Inpost Sa

Good morning, my name is Gabriela Burdach and I'm the Investor Relations Director at InPost. Welcome to InPost Full Year 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 this slide, we will have a Q&A session. Today's presenters are Rafał Brzoska, CEO, Michael Rouse, CEO International, and Javier Van Engelen, CFO of InPost Group. I am now 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. I'm really thrilled to share the outstanding results of InPost Group for the full year 2024. It's been really a record-breaking year for us, demonstrating the strength of our business model. As you can see, we've achieved significant growth across all key metrics. Parcel volumes increased to 1.1 billion, a 22% increase year on year. This increase in volume combined with strategic initiatives moved our revenue to more than 11 billion of Polish zloty, a substantial 23% year on year growth. Last year, we also invested heavily in our future with capital expenditures reaching more than 1.4 billion, which is a 37% increase year on year. This investment is primarily focused on expanding our network and enhancing our operational capabilities to support our continued growth trajectory, particularly in international markets. Despite of higher capex, we finalized 2024 with lower net debt to EBITDA ratio, including 0.4 billion spent on M&As, reflecting our prudent financial management and strong cash generation. Our profitability has also seen a significant boost, with group-adjusted EBITDA reaching 3.6 billion Polish zloty, a robust 33% year-on-year increase. This reflects the operational leverage we've gained from our expanding scale, but also efficient operations. Group-free cash flow also saw a healthy increase, reaching almost 1 billion up 22% year on year, further demonstrating the combined strength of our performance and financial discipline. Let me now share some updates on our network development. Last year, we deployed a record high number of APMs, significantly expanding our network and reach, which goes hand in hand with increasing local efficiency. We've added an impressive 11.5 thousand APMs, further solidifying our position as a leader in out of home delivery in Europe. Our total APM network now stands at 47,000 machines, representing growth of 32% in recent year. I want to emphasize it. Across the markets in which we operate, we are the largest APM network and third largest logistics carrier by volume. We've also seen growth in our PUDO point network, which has reached 34,000 locations. This expansion of both APMs and PUDOs provides even greater convenience and flexibility for our customers, allowing them to send, collect and return parcels at a location and time that suits them best. Also, this expanded network is crucial for supporting our growth and ensuring we meet the increasing demand for our cross-border service, which we launched last year. Let's move on to the next slide, which addresses market trends. As in previous quarters, we continue to gain market share across all our geographies. Last year in Poland, we continued gaining market share while already being the outright market leader. In Montreal-related countries, our growth has outpaced overall e-commerce parcel growth with volumes and a strategically important B2C sector rising by an impressive 28% year-on-year and dynamic growth in APM volumes up by 81% year-on-year. In the UK, the demand acceleration is driving the needs for faster APM deployment and we remain focused on network development to expand the volume. Having completed Menzies acquisition in October, we are now a stronger player with fully in-house logistics to out-of-home points. On the next page, you may see that, of course, we are proud of the business progress. We remain strongly committed to ESG and especially the reduction of our environmental impact. We are on the path to net zero by 2040 with a very strong focus on minimizing our emissions per parcel. Our APMs and PUDOs are key to our sustainability strategy. They offer convenient alternatives to a traditional delivery, leading to a 98% CO2 reduction over the last mile and 71% across the entire route. We are also continuously reducing overall CO2 emissions per parcel with a 37% decrease over the last three years. As illustrated on the right-hand side, our commitment to ESG has led to consistent year-on-year improvements in our ESG ratings, which notably surpassed the industry average. We will continue investing in green technologies and sustainable practices as we strive towards our net-zero goals. Moving on to our business update for Poland, where we continue to strengthen InPost as a love brand. Let's start with our robust and growing user base. 24 million users in Poland use our services. This number represents almost 100% of the Polish e-commerce population, which demonstrates the widespread adoption and preference for impulse convenient delivery solutions. Our mobile app plays a significant role in driving user engagement. We have almost 14 million app users, a number that surpasses the number of households in Poland. These customers order over 40% more than non-mobile app users, demonstrating the increased engagement driven by our app's convenience. Last year, we launched our loyalty program to further enhance user engagement. We already have 11 million users registered and the program already generates millions of incremental parcels showcasing its effectiveness in driving additional volume while rewarding our loyal customer base. Let's move on to the next page. While the previous slide demonstrated loyalty, on the next two slides, I'm proud to share some external survey results that clearly show that InPost is by far the preferred brand for e-commerce shoppers. First, almost every e-commerce shopper in Poland prefers InPost APM delivery over other methods, whether it's Tudor, Pudopoint or other APM provider. The second chart speaks for itself. People are willing to recommend us more often than to recommend other carriers and other APMs brands. Our NPS of 77 stands out well ahead of our competitors. Slide 11 shows the impact impulse APMs have on conversion rates. Starting from the left, a whopping 88% of consumers choose impulse as their most frequent APM for delivery. And again, this is far ahead of any competing APM network. In the middle, 95% of shoppers claim that impulse convenience, quality and reliability are motivating them to shop online. Let's move on to the next slide. On this page, we go back to the hard numbers of footprint where the share of compartments is the best measure to express unrivaled proximity to the Polish consumers. We are and remain the leader in terms of the number of APMs, but we have an even more clear leadership with over 70% of the number of compartments on the Polish market. Do note that the balance 30% is shared by many different brands with separate logistics, varying quality, separate IT systems, and completely different strategies. Leading in APMs and compartments is one thing, but knowing how to operate them is something completely different. Let's therefore see how our network performs on the next page. Looking closer at our Poland operations, let me draw your attention to the three important performance indicators. First, our APM infrastructure has expanded significantly by 15%. We've grown to over 25,000 lockers, solidifying our leader position in Poland. our parcel volumes increased by 20% year-on-year. APM volume was up by 18% and Tudor delivers experienced more dynamic growth of 27 largely driven by the expansion of international e-commerce platforms. Every year, roughly 20% of our volume growth comes from new merchants in spite of the leading position in the market already. Third, And as a logical result of the first two points, despite our leadership position and the increase of competitive networks, the utilization levels of our lockers continue to grow. This success is not only due to growing volumes. It is driven by our robust logistics backbone, advanced data analytics, and cutting-edge technology that enable us to enhance efficiency, particularly in the middle and last mile of delivery. These metrics confirm that we are simultaneously growing our physical presence, increasing delivery volumes and improving efficiency. A very powerful combination that positions us well for sustained profitable growth. Next slide, please. Let me now focus on our innovations. InPost Pay and the more recent loyalty program. InPost Pay already has almost 8 million registered users and partnerships with over 1,600 merchants that already see a 30% plus increase in their checkout conversions. These metrics confirm that InPost Pay effectively meets market needs while delivering value to both merchants and consumers, really advancing our group's mission to enhance e-commerce experiences. Which brings us to our loyalty program. although just launched in the last quarter. It is already a success. It attracts customers and increases user and merchant loyalization. Over 11 million users have enrolled and we already see that these users order more than before, bringing in that incremental number of parcels. We've received a lot of positive feedback and we plan to roll out loyalty program to other markets too. I'll now hand over to Michael for an update on our international business. Thank you very much.

Thanks, Rafael. Good morning, everyone. 2024 has been a strong year for the international business and all the markets that operate within it. We continue to accelerate our flywheel across all of its components as our international expansion gathers increasing momentum. We expanded our international network by over 11,000 out-of-home points, including over 8,000 APMs. We continue to heavily invest in our critical infrastructure capabilities, both in APM network deployment, but also in logistics sites, opening over 20 new depots and hubs in 2024. These investments build the backbone and allow us to continuously improve the quality of our services in each market to enable that long-term consumer centricity and adoption that now fuels our Polish business. As Rafal mentioned, it's not just about lockers. In all our international markets, we've continued to grow our volume well above the market rate, taking market share from incumbent legacy players, supporting merchants in fueling the local and cross-border e-commerce markets, and solidified in post in Mondial Relay as the leading locker solution in the UK and France. In our international markets, we're either a clear number one in terms of APM network, which is the case in the UK and France, or we're number two, like in Iberia and Italy, and accelerating, where the number one today is Amazon, but operates a different model. What we're really very focused on is investing in the network in all markets, but with the UK taking greater importance to satisfy rising consumer demand for our APM solution, Europe's largest e-com opportunity. What we're also proud of is our merchant base. We cooperate with over 56,000 merchants, with 2024 being a year of big wins, and our app has gained significant penetration, attracting millions of new users to APMs. As we move on to the next slide, just to demonstrate, 2024 has been such a big year of wins, with our merchant B2C base expanding, and this has been such a critical element of our international expansion. That's why I'm extremely proud of what you can see on this slide, that we have such players in our portfolio, such as H&M, Adidas, ASOS, Zara, and international marketplaces to name a few. And as our market penetration and quality of services improve, we continue to see increasing share of checkout development coupled with a growing pipeline for new brand additions. The growth potential from B2C has such significant headroom as we start from such a low base in all our markets. Now let's focus on Mondial Relay. There are two crucial points that I'd like to highlight here. In 2024, we deployed a record high number of almost 4,000 APMs in Mondial Relay markets. The number of APMs increased by 73% One of the drivers of such dynamic network expansions was deals with major retail chains like Carrefour, Conforama and Lidl, as we continue to leverage pan-European coverage. As our locker density coverage increases, with increasing density, we continue to observe the positive trend of the increasing adoption of our lockers. The number of parcels delivered to lockers has almost increased by 81%, exceeding the APM growth by almost 10 percentage points, with locker volume now accounting for 30% of our volume within Mondial Relay, again demonstrating significant potential for volume conversion as the locker estate expands. As you can see on the right-hand side, the result of APM volume growing faster than deployment is the increasing utilization of our network, but also a factor of the quality of locations being deployed. Javier later will talk about this in the financial section and how it enhances the economics. On the next slide, we continue to see strong growth in the B2C and return segment, which has significantly outpaced total volume growth and was higher than in previous quarters. With C2C year over year remaining stable, the share of B2C in our total volume is increasing. For Q4, it was almost 50%, but there were some weeks in Q4 when we saw a B2C share even close to 60%. What I'd also like to highlight here is the improvement in delivery time and quality. We always say that we're more than just lockers and quality is one of those components of our success in Poland. Our infrastructure investments in not just lockers, but also last mile and middle mile coverage with the 20 new depots and hubs I mentioned before, demonstrate our roadmap to replicate quality in international markets. The results in Q4 in Mondial are a testimony to that, and with over 60% of Mondial relay B2C parcels in Q4 in 2024 were delivered next day, and 90% within two days. Also last year, we focused on our merchant base expansion. both with hunting and farming activities. We expanded our merchant base by a few thousand, and now 55% of top e-merchants in France are Mondial Relay clients, with significant headroom to expand share, both with new wins and share of checkout. In 2025, we'll remain hyper-focused on this strategically important growth opportunity. So moving on to slide 21. This slide is extremely important, and I'm really pleased to present it. This journey of the transformation of Mondial Relay began in 21 to turn around a legacy low-cost regional player into a number two market playing disruptor is now gaining clear consumer choice and recognition. According to a recent consumer perception survey, awareness levels have significantly improved for Mondial Relay, and we now lead in top-of-mind awareness in France. We're also the most recognized out-of-home provider, which is critically important, given that more and more French consumers are choosing out-of-home delivery, with over 50% of total e-commerce shoppers in France making that their preferred choice. The satisfaction of our APM clients, whose numbers has increased by over 80%, is also reflected in the MPS index, where we have held the highest position in the market for the last few years, and with that gap increasing against the nearest competitor. On the next page, our mobile app development and traction is an important ingredient to creating this consumer awareness and satisfaction. We have now 3.2 million downloads at the end of 24, with the 4 million number fast approaching this month, demonstrating the pace of traction within the French consumer base. We've been adding new features and actively listening to our customers' needs and responding to them. We're very excited to see that our app was one of the most downloaded in the mobile stores in 24 in France, reaching number one download during Q4. Together with what you saw on the previous slide, this confirms that we're on a good path to replicate the premium love brand that we have in Poland across the French market. Now, let's turn our attention to the UK. The UK is the largest e-commerce market in Europe, with volume reaching over 4 billion parcels on an annual basis. We have a strong presence in C2C and returns for B2C. The product offers that started our UK journey has allowed us to quickly capture consumer adoption for using lockers to drop off parcels. The largest part of the UK e-commerce market is B2C, where we have just launched our services in Q4 24. We're currently focused on enhancing our B2C offering and driving greater adoption among merchants, where we're already live with 40 merchants and over 50 already in integration pipeline. So we have a strong base of return clients, mainly from the growing fashion segment, and we're focused on adapting them to use our B2C services. Our plan in 2025 is to have over 300 B2C merchants by the end of the year. And from the user's perspective, we see that approximately 50% of our B2C users who order to lockers were already our clients, either with returns or C2C previously, demonstrating that the entry strategy has provided us a strong consumer base to further drive adoption and usage. And let's move on to slide 24. On the next slide, we show how we're expanding our focus on the network. And expanding this network is crucial for our growth in volume, especially as we've launched our B2C offerings. In 24, we significantly accelerated our network by deploying nearly 3,000 machines and almost doubling the number of PUDOs. As a result, we now boast the largest APM network in the UK, reaching 65% of the population in the top three cities and over 40% of the entire UK population. This enhanced convenience has attracted more customers, leading to a 60% increase in the user of our services while maintaining our high Trustpilot score. Similar to France, quality and consumer centricity is at the backbone of these services. Throughout the whole of 24, utilization of our network was over 100%, which means that our locker growth must now even be faster in order to meet demand for our services from the increasing number of in-post users. So the focus for 25 in the UK is to accelerate the deployment to ease utilization and prepare for B2C service expansion at even better quality. With 15,000 locations our target for the year end, And that will be our single biggest ever deployment in a year in a single market. So here on slide 25, we focus not only on our network, but also on merchants and on in-post users. Similar to Mondial Relay, we're seeing great interest in our UK mobile app. The number of our app users has doubled year over year, nearly approaching 2 million, and we're ranked highly. The UK app remains a key focus and a key area of development, especially since we see that users who engage with it pick up more parcels than those who don't. So the UK market is really set for further development in 2025, and now I'll hand over to Javier to talk about the financials. Thank you.