Bpost Sa Unsp/Adr

Ladies and gentlemen, hello and welcome to the BNode First Quarter 2026 Analyst Conference Call. On today's call, we have Mr. Philippe Darcien, CFO. Please note, this call is being recorded, and for the duration of the call, however, you will have the opportunity to ask questions at the end of the call. This can be done by pressing pound key 5 on your telephone keypad to register your question. If you wish to withdraw your question... please dial pound key six on your telephone keypad. I will now hand over to your host, Philippe Darcien, CFO, to begin today's conference. Please go ahead, sir.

Thank you. Good morning, ladies and gentlemen. Welcome to all of you, and thank you for joining us. I'm pleased to present you our first quarter result as CFO of D-Node. With me, I have Alexandra and Antoine from Inverters Relations. We posted the materials on our website this morning. and I will walk you through the presentation and will then take your questions. As usual, two questions each, which ensures one gets the chance to be addressed in the upcoming hour. I will start with our quarterly financial results, then provide an update on the progress on our key strategic initiatives during the quarter, before concluding with our financial outlook. As you can see on the highlights on page three, our group operating income for the first quarter amounted to 1 billion 63 million euros, representing a year-on-year decrease of 56 million euros or 5%. This performance reflects a combination of factors. First, as expected, we saw the impact of contract termination traded US, which were announced in the course of last year and already incorporated in our outlook we presented earlier this year. This termination resulted in an 11% year-on-year revenue decline, or €38 million. And together with temporary top-line pressure at Stasi Americas, largely offset by the 4% top-line growth achieved at Paxon Europe. Second, in Belgium, in addition to the revenue decline following the termination of the 679 contract, domestic main volumes declined by 14.3%. This was only partially offset by a parcel volume growth of 9.1%. In our cross-border activities, we also recorded higher inbound volume from Asia, which support overall parcel flows. Overall, and as expected, the actuality decline in main volumes and the termination of the 679 activity activities weighed on the EBIT on the BPOS segment, despite the positive contribution from our ongoing reorganization measures. That said, at Paxson, despite the sharp contraction in top line, we were able to deliver EBIT growth, reflecting a strong cost discipline in North America and solid operational execution in Europe. As a result, Group-adjusted EBIT reached 33 million euros, down 8 million compared to last year, and broadly in line with our expectations. Before turning to the financial performance of our business unit, let me highlight, as shown on slide 4, that beyond the evolution of EBIT, our adjusted net profit reflects a 12 million euro improvement in financial results. This improvement was mainly driven by favorable non-cash effects and higher net income from our treasury investment, partially offset by higher interest expense related to the bonds issued in June last year. Let me now move to the delay performance of the three segments. I am now on slide five, covering the B post segment. Revenues for the segment declined by 21 million euro to 524 million. year on year. Domestic mail revenue decreased by 21 million euros or 7.2%. Mail and press volumes contracted by 14.3% in the quarter compared with minus 7.5 last year and in line with meetings volume decline guidance we provided earlier this year. This accelerated decline mainly reflects lower transaction mail volumes following the introduction of mandatory B2B invoicing as of the beginning of the year, as well as the termination of several advertising contracts. Overall, the decline in main volumes had a negative revenue impact of around €40 million, which was partially offset by roughly half by positive price and mix effects of plus 7.1% or 19 million euro. Parthas revenue increased by 7 million euro or 5.8% year on year, driven by volume growth of 9.1%, partially offset by a negative price-mix effect of 3.3% during the quarter. On the volume side, the reported 9% growth correspond to an underlying growth of around 5% after adjusting for the estimated volume loss linked to the strike in February last year, when parcel volume declined by 12% in that month and over 2% in the full quarter. As observed in recent quarters, growth continued to be driven by strong performance of marketplaces. This dynamic weights on product and customer mix and explains negative price and mix evolution of minus 3.3%, despite underlying price increases. Finally, revenues from other activities, including retail, value-added services, and personal logistics, declined by €7 million year-over-year. This mainly reflects our revenue following the termination of the 679 activities at the beginning of the year, as well as lower revenue from fine solutions partially offset by higher revenue at Dynagroup. Let's move to the P&L of B post on page 6. Including high intersegment revenues from inbound cross-border volume processed through the domestic network, total operating income declined by 3.1% or 17 million euros year on year. On the cost side, OPEX including DNA decreased by 1.2% or 6 million euros, mainly driven by two opposing effects. First, we recorded a reduction of approximately 1,260 lower FTEs and interim staff, representing a decrease of more than 5%, reflecting the benefits from the ongoing reorganization of our distribution rounds and retained offices. And second, this was partially offset by higher salary costs per FTE up 2% year-on-year following the March 25 and 26 salary indexations. Despite last year's EBIT impact of around 6 million for the two-week strike, EBIT declined by 11 million year-on-year. This evolution was mainly driven by the anticipated acceleration of the structural male decline and the termination of the 679 contract. only partially mitigated by partial growth and the benefits of our reorganization measures. Moving on to Paxson on slide 7. Broadly in line with the trend we observed in the fourth quarter, two main effects came into play during the quarter. At Paxson Europe, rec news remained broadly stable year over year. We recorded around 4% growth across European businesses and geographies, with some activities still achieving high single-digit growth. This positive momentum was, however, offset by a negative performance at Stasi Americas, which is reported with impact on Europe, following a contract termination in the fourth quarter. This resulted in a significant revenue decline during the quarter, compounded by an adverse FX impact of 5 million euro. At Paxton North America, Revenue declined by €39 million. A constant exchange rate, this corresponds to an 11% decrease driven by three factors. Revenue churn from contract termination announced last year, together with mid-single-digit negative same-store sale evolution, partially offset by the in-year revenue contribution of around €27 million from new customers, of which 40% are radial fast-track clients. Let's move to the P&L of Paxson on slide 8. Against this backdrop, total operating income declined by 9.3% or minus 40 million euros year on year. Operating expenses, including DNA, decreased at a faster pace down 10.4% or 45 million euros. This cost reduction was primarily achieved in North America, driven by lower variable expects and OPEX in line with the revenue evolution at Radial US, while maintaining a solid variable contribution margin. These effects were further reinforced by fixed costs and headcount actions. As a result, adjusted EBIT increased by 4 million to 11 million euros in the quarter. with growth recorded in both Europe and North America. In Europe, this reflects top line growth combined with productivity gains. In North America, heavy growth was driven by cost containment measures, which more than offset the ongoing top line pressure. Turning now to Landmark Global on slide nine. At Landmark Europe, revenues increased by 8 million or plus 10% year over year. Once again this quarter, growth was driven by strong increase in volume from Asia across all major destinations, most notably Belgium, supported by large Chinese e-commerce platform, as well as the United States. In addition, other European lanes continued to grow as well. At landmark North America, excluding unfavorable ethics effect, revenue was slightly up year over year. This reflects, on one hand, soft volume growth in the context of a macroeconomic slowdown, and on the other hand, a negative mixed effect with higher share of domestic volumes and lower Canada to U.S. volumes. Overall, landmark global operating income increased by 5 million or plus 3.4% year-on-year. As shown on page 10, OPEX and GMA increased by 7.7%, This was primarily driven by high transportation costs linked to volume growth, including increase in bond volume with Belgium as financial destination. In addition, the quarter was impacted by unfavorable saving cost effects, both in transport and payroll, which we expect to reverse over the coming quarters. As a result, adjusted EBIT decreased to just under 15 million. This decline mainly reflects the temporary cost saving effects which offset the underlying profitable growth in Europe and to a lesser extent in North America. Moving on to corporate segment on slide 11. The adjusted EBIT improvement is driven primarily by cost development. Strengthened cost management and 1% FTE more than absorb the 2% salary indexation, resulting in an improved adjusted EBIT of 3 million to minus 9 million. Let's now move to the cash flow on slide 12. The net cash inflow for the quarter amounted to 110 million compared with 91 million last year. This improvement mainly reflects favorable working capital movements and continued CapEx discipline. Overall, the key drivers were as follows. Cash flow from operating activities before changes in working cap amounted to 114 million, representing a 70 million decrease year-on-year, mainly driven by lower EBITDA. Change in working capital and provision contributed to 74 million euros. The 29 million euros positive variance year-on-year mainly reflects two effects. First, the settlement of the client balance, and second, the payment of a cash advance in the context of the 679 activities transferred to Beite Paribas Fortis, while a small part of these activities are still partially subcontracted to be imposed, we received a working capital injection in return. It's important to note that this movement is expected to reverse over the course of the year. Net cash outflow from investing activities amounted to €21 million, driven by CAPEX's for parcels lockers and capacity expansion investment in our domestic fleet and international e-commerce logistics. This element largely explains the evolution of our free cash flow for the quarter. Finally, the net cash outflow from financing activities totaled 57 million euros, broadly in line with last year, and primarily reflecting payments related to this liability. Let me now briefly turn to our strategy and transformation update. I'm on page 13. Two months ago, we outlined our annual plan and key priorities for the year. Today, I will share a few updates and Chris will provide you a more comprehensive review when we present our half-year results in August. Let me start with B-Post, with transformation efforts around four priorities area. First, the shift in our operating model. We are making progress on the key tracks of our future operating model, notably through the rollout of dense and non-dense distribution rounds, as well as optimized correct model, which correspond to two complementary round types and a further centralization and automation of mail preparation. These are designed to deliver operational efficiencies with hefty savings. and space consolidation and optimization. As planned, this model was implemented during the first quarter in five distribution offices out of a national network of a bit less than 160 offices. We are progressing with a phase rollout over the coming quarters with a clear acceleration from Q3 onwards, targeting around 50 distribution offices by year end. In parallel, we continue to execute the reorganization of distribution offices and their delivery rounds together with the delivery of associated FTE savings. On a full year plan, around 140 organizations leading to approximately 1,150 lower FTEs. we delivered close to 40 reorganizations in the first quarter, fully in line with our planning. Importantly, the April strike has not impacted this transformation stream, and execution remains on track. For perspective, we completed 138 reorganizations last year, which are now clearly delivering results and contributed, as observed in this quarter, of a reduction of around 5% or approximately 1,260 FTEs within the BPOST business unit. Second, scaling out our out-of-home network. Building on the strong acceleration achieved last year, where holdout already significantly increased, we continue to make solid progress on scaling out-of-home with the installation of 155 FTEs pathos lockers or BB box, again, fully in line with the annual plan. And we also secured over 200 locations for future installations. As a reminder, our objective is to grow the APM network by 35% by year-end, which will bring us almost one year ahead of the ambition presented at the Capital Market Day. To date, we have a total of more than 2,700 lockers installed compared to around 1,250 at the end of 2024 and around 200-550 at the end of 2025. As a result, during this first quarter, we doubled the number of parcels delivered through the BBOX network compared to last year. In parallel, people continue to improve customer convenience by scaling same-day local delivery, notably when home delivery is unsuccessful, which translates into higher NPS and improved profitability compared with next-day availability at post offices. Third, asset utilization optimization. We are actively exploring opportunities to improve the utilization of our assets and, in particular, our transport fleet. which is today primarily used during night hours. As part of this effort, we launched a pilot transport of the future, aimed at testing the creation of a standalone transport activity, serving both internal and external customers. The pilot was initially designed around 20 trucks and 40 volunteer drivers. That interest has significantly exceeded expectation, demonstrating strong engagement from the field and validating the relevance of the concept. The objective is to generate additional revenues, improve utilization of the fleet and drivers, and progressively expand our service offering. Finally, strengthening our B2B offering. As previously communicated, we recently launched an inline delivery solution for our B2B customers. initially based on a BBOX parcel locker model. This quarter, we have upgraded the offering by expanding it through two additional logistics subsidiaries within the BNode group, turning into a multi-model solution, including options such as card booth delivery and on-site deliveries. Overall, this initiative reflects our continued progress in reshaping the BBOX operating model. improving capital and asset efficiency, and reinforcing our value proposition to both consumer and business customers. Moving on to Paxon North America. At this stage, top-line expansion in Paxon North America is progressing in a more challenging demand environment, with same-store sales softer than initially anticipated, where new customers' contributions are progressively building up. In response, and in order to remain on track to deliver our EBIT objective, we are implementing additional cost actions. These measures are not only designed to offset the near-term top-line pressure, but also to further strengthen Paxon North America competitiveness in the market. We have already made significant progress on variable costs. where discipline remains very strong and where we continue to maintain a record high variable contribution margin. Building on this, the focus is now on fixed costs. The additional actions include optimizing our real estate footprint, reducing discretionary spending, and right-sizing non-operational fixed overheads to better align our organization with our volumes. Following the actions already taken on both variable and fixed operation FTEs, we are now focusing on the non-operational fixed cost base. Let me now shift to Paxon Europe. The launch of our forward plan marks the next step in accelerating top-line growth, building on the now fully integrated and consolidated commercial platform that brings together Stasi, Activance and Regal Europe, led by Stasi's commercial know-how. The plan is designed to amplify existing customers' momentum while expanding across products, geographies and customer relationships, supported by more structured and disciplined sales execution. In practice, this includes improved account coordination, and closer executive-level engagement, ensuring we continue to deepen relationships with our core customers and capture the full value of those partnerships. At the same time, we are strengthening lead generation, leveraging our rebranding, and continuing to invest in the development of our sales team to support incremental and sustainable growth. Finally, I will come to this section with Landmark Global, where our focus in the first quarter remained twofold, expanding volume through new cross-border lanes while strengthening transport cost management. On the growth side, by leveraging agility and rapid opportunities capture in a challenging macroeconomic environment, we saw a strong acceleration of volume towards the U.S. not only fueled by continued momentum on the China to U.S. lane. U.S. is therefore increasingly becoming a key destination alongside Belgium and Canada. And in Europe, we also see a solid pipeline of new lanes originating from Spain and the Netherlands. This leads me to the outlook update for 26 on slide 14. As a reminder two months ago, we introduced our 26 adjusted EBIT guidance in the range of 165 to 195 million euro. Based on our first quarter performance, group results are broadly in line with our internal plan and our expectation at this stage of the year. Since then, however, we have been impacted by industrial action and BIPOs in April. As a result, While we are maintaining the adjusted EBIT guidance that we introduced two months ago, we are today more exposed to the lower end of the range. This reflects an estimated direct EBIT impact from the strike of around 15 million euro. Beyond this, fuel price developments are currently not considered as a material risk for the group, as we are largely insulated to a combination of pricing mechanism, contractual pass-throughs, or internal cost-edging measures, depending on the entity. That said, continued vigilance remains, of course, required, as the current outlook does not reflect potential indirect and long-term commercial impact resulting from the April strike. Nor does it factor potential effects relating to the current geopolitical situation in Iran. This could include industrial disruption linked to fuel shortages, higher energy costs, as well as a broader impact on inflation, consumer confidence, disposable income and spending, and therefore on the top line development. Overall, while we remain within our community guidance range, the April strike put significant pressure on the guidance, And although this has been widely and intensively covered by Belgian media, for those less familiar with the situation beyond our own market, let me briefly summarize what happened and the impact identified to date. In April, BETO experienced a five-week nationwide strike in Belgium, which significantly disrupted our sorting and delivery operations. The impact was most pronounced in Wallonia and in the Brussels region. As a result, we accumulated a backlog of more than 16 million letters and 0.7 million parcels. In addition, we estimated a loss of approximately 3.2 million parcels volume, mainly due to customers diverting shipments to competitors. The strike was triggered by employee opposition to certain elements of the ongoing transformation plan, in particular proposed adjustments to starting hours, which shifts up to two hours later in the morning. These changes are aimed at enabling later parcel cut-off times and better aligning our operation with customer requirements in an increasingly competitive manner. parcels market. From a financial perspective, our current assessment is that the direct EBIT impact of the strike is estimated around €50 million, expected to materialize in the Q2 results. This estimate excludes any potential future indirect impact and mainly reflects three direct elements. Revenue losses in both mails and parcels, including quality-related penalties, incremental costs linked to contingency measures, and the costs associated with clearing the accumulated backlog. Our operational and commercial teams are currently fully mobilized to clear the backlog as quickly as possible, while actively working to rebuild customer confidence and address the reputational impact resulting from the strikes. As mentioned, While we consider this estimate to be robust for the direct impact, it does not capture potential longer-term and indirect infect, which is why we continue to closely monitor the situation. With this, I'm now ready to take your questions. As usual, two questions each. Operator, please open the line.

Ladies and gentlemen, as a reminder, if you'd like to ask a question or contribute on today's call, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. Please also ensure your line remains unmuted locally. You will be advised when to ask your question. The next question comes from McKeel DeClerk from KVC Securities. Please go ahead.

Thanks for taking my question. I have two, please. The first one is on the strikes in Belgium. I appreciate the direct impact of 15 million, but there's a bit more color that you can give on those quality penalties and these contingent measures, how we should look at that when these costs will be booked. Will that also be Q2, or I think it will also be a bit later in the year for the the quality penalties. That's one angle, of course. Secondly, you also have the commercial impact. You had strikes last year. The lasting impact remained a bit more limited, I would assume, looking at the volumes in the remainder of 2025. But now, second year on the row and a bit of a bigger strike, let's just say. What has been your feedback here from customers? You say that you estimate to have lost 3.2 million parcels to competitors this quarter, which I assume is 3 to 4%. Will they be coming back or how have your discussions with these customers been? So that would be my first question. And then secondly, we have seen in the news that Amazon is also opening its supply chain logistics network. I'm just wondering if you look a bit at the Amazon offering today in the US, how does this overlap with your existing activities at Radial and Landmark and how you are looking at this, given that the same store sales at Radial are already down mid-single digits in the recent quarters. So any comment on that would be useful.

Okay. Thank you for your question. So, strikes direct impact, they will mostly be booked in the second quarter. The top-line impact is in the month of April. Pure technically, there were two days of strike in the month of March, but it's really immaterial. Most of it is in the month of April. So, the loss of revenue will materialize definitely in the second quarter. The contingency cost that we had to support was some storage costs. I'm sure you're afraid in the newspaper that we had some of our customers ask us to store the parcels in a location because their own warehouse were totally full. So there are some costs associated with that. Sometimes we have redirected some parcels to some of our subsidiaries to deliver the parcels. These are extra costs that we have supported. And there will be also a bit of the cost linked with the decrease of the backlog where we are injecting roughly 200 temporary workers on top of the usual one to decrease the backlog as soon as possible. So this is a bit what it entails in terms of of direct costs and contingency costs. When it comes to the commercial aspect of it, I will be as transparent as I used to be. Our customers were not delighted, to say the least, especially in the context that you rightly mentioned. We already had a strike last year once again, and customers have indeed diverted their volumes. Now it's really up to us to demonstrate that from an ongoing basis, we are capable of coming back to a high-level quality service as we used to do when we are not on strike. And I think it will be a discussion customer by customer and a decision customer by customer at the speed at which they will reject volume into the network. They are already rejecting volume into the network. No discussion, but some customers have not returned back. And as I said, it will be a more one-on-one discussion with each of them. So the commercial impact will be seen on one end in the second quarter by the speed at which the customer comes back and at which level, and potentially a more longer effect as some customers have definitely for a dual carrier strategy, while some of them were only monocarrier with us prior to this strike. So it's up to us to, and it's really the willingness of the management and the people on the ground to deliver as much qualitative service as possible and as soon as possible. As we speak right now, we could say that we are back in full operation. There is no strikers anymore since roughly a week, so we are in full operational mode. Your question on Amazon, yes, but it's not the first time that a major player is developing this kind of activities. It will be one more competitor than we had in the past. We had some big retailer chain not so long ago who decided to do the same. So, fundamentally, I don't think it will have a direct impact on us. Indeed, you pointed out that the same-store sale evolution, the negative one, indeed, it was in the first quarter. more than what we had anticipated, and you will be reminded that evolution has been negative for multiple quarters in a row. We thought that two, three, two, four last year, we had reached the bottom, but it seems that it's not the case, and we had, as you mentioned it, mid-single-digit decrease again in the first quarter of 25. I hope this answers your question.

If I can ask a small follow-up on the strikes, I know commercial impacts, you won't see or have visibility on that in the short term, or maybe a bit, of course, but on the indirect costs for the storage and the quality penalties, is it fair to assume that you will get a number on that during the second quarter results?

It's already partially included. Frankly, in the impact, the biggest part is relating to the loss volume and the related EBIT and not so much about those contingency costs. Because those measures that have been put in place are rather limited if you look at the total operation cost.

Thank you. That's good. Thank you.

The next question comes from Frank Klassen from DeGroof Petercam. Please go ahead. Yes. Good morning, all.

My first question is on Paxson, on the financial performance. If I look at Q1, minus nine on top line and 2.8% on EBIT margin. Yes, if I recall well, one of the building blocks of your guidance was Paxson to reach low to mid single digit growth for the full year with a six to 8% EBIT margin. So I'm struggling to see how we can get there in the rest of the years, because that's quite a gap. Could you elaborate how you think you can bridge this gap? That's my first question. And then secondly, on the automatic wage inflation in Belgium, you just made a step of 2%. When do you expect to see the next step and what is, let's say, baked into your current guidance on that one? Thank you.

Let me start with the second one and I will come back with the first one. So indeed, we learned late afternoon yesterday that there will be an additional 2% step increase. We had anticipated to have one in 2026. Apparently, not apparently, we had anticipated that to happen a bit later in the year. We had one month. We have this step up comes one month ahead of what we had in our forecast. Coming to Paxson, your point is absolutely right, and we will not be able to catch up. We will not be able to catch up. Different reasons for that one, if you allow me to elaborate a bit. If we look at Radial US or Paxson US, if you want, As I said, we are facing same-store sale, which are significantly higher than anticipated. And lower, it depends. If it's a negative, it goes up or so. It's Antoine who tried to correct me, but I repeat to make sure the message is clear. There is a decrease, and the decrease is bigger than what we anticipated. And it's on all customers. The second point is that we were anticipating a pickup of the contribution of new customers, especially in the second half of the year. We don't see it coming to the . So, we will be worse than when we anticipated. This being said, there is a top line discussion. And there is a second one when it comes to EBIT contribution and cash contribution. And there, we believe that with all the measures that have already been taken and the one that are in the pipe, as we speak, we could be able to offset that negative evolution in terms of top line. What kind of measures are we talking about? Some of them, we already mentioned them, and now we are implementing them. optimization of real estate footprint, including a sublease of underutilized facilities, divesting on some no-core assets, reduction of discretionary spending, travel and entertainment, and also wide-sizing fixed-effect accounts aligned to lower volume. Again, there is nothing new on that one except the fixed-cost one, as I said, that was not the primary focus of the last quarters. Now, it has become. So, all in all, I do believe that those measures will be able to affect largely the decline or the lower or the development, the top-line development at a lower than anticipated, the lower top-line development, yes. Sorry. That was for radial. Stasi Americas, indeed, we are low in the top line evolution. We lost a major customer at the end of 2025, which is materializing in the Q1 region. Though, two elements on that one, and I don't want to oppose them, but I want to make the comparison. As much as I said that a 3D model We see a lower in-year revenue contribution from the pipeline development. It's not the case in Stasi Americas. The pipeline of Stasi Americas is very strong, and we believe that it will be able to offset part of the losses of the volume related to the departure of one customer, combined with fixed cost measures to protect the top line evolution. to a lesser extent at Radial, but it will contribute as well. So, to summarize, we have to recognize that, yes, we are a bit behind. In being said, an element that I really want to point out is that all over the place within the Baxon world, the profitability is and remains very high. Variable contribution at Radial, you might tell me, Philippe, you tell us that Since I will be close to four years in depots, I'm telling you that every quarter, but it's reality, and it's still there. So this is an achievement. And also, despite a lower top-line development, when you look at the Paxson Europe environment, we see still significant or very strong growth margin in the existing business, which is very reassuring. It's very, very robust. And we also see, thanks to the fact that in Europe, the three former brands are now being operated together. So Stasi, Actisense and Radian, we see a pickup on the performance in Central Europe, mainly by operating all these three brands on the same territory all together. So it's a bit of a mix bag, but there is still very good and reassuring positive elements.

Well, that's very helpful. Thank you for all your comments.

You're welcome.

The next question comes from Hank Slotboom from The Idea. Please go ahead.

Good morning, Philippe and Antoine. I've got one clarification question and one other question. The clarification question relates to what you just told about the impact on margins, the mitigation impact on margins. We are talking about margins in the U.S., not about the absolute EBIT, I assume.

Yes and no. By the way, good morning. So, we maintain the margin, but if we compare to the guidance that we had that expected development of the top line, since there will be less top line, it will be additional EBIT contribution to offset that one. So, it's a bit yes to both, in fact.

Okay, perfect. That's clear. Then, on Land Park, and that's basically two questions folded into one. The higher transportation costs, Philippe, I thought that the organization was structured in a way that There are back-to-back agreements. So you know on four hands roughly what you're going to pay, what you have to ask your clients based on your estimated costs. The transportation cost impact, didn't you use a fuel surcharge, for example, or something like, you're an acid light player in that field, or is this reflecting the disadvantage of an acid light model that when capacity is scarce, we saw a lot of disruption in sea transport, in air freight, and that sort of things, that you end up paying a higher cost price anyhow, no matter what, to get the stuff from, for example, China to Europe. That's the first question, and connected to it, is it fair to assume that Landmark had a bit of tailwind in Europe because the French have introduced the 2 euro levy per product line already in January, whereas the rest of the EU is doing that as of 1st of July. So, I've been hearing a lot of stories about Chinese taking their goods to Schiphol Airport, Amsterdam and Liège and Brussels instead to avoid this hassle of the 2 euros and to avoid the 2 euros as a whole. Perhaps you can highlight that.

Sure. I will start with the second one. Indeed, you are well informed. We see in Liège, I was just right before this call with our guy in charge of the inbound volume in Belgium, we see an increase of activity in Liège. But what we are seeing is that the planes are coming, that they are offloaded, then the containers are directly loaded to trucks to go either to France, to go to the Netherlands or to Germany. So, we might have a small effect, a small ripple effect in our last mile activities in Belgium, because we only do that in Belgium, but I would not say that it's significant. But it's a fact. This being said, it's also something we are contemplating. Since we are the operator, we are the incumbent in Belgium, can our activity and the transport one could play a role into being, capturing part of those volumes. But most of them, as you rightly pointed out, are not directed to the Belgian market. They are mostly directed to the non-Belgian market. So that's for the 2% euro surcharge. Taxes, not surcharge. When it comes to landmark and transport costs, I would like to broaden a bit the debate and also emphasize the fact that landmark is managing the transport for all the group, for BNODE. Of course, transport for Benin Last Mine is limited because we do the last mine activities. But for all the fulfillment activities within the Paxson world, it's managed through Landmark. And the one who are benefiting, everyone is benefiting from the good condition that we could get. So it's important to notice that that activity is not only limited to the Landmark business unit. Now, your question about transportation costs and the fact that they are evolving upwards due to different elements, it is really a pass-through for us, and we do not see any big impact from that.

Okay, that's clear.

Thank you. The next question comes from Mark Zak from Kepler Shoebrew. Please go ahead.

Yeah, good morning. Thank you for taking my question. Really on the big consumer sentiment or the impact of higher energy prices on the consumer, could you elaborate a bit what you currently see both for the U.S. and Europe in your business? You talk about, let's say, lower sales in the U.S., for Radial is that do you feel like this is related to the energy price increases and therefore blame on consumer finances and therefore mostly concentrated in March and looking forward maybe in April or have you seen lower same-store sales before the entirety of Q1 that obviously includes then January and February as well and what you can see in your European business not only Paxon, but maybe also a lot more global, and then the powerful businesses in Belgium. How did March compare to January and February? Was there any impact from higher fuel prices on the consumer, and what do you see currently for April? That would be the first question. Second question, if you could elaborate a bit on why you don't see material impact from amazon in the us um i guess from what we can can get from amazon's press releases at least to me not entirely clear where they are actually really competing do you feel like they are opening up really contract logistics, proper 3PL services in the air. So it's more like warehousing with not too much direct management of inventory there. So I could guess that if it's just warehousing, there wouldn't probably be much of an impact. But if they do proper 3PL contract logistics as well, I can imagine that maybe So it would be great to hear your thoughts, what you believe Amazon is actually doing in the future. Thank you.

Okay. It's going to become an habit. I will start with the second and we'll continue with the first one. So I'm not in the shoes of Amazon. So I recommend you to direct your question to them on that one because I don't want to speculate on what they are doing. What I'm telling you is that we do not see impact on that at least so far. They have always operated their warehouse, sometimes themselves, sometimes also seem to contract logistic players. They have been active in transport. They are permanently starting testing or going with new activities around the 3 p.m. That's true. But so far, we don't see any impact from that. And again, I cannot speak for Amazon. When it comes to the consumer sentiment, I don't have the figures for the US, but I think the same-store sale is a good proxy for measuring what is happening there. As I said, seven quarters in a row, then the same-store sale is going down, and it even accelerated in the first quarter of this year. I don't know what the next... further part of the year will bring us. As I said, we already thought that at the end of Q3, Q4, we had reached the bottom. We have been proven wrong on that one, so it's difficult to speculate on that. When it comes to Europe, I have the consumer sentiment numbers in front of me, and if we ended up The last quarter of last year, something which is, I would say, break even, slightly positive in November, very slightly positive in December. The beginning of the year was, Jen and Shad were more positive, but we saw a total flip of that consumer confidence in the month of March, and even more so in the month of April. So, again, in terms of trend, it's difficult to speculate, but currently we see a downward trend. Thank you.

The next question comes from Marco Limite from Barclays. Please go ahead.

Hi, good morning. Thanks for taking my question. I've got a couple of follow-ups on your strikes in Belgium. So first question would be, I mean, what sort of confidence have you got in terms of the strikes to be totally over or do you see a risk of these strikes coming back? And to what extent negotiations and discussions are sort of stopping you to go through your transformational change, operational changes you wanted to make? what is also the negative impact from implementing your operational changes slower than what you thought maybe at the start of the year. And the second question is on your volume growth in April. I appreciate you quantifying the hard numbers, but if you could give us a bit of color of what has been the volume growth or the volume decline in April for parcel volumes in Belgium? And have you seen, let's say, the growth rate picking up in May post end of strikes?

Thank you. Again, I will start with the second one. Thank you for your questions, Marco. Volumes decline that we have seen in the month of April is around 25%. and it's still too early to comment on what is happening in May. When it comes to the strike and the risk associated with them, so I just want to remind that several elements. So there is in the mind, and I don't want to speak for them, but based on what my colleagues are telling me while discussing with our social partners, is that there is a clear understanding of the need to change the business model. They clearly understand the fact that the mail is no longer bringing growth. It is declining. It is declining at high pace. And it will not come back. They totally acknowledge it. As well as the change in the demand from the customer, they totally acknowledge it. what is very difficult for them from a human standpoint for all the athletes and all our colleagues, when if we look back three to four years back, when we still had the press concession, we had colleagues who were waking up at three or four in the morning, coming back at the office to be able to have delivered all the press and the magazine prior to 7.30 in the morning. Those volumes are gone because the press concession ended up And we are no more, except in Wallonia, still for until the end of this year, we are no more distributing those volumes. So that was already a first shock for them, which is impacting their life. Because, you know, we have that concept, which is very usual in the mail business, which is when your job is finished, you can go. Those guys have, since years, not to say decades, have used to have a life organized about you start early, but you also finish early, and if you want to have some activities after your hours, or potentially if you decide to go for a second job, you have plenty of time to do it, because most of these people, especially the ones that are submitting the press, around 11, 12 in the morning, in the day, they were done, and they could do, revert to other activities, either professional or leisure, or going and pick up the kids at school. Then there's been a second element to that one, is with declining mail volumes, the number of people that we need in our distribution network is decreasing. I mentioned the fact that last year, we have been able to reorganize the offices. It has always been done over the last 15 years, the reduction, the adjustment of the FTEs in the distribution network. But it accelerated, I think, over the last two years. Last year, we reduced the headcount by more than 1,000 employees. We will continue doing the same in 2026. And people understand that. It's a mechanical consequence of the evolution of the business. But it's not easy to take it on board. Also, the way we reorganize the offices with the combination of some routes. We have some dense and non-dense routes. We also want to extract more efficiency on that part. So it's an additional pressure on these people who sometimes in some offices When we adjust the headcount, it could lead to reduction of 15 to 60% of headcount in one particular distribution offices. So, it's tough on people. We have to recognize that. But there is a very clear understanding and no discussion on the need for change. And the society is changing. Again, the fact that we want for some of our colleagues to delay the start of their day to be able to deliver the parcels, to accept parcels, the cut of time in the sorting center a bit later. Again, it's a disruption into their private life. We have to recognize it. I do believe that it will take maybe a bit of time, but people will adjust to that one. I think I would be more worried if there would be a strong opposition on the need for change then I would say the short-term impact of the direct impact on their private life, if I could say so. So, can we guarantee that strikes are over? No. Also, what I see is that our colleagues have at heart the willingness to serve the customer in a qualitative way, and I don't think it has changed during the course of the strike. Let's give us a bit of time to swallow, digest, adjust, and I'm very confident for the future.

Thank you. Can I stick another question, please? So you have kept today the guidance despite a 15 million EBIT negative from the strikes, plus wage increase one month before, let's say, your business plan, which from memory I think is about low single-digit million higher OPEX per month. So, rough numbers, you now have got 20 million EBIT headwinds compared to your original guidance, but you are still holding on the old guidance. Does this mean that, you know, beyond, I mean, you think you are sort of tracking or you were tracking at the upper end of the guidance and therefore minus at least 20 million, now you are at the low end of the guidance? Or, yeah, how to justify you keeping the guidance? Thank you.

Thank you for your question. Indeed, we maintain the guidance, but as we said, we are more exposed to the low end of it. I think during the presentation and with the question of your colleagues, I had the opportunity to emphasize on the reaction on the cost side that we are putting in place everywhere. Good example, again, in Belgium, the reorganization has not stopped in the first quarter. It has not even stopped during the strike, meaning that all this evolution, positive evolution in the cost development, meaning more efficient. We are still planning and confident that we could execute them. For all the other entities, especially on Paxson, those guys are... are really committed to compensate the shortfall, the temporary shortfall, or the slower development of the top line by cost measures, and we have levers. It's not just a task that we put in an Excel spreadsheet. We have detailed plans at various entity levels, which lead us to believe that it could materialize, and we have concluded that at this stage, based on direct impact, we still maintain our guidance, though guiding more to the low end of it. Thank you very much.

Ladies and gentlemen, there are no further questions, so I will hand it back to Philippe to conclude today's conference. Thank you.

We would like to thank you, everybody, in the call for having taken the time to be with us and for your very pertinent questions. As a reminder, BPOS-NJ will hold its AGM next Wednesday, and our second quarter result will be released on August 7. In the meantime, we look forward to staying in touch, and thank you very much, and have a great day.

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