0.1m to profit before tax from continuing operations of the group.
The resulting goodwill of EUR 0.2m derives from future growth and expected synergies within the cross-border activities. None of the goodwill is expected to be deductible for income tax purposes.
In June 2020, bpost paid an amount of EUR 3.0m for 11.4% of the shares of Anthill in execution of the call option foreseen in the agreement of 2018. The fair value of the contingent consideration was recognized as a liability. The payment had no impact on the originally calculated goodwill nor on the result of the year.
Furthermore in June 2020, the agreement of March 2018 has been amended and the variable exercise price of the put for the remaining shares of Anthill BV (25.0%) has been reassessed, the total discounted outstanding liability amounts to the maximum amount of EUR 13.3m. The increase of the contingent liability (EUR 3.9m) was recognized in the financial costs in the second quarter.
In September 2019, Active Ants acquired 100% of the shares of AtoZ Global BV and Multi-Channel Services Fulfilment BV. The group is active in the national and international distribution of packages or multi-channel services fulfilment, consisting of product storing, picking, packing, organization of transport activities, returns handling and shipping. Active Ants paid an amount of EUR 3.6m for the shares. Next to that, the agreement foresees a contingent consideration based upon the 2019 and 2020 revenues and a second one based upon the 2021 EBITDA margin, the fair-value of the contingent considerations is recognized for an amount of EUR 1.4m (maximum amount of EUR 1.9m) related to revenues target and EUR 0.4m (corresponding to maximum amount) related to EBITDA margin target. Transaction costs were expensed and are included in the operating expenses in 2019. The company was consolidated within the Parcels & Logistics Europe & Asia operating segment using the full-integration method as from October 2019. The calculated goodwill is presented as follows:
| Fair value of the assets acquired and liabilities assumed in the acquired entities | In million EUR |
|---|---|
| Non-Current Assets | 0.9 |
| Property, plant and equipment | 0.3 |
| Intangible assets | 0.7 |
| Current Assets | 1.5 |
| Trade and other receivables | 1.0 |
| Cash and cash equivalents | 0.5 |
| Non-Current Liabilities | (0.1) |
| Deferred tax liabilities | (0.1) |
| Current Liabilities | (0.9) |
| Trade and other payables | (0.9) |
| FAIR VALUE OF NET ASSETS ACQUIRED | 1.4 |
| Goodwill arising on acquisition | 4.0 |
| PURCHASE CONSIDERATION TRANSFERRED | 5.4 |
| of which: | |
| - Cash paid | 3.6 |
| - Contingent consideration | 1.8 |
| Analysis of cash flows on acquisition | In million EUR |
| Net cash acquired with the subsidiary | 0.5 |
| Cash paid in 2019 | (3.6) |
| NET CASH OUTFLOW | (3.1) |
The fair value of the current and non-current trade receivables amounted to EUR 1.0m and it is expected that the full contractual amounts can be collected.
The adjustment to fair value following the purchase price allocation consisted of the recognition of customer relationships (useful life 5 year) for an amount of EUR 0.7m.
In 2020 AtoZ and MCS contributed to EUR 8.8m of revenue and EUR 0.9m to profit before tax from continuing operations of the group. In 2019 AtoZ and MCS contributed EUR 2.7m of revenue and EUR 0.3m to profit before tax from continuing operations of the group.
The resulting goodwill of EUR 4.0m derives from future growth and expected synergies within the fulfilment activities. None of the goodwill is expected to be deductible for income tax purposes.
bpost operates through three business units and support units providing services to these business units:
The business unit Mail & Retail ("M&R") oversees the operational activities of collecting, transporting, sorting and distributing of addressed and non-addressed mail and printed documents, in Belgium and offers these operational activities for parcels to other business units of bpost and oversees the activities related to:
The business unit also carries out SGEI on behalf of the Belgian State.
The business unit Parcels & Logistics Europe & Asia ("PaLo Eurasia") oversees:
The business unit runs several operations centers across Europe including, fulfilment and sorting centers and several Parcel hubs.
The business unit Parcels & Logistics North America ("PaLo N. Am.") is in charge of the commercial and operational activities related to:
Corporate and Support units ("Corporate") consist out of the 3 support units and the corporate unit. The support units offer business solutions to the business units and to Corporate and includes Finance & Accounting, Human Resources & Service Operations, ICT & Digital. The Corporate unit includes Strategy, M&A, Legal, Regulatory and Corporate Secretary. The EBIT generated by the support units is recharged to the business units as OPEX while the depreciation remains in Corporate. Revenues generated by the Support Units, including sales building are disclosed in Corporate.
As bpost identifies its CEO as the chief operating decision maker ("CODM"), the operating segments are based on the information provided to the CEO. bpost computes its profit from operating activities (EBIT) at the segment level and is measured consistently with the financial statements' accounting guidelines (IFRS). Assets and liabilities are not reported per segment to the CODM.
No operating segments have been aggregated to form the above reportable operating segments.
Services and products offered between legal entities are at arm's length whereas the service and products offered between business units of the same legal entity are generally based on incremental costs. Services provided by support units to business units of the same legal entity are based on full cost.
Corporate treasury, bpost bank and tax are centrally managed for the group. The net financial result, income tax and share of results of associates and joint ventures are only disclosed at the level of the group.
| The following tables present an overview of the segment results: | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year-to-date | M&R | PaLo Eurasia |
PaLo N. Am. |
Corporate | Eliminations | Group | ||||||
| In million EUR | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 |
| External operating income |
1,410.3 | 1,279.6 | 583.3 | 762.1 | 705.0 | 906.7 | 25.4 | 11.8 | 0.0 | 0.0 | 2,724.0 | 2,960.2 |
| Intersegment operating income |
124.6 | 152.3 | 13.2 | 9.5 | 4.0 | 4.4 | 266.4 | 262.1 | (408.2) | (428.2) | (0.0) | 0.0 |
| TOTAL OPERATING INCOME |
1,534.9 | 1,431.8 | 596.5 | 771.5 | 708.9 | 911.1 | 291.8 273.9 | (408.2) | (428.2) | 2,724.0 | 2,960.2 | |
| Operating expenses |
1,267.8 | 1,230.9 | 531.9 | 678.2 | 678.9 | 838.3 | 242.3 | 235.2 | (408.2) | (428.2) | 2,312.7 | 2,554.5 |
| Depreciation, amortization |
63.0 | 65.7 | 16.3 | 16.5 | 53.5 | 63.7 | 52.0 | 53.4 | 184.7 | 199.3 | ||
| PROFIT FROM OPERATING ACTIVITIES (EBIT) |
204.2 | 135.2 | 48.3 | 76.8 | (23.4) | 9.1 | (2.5) | (14.7) | 0.0 | 0.0 | 226.6 | 206.4 |
| Share of profit of associates and joint ventures |
9.5 | 13.7 | ||||||||||
| Financial results | (34.7) | (29.9) | ||||||||||
| Income tax expenses |
(74.4) | (54.3) | ||||||||||
| PROFIT OF THE PERIOD (EAT) |
204.2 | 135.2 | 48.3 | 76.8 | (23.4) | 9.1 | (2.5) | (14.7) | 0.0 | 0.0 | 126.9 | 135.9 |
Third quarter 2020 Interim Financial Report Brussels, 03/11/2020 – 17:45pm (CET) Regulated information corporate.bpost.be/investors
| M&R | PaLo Eurasia |
PaLo N. Am. |
Corporate | Eliminations | Group | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| In million EUR | 3Q19 | 3Q20 | 3Q19 | 3Q20 | 3Q19 | 3Q20 | 3Q19 | 3Q20 | 3Q19 | 3Q20 | 3Q19 | 3Q20 |
| External operating income |
444.5 | 414.3 | 195.1 | 259.5 | 239.9 | 294.9 | 2.2 | 4.2 | 0.0 | 0.0 | 881.5 | 972.9 |
| Intersegment operating income |
41.6 | 49.4 | 3.2 | 3.6 | 1.5 | 1.0 | 88.6 | 86.2 | (134.9) | (140.2) | 0.0 | 0.0 |
| TOTAL OPERATING INCOME |
486.0 | 463.7 | 198.3 | 263.1 | 241.4 | 295.9 | 90.8 | 90.4 | (134.9) | (140.2) | 881.5 | 972.9 |
| Operating expenses |
426.9 | 405.8 | 183.5 | 228.2 | 229.7 | 269.2 | 77.8 | 77.0 | (134.9) | (140.2) | 783.0 | 840.1 |
| Depreciation, amortization |
20.7 | 22.7 | 5.1 | 5.9 | 20.2 | 21.1 | 18.2 | 18.1 | 64.2 | 67.8 | ||
| PROFIT FROM OPERATING ACTIVITIES (EBIT) |
38.5 | 35.1 | 9.7 | 29.0 | (8.6) | 5.6 | (5.2) | (4.7) | 0.0 | 0.0 | 34.3 | 65.1 |
| Share of profit of associates and joint ventures |
5.2 | 5.7 | ||||||||||
| Financial results | (12.4) | (11.5) | ||||||||||
| Income tax expenses |
(13.8) | (14.8) | ||||||||||
| PROFIT OF THE PERIOD (EAT) |
38.5 | 35.1 | 9.7 | 29.0 | (8.6) | 5.6 | (5.2) | (4.7) | 0.0 | 0.0 | 13.4 | 44.4 |
The tables presented below provide an overview of the entity-wide disclosures and also cover the IFRS15 disclosure requirements.
The total operating income (excluding intersegment operating income), Revenue and Other Operating income, is measured on the same basis as the financial statement's accounting guidelines (IFRS) and business unit performance.
| Year-to-date | Total operating income | ||||||
|---|---|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % | 2019 | 2020 | ||
| Mail & Retail | 1,410.3 | 1,279.6 | -9.3% | 1,398.6 | 1,270.6 | ||
| Transactional mail | 551.7 | 532.3 | -3.5% | 551.5 | 532.0 | ||
| Advertising mail | 171.9 | 131.2 | -23.7% | 171.9 | 131.2 | ||
| Press | 257.7 | 250.6 | -2.8% | 252.6 | 245.8 | ||
| Proximity and convenience retail network | 350.7 | 288.9 | -17.6% | 344.9 | 285.2 | ||
| Value added services | 78.3 | 76.6 | -2.2% | 77.7 | 76.5 | ||
| Parcels & Logistics Europe & Asia | 583.3 | 762.1 | 30.7% | 580.6 | 762.0 | ||
| Parcels BeNe | 272.8 | 379.8 | 39.2% | 271.0 | 379.7 | ||
| E-commerce logistics | 92.5 | 126.5 | 36.7% | 91.6 | 126.4 | ||
| Cross border | 218.0 | 255.8 | 17.3% | 218.0 | 255.8 | ||
| Parcels & Logistics North America | 705.0 | 906.7 | 28.6% | 699.1 | 897.3 | ||
| E-commerce logistics | 638.6 | 842.5 | 31.9% | 632.8 | 833.1 | ||
| International mail | 66.4 | 64.3 | -3.3% | 66.3 | 64.2 | ||
| Corporate & Supporting functions | 25.4 | 11.8 | -53.5% | 0.0 | 0.0 | ||
| TOTAL | 2,724.0 | 2,960.2 | 8.7% | 2,678.3 | 2,929.9 |
| 3rd quarter | Total operating income | Revenue | |||
|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % | 2019 | 2020 |
| Mail & Retail | 444.5 | 414.3 | -6.8% | 439.9 | 411.5 |
| Transactional mail | 168.8 | 168.3 | -0.3% | 168.6 | 168.2 |
| Advertising mail | 50.8 | 45.9 | -9.7% | 50.8 | 45.9 |
| Press | 82.1 | 78.7 | -4.1% | 80.3 | 77.2 |
| Proximity and convenience retail network | 116.9 | 96.2 | -17.7% | 114.3 | 95.1 |
| Value added services | 25.9 | 25.2 | -2.6% | 25.8 | 25.2 |
| Parcels & Logistics Europe & Asia | 195.1 | 259.5 | 33.1% | 192.9 | 259.5 |
| Parcels BeNe | 94.4 | 125.6 | 33.1% | 92.7 | 125.6 |
| E-commerce logistics | 32.3 | 40.8 | 26.5% | 31.8 | 40.8 |
| Cross border | 68.4 | 93.0 | 36.0% | 68.4 | 93.0 |
| Parcels & Logistics North America | 239.9 | 294.9 | 22.9% | 238.2 | 293.2 |
| E-commerce logistics | 218.4 | 273.4 | 25.2% | 216.9 | 271.8 |
| International mail | 21.4 | 21.4 | 0.0% | 21.3 | 21.4 |
| Corporate & Supporting functions | 2.2 | 4.2 | 92.9% | 0.0 | 0.0 |
| TOTAL | 881.5 | 972.9 | 10.4% | 871.0 | 964.1 |
The geographically split of total operating income (excluded intersegment operating income) and the non-current assets are attributed to Belgium, rest of Europe, United States of America and the rest of the world. The allocation per geographical location is based on the location of the entity generating the income or holding the net asset. Other operating income is allocated to several line items.
| Year-to-date | 3rd quarter | ||||
|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % | 2019 | 2020 |
| Belgium | 1,800.4 | 1,787.8 | -0.7% | 550.0 | 586.9 |
| Rest of Europe | 200.3 | 227.9 | 13.8% | 79.2 | 74.7 |
| USA | 689.1 | 870.1 | 26.3% | 244.0 | 280.7 |
| Rest of world | 34.1 | 74.3 | - | 8.3 | 30.5 |
| TOTAL OPERATING INCOME | 2,724.0 | 2,960.2 | 8.7% | 881.5 | 972.9 |
| As of 31 December | As of 30 September | ||
|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % |
| Belgium | 977.2 | 926.8 | -5.2% |
| Rest of Europe | 180.1 | 195.3 | 8.5% |
| USA | 874.8 | 851.9 | -2.6% |
| Rest of world | 46.2 | 42.8 | -7.4% |
| TOTAL NON-CURRENT ASSETS | 2,078.4 | 2,016.8 | -3.0% |
Total non-current assets consist out of property, plant and equipment, intangible assets, investment properties and trade and other receivables (> 1year).
Excluding the compensation received from the Belgian federal government to provide the services as described in the management contract and press concessions, included in the Mail and Retail segment, no single external customer exceeded 10% of bpost's operating income.
| Year-to-date | 3rd quarter | |||
|---|---|---|---|---|
| In million EUR | 2019 | 2020 | 2019 | 2020 |
| Revenue excluding the SGEI remuneration | 2,475.4 | 2,730.5 | 805.0 | 901.6 |
| SGEI remuneration | 202.9 | 199.4 | 66.0 | 62.5 |
| TOTAL | 2,678.3 | 2,929.9 | 871.0 | 964.1 |
SGEI remuneration is disclosed under Press and Proximity and convenience retail network in the Mail and Retail segment.
The table below presents a breakdown of services and other goods:
| Year-to-date | 3rd quarter | |||||
|---|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % | 2019 | 2020 | Change % |
| Rent and rental costs | 40.1 | 52.1 | 30.0% | 12.5 | 18.4 | 46.6% |
| Maintenance and repairs | 85.2 | 82.1 | -3.6% | 27.8 | 26.6 | -4.4% |
| Energy delivery | 33.5 | 31.1 | -7.1% | 10.9 | 10.0 | -9.1% |
| Other goods | 25.2 | 30.3 | 20.2% | 8.4 | 9.6 | 14.1% |
| Postal and telecom costs | 15.2 | 15.2 | -0.3% | 5.2 | 4.9 | -5.3% |
| Insurance costs | 18.2 | 17.9 | -1.8% | 6.4 | 5.9 | -7.8% |
| Transport costs | 461.8 | 600.3 | 30.0% | 158.1 | 195.7 | 23.8% |
| Publicity and advertising | 16.7 | 12.8 | -23.0% | 5.2 | 3.4 | -35.8% |
| Consultancy | 27.4 | 16.2 | -41.1% | 8.2 | 2.9 | -64.8% |
| Interim employees | 103.2 | 162.9 | 57.9% | 39.2 | 54.3 | 38.8% |
| Third party remuneration, fees | 106.8 | 109.2 | 2.2% | 38.5 | 36.3 | -5.9% |
| Other services | 70.7 | 88.4 | 25.1% | 23.5 | 28.1 | 19.5% |
| TOTAL | 1,004.0 | 1,218.5 | 21.4% | 343.9 | 395.9 | 15.1% |
Services and other goods increased by EUR 214.6m, or 21.4% to EUR 1,218.5m as of September 30, 2020. This increase was mainly explained by the increased number of interim employees (EUR 59.8m), higher transport costs (EUR 138.5m), increased costs for other goods (EUR 5.1m, mainly hand gels, disinfectants,…) and other services (EUR 17.7m, mainly due to increased payments processing fees on Radial US in line with increased volumes). The increase of these costs should be seen together with the increased revenues and result from higher volume of parcels and COVID-19.
Property, plant and equipment decreased by EUR 24.0m, or 2.1%, to EUR 1,109.6m as of September 30, 2020. The decrease was mainly explained by the depreciation for EUR 163.8m (including EUR 82.2m related to IFRS 16 right of use assets), the transfer to assets held for sale for EUR 9.4m and the evolution of the exchange rate, partially offset by capital expenditures of EUR 63.2m and right of use assets recognised for EUR 96.4m (mainly due to new warehouses for Radial, Active Ants and operational vehicles in Belgium).
Intangible assets decreased by EUR 37.5m, or 4.2%, to EUR 860.8m as of September 30, 2020. The decrease was mainly due to the depreciation for EUR 35.4m and the evolution of the exchange rate partially offset by the capital expenditures of EUR 23.6m.
At reporting date, bpost group assessed if there was any indication of impairment and reviewed the impairment testing of the goodwill of the previous quarter, which led to no impairment charges being recorded as of September 30, 2020 as disclosed in disclosure 3.2 goodwill.
Equity accounted investees slightly decreased by EUR 0.4m, to EUR 239.1m as of September 30, 2020. bpost's share in the profit of bpost bank for EUR 13.7m was more than compensated by the decrease in the unrealized gain on the bond portfolio in the amount of EUR 14.0m recognized in other comprehensive income, due to a partial sale of the bond portfolio and the increase of the underlying yield curve by 3 basis points (bps) compared to December 31, 2019. As of September 30, 2020,
investments in associates comprised net unrealized gains in respect of the bond portfolio in the amount of EUR 7.6m, which represented 3.2% of total investments in associates. The unrealized gains were generated by the lower level of interest rates compared to the acquisition yields of the bonds. Unrealized gains are not recognized in the income statement but are rather recognized directly in equity in other comprehensive income.
Current trade and other receivables decreased by EUR 122.5m to EUR 595.1m as per September 30, 2020. The decrease was mainly driven by the usual settlement of the SGEI receivable during the first quarter of the year.
In view of the high level of uncertainty in the short-term economic outlook with regard to the impact of Covid-19 on default risk of customers however, a post-model overlay was used to add an additional provision based on customer credit rating information.
Cash and cash equivalents increased by EUR 185.9m to EUR 856.1m as of September 30, 2020, this increase was due to the free cash flow (EUR 298.3m), partially offset by the cash flow related to financing activities (EUR 98.2m).
Non-current trade and other payables increased by EUR 16.8m to EUR 44.5m mainly due to the recognition of the contingent liability for the remaining shares of Active Ants International BV. Active Ants International BV has been established in April 2020 and bpost holds 75% of the shares. For the remaining 25% of the shares a call and put structure is foreseen, the variable exercise price of the put has been recognized as a financial liability for a discounted amount of EUR 17.5m (corresponding to the maximum amount). Changes to the financial liability will be recognized in the income statement.
| As of 31 December | As of 30 September | |
|---|---|---|
| In million EUR | 2019 | 2020 |
| Post-employment benefits | (29.4) | (27.1) |
| Other long-term benefits | (282.2) | (276.8) |
| Termination benefits | (9.0) | (7.2) |
| TOTAL | (320.6) | (311.2) |
Employee benefits decreased by EUR 9.4m, or 2.9%, to EUR 311.2m as of September 30, 2020. The decrease mainly reflects:
Income tax payable increased by EUR 35.7m to EUR 42.9m mainly due to lower advance tax payment by bpost NV/SA.
Current trade and other payables decreased by EUR 120.2m to EUR 1,130.6m as of September 30, 2020 due to the decrease of trade payables by EUR 84.5m and social payables by EUR 35.7m. The decrease of the trade payables was mainly explained by the cost containment actions (amongst other lower project costs at Corporate) in 2020, partially compensated by the positive impact of extended payment terms in COVID-19 period. The decrease of the social payables was mainly caused by the timing difference as 2019 full year social accruals (holiday pay, bonuses,…) have been paid during the first half of 2020.
The following table provides the fair value measurement hierarchy of bpost's financial assets and financial liabilities per September 30, 2020:
| Fair value categorized: | ||||||
|---|---|---|---|---|---|---|
| In million EUR As at 30 September 2020 |
Carrying amount |
Quoted prices in active markets (Level 1) |
Significant other observable inputs (Level 2) |
Significant unobservable input (Level 3) |
||
| Financial assets measured at amortized cost | ||||||
| Non-Current | ||||||
| Financial assets | 39.3 | 0.0 | 39.3 | 0.0 | ||
| Investments securities | 0.0 | 0.0 | 0.0 | 0.0 | ||
| Current | ||||||
| Financial assets | 1,451.1 | 0.0 | 1,451.1 | 0.0 | ||
| Total financial assets | 1,490.4 | 0.0 | 1,490.4 | 0.0 | ||
| Financial liabilities measured at amortized cost (except for derivatives): |
||||||
| Non-Current | ||||||
| Long-term bond | 643.4 | 680.4 | 0.0 | 0.0 | ||
| Financial liabilities | 579.6 | 0.0 | 579.6 | 0.0 | ||
| Current | ||||||
| Derivatives instruments - forex swap | 0.0 | 0.0 | 0.0 | 0.0 | ||
| Derivatives instruments - forex forward | 0.7 | 0.0 | 0.7 | 0.0 | ||
| Financial liabilities | 1,405.7 | 0.0 | 1,405.7 | 0.0 | ||
| Total financial liabilities | 2,629.4 | 680.4 | 1,986.0 | 0.0 |
The fair value of the non-current and current financial assets measured at amortised cost and the non-current and current financial liabilities measured at amortised cost, approximate their carrying amounts. As they are not measured at fair value in the statement of financial position their fair value should not be disclosed.
During the period there was no transfer between fair value hierarchy levels and there were no changes in the valuation techniques and inputs applied.
At the end of the third quarter 2020 the main financial liabilities consisted of:
bpost has two undrawn revolving credit facilities for a total amount of EUR 375.0m. The syndicated facility amounts to EUR 300.0m, which expires in October 2022, has been extended in 2019 to October 2024 whereas the bilateral facility of EUR 75.0m, which expires in June 2023, has been extended in 2020 to June 2025 and allows for EUR and USD drawdowns. The interest rate of EUR 300.0m revolving credit facility changes according to bpost's sustainability rating as determined by an external party.
bpost uses foreign exchange forward contracts and foreign exchange swap contracts to manage some of its exposures in foreign currencies. Those contracts have been underwritten in order to hedge the exchange rate risks linked to the intercompany loans granted by bpost to its subsidiaries.
In February 2018, bpost entered into a forward starting Interest Rate Swap with a 10-year maturity and a nominal amount of EUR 600.0m. The transaction was contracted in order to hedge the interest rate risk on the contemplated issuance of a long-term bond to refinance the acquisition bridge loan entered into in November 2017 for the acquisition of Radial. In July 2018, bpost issued a EUR 650.0m 8-year bond. At that time, the interest rate swap was unwound and settled via a payment of EUR 21.5m split between an effective part EUR 20.0m and an ineffective part EUR 1.5m. The ineffective part was booked in the income statement. The effective part of the cash-flow hedge (EUR 20.0m) has been recognized in other comprehensive income (amount net of tax is EUR 14.8m) as cash-flow hedge reserve. This cash-flow hedge is reclassified to profit or loss during the same periods as the long-term bonds' cash-flows will affect profit or loss over 8 years as from its issuance date. In 2020 a net amount of EUR 1.4m has been reclassified to the income statement.
In 2018 bpost entered into a USD term loan, with a maturity of 3 years with two possible extensions of one year each. To refinance the 2017 acquisition of Radial Holdings, LP, bpost, with EUR as its functional currency, borrowed along with the issuance of the bond in USD to mitigate the risk on foreign exchange rate differences on the foreign operations. Hence bpost performed a net investment hedge. Consequently, the effective portion of changes in the fair value of the hedging instrument is recognized in other comprehensive income. The notional amount of the hedging amounted to USD 143.0m, whereas the carrying amount converted into Euro amounted to EUR 122.1m. At September 30, 2020 the net profit on the revaluation of the USD loan recognized in other comprehensive income and accumulated in the foreign currency translation reserve amounted to EUR 5.2m. There was no ineffectiveness in 2020.
The contingent liabilities and contingent assets are materially unchanged from those described in the note 6.30 of bpost's annual financial statements as at December 31, 2019. This interim financial report should be read in conjunction with bpost's annual financial statements as at December 31, 2019.
On the evening of October 15th, 2020, Radial North America experienced a ransomware attack impacting some of its US operations. Once it became apparent that the ransomware attack could cause significant financial and technical damage, Radial shut down its systems voluntarily so as to bring them back up safely. The shutdown prevented that harm from happening, but also stopped normal fulfilment activities from taking place whereas payment processing systems were not impacted. Since then, the information technology and security teams have been working relentlessly but safely towards recovery and reopening of systems, sites and services. Whilst the attack caused a disruption of business at Radial North America, Radial has managed to regain sufficient functionality to allow it to restart fulfilment operations at all of its locations. To mitigate the impact of any degradation to its level of functionality, Radial is taking additional action to ensure it can support the expected volume of the upcoming peak period. Through an in-depth analysis it was determined that this was an encryption attack meant to halt business operations, not an exfiltration attack meant to steal data. As such, there is no
indication that any client or personal data has left the systems. Radial made its clients immediately aware of the situation and has been providing them with consistent updates throughout the process. As the forensic investigation is ongoing, we are unable at this point to disclose an aggregate financial impact on our business. However, bpost group can confirm that FY20 group adjusted EBIT will be at least EUR 270m, including the financial impact of the attack. Due to the second wave of the pandemic and lockdown measures taken, the visibility for the fourth quarter is however limited. We are cooperating with US law enforcement authorities and will fully support criminal action against the attackers if the criminals are identified and apprehended.
bpost also analyses the performance of its activities in addition to the reported IFRS figures with alternative performance measures (APMs). The definitions of these alternative performance measures can be found below.
Alternative performance measures (or non-GAAP measures) are presented to enhance an investor's understanding of the operating and financial performance, to aid in forecasting and to facilitate meaningful comparison of the result between periods.
The presentation of alternative performance measures is not in conformity with IFRS and the APMs are not audited. The APMs may not be comparable to the APMs reported by other companies as those companies may compute their APMs differently from bpost.
The calculation of the Adjusted performance measure, Adjusted operating free cash flow and the bpost SA/NV Net Profit (BGAAP) can be found below the definitions. The APMs derived from items reported in the financial statements can be calculated with and reconciled directly to the items as disclosed in the definitions below.
Adjusted performance (Adjusted operating income / Adjusted EBITDA/ Adjusted EBIT/ Adjusted EAT): bpost defines the Adjusted performance as operating income/EBITDA/EBIT/EAT excluding the adjusting items. Adjusting items represent significant income or expense items that due to their non-recurring character are excluded from performance analyses. bpost uses a consistent approach when determining if an income or expense item is adjusting and if it is significant enough to be excluded from the reported figures to obtain the adjusted ones. An adjusting item is deemed to be significant if it amounts to EUR 20m or more. All profits or losses on disposal of activities are adjusted whatever the amount they represent, as well as the year-to-date amortization and impairment on the intangible assets recognized throughout the Purchase Price Allocation (PPA) of the acquisitions. Reversals of provisions whose addition had been adjusted are also adjusted whatever the amount they represent. The reconciliation of the adjusted performance is available below the definitions.
bpost's management believes this measure provides the investor a better insight and comparability over time of the economic performance of bpost.
bpost SA/NV net profit (BGAAP): bpost defines bpost SA/NV net profit (BGAAP) as the non-consolidated profit (loss) following the Belgian General Accepted Accounting Principles after taxes and after transfer from/to untaxed reserves, this corresponds to the profit (loss) for the period available for appropriation (code #9905 of the BGAAP annual accounts). The detailed reconciliation from the consolidated IFRS profit of the year to the performance measure is available below the definitions.
bpost's management believes this measure provides the investor a better insight on the potential dividend to be distributed.
Constant exchange rate: bpost excludes in the performance at constant exchange rate the impact of the different exchange rates applied in different periods for the segment Parcels & Logistics North America. The reported figures in local currency of the prior comparable period are converted with the exchange rates applied for the current reported period. bpost's management believes that the performance at constant exchange rate provides the investor an understanding of the operating performance of the entities part of the Parcels & Logistics North America segment.
CAPEX: capital expenditure for tangible and intangible assets including capitalised development costs, excluding right of use assets.
Earnings Before Interests, Taxes, Depreciation and Amortization (EBITDA): bpost defines EBITDA as Earnings from operating activities (EBIT) plus depreciations and amortizations and is derived from the consolidated income statement.
Net debt /(net cash): bpost defines Net debt / (net cash) as the non-current and current interest-bearing loans and borrowings plus bank overdrafts minus cash and cash equivalents and is derived from the consolidated statement of financial position.
Operating free cash flow (FCF) and Adjusted Operating free cash flow: bpost defines FCF as the sum of net cash from operating activities and net cash used in investing activities and is derived from the consolidated statement of cash flows.
Adjusted operating free cash flow is the operating free cash flow as defined excluding working capital impact of "the collected proceeds due to clients". The reconciliation is available below the definitions. In some cases, Radial performs the billing and receiving of payments on behalf of their customers. Under this arrangement, Radial routinely remits billed amounts back to the client, and performs periodical settlements with the client on amounts owed to or from Radial based on billings, fees, and amounts previously remitted. Adjusted operating free cash flows excludes the cash Radial received on behalf of their customers as Radial has no or little impact on the amount or the timing of these payments.
Evolution Parcels B2X volume: bpost defines the evolution of Parcels B2X as the difference, expressed as a percentage, of the reported volumes between the current and prior comparable period of the B2X parcels processed by bpost SA/NV.
Radial North America Performance in USD: bpost defines the performance of Radial North America as the Total operating income, EBITDA and EBIT expressed in USD following the consolidation of the group of Radial entities held by bpost North America Holdings Inc. Transactions between the group of Radial entities and other bpost group entities are not eliminated and are part of the Total operating income, EBITDA and EBIT.
bpost's management believes this measure provides the investor a better insight in the performance of Radial and the scale up of its US presence and the expanding of its product offering into value-added activities that cover the entire value chain in E-commerce logistics and omnichannel technology.
Underlying volume (Transactional mail, Advertising mail and Press): bpost defines underlying mail volume as the reported mail volume including some corrections, for example the impact of the number of working days and mail volumes related to elections.
OPERATING INCOME
| Year-to-date | 3rd quarter | |||||
|---|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % | 2019 | 2020 | Change % |
| Total operating income | 2,724.0 | 2,960.2 | 8.7% | 881.5 | 972.9 | 10.4% |
| Gain on the sale of Alvadis (1) | (0.6) | 0.0 | (0.6) | 0.0 | ||
| ADJUSTED TOTAL OPERATING INCOME | 2,723.4 | 2,960.2 | 8.7% | 880.9 | 972.9 | 10.4% |
| Year-to-date | ||||||
|---|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % | 2019 | 2020 | Change % |
| Total operating expenses excluding depreciation, amortization |
(2,312.7) | (2,554.5) | 10.5% | (783.0) | (840.1) | 7.3% |
| ADJUSTED TOTAL OPERATING EXPENSES EXCLUDING DEPRECIATION, AMORTIZATION |
(2,312.7) | (2,554.5) | 10.5% | (783.0) | (840.1) | 7.3% |
| Year-to-date | 3rd quarter | ||||||
|---|---|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % | 2019 | 2020 | Change % | |
| EBITDA | 411.3 | 405.7 | -1.4% | 98.5 | 132.8 | 34.8% | |
| Gain on the sale of Alvadis (1) | (0.6) | 0.0 | (0.6) | 0.0 | |||
| ADJUSTED EBITDA | 410.7 | 405.7 | -1.2% | 97.9 | 132.8 | 35.7% |
| Year-to-date | 3rd quarter | |||||
|---|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % | 2019 | 2020 | Change % |
| Profit from operating activities (EBIT) | 226.6 | 206.4 | -8.9% | 34.3 | 65.1 | 89.5% |
| Gain on the sale of Alvadis (1) | (0.6) | 0.0 | (0.6) | 0.0 | ||
| Non-cash impact of purchase price allocation (PPA) (2) |
15.7 | 13.7 | -12.6% | 4.6 | 4.4 | -3.4% |
| ADJUSTED PROFIT FROM OPERATING ACTIVITIES (EBIT) |
241.6 | 220.1 | -8.9% | 38.3 | 69.5 | 81.5% |
| Year-to-date | 3rd quarter | |||||
|---|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % | 2019 | 2020 | Change % |
| Profit for the year | 126.9 | 135.9 | 7.1% | 13.4 | 44.4 | |
| Gain on the sale of Alvadis (1) | (0.6) | 0.0 | (0.6) | 0.0 | ||
| Non-cash impact of purchase price allocation (PPA) (2) |
14.5 | 12.9 | -10.7% | 4.3 | 4.2 | -3.3% |
| ADJUSTED PROFIT OF THE YEAR | 140.7 | 148.8 | 5.7% | 17.0 | 48.6 |
(1) On august 30, 2019 – after approval from the Belgian Competition Authority – Ubiway finalised the share purchase agreement with Conway for the sale of Alvadis, a company of the Ubiway group. Alvadis has been deconsolidated end of August 30, 2019. At the time of the startup of the sales process (in December 2018), Alvadis had been transferred to assets held for sale. The normalisation of EUR 0.6m cooresponds to the gain on the disposal of the activities.
(2) In accordance with IFRS 3 and throughout the purchase price allocation (PPA) for several entities, bpost recognized several intangible assets (brand names, know-how, customer relationships…). The non-cash impact consisting of amortization charges on these intangible assets is being adjusted.
| Year-to-date | 3rd quarter | |||||
|---|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % | 2019 | 2020 | Change % |
| Net Cash from operating activities | 206.7 | 370.3 | 79.2% | 31.8 | 28.4 | -10.9% |
| Net Cash used in investing activities | (31.8) | (72.0) | (47.5) | (37.5) | -21.0% | |
| FREE CASH FLOW | 174.9 | 298.3 | 70.6% | (15.8) | (9.1) | -42.0% |
| Collected proceeds due to clients | (29.3) | (25.0) | -14.6% | (6.0) | (42.2) | - |
| ADJUSTED FREE CASH FLOW | 204.2 | 323.3 | 58.3% | (9.7) | 33.0 |
| Year-to-date | 3rd quarter | |||||
|---|---|---|---|---|---|---|
| In million EUR | 2019 | 2020 | Change % | 2019 | 2020 | Change % |
| IFRS Consolidated Net Profit | 126.9 | 135.9 | 7.1% | 13.4 | 44.4 | 231.9% |
| Results of subsidiaries and deconsolidation impacts |
(4.5) | (30.5) | - | 1.3 | (12.7) | - |
| Differences in depreciation and impairments |
(28.1) | 3.0 | - | 1.4 | 1.9 | 44.1% |
| Differences in recognition of provisions | (1.0) | 0.7 | - | (0.5) | 0.0 | - |
| Effects of IFRS 16 | 6.4 | 3.3 | -48.4% | 2.9 | 1.5 | -48.8% |
| Effects of IAS19 | 2.5 | (8.4) | - | 1.8 | (3.9) | - |
| Depreciation intangible assets PPA | 15.7 | 13.7 | -12.6% | 4.6 | 4.4 | -3.4% |
| Deferred taxes | 8.2 | (2.7) | - | 1.9 | (2.8) | - |
| Other | (8.0) | 11.9 | - | (8.8) | 2.5 | - |
| Belgian GAAP unconsolidated net profit available for appropriation |
118.2 | 126.9 | 7.3% | 18.0 | 35.3 | 96.3% |
bpost's unconsolidated profit after taxes prepared in accordance with Belgian GAAP can be derived from the consolidated IFRS profit after taxes in two stages.
The first stage consists of un-consolidating the profit after taxes under IFRS, i.e.:
The table below sets forth the breakdown of the above-mentioned impacts:
| Year-to-date | 3rd quarter | |||
|---|---|---|---|---|
| In million EUR | 2019 | 2020 | 2019 | 2020 |
| Result of the Belgian fully consolidated subsidiaries (local GAAP) | (16.4) | (12.1) | (6.0) | (2.9) |
| Result of the international subsidiaries (local GAAP) | 27.7 | (14.8) | 12.0 | (7.2) |
| Share of results of associates and joint ventures (local GAAP) | (9.2) | (15.3) | (2.8) | (2.5) |
| Other deconsolidation impacts | (6.6) | 11.6 | (1.9) | (0.2) |
| TOTAL | (4.5) | (30.5) | 1.3 | (12.7) |
The second stage consists of deriving the Belgian GAAP figures from the IFRS figures and is achieved by reversing all IFRS adjustments made to local GAAP figures. These adjustments include, but are not limited to the following:
The CEO and CFO declare that to the best of their knowledge, the interim condensed consolidated financial statements, established in accordance with International Financial Reporting Standards ("IFRS"), as accepted by the European Union, give a true and fair view of the assets, financial position and results of bpost and of the entities included in the consolidation.
The financial report gives an accurate overview of the information that needs to be disclosed pursuant to article 13 of the Royal Decree of 14 November 2007.
The information in this document may include forward-looking statements6, 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.
6 as defined among others under the U.S. Private Securities Litigation Reform Act of 1995
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