Inpost Sa

Good morning, my name is Gabriela Burdach and I'm the Investor Relations Director at InPost. Welcome to InPost's third quarter 2024 earnings call. 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. 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 Q&A session. Today's presenters are Rafał Brzoska, CEO, Michael Rouse, CEO International, and Javier Van Engelen, CFO of InPost Group. Now I'm pleased to hand over to our CEO, Rafał, over to you.

Good morning, everyone. Thank you, Gabi, and thank you all for joining us today. Last quarter marked another period of strong growth and strategic progress for InPost. Group parcel volume rose 25% year-on-year, and revenue grew at a comparable rate. Our adjusted EBITDA increased by over 33% compared to the same time last year, and the group adjusted EBITDA margin reached 34%. Q3 was another great quarter for Poland. Our revenue grew by 23% and our adjusted BDA margin reached a solid 46%, which is in line with our outlook. Our international markets also performed exceptionally well last quarter, with parcel volume increasing by 32%, matching revenue growth. Our adjusted EBDA grew by nearly threefold and our margin was double digits at 14%. Javier will explain on the financials later, but let me first share some updates on our network development. 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 nearly 79,000 points, which already includes over 43,000 of APMs. Our extensive local network solidifies our position as number one in key markets such as the UK, France, and of course, Poland. During the last 12 months, we deployed a record number of lockers installing over 10,000 new machines across Europe. And during the last quarter alone, we added over 3,000 machines, which, by the way, is also another record deployment. This accelerating expansion is a testament to the growing demand for our services and our ability to swiftly scale operations. I cannot emphasize that enough. Our robust network is not simply about number of APMs. It provides unparalleled convenience and accessibility for our customers, making us the preferred out of home delivery solution across the continent. Let's move to the next slide, which addresses market trends. As in previous quarters, we continue to gain market share across all our key geographies. In Poland, it is particularly noteworthy that we have expanded our market share further, even as the leading player. In mondial relay countries, our growth has outpaced overall e-commerce parcel growth, with volumes in the strategically important B2C sector rising by an impressive 24% year-on-year. Last quarter was also exceptionally strong for C2C, resulting in a total mondial relay volume increase of 17%. In the UK, we are continuing to develop volume and we remain focused on network development to expand even further. Having completed the Mensis acquisition in October, we are now a stronger player with fully in-house logistics to out-of-home points. Moving on to our business update for Poland. Here in Poland, we have further strengthened our leadership by consistently expanding our network. Over the past 12 months, our network has grown by 15% with the addition of more than 3,000 new machines. This expansion not only broadens our reach, but also reinforces our position as the clear leader in Poland's out-of-home delivery market. Our parcel volumes increased by 21% year-over-year, APM volume was up by 17%, and to-door deliveries experienced dynamic growth of 40%, largely driven by the expansion of Asian e-commerce platforms. Our APM volumes grew faster than locker expansion, highlighting the consistent increase in network utilization. It is worth noting that despite our network already having best-in-class utilization, we continue to improve these rates year over year. Let's move on to the next slide. In Poland, we continue to build a strong community of loyal and engaged users. Today, we have nearly 19 million active APM users with 13 million of them using our mobile app. Our impulse pay service is also gaining immense traction with over 6 million registrants to date. Our customer satisfaction remains exceptional with an impressive NPS of 80 for parcel sending and collecting. For a long time, InPulse has held the number one position as the preferred APM delivery method. According to the latest GMS report, we are currently the top choice for two-door delivery as well. This dedicated community is fundamental to our success, which is why we launched the loyalty program designed to further engage and reward our users. I will talk about that on the next slide. As you are aware, we are very consistent in trying new services and adding new features to our existing offerings. One of the newest additions is our loyalty program, which stands out compared to other programs available in the market. The program provides both incentives and gamification elements to engage users of all levels. Participants earn so-called in-coins simply by using Inpulse services, which can be in exchange for various rewards. This approach drives increased usage of our services like Inpulse Pay and Fresh, supporting the broader Inpulse ecosystem. Today, we are proud to have over 8 million users participating in the program already. The gamification element is very engaging and we are already seeing incremental volume as a result of this feature and the program is still in its basics. There is more to come very soon. Next page, please. Also last month in Poland, we had an exciting given in our operations. Despite being a market leader with best-in-class logistics, we still invest in improvements. In 2016, we opened a sorting hub in the center of Poland, expecting it to serve us for at least a decade. However, impulse growth has outpaced our expectations. To keep up with the growing demand, we decided to build a new logistics center in the same place, twice as large as the original one. In just 300 days since launch at the construction site, we were fully operational. This new hub can process right now 85,000 parcels per hour, delivering unparalleled speed and efficiency to support our expanding network. The logistics quality we've established in Poland serves as a benchmark across all nine of the European markets where we operate. I will now hand over to Michael for a short update on our international business. Thank you.

Thanks, Raphael. Good morning, everyone. Q3 24 has been another strong quarter for the international business and all the markets that operate within it. After the record high locker deployment in Q2, we deployed even more in Q3, over 2,200 machines outside of Poland, bringing the figure to over 7,700 machines added in the last 12 months. We've continued to take market share, disrupting the legacy incumbent players, attracting a younger demographic audience, and building on the number of new users to APMs in all markets. We've also solidified InPost and Mondial Relay as the leading locker solution in the UK and France. What we're most proud of is what you can see on the charts. The number of parcels delivered to APMs increased at a greater pace than our APM deployment figures, Our focus now is to continue this acceleration and investment in the network, which is important in order to ease the already high utilization of our lockers and continue to build future capacity for B2C. Now let's move on to Mondial Relay. There are three crucial points to highlight here. Firstly, we've deployed almost 3,000 APMs in Mondial Relay markets since the beginning of 2024. We now operate through a network of 8,200 machines in all Mondial relay countries, of which 6,300 are in France, where we're the clear leader in lockers. The number of parcels delivered to lockers has again increased at a much faster rate than our APM deployment. Deliveries to lockers already account for one third of all deliveries, a big step forward, doubling from 17% in the same period last year. We continue to see great improvement in the B2C and return segment, which has significantly outpaced total volume growth and was higher than in Q2 24. What you can also see in this slide is a high increase in our C2C volume, which was exceptionally strong, especially compared with earlier quarters. This is mainly because of a more visible seasonal shift with the back to school effect and weather changes in September from the previous year. However, it is our strategically important B2C segment that we're most focused on. The increase in B2C deliveries, higher APM volumes and overall volumes are all positively impacting our profitability, which Javier will discuss in more detail later. Now let's turn our attention to the UK. We have the largest APM network in the UK and the gap between us and the second player is widening with our pace of deployment. We deployed almost 2,000 machines since the beginning of the year, and we plan to have added more by the end of this year. We also accelerated the opening of our PUDO points at the end of Q3 in line with the volume demand as we look for covering the white spaces as we look for future locker locations, and we had twice as many PUDO points as at the end of 23. With such acceleration in developing the network, which already covers 65% of the population in the top three cities compared to 58% a year ago, and almost 40% of the entire UK population now, it is imperative to continue to accelerate capacity ahead of volume growth now, ease utilization, and prepare for the development of new services. As I've mentioned before, we're currently focusing on enhancing our B2C offering and driving greater adoption among merchants. We're proud to see the clients who have used our returns and locker-to-locker services now choose in-post at the checkout for a number of their B2C orders. As I've mentioned, We already have a number of key players such as Zara, Massimo Dudi and other Inditex brands, as well as Sheen and River Island, which went live in Q3. We've also launched a Shopify app in the last quarter to enable their retailer base to offer their customer parcel lockers as a delivery option at checkout. But I must stress this journey to winning B2C is a multi-step journey and building capacity is the first step. The existing solutions live now provide us a great platform to optimize the checkout flows with various integration partners on the market, test with retailers the UK consumer messaging, and adjust our network infrastructure to solve for the various injection points and cutoff times to provide a high quality of service for their customers. Let's move on to the next slide. As you're probably aware, we recently announced the acquisition of Menzies and we now have full control over the entire logistics process. First mile, middle mile and last mile to one of our out of home points across the UK. The only outsourced part at present is the last mile delivery for our locker to door service. As the chart shows, this is also the fastest growing service. To support this demand and enhance service quality, in October we started a partnership with Yodel for to-door deliveries from lockers, alongside the Royal Mail. As part of that partnership, we've made a strategic investment now into Yodel to secure long-term future to-door delivery options for in-post, while also allowing us now to offer in-post locker solutions directly through the Yodel merchant integrations. Thanks to that partnership, we now have a full offering for merchants in the UK, especially B2C clients, and are delighted to be partnering with Yodel now in this next phase of their journey. We believe this will provide additional opportunities for us and help gain more market share in the UK while keeping consumer satisfaction at a high level. On the next slide, this is a short summary of app users and their perception of our services. In France, we hold the number one position in the net promoter score. Our customer satisfaction, which we regularly monitor, remains very high. In the UK and other international markets where we operate under the InPost brand, I'm happy to share that we have high Trustpilot scores of 4.6 and 4.7, depending on the country. Our app user base is growing, with 1.4 million and 2.6 million people having downloaded the app in the UK and France, respectively. We'll keep working on adding new features and aligning it with the Polish app, especially since we see that our app users send and receive more parcels than non-app users, so a key form of our future growth. And last but not least, as Rafal shared in the Poland overview, we've been busy innovating in the international business also. Please take a moment to watch this short video produced by our partner, Adverb, showcasing how we are revolutionizing global logistics through automation and powered by AI by introducing cutting edge Zippy sorting robots to Mondial Relay's distribution facility in Southwest France. These robots are designed to handle Mondial Relay's high volume of parcels and streamline the sorting process. The parcel sorting system compromises stations where operators load parcels onto the robots. Each parcel undergoes scanning, and the robot employs sophisticated algorithms to accurately sort parcels to predefined destinations. This new solution is more efficient, ergonomic, and eco-friendly than traditional sorters. The fleet management software powered by AI enables real-time robot tracking automizing robot performance and efficiency, and turning human-robot collaboration into perfectly timed deliveries every single time, everywhere. This innovation solution not only boosts efficiency, but also enhances delivery accuracy, positioning Mondial Relay at the forefront of the logistics industry. Additionally, last quarter we opened our first-owned logistics hub in Italy, near Milan, situated in an area with a dense network of in-post lockers and puddle points. Lombardi ranks first among Italian regions where the impulse network is most widespread. We believe it is just the beginning of our road and demonstrates not just how we're thinking about last mile disruption, but disruption through the entire parcel value chain. I'll now hand over to Javier to talk through the financial highlights, and thank you.