Inpost Sa

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

Good morning, everyone. Thank you, Gabby, and thank you all for being here today. We are pleased to share another quarter of very strong performance by InPost Group. These results in Q2 and in the first half of 2024 demonstrate execution of our strategy across all markets. We are very proud of the progress made so far this year. At the group level, in the last quarter alone, Inpost handled 264 million parcels, a significant year-over-year increase of 23%, with revenue growing at a comparable rate. Our adjusted BDA grew by 29% year-over-year, and the group adjusted BDA margin reached almost 34%. Q2 was another great quarter for Poland. Our revenue grew by 22% and our adjusted VDA margin reached 46%, a slight Q&Q improvement. Our last quarter was particularly strong in international markets where parcel volume increased by 29% and revenues grew by 27% in local currency. For the first time ever, our adjusted EBITDA margin outside Poland was in the double digits, reaching 15%. Javier will expand on the financials later in the call, but let me first share some highlights from operations in the international markets on the next slide. In the UK, we have achieved new record parcel volumes with over 23 million parcels delivered in one quarter. In addition, this went hand in hand with continued margin expansion. We see huge demand for our services in the UK. Our APM network is highly utilized, so we need to double up on our efforts in network deployment. Also in the UK, we've continued to expand our B2C MVP pilot with encouraging initial results. You can now place orders for pickup at our APMs in around 20 online stores, and we are seeing very positive reception of this new service from both APM users and merchants. In Montréal, we've finally seen the increase in profitability that we promised to deliver this year. We see increasing customer adoption of APMs as well. The volume delivered to lockers last quarter more than doubled year on year, and we continue to focus on our B2C strategy in the mondial relay markets. We were an official partner of the Tour de France race, which further strengthened our brand presence and customer engagement in France and in Italy. Let's move on to the next page. One of our key strategic priorities is to continue to expand our pan-European out-of-home network with a particular focus on APM deployment. We are leading out-of-home network in Europe with over 70,000 points, including over 40,000 APMs. Our extensive APM network solidifies our position as number one in key markets such as the UK, France, and of course, Poland. In Q2 alone, we deployed a record high number of lockers, installing 3000 new machines across Europe or over 5000 this year so far. This accelerating expansion is a testament to the growing demand for our services and our ability to swiftly scale operations. This robust network is not just about numbers. It's about providing unparalleled convenience and accessibility to our customers, making us the preferred solution for out of home delivery across the continent. Let's move on to the next slide on market trends. Just like in previous quarters, we continue to gain market share in all our key geographies. In Poland, it is even more important to highlight that we continued expanding our market share while already being the leading player. In mondial relay countries, despite facing a challenging environment and a declining market, we are significantly exceeding e-commerce parcel growth. We are very encouraged by the fact that especially in the strategically important B2C sector, our volumes grew by over 20% year over year. In the UK, our proven concept not only drives significant volumes increases, but also enhances profitability as we scale up. In Q2 2024, we were able to accelerate volume growth compared to Q1 2024. On the next page, let me share with you some exciting sport-related initiatives at InPost. Last quarter, we had a lot of success in the field of sponsorship. Our consistent approach is to support top sports events, teams, but also individuals, reinforcing our brand presence and market leadership across key regions. In Poland, we have recently extended our contract to sponsor the national football team, a partnership that continues to capture the attention of millions, with each match drawing an average viewership of 10 million. We are sponsor of the Tour de France. In June, 10 million spectators watched the race along the route. And at the July Olympics, one of our Inpulse Sports team members won an Olympic medal. Most recently, we have shared another piece of exciting news from the world of sport. Inpulse Group has become the official partner of Atletico Madrid. This marks our second partnership with a major football team following our collaboration with Newcastle United. In our partnerships, we aim to strengthen local awareness of the impulse and Mondial brands, reinforcing our position as a market leader and cultivating the status of a brand that customers truly love. Moving on to our business update for Poland. In Poland, we have continued strengthening our leadership by consistently expanding our network and generating above market volume growth. In the last quarter, we added more than 800 machines, so we now have over 23,000 APMs. This expansion not only enhances our coverage, but also solidifies our position as the undisputed leader in Poland's out-of-home delivery market. Our parcel volumes in Poland increased by 20%, reflecting strong consumer demand and again proving our ability to meet it effectively. To-door deliveries also saw dynamic growth, surging by 50% year over year. APM volumes grew by 15% year on year, faster than the locker expansion, demonstrating again that we are consistently growing the utilization of our network. It is important to highlight that despite already best-in-class utilization of our network, we are still able to improve on that year over year. Let's move on to the next slide. Lockers are a more convenient solution for customers. This is confirmed not only by our consistent ability to grow volumes ahead of the market, but also by third party independent market research. In Poland, consumer satisfaction remains a cornerstone of our success, as reflected in the impressive and growing number of APM users. Currently, 18.6 million people use our machines out of 24 shopping online. Additionally, our top-rated mobile app has become a vital tool for our customers with more than 12.6 million active users. Our customers have a strong connection with InPost, which has truly become a love brand across Poland. This loyalty is evident in the recent counter survey conducted in June, where an overwhelming 94% of respondents indicated that impulse lockers are their preferred method for receiving parcels. Furthermore, 85% of respondents choose impulse lockers as their preferred method for sending parcels, leaving our competitors far behind in both categories. We are particularly proud that we have maintained our high NPS of AT, which underscores the trust and satisfaction of our customers. We see clear evidence of our customers' loyalty reflected in our internal data, as demonstrated on the next slide, where we take a closer look at who is driving our volumes. Half of the population of Poland uses impulse APMs, and this group is still growing year over year. More importantly, we are seeing an increase in activity among our most loyal group, the super heavy users. These are users that received at least 40 parcels in the last 12 months. Not only is this highly engaged group growing in number, but their order frequency is also increasing each year. As a result, these loyal customers now generate 68% of our APM volume. We are constantly exploring new ways to enhance and expand our services for customers as well. In post-pay, this is a prime example. Since our last call, the number of registered users on the app has surpassed 4 million, marking another significant milestone. I'll now hand over to Michael for a short update on our international business. Thank you, guys.

Thanks, Rafal. Good morning, everyone. As you can see on this slide, Q2 2024 has been another strong quarter for the international business and all the markets that operate within it. With a record high locker deployment, for the first time we've deployed over 2,000 machines outside of Poland. And what's more, in the first half of 24, we've deployed over 3,700 APMs internationally. This is more than all our competitors in these markets combined in the markets we operate within. We've continued to take market share from legacy incumbent players, attracting and building on the number of new users to APMs in all markets, and have solidified InPost and Mondial Relay as the leading locker solution in the UK and France. Our international volume, and by international, I mean all countries you operate in, excluding Poland, has increased in line with our out-of-home network expansion. But what we're most proud of, and is what you can see below, the number of parcels delivered to lockers increased almost three times more than our total APM deployment. That is a clear sign that our lockers are definitely gaining popularity in international markets. So now let's move on to Mondial Relay. Our key priorities remain consistent, expanding our APM network, increasing customer and merchant adoption, and investing in enhancing end-to-end operational quality. Starting with operational improvements, in Q2 24, we continue to invest in logistics to deliver better quality. We now deliver circa 60% of our B2C parcels the next day. And here are three crucial points to highlight. First, we set a new record for locker deployment in Mondial relay markets, adding over 1,000 APMs in the last quarter and nearly 2,000 this year, significantly accelerating our network expansion. In France alone, we had just reached 6,000 APMs. Second, the number of parcels delivered to lockers has grown at much faster rate than our APM deployment. Deliveries to lockers now account for a quarter of all deliveries, excluding returns. Last but not least, we continue to see strong growth in our strategically important B2C and return segment, which has significantly outpaced total volume growth. While the growth rate has slowed compared with previous quarters due to the higher base in nominal terms, it has surpassed the peak of Q4 23. The increase in B2C deliveries, higher locker volumes, and overall volume growth are all positively impacting our profitability. which Javier will discuss in more detail later. In the international markets, we're on the journey to replicate the successful Polish Flywheel, placing customer centricity at the core of our strategy and continue to work on improving the user experience. We've maintained the best MPS rating in the market and we continue to receive very positive consumer and merchant feedback alike. One of the tools we're leveraging to enhance user experience is our mobile app, which has gained continuous significant traction with now over 2.1 million downloads in France alone. While the app doesn't yet offer all the features available in the Polish market, the core functionalities are now in place. And importantly, we've already observed that the app customer user is now frequently using an APM more than the non-app user. Now let's turn our attention to the UK on page 17. In Q2 24, we saw an acceleration of volume and profitability compared with both Q1 24 and the end of last year. We have the largest APM network in the UK with over seven and a half thousand APMs. In H1 24, we added over a thousand lockers with 700 machines deployed in the last quarter alone. The number of APMs grew by almost 40%, while the number of lockers was up by 60% year over year, the result of continuously deploying larger machines and expanding existing ones within the network. As illustrated on the right-hand side, our quarterly volume experienced consistent growth throughout 23 and the first half of 24. In the last quarter, volumes more than doubled year over year. And it is worth highlighting that in half 1.24, we generated volumes similar to the whole of 2023. In the coming quarter, we'll continue our ambitious deployment plan and expand beyond the core three cities. That's already well underway, offering national seven-day-a-week coverage for the UK market. We're also piloting our B2C offering, as I've mentioned before on previous calls. You now may have seen us at the checkout of major fashion brands throughout the UK. We have drawn some encouraging conclusions from that project, and we hope to share later in the year some of those important findings. But I'll now move on to the next slide. In the UK, in line with what we've seen at Mondial Relay, we're witnessing a significant increase in mobile app downloads. Last quarter, many times the InPost app ranked amongst the top 10 most downloaded lifestyle apps in the UK, even reaching number one on a few occasions. But given that the app users tend to place more orders than the non-app users, the growing popularity of our mobile app has the potential to drive additional volume over time as we continue to build the full infrastructure and user base in the UK. While it's still too early to provide detailed insights, the initial data on user behavior and order frequency are very encouraging. I'll now hand over to Javier to talk about the financial highlights, and thank you.