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bpost SA/NV
Earnings Release • Mar 9, 2021
3922_rns_2021-03-09_4daa1244-94f8-4ff7-b4f4-86189ebdba46.pdf
Earnings Release
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Fourth quarter 2020 results Analyst call
Jean-Paul Van Avermaet, CEO Leen Geirnaerdt, CFO
10 March 2021
Investor presentation
Interim financial report 4Q20
Financial Calendar
05.05.2021 (17:45 CET) Quarterly results 1Q21
12.05.2021 Ordinary General Meeting of Shareholders
05.08.2021 (17:45 CET) Quarterly results 2Q21
09.11.2021 (17:45 CET) Quarterly results 3Q21
More on corporate.bpost.be/investors
Disclaimer
This presentation is based on information published by bpost group in its Fourth Quarter 2020 Press Release and 2020 Annual Report, made available on March 9th, 2021 at 5.45pm CET on corporate.bpost.be/investors. This information forms regulated information as defined in the Royal Decree of November 14th, 2007. The information in this document may include forward-looking statements1 , which are based on current expectations and projections of management about future events. By their nature, forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside the control of the Company. Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forwardlooking statements. Accordingly, no assurance is given that such forward-looking statements will prove to have been correct. They speak only as at the date of the Presentation and the Company undertakes no obligation to update these forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements. This material is not intended as and does not constitute an offer to sell any securities or a solicitation of any offer to purchase any securities.
Highlights of FY20
COVID-19 drove outperformance vs. initial 2020 group adjusted EBIT guidance of € 240-270m, through strong development in Parcels and Logistics
| Topic | Results | Outlook for 2020 | |
|---|---|---|---|
| Group adjusted EBIT |
€ 280.6m 6.8% EBIT margin |
Adjusted EBIT at least € 270m1 |
|
| Mail & Retail | € 171.2m 8.7% EBIT margin |
||
| Parcels & Logistics Eurasia |
€ 101.4m 9.3% EBIT margin |
||
| Parcels & Logistics N. Am. |
€ 32.8m 2.5% EBIT margin |
||
| Capex | € 147.7m | € 150m maximum1 |
1 Last revised 2020 group outlook as issued at 3Q20 release on Nov. 3rd, 2020
Highlights of 4Q20 4Q20
4Q20 fully in line with our expectations
| Group operating | |
|---|---|
| income |
€ 1,194.4m up 7.2%
Group adjusted EBIT
€ 60.5m 5.1% EBIT margin
Mail & Retail
€ 34.3m 6.5% EBIT margin
- Total operating income at € 526.1m (-2.0%) driven by COVID-19 impact on Advertising Mail and on Retail
- Underlying mail volume decline at -11.8% driven by Advertising Mail at -20.4%
- Adjusted EBIT decline (-33.3%) driven by COVID-19 top-line evolution, while additional costs for elevated parcels volumes handled through the mail network were compensated by reinvoicing to PaLo Eurasia and cost containment in SG&A
Parcels & Logistics Eurasia
€ 22.4m 7.1% EBIT margin
- Total operating income at € 316.4m (+35.0%) mainly driven by Parcels BeNe (€ +60.3m, +55.9%)
- Parcels B2X organic volumes +67.4% from thriving e-commerce during nonessential retail closure in November and EoY peak
- Adjusted EBIT up € +8.6m (+62%), with margin improvement driven by elevated parcels volumes handled through the mail network
Parcels & Logistics N. Am.
€ 13.9m 3.3% EBIT margin
- Total operating income at € 424.9m (+7.5%) driven by continued strong E-commerce logistics development
- FY20 TCV at \$ 1,188.4m, largely above FY target
- Adjusted EBIT increase of € +3.3m. Excluding ransomware attack impact (€ -9.2m), adjusted EBIT would have more than doubled at € 23.1m, fully driven by operating leverage in E-commerce logistics and cost containment
Non-financial highlights
CONNECT 2026 Strategic vision built on 7 ambitions
3 new fulfilment centres in 2021 in Belgium and Germany
Ecozone
100% emission-free distribution network in Mechelen (Belgium)
Sustainability strategy Launch of the new Materiality Assessment
Cohesion in society
bpost will continue to provide banking services through its physical network
4Q20 adjusted EBIT in line with expectations
Higher EoY peak opex and impact of ransomware attack were partly compensated by strong cost control on discretionary spend across all BUs; while second COVID-19 lockdown impacted M&R negatively
1 Adjusted excludes items that are non-recurring in nature and significant (> € 20m). All profits or losses on disposal of activities are adjusted whatever the amount they represent, as well as the amortization and impairment on the intangible assets recognized throughout the Purchase Price Allocation (PPA) of the acquisitions. Reversals of provisions whose addition had been excluded from income are also adjusted whatever the amount they represent.
| € million | Reported | Adjusted1 | |||
|---|---|---|---|---|---|
| 4Q19 | 4Q20 | 4Q19 | 4Q20 | % ↑ | |
| Total operating income | 1,113.8 | 1,194.4 | 1,113.8 | 1,194.4 | 7.2% |
| Operating expenses | 987.4 | 1,081.0 | 987.4 | 1,081.0 | 9.5% |
| EBITDA | 126.3 | 113.4 | 126.3 | 113.4 | -10.2% |
| Depreciation & Amortization | 62.9 | 119.1 | 57.1 | 52.9 | -7.4% |
| EBIT | 63.4 | -5.7 1 |
69.2 | 60.5 1 |
-12.6% |
| Margin (%) | 5.7% | -0.5% | 6.2% | 5.1% | |
| Financial result | -26.7 | -17.9 | -26.7 | -17.9 | -33.1% |
| Profit before tax | 43.0 | -160.5 | 48.8 | 47.3 | -3.2% |
| Income tax expense | 15.2 | 1 -5.4 |
16.5 | 1 -4.8 |
- |
| Net profit | 27.8 | -155.1 2 |
32.4 | 52.1 2 |
60.8% |
| FCF | 127.2 | 145.4 3 |
83.8 | 117.2 3 |
39.9% |
| Net Debt at Dec 31 | 779.9 | 495.2 | 779.9 | 495.2 | -36.5% |
| Capex | 73.2 | 60.9 | 73.2 | 60.9 | -16.8% |
Average # FTEs and interims 38,730 43,732 38,730 43,732 12.9%
1
2
3
Impairment loss recognized on the remeasurement to fair value less costs to sell of bpost bank (€ 141.6m) is adjusted
Adjusted FCF excludes the cash Radial receives on behalf of its customers for performing billing services
Results by segment 4Q20
€ million
| M&R | PaLo Eurasia | PaLo N. Am. | Corp | Eliminations | Group | |
|---|---|---|---|---|---|---|
| External operating income | 456.6 | 311.8 | 422.5 | 3.6 | 0.0 | 1,194.4 |
| Intersegment operating income | 69.6 | 4.6 | 2.4 | 113.1 | -189.7 | 0.0 |
| Total operating income | 526.1 | 316.4 | 424.9 | 116.7 | (189.7) | 1,194.4 |
| Operating expenses | 478.5 | 288.6 | 395.4 | 108.2 | -189.7 | 1,081.0 |
| EBITDA | 47.6 | 27.8 | 29.5 | 8.5 | 113.4 | |
| Depreciation & Amortization | 63.2 | 6.1 | 31.2 | 18.6 | 119.1 | |
| Reported EBIT | -15.5 | 21.7 | -1.7 | -10.2 | -5.7 | |
| Margin (%) | -3.0% | 6.9% | -0.4% | -8.7% | -0.5% | |
| Adjusted EBIT | 34.3 | 22.4 | 13.9 | -10.2 | 60.5 | |
| Margin (%) | 6.5% | 7.1% | 3.3% | -8.7% | 5.1% |
Combined PaLo Adjusted EBIT of € 36.4m
4Q20
Top-line decrease driven by COVID-19 impacts on Advertising Mail and on proximity retail
M&R external operating income, € million 1 2 3 4 5 Proximity and convenience retail network -14.3 486.8 Value added services 4Q19 Transactional -3.4 Advertising -12.7 Press -0.3 0.6 4Q20 456.6 -30.2
Domestic Mail
Operating income decline at € -16.5m i.e. € +1.8m working days impact, € -35.3m volume (-11.8% underlying volume decline) and € +17.1m price/mix.
3 1 4 1 2
Advertising
-20.4% underlying volume decline against tough comparable base of +0.5% in 4Q19 and driven by:
- ‐ non-essential retail closure during the full month of November, impacting volumes by -24.3% in Nov.
- ‐ continued uncertain COVID-19 context with limited visibility ahead (e.g. travel sector and cancelled Motor Show in Jan-21) 2 3 5
Press
price/mix.
Transactional
-10.8% underlying volume decline against tough comparable base of -7.2% in 4Q19 and driven by the known structural trends of continued e-substitution, higher acceptance of e-documents at the receivers' side and digitization of C2B communication through smartphone apps. Christmas cards supported the volume trend and contributed positively to
-2.7% underlying volume decline.
Proximity and convenience retail network
Lower Ubiway retail revenues from reduced footfall as a result of COVID-19, especially in travel environments.
Value added services
Higher revenues from data and document management.
M&R adjusted EBIT decline from COVID-19 top-line evolution, while higher peak opex was compensated by cost containment
4Q20 – M&R
| € million | |||
|---|---|---|---|
| Mail & Retail | 4Q19 | 4Q20 | % ↑ |
| External operating income | 486.8 | 456.6 | -6.2% |
| Transactional | 196.3 | 192.9 | -1.8% |
| Advertising | 64.1 | 51.4 | -19.8% |
| Press | 88.8 | 88.5 | -0.4% |
| Proximity and convenience retail network | 111.9 | 97.6 | -12.8% |
| Value added services | 25.6 | 26.2 | 2.2% |
| Intersegment operating income | 50.0 | 69.6 | 39.0% |
| Total operating income | 536.8 | 526.1 | -2.0% |
| Operating expenses | 466.4 | 478.5 | 2.6% |
| EBITDA | 70.4 | 47.6 | -32.3% |
| Depreciation & Amortization | 20.7 | 63.2 | 204.9% |
| Reported EBIT | 49.7 | -15.5 | - |
| Margin (%) | 9.3% | -3.0% | |
| Adjusted EBIT | 51.5 | 34.3 | -33.3% |
| Margin (%) | 9.6% | 6.5% | |
| Average # FTEs and interims | 22,753 | 24,866 | 9.3% |
| Additional KPIs | |||
| Underlying Mail volume decline | -5.5% | -11.8% | |
| Transactional | -7.2% | -10.8% | |
| Advertising | 0.5% | -20.4% | |
| Press | -6.5% | -2.7% |
Key takeaways 4Q20
- Total operating income declined by € -10.7m (-2.0%) from mail volume decline and lower Proximity and convenience retail network revenues, partly compensated by mail price increases and higher intersegment operating income related to parcels volumes.
- Operating expenses (incl. adjusted D&A) increased by € -6.5m (+1.3%):
- ‐ Higher operational costs in the mail network during non-essential retail lockdown in Nov-20 and EoY peak were mainly driven by elevated parcels volumes and therefore to a large extent compensated by higher cost transferred to PaLo Eurasia. This opex mainly related to (1) significantly higher payroll & interim costs through increased headcount, regular salary indexation and COVID-19 premium for operational staff in duty (Nov. 30th to Dec. 24th), (2) higher transport costs from higher use of subcontractors and (3) higher rental costs for fleet.
- ‐ Higher reinvoicing from Corporate linked to IT-projects and cost phasing from 1H20 into 4Q20 (e.g. holidays).
- ‐ The above were partly compensated by lower material costs from Ubiway retail and general cost containment on discretionary spend.
- M&R adjusted EBIT declined by € -17.2m to € 34.3m. Reported EBIT at € -15.5m was impacted by € 49.1m of impairment charges on Press and Retail.
4Q20 – PaLo Eurasia
PaLo Eurasia revenue mainly driven by thriving domestic e-commerce during November lockdown and EoY peak
PaLo Eurasia external operating income, € million
Parcels BeNe
Parcels B2X1 revenues up 69.9% driven by volume growth of +67.4% and positive P/M of +2.5%. Volume growth is fueled by non-essential retail closure in Nov-20 and strong EoY peak. P/M was supported by peak surcharges and favourable product & customer mix.
Strong volume and revenue development at Dynalogic.
16.2
Total Parcels BeNe revenues up € 60.3m (+55.9%) driven by Parcels B2X and Dynalogic and partly offset by YoY revenue decline of other activities resulting among others from LY's closure of non-profitable businesses.
E-commerce logistics
Revenue up € +5.5m, or € +7.0m excl. last year's positive effect of contingent consideration reversal on Leen Menken (€ -1.5m), and mainly driven by:
- ‐ Strong organic growth at Active Ants from existing customers and new customers acquired through the MCS Fulfilment integration as of October 2019
- ‐ Radial Europe growth driven by UK and the new fulfilment site in Poland which opened in 3Q20
Cross-border
Revenue evolution driven by:
- ‐ Continued strong growth of Asian parcel volumes linked to rail transport of containers as an alternative to air freight, but at a slower pace than previous quarters of 2020
- ‐ Growth in UK business driven by new customers and surcharges
- ‐ Partly offset by declining crossborder postal business where growth in inbound parcels could not fully compensate the decline in both inbound & outbound mail volumes
2 3
1
Positive EBIT margin development driven by elevated parcels volumes handled through the mail network
€ million
| Parcels & Logistics Europe and Asia | 4Q19 | 4Q20 | % ↑ |
|---|---|---|---|
| External operating income | 229.9 | 311.8 | 35.6% |
| Parcels BeNe | 107.8 | 168.1 | 55.9% |
| E-commerce logistics | 40.6 | 46.0 | 13.5% |
| Cross-border | 81.5 | 97.7 | 19.9% |
| Intersegment operating income | 4.5 | 4.6 | 0.9% |
| Total operating income | 234.4 | 316.4 | 35.0% |
| Operating expenses | 215.9 | 288.6 | 33.7% |
| EBITDA | 18.5 | 27.8 | 49.9% |
| Depreciation & Amortization | 5.4 | 6.1 | 13.5% |
| Reported EBIT | 13.2 | 21.7 | 64.8% |
| Margin (%) | 5.6% | 6.9% | |
| Adjusted EBIT | 13.9 | 22.4 | 61.8% |
| Margin (%) | 5.9% | 7.1% | |
| Average # FTEs and interims | 3,481 | 3,886 | 11.6% |
| Additional KPIs | |||
| Parcels volume growth1 | 27.2% | 67.4% |
1 4Q19 restated to reflect Parcels B2X volume growth
Key takeaways 4Q20
- Total operating income up € +82m or +35% (€ +83.5m or 35.8% excl. last year's € -1.5m contingent considerations reversal on Leen Menken) driven by positive revenue development across the board, especially Parcels BeNe (€ +60.3m, +55.9%) and Cross-border (€ +16.2m, +19.9%).
- Operating expenses (incl. adjusted D&A) were up € -73.4m (+33.3%), mainly explained by higher volume-linked variable costs translating into higher payroll, interim, transport and parcels insurance costs. Consequently, PaLo EA recorded higher intersegment operating expenses from M&R driven by elevated parcels volumes in the integrated last-mile mail & parcels network during the Nov-20 lockdown and EoY peak. Channel mix was negative driven by higher mail volumes in the integrated network compared to the 2Q20 lockdown and therefore resulting in a higher use of subcontractors.
- Adjusted EBIT increased by € +8.6m (+61.8%). Excluding last year's contingent considerations reversal on Leen Menken, adjusted EBIT was up € +10.1m operationally.
4Q20 – PaLo Eurasia
Continued strong e-commerce development at PaLo North America despite ransomware impact
PaLo North America external operating income, € million
E-commerce logistics
YoY increase of +9.3% (+17.9% at constant exchange rate) despite ransomware impact.
Revenue increase mainly driven by Radial North America recording continued good growth of existing customers (+18.5%) and of new clients launched in 2019, partly offset by some client churn.
Cross-border (Landmark, Apple Express and FDM) recorded strong volumes from existing and new customers fueled by e-commerce development.
International mail
1 2
Revenue decline (-19.4%, or -13.2% at constant exchange rate) driven by unfavourable impact of COVID-19 on the mail business.
Operating leverage drove PaLo NA adjusted EBIT uplift despite ransomware attack impact
€ million
| Parcels & Logistics North America | 4Q19 | 4Q20 | % ↑ |
|---|---|---|---|
| External operating income | 392.5 | 422.5 | 7.6% |
| E-commerce logistics | 369.5 | 404.0 | 9.3% |
| International mail | 23.0 | 18.5 | -19.4% |
| Intersegment operating income | 2.8 | 2.4 | -12.8% |
| Total operating income | 395.3 | 424.9 | 7.5% |
| Operating expenses | 369.9 | 395.4 | 6.9% |
| EBITDA | 25.4 | 29.5 | 16.1% |
| Depreciation & Amortization | 18.1 | 31.2 | 72.5% |
| Reported EBIT | 7.3 | -1.7 | - |
| Margin (%) | 1.9% | -0.4% | |
| Adjusted EBIT | 10.6 | 13.9 | 31.0% |
| Margin (%) | 2.7% | 3.3% | |
| Average # FTEs and interims | 10,850 | 13,434 | 23.8% |
| Additional KPIs, adjusted | |||
| Radial North America revenue, \$m | 353.2 | 407.1 | 15.3% |
| Radial North America EBITDA, \$m | 18.7 | 22.6 | 20.5% |
| Radial North America EBIT, \$m | 2.1 | 7.6 | 261.9% |
1 In 2020 the net estimated costs amounted to € 9.2m and as Radial has a cyber insurance coverage, the foregoing constitutes a contingent asset towards the insurance companies.
Key takeaways 4Q20
- Total operating income increase of € +29.7m or +7.5% (+16.0% at constant exchange rate) fully driven by E-commerce logistics.
- Operating expenses (incl. adjusted D&A) increased by € -26.4m (€ -54.3m excl. FX) resulting from (1) volume-driven higher variable labour, transport costs and credit card fees, (2) € -3.2m ransomware attack opex net of partial insurance recovery, and finally (3) higher adjusted D&A from additional fulfilment sites. These effects were partly compensated by productivity gains in fulfilment and cost containment in general.
- Estimated € -6.0m gross margin shortfall due to the ransomware attack.
- Adjusted EBIT up € +3.3m to € 13.9m. Excluding ransomware attack (€ -9.2m1 ), adjusted EBIT would have more than doubled to amount to € 23.1m (+5.4% margin), driven by operating leverage at Radial. Reported EBIT at € -1.7m was impacted by € 13.0m of impairment charges on The Mail Group.
Corporate EBIT down from lower building sales
€ million
| Corporate | 4Q19 | 4Q20 | % ↑ |
|---|---|---|---|
| External operating income | 4.6 | 3.6 | -23.2% |
| Intersegment operating income | 105.7 | 113.1 | 7.1% |
| Total operating income | 110.3 | 116.7 | 5.8% |
| Operating expenses | 98.3 | 108.2 | 10.0% |
| EBITDA | 12.0 | 8.5 | -29.3% |
| Depreciation & Amortization | 18.8 | 18.6 | -0.6% |
| Reported EBIT | -6.8 | -10.2 | - |
| Margin (%) | -6.2% | -8.7% | |
| Adjusted EBIT | -6.8 | -10.2 | - |
| Margin (%) | -6.2% | -8.7% | |
| Average # FTEs and interims | 1,647 | 1,546 | -6.1% |
Key takeaways 4Q20
- External revenues down by € -1.1m driven by lower building sales.
- Operating expenses (incl. D&A) increased by € -9.8m driven by higher services to the operational Business Units, especially for ITrelated projects.
- As a result, adjusted EBIT decreased by € -3.4m YoY to € -10.2m.
Seasonality and mix contributed to increased FCF1
Reported ‐ € million
| 4Q19 | 4Q20 | Delta | ||
|---|---|---|---|---|
| + | Cash flow from operating activities | 217.6 | 201.0 | -16.6 |
| out of which CF from operating activities before ∆ in WC & provisions | 105.8 | 64.7 | -41.2 | |
| + | Cash flow from investing activities | -90.4 | -55.6 | 34.8 |
| = | Free cash flow | 127.2 | 145.4 | 18.2 |
| + | Financing activities | -162.4 | -40.5 | 121.9 |
| = | Net cash movement | -35.3 | 104.9 | 140.1 |
| Capex | -73.2 | -60.9 | 12.3 |
CF from operating activities
€ -41.2m variance in CF from operating activities before change in working capital and provisions, mainly due to lower adjusted EBITDA (€ -12.9m) combined with higher tax prepayments (€ -25.9m) and the absence of a dividend by bpost bank in 2020 (€ -5.0m)
Change in working capital and provisions (€ +24.6m) of which :
- More cash outflows relating to collected proceeds due to clients in Radial: € -15.1m, high level of merchandise sales in COVID-19 period in 3Q20
- € +36.3m improvement in working capital evolution: primarily driven by increased terminal dues and extended payment terms due to the setup of temporary initiatives during the pandemic partially counterbalanced by lower suppliers balances due to timing of expenses, and increased DSO as a consequence of the mix impact on receivables
- € +3.4m change in provisions
CF from investing activities
Loan to Associate in 4Q19: € +25.0m
Capex at € 60.9m decreased by € +12.3m vs 4Q19 and was mainly spent on increased capacity for E-commerce: Radial and Active Ants additional sites and Parcels B2X sorting capacity
CF used for financing activities
Dividend in 2019 : € +124.0m
4Q20
Balance Sheet
| PPE | 1,133.6 | 1,138.0 | Total equity | 682.6 | 583.8 |
|---|---|---|---|---|---|
| Intangible assets | 898.3 | 771.7 | Interest-bearing loans & borrowings | 1,449.9 | 1,443.2 |
| Investments in associates and joint ventures | 239.5 | 0.1 | Employee benefits | 320.6 | 320.0 |
| Other assets | 40.4 | 54.1 | Trade & other payables | 1,278.5 | 1,487.0 |
| Trade & other receivables | 759.0 | 826.6 | Provisions | 29.8 | 27.0 |
| Inventories | 34.7 | 32.7 | Derivative instruments | 1.3 | 0.3 |
| Cash & cash equivalents | 670.2 | 948.1 | Other liabilities | 14.3 | 13.2 |
| Assets held for sale | 1.4 | 103.3 | |||
| Total Assets | 3,777.1 | 3,874.5 | Total Equity and Liabilities | 3,777.1 | 3,874.5 |
€ million
Equity and Liabilities Dec 31, 2019 Dec 31, 2020
Main balance sheet movements
Assets Dec 31, 2019 Dec 31, 2020
On December 23, 2020 bpost and BNP Paribas Fortis (BNPPF) announced a non-binding agreement on the future long-term partnership of bpost bank NV/SA, including the sale of participations from bpost to BNPPF. bpost and BNPPF have the intention to sign binding agreements by the end of March 2021, with the objective to close the transaction by the end of 2021. As a result the investment in bpost bank has been classified as assets held for sale and the carrying value was reduced to the fair value less costs to sell, hence a loss of € -141.6m has been recognized.
The decrease of the intangible assets was mainly explained by the impairment charges on Press, Retail and International Mail (€ -62.1m) and FX impact on goodwill (€ -42.4m).
The increase of cash and cash equivalents comes from cash from results and the improvement of the working capital (€ +121.2m), partially due to temporary initiatives set up in the context of the pandemic which will be unwound in the course of the first quarter of 2021 and the increase of the terminal dues payables with the foreign operators (both impacting trade & other payables). Net debt consequently decreased by € 284.7m in 2020, from € 779.9m to € 495.2m.
The decrease of the equity was mainly explained by the loss of year (€ -19.2m), the fair value adjustment in respect of bpost bank's bond portfolio (€ -16.1m), the exchange differences on translation of foreign operations (€ -51.6m) and the net impact of the integration of Active Ants International comprising the non-controlling interests and the recognition of the contingent consideration for the purchase of the remaining shares (€ -15.0m).
€ million
Financing Structure & Liquidity
| € million | ||
|---|---|---|
| Available Liquidity | Dec 31, 2019 | Dec 31, 2020 |
| Cash & cash equivalents | 670.2 | 948.1 |
| Cash in network | 163.6 | 167.2 |
| Transit accounts | 105.8 | 32.2 |
| Cash payment transactions under execution | -26.7 | -30.9 |
| Bank current accounts | 377.4 | 574.6 |
| Short-term deposits | 50.0 | 205.0 |
| Undrawn revolving credit facilities | 375.0 | 375.0 |
| Syndicated facility - 10/2024 | 300.0 | 300.0 |
| Bilateral facility - 06/2025 | 75.0 | 75.0 |
| Total Available Liquidity | 1,045.2 | 1,323.1 |
| € million | ||
|---|---|---|
| External Funding | Dec 31, 2019 | Dec 31, 2020 |
| L o ng -term |
||
| Long-term bond1 (1.25% - 07/2026) |
650.0 | 650.0 |
| Bank loans | 183.2 | 159.9 |
| Amortizing Loan (€ 100m) ‐ 12/2022 | 18.2 | 9.1 |
| Term Loan (\$ 185m) - 07/2023 | 165.0 | 150.8 |
| Sho rt-term |
||
| Bank loans: Amortizing Loan (€ 100m) ‐ 12/2022 | 9.1 | 9.1 |
| Commercial Papers | 164.5 | 165.1 |
| Total External Funding | 1,006.8 | 984.1 |
Liquidity: Cash & Committed credit lines
Total available liquidity on December 31, 2020 consisted out of € 948.1m cash & cash equivalents of which € 779.6m is readily available on bank current accounts and as short-term deposits.
In addition, bpost group has 2 undrawn revolving credit facilities for a total amount of € 375.0m.
External Funding & Debt Amortization (excl. IFRS16 lease liabilities)
Out of € 984.1m external funding on balance sheet on December 31, 2020:
- ‐ € 165.1m need to be repaid or will be rolled over in 1Q21 (i.e., commercial paper with maturity ranging between 1 to 3 months).
- ‐ € 9.1m during 4Q21 (i.e., the current portion of the amortizing loan).
1 € 650m long-term bond with a carrying amount of € 643.7m, the difference being the re-offer price and issuance fees.
COVID-19 disclaimer
Due to the continued COVID-19 uncertainties, visibility going forward remains limited which may impact the 2021 outlook.
19 4Q20 Analyst Presentation
Outlook for 2021 Outlook FY21
Group adjusted EBIT in the range of € 265-295m, broadly in line with FY20 which benefited from net positive COVID-19 effect
Mail & Retail
Total operating income:
- Underlying Domestic Mail volume decline in the range of -9 to -11%
- Approved mail pricing impact of +6%
- Expected post-COVID-19 recovery in VAS and proximity retail
6-8% adjusted EBIT margin
Parcels & Logistics Europe & Asia
Mid-single-digit % growth in total operating income with parcels and ecommerce logistics volumes expected to normalize from elevated COVID-19 levels
8-10% adjusted EBIT margin
Operating expenses will include investments to grow omni-commerce logistics in Europe
Parcels & Logistics North America
Mid- to high-single-digit % growth in total operating income driven by Radial existing customers growth and new client launches, normalized for 2020 COVID-19 spike
4-5% adjusted EBIT margin
Group
Low-single-digit % growth in total operating income
Adjusted EBIT between € 265-295m
Gross capex around € 200-220m, geared towards the priorities set in the CONNECT 2026 strategy to grow omnicommerce logistics
Dividend
2021 dividend in the range of 30-50% of IRFS net profit and payable in May 2022 after the General Shareholders' Meeting, in accordance with the new dividend policy
FY20 EBIT fully in line with upped guidance of at least € 270m
Net positive EBIT impact from COVID-191 as group-wide additional opex and pressure on M&R top-line was more than compensated by strong PaLo Eurasia & North America performance and cost containment
1 As of 3Q20, COVID-19 impact has not been quantified since disentangling its effects from the observed business developments has become increasingly artificial and therefore less meaningful. 2 Adjusted excludes items that are non-recurring in nature and significant (> € 20m). All profits or losses on disposal of activities are adjusted whatever the amount they represent, as well as the amortization and impairment on the intangible assets recognized throughout the Purchase Price Allocation (PPA) of the acquisitions. Reversals of provisions whose addition had been excluded from income are also adjusted whatever the amount they represent.
| € million | Reported | Adjusted1 | |||
|---|---|---|---|---|---|
| FY19 | FY20 | FY19 | FY20 | % ↑ | |
| Total operating income | 3,837.8 1 |
4,154.6 | 3,837.2 1 |
4,154.6 | 8.3% |
| Operating expenses | 3,300.2 | 3,635.5 | 3,300.2 | 3,635.5 | 10.2% |
| EBITDA | 537.6 | 519.1 | 537.0 | 519.1 | -3.3% |
| Depreciation & Amortization | 247.7 | 318.5 | 226.2 | 238.5 | 5.5% |
| EBIT | 289.9 | 200.7 2 |
310.8 | 280.6 2 |
-9.7% |
| Margin (%) | 7.6% | 4.8% | 8.1% | 6.8% | |
| Financial result | -61.5 | -47.8 | -61.5 | -47.8 | -22.3% |
| Profit before tax | 244.3 | 29.6 | 265.2 | 251.2 | -5.3% |
| Income tax expense | 89.6 | 48.8 2 |
92.1 | 50.3 2 |
-45.4% |
| Net profit | 154.7 | -19.2 3 |
173.1 | 200.9 3 |
16.0% |
| FCF | 302.0 | 443.7 4 |
288.0 | 440.5 4 |
53.0% |
| Net Debt at Dec 31 | 779.9 | 495.2 | 779.9 | 495.2 | -36.5% |
| Capex | 162.3 | 147.7 | 162.3 | 147.7 | -8.9% |
| Average # FTEs and interims | 35,377 | 38,639 | 35,377 | 38,639 | 9.2% |
Adjustment of € -0.6m at operating income level related to the disposal of Alvadis on August 30, 2019
FY20
Amortization and impairments of intangibles recognized during PPA are adjusted. Goodwill impairments of € 41.4m are also adjusted as they are non-recurring in nature and significant (> € 20m). These adjustments lead to increase in EBIT (€ +79.9m) and income tax expense (€ +1.5m)
Impairment loss recognized on the remeasurement to fair value less costs to sell of bpost bank (€ 141.6m) is adjusted
Adjusted FCF excludes the cash Radial receives on behalf of its customers for performing billing services
4
3
1
2
Results by segment FY20
€ million
| M&R | PaLo Eurasia | PaLo N. Am. | Corp | Eliminations | Group | |
|---|---|---|---|---|---|---|
| External operating income | 1,736.1 | 1,073.9 | 1,329.2 | 15.4 | 0.0 | 4,154.6 |
| Intersegment operating income | 221.8 | 14.0 | 6.8 | 375.2 | -617.9 | 0.0 |
| Total operating income | 1,958.0 | 1,087.9 | 1,336.0 | 390.6 | (617.9) | 4,154.6 |
| Operating expenses | 1,709.4 | 966.8 | 1,233.7 | 343.4 | -617.9 | 3,635.5 |
| EBITDA | 248.5 | 121.1 | 102.3 | 47.2 | 519.1 | |
| Depreciation & Amortization | 128.9 | 22.6 | 95.0 | 72.0 | 318.5 | |
| Reported EBIT | 119.6 | 98.5 | 7.4 | -24.9 | 200.7 | |
| Margin (%) | 6.1% | 9.1% | 0.6% | -6.4% | 4.8% | |
| Adjusted EBIT | 171.2 | 101.4 | 32.8 | -24.9 | 280.6 | |
| Margin (%) | 8.7% | 9.3% | 2.5% | -6.4% | 6.8% |
Top-line decrease driven by COVID-19 impacted mail and proximity retail and by deconsolidation of Alvadis
M&R external operating income, € million
Domestic Mail
Operating income decline at € -83.7m i.e.
- ‐ € +3.1m working days impact
- ‐ € -3.7m net impact elections of 2019
- ‐ € -136.3m volume (-12.0% underlying volume decline, with March to May-20 at -20.1% due to COVID-19)
‐ € +53.2m price/mix 3 1 2
Transactional
-11.3% underlying volume decline of which:
-16.7% March to May-20: COVID-19 lockdown negatively impacted all mail categories, in particular smaller administrative mail volume and registered letters.
Excluding COVID-19, underlying mail volumes subject to the known trends of ongoing e-substitution and digitization.
Proximity and convenience retail network
Decrease mainly driven by:
- ‐ COVID-19 impact on Ubiway retail revenues from partial closure of the network and reduced footfall
- ‐ Deconsolidation of Alvadis (€ -20.9m) as of September 2019
- ‐ Decline in banking & finance revenues 1 4
Advertising
-18.8% underlying volume decline:
- ‐ -36.2% March to May-20 due to cancelled campaigns from COVID-19 lockdown of non-essential retail from March 18 through May 10 and ban on promotions through April 3.
- ‐ Full closure of non-essential retail in Nov-20 and continued hesitance to advertise due to COVID-19 context, impacting volumes by -24.3% in Nov.
Press
-5.3% underlying volume decline driven by e-substitution and rationalization.
Value added services
Higher revenue from fines management more than offset by lower revenues from among others European license plates, data and mail value added services.
M&R adjusted EBIT impacted by COVID-19 top-line evolution despite lower opex
€ million
| Mail & Retail | FY19 | FY20 | % ↑ | |||
|---|---|---|---|---|---|---|
| External operating income | 1,897.1 | 1,736.1 | -8.5% | |||
| Transactional | 748.0 | 725.2 | -3.1% | |||
| Advertising | 236.0 | 182.6 | -22.6% | |||
| Press | 346.6 | 339.1 | -2.2% | |||
| Proximity and convenience retail network | 462.6 | 386.5 | -16.4% | |||
| Value added services | 103.9 | 102.7 | -1.1% | |||
| Intersegment operating income | 174.7 | 221.8 | 27.0% | |||
| Total operating income | 2,071.7 | 1,958.0 | -5.5% | |||
| Operating expenses | 1,734.2 | 1,709.4 | -1.4% | |||
| EBITDA | 337.5 | 248.5 | -26.4% | |||
| Depreciation & Amortization | 83.7 | 128.9 | 54.1% | |||
| Reported EBIT | 253.8 | 119.6 | -52.9% | |||
| Margin (%) | 12.3% | 6.1% | ||||
| Adjusted EBIT | 257.4 | 171.2 | -33.5% | |||
| Margin (%) | 12.4% | 8.7% | ||||
| Average # FTEs and interims | 22,435 | 23,534 | 4.9% | |||
| Additional KPIs | FY19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | FY20 |
| Underlying Mail volume decline | -7.9% | -9.9% | -17.7% | -8.2% | -11.8% | -12.0% |
| Transactional | -9.2% | -8.8% | -16.7% | -8.3% | -10.8% | -11.3% |
| Advertising | -4.7% | -16.5% | -26.6% | -9.4% | -20.4% | -18.8% |
| Press | -6.5% | -5.2% | -8.0% | -5.4% | -2.7% | -5.3% |
Key takeaways FY20
- Total operating income decline of € -113.8m or -5.5% (€ -113.2m adjusted) primarily driven by mail volume decline and lower Proximity and convenience retail network revenues, partly compensated by mail pricing and higher intersegment operating income related to higher parcels volumes.
- Operating expenses (incl. adjusted D&A) declined by € +27.0m (-1.5%) as:
- ‐ higher payroll and interim driven by increased (1) headcount from higher parcel volumes and absenteeism and (2) price from COVID-19 premiums and regular salary indexation; together with specific COVID-19 operating expenses
- ‐ more than compensated by lower material costs from Ubiway Retail (incl. Alvadis deconsolidation impact), higher recoverable VAT, increased sorting expenses transferred to PaLo Eurasia driven by stellar growth in parcel volumes handled through the mail network and lower project related costs.
- M&R adjusted EBIT declined by € -86.1m to € 171.2m. Reported EBIT at € 119.6m was impacted by € 49.1m of impairment charges on Press and Retail.
- COVID-191 had an estimated net negative impact on FY20 EBIT from additional mail volume decline, mainly in advertising mail, and pressure on retail combined with specific additional opex, only partly compensated by cost savings.
PaLo Eurasia revenue driven by strong e-commerce development both domestically and abroad
PaLo Eurasia external operating income, € million
Parcels BeNe
Parcels B2X1 revenues up 54.7% driven by volume growth of +56.2%. Volume growth is fueled by COVID-19 boost to online sales and 2 lockdowns of non-essential retail (March 18th through May 10th and full month of November).
Total Parcels BeNe revenues up € 167.2m (+43.9%), or € +168.9m (+44.6%) excl. last year's positive effect of a contingent consideration reversal on Dynagroup (€ -1.7m). YoY growth is driven by Parcels B2X and Dynalogic, partly offset by revenue decline of other activities resulting among others from LY's closure of non-profitable businesses.
1 Volume growth % consists of B2X parcels, not including Euro-Sprinters, CityDepot, Future Lab and Dynagroup.
E-commerce logistics
Revenue up € +39.5m, or € +41.0m excl. last year's positive effect of a contingent consideration reversal on Leen Menken (€ -1.5m), and mainly driven by:
- ‐ Active Ants growth at existing customers as well as the integration of MCS Fulfilment as from October 1, 2019 (€ +9.3m inorganic growth over FY20).
- ‐ Organic growth at Radial Europe.
Cross-border
Strong revenue development mainly driven by:
‐ Exponential growth of Asian parcel volumes shipped by train (as an alternative to COVID-19 impacted air freight) since June 2020, with pace of growth slowing down QoQ from 2Q through 4Q20
FY20 – PaLo Eurasia
‐ Partly offset by declining crossborder postal business where growth in inbound parcels could not fully compensate the decline in both inbound & outbound mail volumes
Strong EBIT margin uplift driven by stellar growth in parcels volumes handled through the mail network
€ million
| Parcels & Logistics Europe and Asia | FY19 | FY20 | % ↑ | |||
|---|---|---|---|---|---|---|
| External operating income | 813.2 | 1,073.9 | 32.1% | |||
| Parcels BeNe | 380.6 | 547.9 | 43.9% | |||
| E-commerce logistics | 133.1 | 172.5 | 29.7% | |||
| Cross-border | 299.5 | 353.5 | 18.0% | |||
| Intersegment operating income | 17.8 | 14.0 | -21.1% | |||
| Total operating income | 830.9 | 1,087.9 | 30.9% | |||
| Operating expenses | 747.7 | 966.8 | 29.3% | |||
| EBITDA | 83.2 | 121.1 | 45.5% | |||
| Depreciation & Amortization | 21.7 | 22.6 | 4.0% | |||
| Reported EBIT | 61.5 | 98.5 | 60.2% | |||
| Margin (%) | 7.4% | 9.1% | ||||
| Adjusted EBIT | 65.8 | 101.4 | 54.2% | |||
| Margin (%) | 7.9% | 9.3% | ||||
| Average # FTEs and interims | 3,248 | 3,668 | 12.9% | |||
| Additional KPIs | FY19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | FY20 |
| Parcels volume growth1 | 20.9% | 25.2% | 79.3% | 49.0% | 67.4% | 56.2% |
1 FY19, 1Q20 and 2Q20 restated to reflect Parcels B2X volume growth
2 As of 3Q20, COVID-19 impact has not been quantified since disentangling its effects from the observed business developments has become increasingly artificial and therefore less meaningful.
Key takeaways FY20
- Total operating income up € +257m or +30.9% (€ +260.2m or 31.4% excl. last year's € -3.2m contingent considerations reversals on Dynagroup & Leen Menken) mainly driven by Parcels BeNe (€ +167.2m, +43.9%). Terminal dues settlements had a € -2.6m negative impact on revenues YoY.
- Operating expenses (incl. adjusted D&A) were up € -221.3m (+28.9%), mainly from higher volume-linked variable costs translating into higher payroll, interim and transport costs which also drove higher intersegment operating expenses from M&R for parcels volumes handled through the integrated last-mile mail and parcels network. In addition, PaLo EA recorded specific COVID-19 related opex, a € -2.3m unfavourable impact related to terminal dues settlements and VAT recovery (€ -2.5m YoY).
- Adjusted EBIT increased by € +35.6m (+54.2%). Excluding YoY contingent considerations reversals, additional VAT recovery and terminal dues settlements (€ -10.6m combined), adjusted EBIT was up € +46.2m (+84%) operationally.
- COVID-192 had an estimated net positive impact on FY20 EBIT from additional operating income growth in all business lines only partly offset by specific additional opex.
Parcels & Logistics North America driven by significant growth at existing clients and 2019 new business
PaLo North America external operating income, € million
E-commerce logistics
YoY increase of +23.6%, +27.2% at constant exchange rate, despite impact from the ransomware attack.
Revenue increase mainly driven by Radial North America recording significant growth of existing customers (+26.8%) driven by COVID-19 as well as new clients launched in 2019 (sales more than tripling), slightly offset by client churn.
International mail
Declining revenues at The Mail Group1(-7.4%, -5.8% at constant exchange rate).
Significant drop-off in business mail segment as a result of COVID-19.
1 2
FY20 – PaLo N. Am.
PaLo NA EBIT uplift driven by high e-commerce volumes translating into increased operating leverage
€ million
| Parcels & Logistics North America | FY19 | FY20 | % ↑ |
|---|---|---|---|
| External operating income | 1,097.5 | 1,329.2 | 21.1% |
| E-commerce logistics | 1,008.1 | 1,246.4 | 23.6% |
| International mail | 89.4 | 82.8 | -7.4% |
| Intersegment operating income | 6.8 | 6.8 | 1.0% |
| Total operating income | 1,104.2 | 1,336.0 | 21.0% |
| Operating expenses | 1,048.7 | 1,233.7 | 17.6% |
| EBITDA | 55.5 | 102.3 | 84.4% |
| Depreciation & Amortization | 71.6 | 95.0 | 32.7% |
| Reported EBIT | -16.1 | 7.4 | - |
| Margin (%) | -1.5% | 0.6% | |
| Adjusted EBIT | -3.0 | 32.8 | - |
| Margin (%) | -0.3% | 2.5% | |
| Average # FTEs and interims | 8,061 | 9,845 | 22.1% |
| Additional KPIs, adjusted | |||
| Radial North America revenue, \$m | 934.9 | 1,201.3 | 28.5% |
| Radial North America EBITDA, \$m | 29.2 | 78.6 | 169.3% |
| Radial North America EBIT, \$m | -29.2 | 11.5 | - |
1 In 2020 the net estimated costs amounted to € 9.2m and as Radial has a cyber insurance coverage, the foregoing constitutes a contingent asset towards the insurance companies.
2 As of 3Q20, COVID-19 impact has not been quantified since disentangling its effects from the observed business developments has become increasingly artificial and therefore less meaningful.
Key takeaways FY20
- Total operating income increase of € +231.8m or +21.0% (+24.3% at constant exchange rate) driven by E-commerce logistics.
- Operating expenses (incl. adjusted D&A) increased by € -196.0m (€ -224.7m excl. FX) resulting from (1) volume-driven higher variable labour, transport costs and credit card fees (2) bad debt driven by COVID-19, (3) higher adjusted D&A from additional fulfilment sites, (4) COVID-19 related opex and (5) € -3.2m ransomware attack opex net of partial insurance recovery.
This was partly compensated by higher productivity and benefits from cost savings program as well as cost containment measures in general.
- Estimated € -6.0m gross margin shortfall due to the ransomware attack.
- Adjusted EBIT up € +35.8m to € 32.8m driven by strong e-commerce growth and high operating leverage at Radial. Excluding ransomware attack (€ -9.2m1 ), adjusted EBIT would have been at € 41.9m (3.1% margin). Reported EBIT at € 7.4m was impacted by € 13.0m of impairment charges on The Mail Group.
- COVID-192 had an estimated net positive impact on FY20 EBIT from additional E-commerce logistics volumes only partly offset by declining International Mail, specific additional opex and bad debt.
Corporate EBIT decrease mainly driven by lower building sales
FY20 – Corporate
€ million
| Corporate | FY19 | FY20 | % ↑ |
|---|---|---|---|
| External operating income | 30.1 | 15.4 | -48.9% |
| Intersegment operating income | 372.0 | 375.2 | 0.9% |
| Total operating income | 402.1 | 390.6 | -2.9% |
| Operating expenses | 340.7 | 343.4 | 0.8% |
| EBITDA | 61.4 | 47.2 | -23.2% |
| Depreciation & Amortization | 70.8 | 72.0 | 1.8% |
| Reported EBIT | -9.3 | -24.9 | - |
| Margin (%) | -2.3% | -6.4% | |
| Adjusted EBIT | -9.3 | -24.9 | - |
| Margin (%) | -2.3% | -6.4% | |
| Average # FTEs and interims | 1,633 | 1,591 | -2.5% |
1 As of 3Q20, COVID-19 impact has not been quantified since disentangling its effects from the observed business developments has become increasingly artificial and therefore less meaningful.
Key takeaways FY20
- External operating income decreased by € -14.7m driven by lower building sales due to the sale of the headquarters building Centre Monnaie in 2Q19 (€ 19.9m gain on disposal).
- Operating expenses (incl. D&A) increased by € -4.0m driven by higher reinvoicing of services to the operational Business Units (€ +3.2m intersegment operating income). Net of the intersegment operating income, opex (incl. D&A) almost remained stable (€ -0.8m) as the negative YoY VAT recovery impact and higher provisions were partially offset by lower project costs and costs containment.
- As a result, adjusted EBIT decreased by € -15.6m YoY to € -24.9m.
- COVID-191 had an estimated net negative impact on FY20 EBIT mainly related to additional costs for health and safety measures.
Positive evolution of FCF1 mainly driven by payment terms in payables and lower tax related cash flows
Reported ‐ € million
| FY19 | FY20 | Delta | ||
|---|---|---|---|---|
| + | Cash flow from operating activities | 424.2 | 571.3 | 147.1 |
| out of which CF from operating activities before ∆ in WC & provisions | 405.3 | 431.2 | 25.9 | |
| + | Cash flow from investing activities | -122.2 | -127.6 | -5.4 |
| = | Free cash flow | 302.0 | 443.7 | 141.7 |
| + | Financing activities | -314.1 | -138.8 | 175.4 |
| = | Net cash movement | -12.1 | 304.9 | 317.0 |
| Capex | -162.3 | -147.7 | 14.5 |
CF from operating activities
€ +25.9m variance in CF from operating activities before change in working capital and provisions, mainly thanks to tax assessment on previous years (€ 21.3m)
Change in working capital and provisions (€ +121.2m) of which :
- More cash outflows relating to collected proceeds due to clients in Radial: € -10.8m, high level of merchandise sales in COVID-19 period
- € +124.8m improvement in working capital evolution: primarily driven by increased terminal dues and extended payment terms due to the setup of temporary initiatives during the pandemic partially counterbalanced by lower suppliers balances due to timing of expenses, and increased DSO as a consequence of the mix impact on receivables
- € +7.2m change in provisions
CF from investing activities
Proceeds from buildings sales: € -45.6m
Disposal of Alvadis in 3Q19: € -5.9m
M&A activities: € +6.6m (contingent consideration Dyna and purchase AtoZ and MCS)
Capex: € +14.5m (€ 147.7m FY20 vs € 162.3m LY). Main investments in 20 include increased capacity at Radial, Parcels B2C and Active Ants and ICT projects
CF used in financing activities
Dividend in 2019 : € +174.0m
Key contact
Antoine Lebecq Head of Investor Relations
Email: [email protected] Direct: +32 (0) 2 276 29 85 Mobile: +32 (0) 471 81 24 77 Address: bpost group, Centre Monnaie, 1000 Brussels, Belgium
