bpostgroup: results third quarter 2023

bpostgroup: results third quarter 2023

Group underlying performance exceeding plan in seasonally softer quarter marked by continued adverse conditions. Resilient Belgium backed by strong parcel volumes, along with improved profits in Eurasia, mitigates North America revenue pressure.

Press release
​​Brussels, 09/11/2023 - 5:45pm
​Regulated information
bpostgroup.com

Third quarter 2023 highlights

  • Group operating income at 978.5 mEUR, -4.2% compared to last year.
  • Group adjusted EBIT at 28.1 mEUR (margin of 2.9%) or at 23.1 mEUR excluding 5.0 mEUR downward revision of 2023 impact of repricing services to the Belgian State1. Group reported EBIT at -50.1 mEUR, impacted by the provision of 75.0 mEUR related to overcompensation (see note 3).
  • Belgium
    • Total operating income at 538.4 mEUR (+6.2%).
    • Underlying mail volume decline of -8.2%, nearly offset by positive price/mix impact.
    • Parcels volumes increased by +5.5% and price/mix impact of +6.6%.
    • Higher opex (+20.8%) due to the provision related to overcompensation of 75.0 mEUR.
    • This provision explains the reported EBIT at -49.2 mEUR, whereas the adjusted - amongst other for this provision - EBIT at 25.9 mEUR (4.8% margin). +5.0m EUR impact of downward revision of 2023 repricing services to the Belgian State.
  • E-Logistics Eurasia
    • Total operating income at 151.6 mEUR (-2.4%) driven by lower cross-border sales reflecting adverse UK market conditions, and softer growth from recent customer wins in Asia, partially offset by continued expansion of Radial EU and Active Ants (+11%).
    • Lower opex (-6.8%) from lower transport costs in line with volume development and stable payroll costs.
    • Reported EBIT at 7.1 mEUR (+4.7%) and adjusted EBIT at 7.9 mEUR (5.2% margin).
  • E-Logistics North America
    • Total operating income at 310.3 mEUR, (-17.6% or -10.8% at constant exchange rate), reflecting lower volumes at Radial and Landmark US (Amazon insourcing).
    • Lower opex from lower variable costs including continued strong labor management and productivity gains, and 7.1 mEUR bad debt provision in the third quarter 2022.
    • Reported EBIT at 2.3 mEUR (0.8% margin) and adjusted EBIT at 4.5 mEUR (1.5% margin).

CEO quote

Philippe Dartienne, CEO a.i. of bpostgroup: “Considering the seasonality and the traditionally softer summer months in the third quarter, we have once again delivered good results, exceeding our plan at Group level. This accomplishment comes within a soft and challenging market backdrop. I would like to thank all our employees for their dedicated efforts in achieving these solid financial and operational results.

​In line with our commitments, we have made significant progress in recent months, allowing bpostgroup and its employees to look ahead with increased confidence. We have finalized all our compliance reviews and now have a clearer view on the financial impacts, enabling us to reinstate our group EBIT guidance for 2023. Additionally, this week, we warmly welcome Chris Peeters, our new Group CEO.

​Our focus is now on the fourth quarter and the year-end peak season; we are well-prepared to tackle this challenge despite market's uncertainties, notably in North America where volumes are currently under pressure. As the clock is ticking, bpostgroup and all its employees in Belgium are also eagerly awaiting the outcome of the press concession tender, which would further reduce the surrounding uncertainty and allow us to move forward with visibility ahead.

2023 group EBIT outlook

Following preliminary results of the compliance review of the services provided to the Belgian State, bpostgroup had to withdraw its initial 2023 EBIT guidance of 240-260 mEUR on April 24, 2023 pending further legal and financial analysis.

Following the recent update on compliance reviews, bpostgroup is now in a position to reinstate a group EBIT guidance for 2023.

Despite North American market headwinds and compliance reviews impacts, bpost today expects the group adjusted EBIT to be above 240 mEUR

The group’s total operating income for 2023 is now expected to decrease by a low-single digit percentage2,4.

For Belgium, including the 10 mEUR negative impact related to the 2023 State services repricing, the outlook is revised as follows:

  • 4 to 5% growth2 in total operating income, notably driven by:
    • Mail: an underlying Domestic mail volume decline expected between -8% and -9%, offset by price increase and mix impacts.
    • Parcel: a mid- to high-single-digit percentage volume growth and a mid-single-digit percentage price/mix impact.
  • 7 to 9% adjusted EBIT margin including higher payroll costs from full-year impact of the 2022-2023 salary indexations3, higher energy costs and compliance reviews related costs, partly mitigated by some efficiency gains in operations and continued cost reduction initiatives.

For E-Logistics Eurasia:

  • Low double-digit percentage growth in total operating income, driven by:
    • Continued growth of Radial Europe and Active Ants, and
    • Growing Commercial Cross-Border activities incl. development of new lanes.
  • 3 to 5% adjusted EBIT margin reflecting a negative mix effect at Cross-Border and including scale-up of sales organization and start-up costs of new customers at Radial Europe and Active Ants.

For E-Logistics North America:

  • Low double-digit percentage decline4 in total operating income (versus slightly lower initially) reflecting:
    • Amazon’s insourcing at Landmark Global and general price pressure.
    • Lower growth momentum at Radial in current market conditions, and overcapacity leading to price pressures and ongoing churn.
  • 4 to 6% adjusted EBIT margin from tighter labor costs, labor management and costs measures, offsetting price pressures and higher opex and incremental depreciation and amortization from new sites.

Group EBIT will include higher payroll costs at Corporate level and operating expenses to support the ongoing group transformation, as well as impacts from the compliance reviews.

Gross capex is now expected to be around 170 mEUR, ​ reflecting discipline in difficult market conditions.

1 The 2023 annualized negative EBIT impact of repricing license plates, 679 accounts and traffic fines has been reduced to 10 mEUR compared to 12.5 mEUR already recorded end of June 2023.

2 Excluding deconsolidation of Ubiway Retail

3 Next +2% salary indexation to occur in December 2023, adding to the ones of February, April, June, September, December 2022 and January 2023. Monthly forecasts of the Federal Planning Bureau is available at https://www.plan.be/databases/17-en-consumer_price_index_inflation_forecasts

4 Assuming EUR/USD at 1.08 for 2023

 

Press release Q3_2023_EN.pdf 655 KB
Press Relations
Press Relations MULTI - Boulevard Anspachlaan 1 bus 1, 1000 Brussels

 

About bpost

About bpostgroup 

bpost is Belgium’s leading postal operator and a growing parcel & omni-commerce logistics partner in Europe, North-America and Asia. Our 36,000 employees in Belgium and across the globe connect consumers, businesses and government, by delivering mail and parcels to millions of doorsteps and providing e-commerce logistics services. As a people- and planet-friendly company we create long-term sustainable value for our customers and shareholders. In 2023 bpost generated a turnover of EUR 4,272.2 million.

 

Are you a customer and do you have question of a complaint? 
Click here to contact us.

bpost
Boulevard Anspach 1, box 1 – 1000 Brussels