bpost provides an update on current trading and announces the payment of an interim dividend of 1.06 euro gross per share

TRADING UPDATE

Confirmation of 2018 guidance  

o    The net result after tax of bpost N.V./S.A. for the 10 months period ended on 31 October 2018 amounted to EUR 229.6m (BGAAP).

o    October 2018 operational results are in line with our expectations. The company is operationally ready to enter the end-of-year peak period.

o    bpost will also finalize the sale procedure for its Old Brussels X sorting centre later this month. The cash proceeds and capital gain will be in line with our expectations. The capital gain will be included in the normalized 2018 EBITDA figure as per financial policy. More information regarding the sale will be communicated in the course of December, after finalization of the sale procedure.

o    In the absence of any unforeseen operational disruption, management reiterates its 2018 guidance for normalized EBITDA at the low-end of the range of EUR 560-600m as communicated with the Q3 results.  

• Update on social climate  

o    bpost has submitted concrete proposals to union representatives in order to provide an answer to employees’ concerns regarding workload, purchasing power and attractiveness of the jobs on the field. According to the formal Belgian negotiation process these proposals will now be presented by the unions to their delegates with a view to complete a 2019-2020 labour agreement.

o    The challenges that the industry is facing, namely changing customer needs, lack of  further productivity improvements under the current operating model, absenteeism and a tight labour market needed to be openly discussed and addressed. From the recent negotiations emerges a shared recognition of the need for a more adapted distribution model as articulated in June.

o    Management is confidently looking forward to the continuation of social dialogue in order to finalize this agreement and now that the strikes came to an end fully focuses on the service delivery to citizens and clients in this critically important end-of-year period.  

•          Implications for 2019 and beyond  

o    Management anticipates a significant negative impact on earnings of several elements and will assess their 2019-20 implications. For 2019 more specifically, we anticipate the following impact:

§  An acceleration of the labour cost indexation leading to an additional ~1% cost increase compared to the plan,

§  The possible 2019-20 labour agreement when it comes to a conclusion,

§  The staff productivity initiatives on mail operations which cannot be implemented in 2019,

§  An acceleration of the structural measures for an adapted distribution model is necessary, negatively impacting our cost base 2019 by an estimated EUR 10-15m.

o    The price increase for the domestic mail small user basket for the year 2019 was approved by the regulator. As from January 1st we will be able to introduce the new product offering D+3. The average price increase for the domestic mail is estimated at +4.6% for the year 2019.

Attached the full press release (PDF)