bpost Group’s fourth quarter and full year 2019 fully in line with guidanceTuesday 17 March 2020
Tuesday, March 17 2020 - Fourth quarter and full year 2019 results
Jean-Paul Van Avermaet, CEO of bpost Group:
“Belgium is going through an unprecedented crisis. During this exceptional and difficult period, the presence of bpost close to the citizens takes on its full meaning. From the newspaper delivered every morning to the payment of pensions, the services provided at our counters up to the card or the letter carried to isolated people: each mission that bpost carries out creates links between people and breaks the isolation of the most vulnerable. Today, these missions are vital.”
“Many measures have been put in place to guarantee the health of our employees and our customers, which must be the first priority for each of us.”
“Solidarity flows through the veins of bpost and its employees. The results that we are presenting today are those of our thousands of employees who, yesterday as today and tomorrow, get up every morning to provide exceptional service to all citizens. It’s with great pride that I am now part of the bpost family.”
Fourth quarter 2019 highlights
- Group operating income at EUR 1,113.8m, -1.6% compared with the same period last year and driven by mail volume decline and lower building sales
- Group reported EBIT at EUR 63.4m. Adjusted EBIT at EUR 69.2m (margin of 6.2%)
- Mail & Retail
- Total operating income at EUR 536.8m (-2.3%) resulting from domestic mail decrease and deconsolidation of Alvadis, the telecom card business.
- Underlying mail volume decline limited to -5.5% supported by favourable phasing effect in transactional and small growth in advertising mail.
- Reported EBIT at EUR 49.7m. Adjusted EBIT at EUR 51.5m (9.6% margin), down by -36.8% from top-line evolution and higher payroll & project costs.
- Parcels & Logistics Europe & Asia
- Total operating income at EUR 234.4m (+0.9%). Excluding the net year over year impact of contingent considerations reversals, growth of +8.8% driven by Parcels BeNe (+22.4%).
- bpost remains operational partner of choice for the delivery of parcels in Belgium with strong organic Parcels BeNe volumes at +24.3% driven by e-commerce growth and DynaLogic, bpost Group’s specialized logistics company.
- Reported EBIT at EUR 13.2m. Adjusted EBIT at EUR 13.9m (5.9% margin). Adjusted EBIT excluding the impact of the contingent considerations mentioned above and a goodwill impairment in 4Q18 (EUR 8.4m) increased by EUR 6.6m (+115%) driven by business performance.
- Parcels & Logistics North America
- Total operating income at EUR 395.3m (+3.8%), supported by FX, confirms positive commercial development partly offset by 2018 customer churn and repricing impact.
- Total Contract Value (“TCV”) at USD 385m above full year target.
- Reported EBIT at EUR 7.3m, adjusted EBIT at EUR 10.6m (2.7% margin) mainly impacted by costs related to new client launches.
- In line with guidance to pay at least 85% of the BGAAP net profit of bpost SA/NV as dividend on the results of full year 2019, the Board of Directors proposed a total dividend per share of EUR 0.73 gross. This represents a pay-out ratio of 85%. The dividend is composed of an interim dividend of EUR 0.62 (paid in December 2019) and a final proposed dividend of EUR 0.11, subject to the approval of shareholders.
Chairman & CEO quote
François Cornelis, Chairman of the Board of Directors, commented:
“2019 results are fully in line with expectations. bpost Group has delivered on its promises with full-year adjusted EBIT above EUR 300m, at EUR 310.8m. The contributions by business unit are also as anticipated. It was a challenging year characterized by pressure on our traditional mail business and the turnaround process at our North American activities, while our domestic parcels volumes continued to grow significantly.
Delivery on results was achieved thanks to the daily effort and enthusiasm of our employees, who adapt to these challenges and turn them into success.
I also want to thank Koen Van Gerven who ended his mandate at the end of February for having laid the foundations of a significant transformation for bpost Group. I wish him all the best in his future projects. I welcome Jean-Paul Van Avermaet at bpost Group who has started on March 2nd as Group CEO. With his experience and stakeholder management skills, he’s committed to write the next chapter of bpost Group.”
Jean-Paul Van Avermaet, CEO of bpost Group:
“In a digitizing world, with many other societal challenges, we can only be successful by focusing on future-proof customer services, engaged and empowered employees and healthy financial results. bpost Group is a beautiful company with a solid foundation of which every employee can be proud and this is what we want to remain in the future. Therefore we will continue to transform the company by investing in a culture of customer care and innovation while playing our important societal role close to our stakeholders.”
Outlook for 2020
While remaining an efficient mail operator in Belgium, bpost Group is establishing a prominent position in the parcels and e-commerce logistics space in Europe and the US. It requires time and investments for the European and North American Parcels and Logistics businesses to reach critical scale. Therefore bpost Group doesn’t yet expect the effects of structural mail volume decline to be fully compensated by the Parcels & Logistics growth activities at the adjusted EBIT level in 2020.
Group total operating income for 2020 is expected to increase by a low single-digit percentage, while Group adjusted EBIT is expected to range between EUR 240 and 270m.
For the business units, bpost Group expects:
Mail & Retail:
- Total operating income decline up to -5% with underlying Domestic Mail volume decline expected between -9% to -11% the effect of which will be partly compensated by an approved mail pricing increase of +5.1%.
- 8-10% adjusted EBIT margin
Parcels & Logistics Europe & Asia:
- Low teens % growth in total operating income
- 6-8% adjusted EBIT margin
Parcels & Logistics North America:
- Mid-single-digit % growth in total operating income
- Adjusted EBIT margin positive up to 2%
Gross capex is expected to amount up to EUR 200m.
The dividend relative to the results of the financial year 2020 will depend on the long-term capital allocation policy, which is being reviewed by the new CEO and the Board of Directors.
We are monitoring closely the potential impact of the COVID-19 virus on bpost Group. It cannot be excluded that there could be negative impacts on 2020 Group results. We are currently not in a position to make more concrete assessments.
The full press release of the fourth quarter and full year 2019 results can be found in the PDF file below.