Inpost Sa

Good morning, my name is Gabriela Burdach and I'm the Investor Relations Director at InPost. Welcome to InPost first quarter 2024 earnings call. As always, a quick disclaimer, today's call includes forward-looking statements that are subject to risks and it is possible that the actual results may differ materially. The call is being recorded and it will be available on our IR website shortly after the call. Today's presenters are Rafał Brzoska, CEO, Michael Routh, CEO International, And for the first time, Javier Van Engelen, the new CFO of the InPost Group. After the slides, we will have a Q&A session. I am now pleased to hand it over to our CEO. Rafał, over to you.

Good morning. Thank you, Gabi, and thank you all for joining us today. We had an encouraging start to 2024, which was in line with our ambitions and expectations. We remain very much on track in implementing our strategic priorities, and these include continuing to expand our pan-European locker network with a particular focus on APM deployment levels in the UK and in France, of course. Let's begin with an overview of our European presence. We are the leading out-of-home network in Europe with over 70,000 points, including 38,000 APMs and 32,000 PUDO points. In just the first quarter of this year, we expanded our network by over 3,000 locations. It's also worth mentioning that 62% of our out-of-home points are now located outside of the domestic market. Next page, please. Let's look at our Q1 highlights. In Q1, at the group level, INPOS handled 243 million parcels, representing a 22% increase compared to previous year, with revenue growing at a similar pace. Our adjusted EBITDA for Q1 was 36% higher than last year, accompanied by a robust positive free cash flow at the group level and a further reduction in our net leverage ratio. In Poland, our parcel volume once again outperformed the e-commerce market. Revenue grew by an impressive 26% and our adjusted EBITDA margin reached 45%, which is a similar level to the same time last year. Turning now to international markets, our parcel volume increased by 26%, with the UK adding the most, but all our markets delivered year-on-year growth. Revenue in non-domestic countries rose by 15%, but adjusting for foreign exchange effects, the growth rate reached 25%. Our adjusted BDA margin for combined international markets achieved a record 9% compared to just 3% in the same quarter a year ago. To wrap up, We are making a very good progress in building our B2C business in Montréal, driving profitable growth in the UK and Italy, as well as enhancing our already market leading position in Poland. Looking ahead, we remain confident in our full year outlook. Let's move on to the next page. We deliver double digit growth in volume, significantly outpacing the market across all our geographies. And in Poland, we continue to expand our market share while already being a leading player. Last quarter, we once again outpaced the market by a solid eight percentage points. In Mondial Relay countries, despite facing a challenging environment and declining market, we are surpassing e-commerce parcel growth. We are very encouraged by the fact that, especially in a strategically important B2C sector, our volumes grew by an impressive 28% year-on-year. In the UK, Our proven concept not only drives significant volume increases, but also enhances profitability as we scale up. In Q1 2024, our parcel volume surged by 147% in a stagnant market. And our current focus is on expanding capacity to support our further growth. Moving on to the business update Poland. Here you may see that in Poland, we have continued to expand our network reaching a total of 22,600 APMs with nearly 700 machines added in the last quarter alone. This solidifies our undisputed leading position in Poland in terms of network coverage. And our parcel volumes in Poland increased again by 20%, with APM volumes growing by 18% year over year, which was driven by marketplaces and the fashion segment. Door-to-door deliveries showed dynamic growth of 34%, also driven mostly by marketplaces. Now turning to the next page, here I would like to showcase Input's robust utilization levels across our network. Our data confirms that when we deploy new APMs, they follow the same trend in utilization versus our older machines. We already have 22,000 APMs in Poland and the most dense APM network, and yet the newly added APMs still have high and improving utilization rates. For the total network, regarding what you can see on the right-hand side, we were able to improve utilization year-on-year despite the fact that we are already at the very attractive levels. During the last peak, we had higher total network utilization than the previous one. And this trend continued throughout Q124 as well. On the next page, you may see that we are continuously searching to improve our customers' and merchants' experience. I've already mentioned several times that InPost Pay will be our company's most important innovation since the creation of the first APM. Launching Q1 2024, it is more than just a payment app. It's very convenient and very efficient checkout app providing a two-click payment and the easy delivery. We have just started and we have 1.6 million registered users already. We are receiving high ratings from them. Our NPS is already at the level of 61 points. We also see a very positive feedback from merchants who observe a boost in conversion at the checkout, and that's essential for them. I will now hand it over to Michael for a short update on our international business. Thank you.

Thanks, Rafael. Good morning, everyone. Q124 has been a strong quarter for the international business and all the markets that operate within it. We've continued to take market share from legacy incumbent players, and we've been attracting and building new users to our APMs in all markets. And we've solidified InPost and Mondial Relay as the leading locker solution in the UK and France. At a snapshot, as Raphael mentioned earlier, over 60% of the group's total out-of-home delivery points are now located outside of Poland, This percentage will only continue to grow. And in terms of volumes, over one third of the total group is generated by our international markets now. And in Q1 24, these grew by 26% faster than the Polish volumes. And we expect this to be the case on a go forward basis also. In Q1 24, we increased our international APM network by 55% year over year by adding over 1500 new APMs. The number of lockers increased even faster by 73% year over year, as we deployed larger machines and also expanded the APMs already deployed as we continue to build capacity for the increasing volume demand. We're still adding putter points to increase the density of our network, and this is not at the same pace as APMs, but they do continue to provide great support in highly populated, but potentially difficult to deploy APM locations. Now let's move on to Mondial Relay on page 13. Our key priorities here remain the same, and our strategy remains on track. One, to expand our APM network. Two, to grow the customer and merchant adoption. And three, invest in improving end-to-end operational quality. In Q124, we added almost 900 new APMs and 500 PUDOs, increasing the total number of out-of-home points by 20% year-over-year as we continue to build density and convenience. In France, over 30% of the population live within a seven minute walk to our APM in Pérou and we continue to invest in this convenience strategy. So let's move on to volumes. Mondial Relais is operating in a very difficult market condition with declining e-commerce market as well as healthy competition, however. Despite those market challenges, we've delivered 9% volume growth in Q124, significantly surpassing the e-commerce market, proving that our efforts and business model are successful. Our offer is clearly attractive and continues to gain traction with both consumers and merchants alike. This growth is driven by the B2C segment that increased year over year by 28% in the whole quarter, and now accounts for over 40% of the total Mondial relay volumes. Moreover, All of our new volume is going to our APMs. In Q1, 23% of Mondial Relay's volume in France was delivered via lockers, a significant leap from the 10% in Q1 23. You can also see it on the chart in the middle. Our new cohort follows the adoption rate of the previous ones, confirming the recognition of our expanding locker network. The whole network utilization is growing, but we still see room for further improvement as we continue to build out the density and convenience. Javier will talk about financials later, but I just want to highlight here that Mondial Relay is gaining scale while at the same time improving its profitability. So now turning to slide 14. A critical part of our journey in transforming Mondial is transforming the consumer and market legacy perception. We're very excited about the Tour de France event that starts next month, and this is a significant stepping stone partnership to deeply connect with an event that is at the heart and minds of the French nation. Mondial Relay and InPost are the official event sponsors. To give some further context, Tour de France gathers 10 million spectators every year along the roads, plus over 2 billion people watching the event on TV or via streams globally. There will be 21 stages, including three in Italy and 17 in France, and one hybrid stage starting in Italy and finishing in France. We'll have InPost branding in Italy and Mondial Relay branding in France. And we are directly installing 300 APMs in connection with the Tour de France. But the event gives us even more means to build loyalty amongst APM landlords, partners, and specifically with some of our merchants to engage our growing consumer base. Our marketing team is busy making this a standout occasion with accompanying events, pavilions, mascots, and all other stuff to make sure we are visible on the route and starting and finishing towns. We're super excited to be sort of launching this partnership this year. Now, let's turn our attention to the UK. In the UK, we're on a path to create a fully integrated model. In Q124, we saw a continuation of trends in volume and profitability from the end of last year. We have the largest APM network in the UK with over 6,800 lockers. And in Q124, we deployed over 400 lockers, increasing the APM network by 33% year over year. This expansion solidifies the coverage of our network. In the core three cities, our coverage is over 60% of the population, and for the entire country, it's now at a solid 33%. The number of lockers grew even faster than APMs by 60% year-over-year, the result of deploying larger machines and extending the existing ones, all while keeping our utilization rates at the highest levels. As illustrated on the right-hand side, our quarterly volume experienced consistent growth through 23 and 24. In the last quarter, volume has more than doubled year-over-year, and it's worth highlighting that Q1 24 volumes were at the level of the 23 peak. There is still room for growth, especially as our offering in the UK doesn't cover B2C, which is the largest part of the market that we still have to address. In the next quarters, we will continue our ambitious deployment plan and expand beyond the three core cities as we offer national seven-day-a-week coverage. We will continue to improve operations in conjunction with Menzies, and we're now piloting a B2C offer and plan to launch B2C on a larger scale towards the end of this year. Thank you, and I'll now hand over for the first time to Javier to talk about the financial highlights.