bpost NV/SA

Ladies and gentlemen, hello and welcome to the Bnode Third Quarter 2026 Analyst Conference Call. On today's call, we have Mr. Chris Peters, CEO, and Mr. Philippe Dartienne, CFO. Please note, this call is being recorded, and for the duration of the call, your line will be on listen only. 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 6 on your telephone keypad. I will now hand over to your host, Mr. Chris Peters, CEO, to begin today's conference. Please go ahead, sir.

Thank you. Good morning, ladies and gentlemen, and thank you for joining us today for our third quarter results presentation. Joining me are Philippe, These materials were published on our website earlier this morning. We will first take you through the presentation and will then answer your questions. As always, we kindly ask you to limit yourselves to two questions each to ensure everyone has the opportunity to participate during the call. Philippe will first take you through our Q3 financial performance. I will then update you on our strategic plans. with our outlook for the remainder of 2026. Philippe, over to you.

Thank you Chris and good morning everyone. As you can see from the highlights on page 3, Group Operating Income for the third quarter amounted to €1.5 billion, representing a year-on-year decrease of €24 million or minus 2%. The quarter was characterized by the usual seasonal softness combined with weaker than expected demand trends across several parts of the group. Most of the revenue decline was driven by B post, where the accelerated male volume decline reached 16.4%, while parcel volume growth remained limited at 1.3%, with September momentum falling short of typical back-to-school trends and our expectations. At the same time, Paxon Europe delivered revenue growth of 6.6%, helping to mitigate the impact of the previously announced customer churn at Radial US and a broadly stable revenue performance at Stasi Americas. At Landmark Global, revenue was slightly higher year on year, despite the volume pressure on Asian flows following the introduction of the 3 euro levy on July 1st. This pressure was partially mitigated by temporary business opportunities with existing customers, but at a less favorable mixed profile. And that's a point I will come back on later. Turning to our adjusted EBIT, which came at minus 21.2 million. The year-on-year decline of 18 million euros was primarily driven by B post, where the EBIT decreased by close to 20 million, reflecting the termination of the 679 banking activities and the accelerated decline in mail volume. as well as inflationary pressure on payroll despite ongoing FTE reductions. At Paxson, EBIT increased by close to 9 million year on year. In Europe, revenue growth translated into higher Profitability, while in North America profitability improved despite lower revenues, reflecting the benefit from the cost-cutting measures and operational improvements that we already discussed during the previous presentations. At Landmark Global, as I just mentioned, revenues remain broadly stable year on year, but this resilience was supported by temporary business opportunities and this also came at the expense of profitability. As your European and US regulatory measures weight on the product mix and overall margin profile. As a result, despite relatively stable revenue, the EBIT contribution decreased by a bit more than 7 million year on year. While the third quarter is typically impacted by seasonality and summer softness, we recognize that the performance came in below our expectation. In particular, parcel volume momentum remained subdued in September, while the impact of the new regulatory measures on Asian cross-border flows proved more pronounced than initially anticipated. As a result, and given that part of these headwinds are expected to persist into the fourth quarter, we have revisited our outlook to reflect the trends that we are currently observing across the businesses. Chris will walk you through our updated expectations at the end of the presentation. which then let me turn to the performance of the three business units. I'm on slide five covering B post segment. Revenue declined by 26 million euros year on year to 487 million. Domestic mail revenue decreased by 24 million or 9.4%. Mail and press volume contracted by 16.4% during the quarter compared with 10.1 last year and 15.5 in H1, and in line with the mid-teens volume decline guidance we provided earlier this year. Besides the lower transactional main volumes following the introduction of the mandatory B2B invoicing at the beginning of the year, as well as the termination of several advertising contracts, the volume decline also reflects and accelerated decline in press volume of 29.5%, driven by the ongoing newspaper volume transition in the northern part of the country. Overall, mail volume decline and a negative renew impact of around 40 million euros, only partially offset by a positive price and mix effect of 7% that translate in 16 million euros. Parcel revenues increased by a modest 3 million or 2.2% year on year. In terms of volume, we saw a growth of 1.3%. However, this figure benefited from one additional working day and on a daily average basis volumes were broadly stable at minus 0.3% year on year. In Q1, parcel volumes were growing at around 5% on an underlying basis, broadly in line with our expectation. Since the disruptions experienced the Q2, volume momentum has remained subdued and growth has not returned to pre-strikes level. This was particularly noticeable in September, where we did not observe the usual post-summer acceleration, leading us to adopt more cautious assumptions for the fourth quarter. For Q3, several factors contributed to this software volume development. Consumer confidence continued to deteriorate throughout the quarter, while household spending remained resilient but subdued. In addition, we experienced a temporary operational disruption at one of our largest e-commerce customers, which negatively impacted volumes during the period. Finally, exceptionally warm weather in September delayed seasonal apparel purchased and waited on apparel-related e-commerce activity during what is normally an important back-to-school month. And despite this multi-volume environment, price and mix contributed positively by close to 1%. Finally, revenues from other activities, including retail, value-added services and personalized logistics, declined by €4 million year-on-year. This mainly reflects lower revenues following the termination of the 679 banking activities at the beginning of this year. However, one should note that these impacts were partially offset by continued strong growth at Dyna Group, which delivered more than €13 million or 14% of additional revenue year to date. Let's move to the P&L of B post on page 6. Sorry. Including inter-segment revenues from inbound cross-border volumes processed through the domestic network, total operating income declined by 23 million or minus 4.4% year on year. On the cost side, OPEX, including DNA, slightly decreased by 4 million euros or 0.7%. mainly given by two effects. First, we reduce our workforce by approximately 1,730 FTEs and interim staff representing a decrease of 7.2% year on year compared to approximately 1,500 reported at the end of the first half. This corresponds to an immediate improvement of more than 20 million year on year and reflect the continued benefit from the ongoing regularization of our distribution and retail operations. These savings were partially offset by higher costs per FTE following two salary indexations over the past 12 months, resulting in an increase of close to 3%. Second element, transport cost increase primarily due by volume growth in post-traumatic logistics and the impact of temporary fuel surcharges. Despite significant productive effort and continued progress on the reorganization agenda, these benefits were more than offset by inflationary pressures, as well as a decline in high-margin main revenue and the termination of the 619 activities. In addition, lower cross-border volume from landmark Asia to Belgium activities following the implementation of the 3 euro levy reduced the absorption of BIPO's fixed cost base, creating an additional drag on EBIT. As a result, and against a backdrop of muted parcels from growth, the adjusted EBIT declined by 20 million euros year-on-year to minus 29 million. Turning to Paxson on slide 7. As in previous quarters, the performance reflects two contrasting trends. At Paxson Europe, revenue increased by 5.5% year on year. Across our European businesses and geographies, we delivered growth of around 6.6% in line with Q2, with several activities continuing to grow at high single-digit rates. This positive momentum was partially offset by the performance of Ecstasy Americas, which I remind you is reported with impacts on Europe, where revenues at constant FX rate continued to decline following contract termination announced during the fourth quarter last year. In addition, and to a lesser extent, Revenue were impacted by customer departure late in the quarter and by reduced service scope with certain existing customers. While overall growth remained solid during the quarter, we are seeing increased commercial delays. As a result, the contribution from recently signed customers is ramping up more slowly than initially anticipated, which is beginning to weight on our near-term growth Expectations. At Paxon North America, revenues declined by €12 million. A constant exchange rate is corresponding to a decrease of around 10%, driven by three factors. First, the expected revenue churn from customer, customer contract termination announced last year. Second, mid-single digit negative same-store sales, representing a slight deterioration compared with the previous quarter. and third, these effects were only partially offset by the contribution from recently signed customers, which generated around €30 million of revenue during the quarter. The ramp-up of new customer wins continued to progress more slowly than initially anticipated and remains insufficient to fully offset churn, which is increasingly weighing on our near-term growth expectation here as well. Let's move to the P&L of Paxson on slide 8. Against this backdrop, total operating income remained yearly stable year over year, while operating expense, including DNA, decreased by close to 3%. The development of our cost base reflects the different dynamics across our two regions. In Europe, excluding Stasi US, operating expense increased broadly in line with top line growth. In North America, Note that Stasi currently experienced some temporary customer profitability issues, but radial cost adjusted downwards along lower activity levels while maintaining strong variable contribution margins. This was further supported by ongoing fixed cost initiative and headcount reduction at Radial, contributing to the continued improvement in profitability despite lower revenues. As a result, adjusted EBIT increased by close to 9 million to 7 million euros in the quarter. Turning now to Landmark Global on slide 9. At Landmark Europe, the main development during the quarter remained the impact of the 3 euro levy which came in force on July 1st and weighed on Asia to Belgium volumes, with an impact broadly in line with what market participants have reported over the recent months. Importantly, we did not observe any meaningful sequential recovery throughout the quarter, with volume remaining under pressure from July through September. This volume pressure was partially mitigated by a temporary business opportunity with existing customers, which helped stabilizing overall volumes. However, this incremental volume came with a less favorable mixed profile, resulting in a slight deletion of both revenue and profitability. Beyond Asia to Belgium, we continue to see healthy momentum across most other European and UK flows, which contributed positively to the quarter, and ultimately allowed Europe to deliver a modest year-on-year revenue growth of close to 2% despite the regulatory headwinds. At landmark North America, revenue was slightly higher year-on-year at constant exchange rate. Next to a modest volume growth consistent with a softer macroeconomic backdrop, this performance also reflects an unfavorable mixed effect driven by higher proportion of U.S. domestic volumes and lower U.S. to Canada flows, which continue to be impacted by tariff-related measures. Overall, landmark global operating income increased by 1% year over year. As shown on slide 10, OPEX and DNA increased by close to 7%, primarily reflecting two factors. First, higher transportation costs driven by volume growth, but also by temporary fuel surcharges and lower carrier rebates compared with the prior year. And second, an unfavorable phasing terminal use. As a result, despite volume resilience across most our commercial activities, adjusted EBIT decreased by 7 million to just under 10 million, reflecting an unfavorable business mix effect already visible in previous quarter, but further exacerbated this quarter by the regulatory change impacting Asian volume in Europe. An unfavorable phasing of terminal dues which is expected to normalize over the remaining of the year. Moving on to corporate segment on slide 11. EBIT improved modestly on year to minus 9 million, driven by continued cost discipline and workforce reduction of around 4%, more than offsetting the annual salary indexation of just under 3%. Let me turn now to cash flow on slide 12. Net cash outflow for the quarter amounted to minus 770 million compared with an outflow of around 16 million last year. This primarily reflects the repayment of the 2018 bond at maturity in July 2026. And excluding this financing effect, free cash flow remained broadly stable year on year at around 63 million. This reflects, on one hand, cash flow from operating activities of around 91 million, broadly stable with last year. The lower EBITDA was largely compensated by a favorable working capital evolution, notably at receivables level. On the other hand, CAPEX amounted to approximately 28 million, remaining broadly stable year on year. As a result, underlying casualization remained resilient during the quarter despite the lower profitability performance. Chris, over to you.