bpost SA/NV — Investor Presentation 2016

Mar 9, 2016

Brussels – March 10, 2016

Investor presentation - Interim financial report 4Q15

Financial Calendar

More on www.bpost.be/ir

02.05.2016 (17:45 CET) Quarterly results 1Q16

11.05.2016 Ordinary General Meeting of Shareholders

17.05.2016 Ex-dividend date

19.05.2016 Payment date of the dividend 08.08.2016 (17:45 CET) Quarterly results 2Q16

09.11.2016 (17:45 CET) Quarterly results 3Q16

05.12.2016 (17:45 CET) Interim dividend 2016 announcement

08.12.2016 Ex-dividend date (interim dividend)

12.12.2016

Payment date of the interim dividend

Disclaimer

This presentation is based on information published by bpost in its Fourth Quarter 2015 Press Release and 2015 Annual Report, made available on March, 9th 2016 at 5.45pm CET on corporate.bpost.be/investors. This information forms regulated information as defined in the Royal Decree of 14 November 2007. The information in this document may include forwardlooking statements1, which are based on current expectations and projections of management about future events. By their nature, forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside the control of the Company. Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements. Accordingly, no assurance is given that such forward-looking statements will prove to have been correct. They speak only as at the date of the Presentation and the Company undertakes no obligation to update these forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements. This material is not intended as and does not constitute an offer to sell any securities or a solicitation of any offer to purchase any securities.

1 as defined among others under the U.S. Private Securities Litigation Reform Act of 1995

Highlights of 4Q15 – Excellent results

¹ i.e. excluding 224 additional FTEs and interims for peaks in parcels volume and new solutions leading to an average reduction of FTEs and interims for 4Q15 of 480

Highlights FY15 – Excellent results, all financial targets met

Normalized1, € million

Topic	Results		Last outlook for 2015
EBITDA	FY15:	€ 583.6m (+2.0%, + € 11.5m)	at least at the high levels
EBIT	FY15:	€ 494.4m (+3.0%, + € 14.3m)	achieved in 2014
Domestic Mail	FY15:	-5.0% (underlying volume)	< -6%
Parcels	FY15:	+12.6% (domestic volumes)	Double digit
Productivity	FY15:	-885 FTE2	Low end of 800 to 1,200 range
Dividend	• •	Total gross dividend of € 1.29 per share proposed Interim dividend already paid: € 1.05 Final dividend of € 0.24 (+ € 0.02 vs. LY)	at least € 1.26

¹ Normalized figures are not audited

² i.e. excluding 174 additional FTEs and interims for peaks in parcels volume and new solutions leading to an average reduction of FTEs and interims for FY15 of 711

Strong EBITDA uplift (€ +6.1m) driven by excellent parcels performance and improved mail volume trend at -3.9% supported by continued cost control

Normalized1, € million

€ +10.2m / +7.8%

5

Summary of key financials 4Q15

€ million

	Reported			1 Normalized
	4Q14	4Q15	4Q14	4Q15	% Δ
Total operating income (revenues)	655.3	669.0	655.3	642.9	-1.9%	Gain from sale of
Operating expenses	524.3	505.8	524.3	505.8	-3.5%	sizeable building
EBITDA	131.0	163.2	131.0	137.1	4.7%	€ 26.1m
Margin (%)	20.0%	24.4%	20.0%	21.3%
EBIT	102.8	139.1	102.8	113.0	9.9%
Margin (%)	15.7%	20.8%	15.7%	17.6%
Profit before tax	85.3	144.8	85.3	118.7	39.1%
Income tax expense	34.7	49.3	34.7	40.4
Net profit	50.7	95.6	50.7	78.3	54.6%
FCF	48.4	68.6	48.4	68.6	41.8%
bpost S.A./N.V. net profit (BGAAP)	78.8	101.4	78.8	81.1	3.0%
Net Debt/ (Net cash), at 31 Dec.		(486.2) (549.5) (486.2) (549.5)			13.0%

Total operating income (revenues)

Normalized1, € million

		4Q14 reported	Reclass³	4Q14 comparable	SGEI	Organic	4Q15	% Org
	Transactional mail	259.2	0.7	259.9	-	-6.5	253.4	-2.5%
Domestic mail	Advertising mail	71.5	-	71.5	-	-2.9	68.6	-4.0%
	Press	78.5	-	78.5	-1.4	-0.2	76.9	-0.2%
	Domestic parcels²	40.9	-0.9	40.0	-	4.5	44.5	11.3%
Parcels	International parcels	46.3	-1.4	44.9	-	6.4	51.3	14.2%
	Special logistics	2.9	-0.3	2.6	-	-0.4	2.2	-14.7%
	International mail	55.3	-1.6	53.8	-	-5.3	48.4	-9.9%
Additional sources	Value added services	23.7	-1.1	22.6	-	2.5	25.2	11.2%
of revenues	Banking and financial	52.6	-	52.5	-1.3	-0.2	51.0	-0.4%
	Other	26.5	4.7	31.2	-1.5	-2.0	27.7	-6.5%
	Corporate⁴	-2.1	-	-2.1	-	-4.2	-6.3	-
TOTAL		655.3	-	655.3	-4.2	-8.3	642.9	-1.3%

¹ Normalized figures are not audited

² Defined as domestic and Belgian in- and outbound

³ Some intercompany eliminations mainly related to international activities previously reported in Other revenues are now being reported under their corresponding product lines.

Following a correction of the allocation of cash sales (stamps and franking machines) to products as of January 1, 2015 some revenues are shifting from Domestic parcels to Transactional mail.

⁴ Negative figures in Corporate 4Q15 due to stamps revenue recognition.

Improved domestic mail underlying volume at -3.9% driven by transactional and advertising

Total operating income (revenues), normalized, € million

¹ 4Q15 has the same number of business working days as 4Q14. 2 Corrected for requalification of advertising mail to administrative mail.

Strong growth in domestic and international parcels driven by December sales

Total operating income (revenues), normalized, € million

• Excellent volume growth of 13.9% driven by e-commerce, positive evolution from catalogue sellers and continued growth in C2C (new product offering).
• Negative price/mix of -2.3% (faster growth of large e-tailers with high volumes and lower prices than the smaller customers).
• December particularly strong at 15.7%, slightly up from last year (15.6%).
• From US: € +6.3m (including positive FX impact of € +3.9m), driven by peaking December sales.

Additional sources of revenues driven by new solutions but remain impacted by the curtailment of international mail

Total operating income (revenues), normalized, € million

• Impacted by continued curtailment (since 1Q15) of low margin activities (€ -4.0m) which positively contributes to overall profitability.
• Positive contribution of solutions mainly driven by telco contract for decoder swap (€ +0.9m), e-ID (€ +0.4m), City Depot (€ +0.3m) and European license plates (€ +0.3m).
• Positive trend on prepaid cards and Western Union transactions offset by volume decline in cash and payment transactions.
• Mainly decreasing volumes in philately (€ -1.3m).

Costs remained well under control and were down € 18.5m

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

• Cost increase due to FX (€ +3.9m), terminal dues (€ +0.9m) and growth in international parcels compensated by decrease due to the curtailment of international mail.
• Total FTE reduction of 480 FTE (€ -6.5m), including 224 additional FTE (parcels and new solutions related).
• Positive mix impact of € -4.6m thanks to the recruitment of auxiliary postmen (€ -2.2m) and reduction of management level FTE (€ -2.4m).
• Less restructuring cost (€ -2.5m) excluding Alpha layoff costs (being used against the 3Q15 provision).
• Other (€ +0.5m): increase in employee benefits partly compensated by positive settlement of social charges.
• Higher third party costs (€ +6.5m) linked to corporate, mail and parcels projects and higher ICT maintenance costs (€ +2.3m).
• Mainly lower provisions for € -8.3m.

Proceeds from sale of buildings contributed to a positive FCF of € 68.6m despite Alpha pay-outs

€ million	4Q14	4Q15	Delta
Cash flow from operating activities	+71.8	+63.8	-8.0
Cash flow from investing activities	-23.4	+4.8	+28.2
Operating free cash flow1	+48.4	+68.6	+20.2
Financing activities	-217.6	-219.1	-1.5
Net cash movement	-169.3	-150.6	+18.8
Capex	-34.0	-32.3	+1.6

• Minor changes in results of operating activities (€ -1.3m).
• Alpha pay-outs of € -10.7m.
• Excluding Alpha pay-outs, working capital evolution improved by € 4.1m driven by positive impact of phasing elements in social debts due to change in payment terms for social security (€ 22.1m) which more than compensated the evolution of settlements and advances on terminal dues (€ -9.0m) and the access fee received in 4Q14 from a partner in financial services (€ -5.0m).
• Acquisition of the Polish subsidiary (€ -2.7m) in 4Q15.
• Lower capital expenditures (€ +1.6m) and higher proceeds from sale of buildings (€ +29.2m) in 4Q15.

Final gross dividend of € 0.24/share will be proposed to reach a total gross dividend payment of € 1.29/share

• The pay-out ratio for the gross interim dividend at € 1.05/share (up € 0.01 vs. LY) was increased to 99.5% in order to compensate for the after-tax Alpha provision booked in 3Q15.
• Subject to Board and Shareholders' meeting approval, we propose a gross final dividend of € 0.24/share (up € 0.02 vs. LY).

Dividend payment, € gross per share	EUR 0.24
Proposed final dividend	EUR 48.0m
Pay-out ratio	x 85%1
bpost S.A./N.V. net profits after tax November to December 2015 (BGAAP, normalized)	EUR 56.4m
	Dividend
Total proposed dividend for 2015	EUR 1.29
Proposed final dividend payment (€, gross per share)	EUR 0.24
Interim dividend paid in December 2015 (€, gross per share)	EUR 1.05

Strong balance sheet structure

€ million

Assets			Equity and liabilities
	2,121.8	2,112.0	Interest-bearing loans & borrowings	2,121.8 75.6 64.8	2,112.0 65.8 64.2
Cash & cash equivalents	562.3	615.7	Provisions
Other assets	74.4	58.5	Trade & other payables	931.4	940.9
Investments in associates	416.5	375.0
Trade & other receivables	400.8	413.5	Employee benefits	368.6	346.2
Inventories PPE & intangible assets	12.5 655.2	11.1 638.1	Total equity	681.4	694.8

Dec 31, 2015 Dec 31, 2014

Outlook for 2016¹

Top line

• Underlying Domestic Mail volume decline between 5 and 6%²
• Compensation for SGEI: € 26.8m lower than in 2015 excluding inflation and volume impact
• Domestic Parcels: double digit volume growth
• International Parcels: continued growth in flows from the US

Costs

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

Recurring EBITDA and dividend payment at the same level as 2015

FCF

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

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

² Number of working days for 1Q16 will be equal to 1Q15, 2Q16 will count 2 working day more, while 3Q16 and 4Q16 will count 1 day less vs. same quarters of 2015.

Acquisition agreement for the Belgian activities of Lagardère Travel Retail

Topic	Comments
Transaction summary	On 4 February 2016, bpost signed an SPA to acquire 100% of the • Travel Retail Belgian's activities1 registered share capital of Lagardère • Build further on revenue diversification and growth in parcels
Key figures & synergies	2014: € 440.0m sales, € 15.6m EBITDA (3.5% margin) • Synergies: preliminary estimate of €4-5m annually after full integration •
Impact on bpost	Full consolidation after closing (after clearance from competition • authorities) • Fully accretive as of 2017
Financing	The acquisition will be fully cash financed •
Expected closing	Closing of the transaction is expected in the following months •
Conditions precedent to closing	• Merger control clearance from the Belgian Competition Authority ("BCA")

Business overview and rationale for the transaction

Lagardère Travel retail in Belgium

Sales 2014: € 440.0m

• Retail: 41% (€ 180.0m)
• Convenience distribution: 18% (€ 80.0m)
• Press distribution: 41% (€ 180.0m)

EBITDA 2014: € 15.6m (3.5% margin)

Rationale for bpost

Diversify into the growing proximity & convenience distribution

• Convenience & proximity retail is expected to grow by 4 to 6% annually between 2015 and 2020 and we expect to grow at least in line with the market
• Invest in footprint expansion (30 to 45 new stores in the next 3 to 5 years) and remodeling of existing stores
• Accelerate product diversification in order to respond to changing consumer behaviors and to enhance profitability

Further enable our growth strategy in domestic parcels

• Improve delivery options and increase footprint in terms of PUDO coverage (network of > 1,900 points across Belgian territory)

FY15

EBITDA increased € 11.5m thanks to parcels growth and strong cost savings

Normalized1, € million

19

1 Normalized figures are not audited

Summary of key financials FY15

€ million

		Reported		Normalized1
	FY14	FY15	FY14	FY15	% Δ	Gain from sale of
Total operating income (revenues)	2,464.7	2,433.7	2,464.7	2,407.6	-2.3%	sizeable building € 26.1m
Operating expenses	1,892.6	1,878.5	1,892.6	1,824.0	-3.6%
EBITDA	572.0	555.2	572.0	583.6	2.0%	Alpha social
Margin (%)	23.2%	22.8%	23.2%	24.2%		plan provision of € 54.5m
EBIT	480.2	466.1	480.2	494.4	3.0%
Margin (%)	19.5%	19.2%	19.5%	20.5%
Profit before tax	454.1	470.6	454.1	499.0	9.9%
Income tax expense	158.6	161.4	158.6	170.9
Net profit	295.5	309.3	295.5	328.1	11.0%
FCF	373.3	315.9	373.5	315.9	-15.4%
bpost S.A./N.V. net profit (BGAAP)	296.9	287.7	296.9	303.6	2.3%
Net Debt/ (Net cash), at 31 Dec.		(486.2) (549.5) (486.2) (549.5)			13.0%

Total operating income (revenues)

Normalized1, € million

		FY14 reported	Reclass³	FY14 comparable	SGEI	Organic	FY15	% Org
	Transactional mail	943.2	2.8	946.1	-	-28.5	917.6	-3.0%
Domestic mail	Advertising mail	271.4	-0.6	270.8	-	-19.9	250.9	-7.3%
	Press	308.4	-	308.4	-10.5	-2.2	295.6	-0.7%
	Domestic parcels²	151.3	-3.7	147.7	-	13.5	161.2	9.2%
Parcels	International parcels	143.3	-3.5	139.8	-	30.2	170.0	21.6%
	Special logistics	12.6	-1.3	11.3	-	-1.8	9.6	-15.4%
	International mail	203.7	-4.6	199.1	-	-23.4	175.7	-11.8%
Additional sources	Value added services	95.4	-3.7	91.6	-	4.6	96.2	5.0%
of revenues	Banking and financial	207.5	-0.2	207.3	-1.6	-0.6	205.1	-0.3%
	Other	106.0	14.7	120.7	-4.5	-4.3	112.0	-3.5%
	Corporate	21.9	-	21.9	-	-8.2	13.7	-37.6%
TOTAL		2,464.7	-	2,464.7	-16.6	-40.5	2,407.6	-1.6%

¹ Normalized figures are not audited

² Defined as domestic and Belgian in- and outbound

³ Some intercompany eliminations mainly related to international activities previously reported in Other revenues are now being reported under their corresponding product lines.

Following a correction of the allocation of cash sales (stamps and franking machines) to products as of January 1, 2015 some revenues are shifting from Domestic parcels to Transactional mail.

Domestic mail underlying volume decline at -5.0%

Total operating income (revenues), normalized, € million

¹ 4Q15 has the same number of business working days as 4Q14. 2 Corrected for requalification of advertising mail to administrative mail.

FY15

Accelerating growth of domestic parcels while international parcels growth is slowing down

Total operating income (revenues), normalized, € million

Additional sources of revenues mainly affected by the curtailment of very low margin international mail activities

Total operating income (revenues), normalized, € million

Important cost savings driven by payroll reduction

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

Operating free cash flow1 of € 315.9m in 2015

€ million	FY14	FY15	Delta
Cash flow from operating activities	+451.5	+361.1	-90.4
Cash flow from investing activities	-78.2	-45.1	+33.1
Operating free cash flow1	+373.3	+315.9	-57.3
Financing activities	-259.3	-263.8	-4.6
Net cash movement	+114.0	+52.1	-61.8
Capex	-90.9	-81.0	+10.0

Alpha provision2 excluded:

• Better results of operating activities (€ +9.9m).
• Income taxes paid on 2013 results (€ -42.0m).
• Alpha pay-outs (€ -14.3m) impact working capital in 2015.
• Excluding Alpha pay-outs, working capital evolution deteriorated by € -44.0m, mainly due to phasing and non-recurring items: terminal dues € -34.4m (out of which € -18.3m relates to the earlier settlement of another postal operator in 2014), access fee received in 4Q14 from a partner in financial services (€ -5.0m), phasing due to change in payment terms for social security charges (€ -3.7m).
• Earn outs paid in 2015 (€ -11.0m) and acquisition of the Polish subsidiary (€ -2.7m) were partially counterbalanced by LY acquired subsidiaries (€ +9.2m).
• Lower capital expenditures (€ +10.0m).
• Higher proceeds sale of buildings in 2015 (€ +27.6m) in 2015, thanks to the sale of a sizeable property in December 2015 (€ 37.4m).
• Higher dividends paid (€ -2.0m interim dividend, € -4.0m final dividend) partly compensated by lower payments related to borrowings and finance lease liabilities (€ +1.4m).

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

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

Key contacts

Baudouin de Hepcée Director External Communication, Investor Relations & Public Affairs	• Email: baudouin.dehepcee@bpost.be • Direct: +32 (0) 2 276 22 28 Mobile: +32 (0) 476 49 69 58 • • Address: bpost, Centre Monnaie, 1000 Brussels, Belgium
Saskia Dheedene Manager Investor Relations	• Email: saskia.dheedene@bpost.be Direct: • +32 (0) 2 276 76 43 Mobile: +32 (0) 477 92 23 43 • • Address: bpost, Centre Monnaie, 1000 Brussels, Belgium