bpost NV/SA

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.