Inpost Sa

Good morning, my name is Gabriela Burdach and I'm the Investor Relations Director at InPost. Welcome to InPost first quarter 2025 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 a Q&A session. Today's presenters are Rafał Grzoska, 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 very pleased to report a strong start to 2025 for our impulse group. Our Q1 performance reflects the strength of both our Polish operations and our international business. We are seeing robust growth across the board, highlighted by 22% year-on-year increase in revenue and an even higher increase by 29%, excluding currency effect. In Q1, we increased group-adjusted BDA by 24% and improved profitability across all segments, which Javier will describe in more detail later. Our recent acquisition of Yodel strengthens our foothold in the crucial UK market, increasing our market share there to 8% and setting the stage for further expansion. Michael will discuss progress on this new project as well. The chart you're seeing in the middle will look different next quarter, as with the inclusion of Yodel, our international business already accounts for over half of InPost's revenue. Let me now share some updates on our network development. Our momentum in APM deployment continues to accelerate. In Q125 alone, we added over 3,000 APMs, an impressive 32% increase, bringing our network to 50,000 machines. This solidifies our position as the largest independent locker network in Europe and underscores our commitment to providing convenient and sustainable delivery solutions. We are also optimizing our PUDO points network with a particular focus on automation, especially in France. And as a result, the number of PUDO points remained stable year over year, which aligns with our strategic goals. Let's move to the next slide, which addresses market trends. As in previous quarters, we continue to expand our market share across all key regions. In Poland, the e-commerce market grew at a rate of 8% in Q1, driven to a larger extent by intangibles, which means the tangible market growth rate is smaller than the average. Despite the softening market, our volume in Poland increased by 10%, even against the very high base of 2024, which saw a boom in international marketplace activity. In Eurozone countries, our growth has again significantly outpaced the overall e-commerce parcel growth. Notably, volumes in the strategically important B2C sector have risen by 29% and APM volumes have experienced dynamic growth increasing by 70%. In the UK, the largest e-commerce market in Europe, our volumes have grown by an impressive 39%. With our recent acquisition of Yodel, our volume in the UK would be over three times higher. Let's turn our attention to Poland as the key market for impulse where we are continuously improving user and merchant loyalty. As you can see, we have significantly expanded our network, adding 15% more APMs year over year, reaching nearly 26,000 locations in Q1 2025. Despite a very high comparison base from last year, we've achieved solid parcel volume growth with a 10% increase in Q1 and reaching 174 million parcels. The faster APM growth compared to Q1 volume is primarily due to the phasing of our deployment strategy. We secure the most valuable locations at the beginning of the year and closely monitor utilization rates for each APM. It's worth noting that locker volumes are growing faster than to-door deliveries and including redirections. This growth aligns with overall network expansion. This once more highlights the increasing popularity and adoption of in-post lockers, especially among international marketplaces. Now let's talk about the strength of our customer base in Poland. I'm pleased to share that we continue strong growth in our user base and user loyalty. Our APM user numbers are up 7% year over year, reaching nearly 20 million. That figure increases to 24 million when we include all users along with two-door customers. Despite these already impressive numbers, we are still attracting approximately 200,000 new users every single month. We know our users well and we understand that they don't shop at just one particular website. In fact, 90% of our loyal users shop at 11 or more e-commerce stores and they prefer InPost APM as delivery option at all these stores. This diversification highlights the convenience of impulse within the broader e-commerce ecosystem, making us the preferred choice for customers regardless of where they shop. Finally, I'm very proud to share the latest Kantar survey results. InPost maintains the highest and unmatched net promoter score for lockers in Poland with an impressive score of 77. Importantly, this is based on independent research. This high NPS truly reflects our commitment to quality, convenience and customer satisfaction, reaffirming our position as the leading e-commerce enabler in Poland. Let's move on to the next page. A critical element of our success in Poland is our strong and growing relationships with merchants. We are proud to serve over 55,000 merchants and we are continuously working to expand and deepen these relationships. We've recently signed a new pan-European agreement with Vintage, further enhancing our presence in the pre-owned fashion market. We've strengthened our cooperation with Amazon in Poland by shortening delivery cut-off time. We are seeing wider adoption of impulse pay by merchants, which further simplifies the checkout process for consumers and drives increased sales for merchants. Currently, over 2,000 merchants are integrated with Inputs Pay, including 20% of our top 100 merchants. By the end of the year, we plan to have 40% of our top 100 merchants using this service. I'll now hand over to Michael for an update on our international business. Thank you.

Thanks, Rafael. Good morning, everyone. Q1 25 has been another strong quarter for the international business. We continue to accelerate our flywheel across all of its components and all our markets. I'll start with the Eurozone segment, which includes all international countries except for the UK. Please note that these Eurozone slides include a combination of Mondial Relay and Italy for the very first time. In the Eurozone, we've expanded our network by 6,000 out-of-home points year-over-year, including 5,000 APMs. Just to give you a sense of how fast we're growing in this space, in Q1, we were opening circa five times more than our nearest competitor at 113 APMs weekly, while all the competitors together in the Eurozone were opening 22 weekly on average, just to demonstrate the pace and execution of our deployment. As a result, we increased population coverage in all regions, as you can see on this slide, which measures the percentage of the population living within a seven-minute walking distance from an in-post location, offering greater convenience for our customers. As Rafael mentioned, in all our markets, we continue to grow our volume above the market rate, taking market share from legacy incumbent players. However, what we're really satisfied with is the flow rate to APMs that we've observed. In Q125, almost 40% of all parcels were delivered to APMs. That's compared to over 20% a year ago and 11% two years ago. That's significant progress as we observe the parcels going to APMs as we continue to automate from our out-of-home network converting from PUDO to APM. We expect this flow rate should only continue to improve. On the next slide, you can see on the left-hand side of the page, we can see the continued growth of B2C. The first quarter of 25 was a 29% increase in B2C growth, continuing the trend we observed in Mondial Relay markets from before. We are strengthening our merchant base by adding new merchants in the first quarter, primarily SMEs, but also well-known brands such as Calcedonia and Icewatch. We continuously work on quality improvement. This is a key part of our transformation of Mondial, and we've increased the share of B2C parcels delivered in D plus one by four percentage points year over year to 65%, all while experiencing growth in both the number of parcels and the number of merchants as we strive to deliver a consistent high quality next day offering to the market. This has allowed us to attract and build upon the number of new users of APMs and our mobile app. Since we see that the mobile app is a great tool our users love it, ordering 40% more than non-app users, we plan to roll out it to two new markets by the end of the year. I'd also like to highlight the significant brand success we've achieved. According to Kantar and OpinionWay surveys, we've seen improved performance in the MPS in France. A reflection of the improvement in network and quality, as mentioned earlier, and the Mondial Relay brand is now amongst the top 50 valued French brands. This is a prestigious achievement, especially since we're the only logistics company on that list, standing among brand champions well known to people from all around the world. On the following slide, let's now focus on our cross-border activities. There are two crucial points here that I'd like to make. First, the cross-border share in market volume is around 30%, and according to market research, it's expected to grow significantly year over year at a rate of 30%, whilst local e-commerce is estimated to be flat. This represents a substantial opportunity for disruption and profit pool capture for Impulse going forward. Second, our market share in cross-border partials is already at the level of 7% to 10%, depending on the country we operate in. We already established in the minds of the Eurozone consumers and merchants, and it's time to accelerate our efforts in this field. We'll be strongly focused on implementing cross-border initiatives and plans. These include the unification of UX to improve our customers' experience, wider international merchant adoption, enhancements in further logistics coverage and quality, and last but not least, expanding into the UK cross-border market in half to 25. E-commerce is a borderless experience for consumers. Our tech enablement, single merchant integration, and consumer-centric focus put us in a strong position to capture share, but also to disrupt the legacy profit pool of those that have enjoyed charging 25 euros per parcel as we target six euros as the optimal price. On the next slide, I'd like to highlight a further two things, specifically now starting to think about the UK and the progress that we've made. In the UK, we've deployed over 3,000 APMs year over year, marking a record high expansion driven by increased independent APM deployment and continued progress with key chain partners. Similarly, to Eurozone markets, we are adding many more APMs than our competitors. In Q1, we were deploying over 70 APMs per week in the UK, while our competition has been less than 15. Including Yodel, which we acquired at the end of April and will consolidate starting for May, our network is now number one, not only in APMs, but also in terms of all out-of-home points. Thanks to the acceleration in APM deployment, we've observed a significant improvement in the quality KPI related to free compartments, reducing instances where a courier or customer cannot place a parcel in the APM. Our in-post UK volume in Q125 grew by 39% year-over-year, and on a pro-format basis, including Yodel, it grew over fourfold. This gives us visibility into how much network we need as our medium-term plan is to transfer some of the to-door volume to our APM network. With the Yodel poodle points, our network coverage has increased to 75% in the top three cities and over 50% for the entire UK. On slide 16 here, I'd like to highlight two important key points. First, our organic process. We added 40 new B2C merchants in Q1, ending the quarter with over 260 partners, including return contracts. We're very pleased with the share of checkout on our new clients, reaching up to 50% in certain cases. We also now have 2 million app users who order 50% more than non-app users, a trend we continue to see as we expand this across not just one market, but all markets, and 42% more APM users. So we can say we did make a big progress in the user base area. Second, the acquisition of Yodel takes us to another level of the customers and merchants cooperation. Yodel cooperates with over 500 merchants and their mobile app has been downloaded over 7 million times. Our plan for integration is well underway, and as we speak to merchants jointly about what those plans can and will be, we'll provide more details of this in our half two results. We can already see the effect of the acquisition has on our merchant base. We are receiving positive feedback on the comprehensive product suite, and we've accelerated negotiations with key strategic retailers. From the latest wins, we are the preferred out-of-home delivery provider now for ASOS, which is a huge success. And also Rafal mentioned the new agreement with Vinted on his part of the presentation. And again, I'd like to highlight this agreement is not only for Poland, but for all our markets. I will now hand over to Javier to take you through the financials.

Thank you, Rafael and Michael, and good morning, everyone. Let's now see how all of this translates into the company's key figures in Q1 2025. As we indicated during our annual earnings call, we've changed our reporting segments. This quarter marks the first release of our results under the new structure, Poland, Eurozone, the UK and group costs. In other words, we have added Italy to Mondial Relay and separated UK as a single segment. For the first time, you will also see position for group costs. This table provides a snapshot of our Q1 group results segmented by these new categories. I won't delve into every number here, as we'll have dedicated slides for each market, net leverage and free cash flow. I do want to draw your attention to a new line in our P&L, group costs that until now were mainly booked in Poland. This includes the cost of management and other group functions that serve all markets. Turning to capital expenditures, in Q1 we invested 340.6 million Polish zloty with a capex to revenue ratio of 11.5%. This was primarily driven by strategic investments in our APM network, which represented nearly 70% of Q1 capex, along with continued investment in IT development accounting for 24% of total capex. Lastly, on this slide, you'll see a decrease in group-free cash flow. This is primarily due to the timing of tax payments. I will discuss this further in the presentation. As Raphael mentioned, overall, Q1 2025 delivered very strong results across our business. Let's now take a closer look at the specifics. Okay, so let's start talking about Poland Q1 2025 performance. we saw a solid 10% increase in parcel volume reaching 174.2 million. This is especially encouraging considering the high base from Q1 2024. Also encouraging is the fact that SMEs grew disproportionately by plus 18% year on year, which in turn has a positive effect on profitability compared to major marketplaces. Revenue in Poland grew by 11% to over 1.6 billion PLN. Now, you'll notice the revenue growth isn't massively higher than the volume growth. We're prioritizing higher volumes over aggressive price increases, but also that comes from a different volume mix. I just said EBITDA in Poland grew by 15% year-on-year to 791.1 million PLN. This boosted our margin to 47.9% compared to 46.2% last year. Improvement resulting from strong volume growth, very good cost management, as well as changing volume structure towards faster growing SMEs. Now let's look at Eurozone results. Let's start with parcel volumes. We delivered an 11% growth, reaching 73.5 million parcels in Q1, significantly surpassing the overall e-commerce market growth. This outperformance was driven by another quarter of strong growth in our strategically important B2C segment, which saw a 29% increase. This demonstrates the ongoing success of our focus on this segment. Moving on to revenue, we achieved a 17% increase year-on-year in local currency and 13% in polyslotting. This growth exceeds volume growth due to a favorable shift in volume mix with increased contribution from higher-priced cross-border and two-door deliveries. Finally, and perhaps most importantly, adjusted EBITDA margin saw a significant improvement to 13.5%, representing a 59% increase in absolute adjusted EBITDA in local currency. Margin expansion is a direct result of several factors. The growth in our higher margin B2C business, increasing adoption of our lockers Michael was talking about, ongoing operational improvements that enhance our efficiency, and good control over cost per parcel and SG&A expenses. In summary, Q1 2025 has been a very successful quarter for Eurozone, demonstrating the effectiveness of our strategic initiatives and our ability to deliver substantial improvements in profitability. Now moving on to the UK. Let me remind you that for the first time, it's only UK on the slide, with Italy included in Eurozone. In Q1, volume in the UK increased by 39% year on year, driven by locker to locker growth and returns, with also B2C contributions starting to be visible in our volume. The increase in revenue, plus 145% year on year, is impacted by the Menzies consolidation. The revenue of the UK without Menzies increased by 26%, lower than volume due to a higher share of locker to locker volume, which is, however, more positive for margins and is in line with our strategy. Adjusted EBITDA increased by 194% due to efficiency improvements and product mix, as well as consolidation of Menzies. On the next page, you can see our usual bridge between adjusted EBITDA and net profit for the first quarter of 2025. Year-on-year adjusted EBITDA for Q1 2025 is up by 23.7%, translating into a profit margin improvement of 50 basis points, from 31.3% to 31.9%. Group adjusted EBIT is up by 11.1% year on year. Adjusted net profit from continuing operations in absolute terms is up by 11.7%. The higher IFRS 16 amortization that impact EBIT is mainly driven by network scale, APM land and debt policies, and the optimization of operations. Between EBIT and net profit, you can see the usual interest expenses connected with debt, unrealized FX losses driven by strengthening of Polish Lotte versus Euro, and a sustainable improvement in our effective tax rate. The next slide again showcases cash generative dynamics of imposed business. In Q1 2025, Poland generated 311 million Polish zloty in free cash flow, representing a free cash flow conversion rate of 39% compared to 68% in the previous year. This was impacted by the balance tax payment, which for the financial year 2023 has been paid in the second quarter and for 2024 in the first quarter of 2025. Adjusting for that free cash flow generation in Poland would be at similar level compared to last year. Free cash flow investment in international markets amounted to 247.6 million Polish zloty, similar compared to same time last year. As a result, group-free cash flow to adjusted EBITDA conversion reached 7%, lower than in the same period in 2024, mainly due to the mentioned tax payment calendar effect in Poland. To close the financial highlights section, let me say a word on net debt and leverage, as shown on this slide. In Q1 2025, gross debt decreased by 39 million PLN, down to 7.7 billion PLN, with changes mainly in other IFRS 16 items such as transportation, fleet and office leases. Net debt increased by 284 million PLN on the back of lower cash generation due to investment in Yodel in Q1 2025. The higher net debt combined with a slightly higher increase in adjusted EBITDA resulted in a stable leverage ratio at 1.89 times at the end of Q1 2025. Let me now close the financial highlights with the outlook for 2025, as you can see on the next slide. We have upgraded our group full-year outlook to incorporate Yodel consolidation starting from May 2025. We now anticipate group volume to increase in the high 20s level and revenue to grow by high 30s year on year. Our outlook for Poland remains unchanged, but the landing will depend on the further e-commerce market development in the second half of the year. Our full year outlook for adjusted EBITDA hasn't changed, as we still expect low to mid 20s adjusted EBITDA growth year on year. Adjusted EBITDA margin will be lower year-on-year as we consolidate Yodel. Our APM deployment and CAPEX are also at the same level as announced previously. On the trading update for Q2 2025, we expect volume growth at a group level by about 25%. In Poland, we anticipate high single-digit volume growth in a softer e-commerce market, and in international, we expect about 50% volume growth, including the ODO consolidation from May 2025. And with this, let me hand over to operator for Q&A session.

Thank you, sir. And ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing a star 1 on your telephone keypad. If you wish to cancel your request, please press star 2. you may also submit your questions via the webcast platform. Now our first question is for Marco Limited from Barclays. Please go ahead.

Hi, good morning. Thanks for taking my question. The first question would be for Rafal, whether you have had time over the last week or month to talk to the new Allegro CEO, and if there's any update on that front. Second question is on the Q2 trading environment. You are guiding for slightly lower growth in Q2 versus Q1 in Poland. Just wondering what you have seen in April and maybe in the first part of May and whether you think the market has already slowed down or just expect to slow down in the remaining months of the quarter. And maybe just a question. on France I mean you show a quite significant increase in margins over here in Q1 you don't provide let's say a specific guidance for France margin level so just wondering whether there is a range you are happy to guide for in terms of your increase

Thank you, Mark. Good morning. I'm happy to answer the first question. So, yes, I met Marcin, with whom we know for longer, and that was a very positive discussion as we continuously understand the market dynamics and also the way our friends from Allegro, They want to have some independence, which is for me and for our team well perceived and well understood already since our IPO. Nothing has changed here. But we both are also pragmatic CEOs and we understand that, you know, both companies may win much more by being together than being, you know, less so specifically that, you know, the challenge on the Polish and the whole European markets is rapidly increasing because of the newcomers who are very aggressive and are like building their position faster than anyone had envisaged. So InPost continuously want to keep that agnostic approach. But of course, historically, we supported our colleagues from Allegro for many years in their growth, and we do continuously the same. So I'm pretty optimistic in terms of how much we can do together, irrespective of, you know, maybe some noise in the public domain. It's not our intention, you know, not to support Allegro. We are here to support them, to help them in the challenging times that's visibly coming. And in terms of our Q2 guidance, I will hand over to Javier, but also my reflection point, which might be very valid in that context. We clearly see that the consumer sentiment in Polish retail is weaker than it was last year. We also observe record high savings of the Polish consumers, which We may draw a kind of conclusion that this is driven also because of by the geopolitical situation, the situation around us, lack of stability and the tariff topic, also the presidential election. Simply, you know, people are a little bit tired. Instead of spending, they rather hold back and they save money. A recent move with the interest rate decrease might become an impulse to start spending more. But as always, we try to be cautious here. So handing over to Javier for more views on that queue to guidance. Thank you.

Yeah, thank you. Thank you, Rafael. Hi, Marco. Just to add on what Rafael said is – As everyone knows, it's been a very volatile first quarter with everything happening geopolitically. Things seem to be stabling down a little bit. but consumer confidence obviously across the Eurozone has been affected by that. If you look at what we're giving from a guidance for Q2, it's the same approach on gaining market share. So this has got nothing to do with our intent on gaining market share, just like we did in Q1, but it's purely a fraction of being a bit more careful on consumer sentiment and the market development itself. As you see, we have not changed our guidance for the year for Poland. That will depend a bit on what happens with consumer sentiment in the second half of the year. But again, things seem to be calming down a little bit. That's, I think, what everyone needs, that the volatility goes down. And apart from that, we keep on reflecting significant market shares in Poland, irrespective of what happens to the e-commerce market. So that's still what we are focused on. That's what also we can control. The rest is a little bit out of our control. As to the third question, Marco, on France, as you see, we've now bundled Eurozone. We don't give specific guidance. Now, what we have clearly said on the Eurozone is that we'll improve year-on-year profitability across the Eurozone. It's been a strong Q1. As you can imagine, Italy, Iberia, and Benefralux, as we call them together, they all make progress. from a lower base for Italy and Iberia, but from a solid base already in Benefralux. What's more important is not how much you will increase in profitability, but how we're delivering it. And just like across the total Eurozone, in France, we've seen healthy top-line growth. But more importantly, especially again on the B2C side and on the APM volumes. And that is also the key levers on how to drive profit margin. Because both from B2C and APM volume, of course, our margins are higher. So we do expect year-on-year improvement. And we'll see throughout the year on the Eurozone how that pans out. But again, a good start in Q1. And hopefully we can maintain some of that momentum as we go through the rest of the quarters.

Okay, thank you. And so sorry for following up. But any comment on how April has developed so far? Is it that broad in line with the guidance or a better start?

Well, you know, we don't give kind of guidance in the quarter on things going up, but it's a dynamic that we've seen before and that we talked about. You see, from a consumer point of view, you see some more savings happening. The market is softer, as we've also said. We see a bit of softening of the market as the year has progressed. We'll have to see how it goes further in May and June.

Yeah, but also one element which is very important, Marco, when you look at the Baselinker index, which is, you know, a pretty, I would say, statistically well-defined index based on a few thousands of merchants, you see clearly that April was lower than Q1. irrespective of that, we've beaten that April index. So again, that gives us confidence that irrespective of that, what's happening with the consumer sentiment and the market situation, because of our agnosticity and literally being exposed to e-commerce across the board, irrespective is that marketplace or independent vertical or SME, we feel confident that Q2, at least after April, we may say, we are better than Baselink or Index.

Thank you very much, very clear.

We will now take our next question from Roman Ryshetnev from Goldman Sachs. Please go ahead.

Yes, hello. Thanks for taking my questions. I have a few areas I would like to touch on. First, you flagged the migration of Chinese marketplace volumes into the Locker channel. Could you elaborate on the overall volume trend you are seeing from these marketplaces and have you seen any deceleration or acceleration versus previous quarters? Secondly, it's been about a month since the Yodel acquisition and could you please share your latest thoughts on the integration process and is there any chance you could reach EBITDA BREAK EVEN ALREADY IN THE CURRENT QUARTER, AHEAD OF YOUR PREVIOUS TIMELINE. AND LASTLY, CAN YOU PLEASE HELP US SIZE THE VOLUME OPPORTUNITY FROM THE NEW AGREEMENT WITH WINTEX? AND FROM A PROFITABILITY PERSPECTIVE, ARE THE TERMS MARGINAL CREATIVE VERSUS YOUR EXISTING B2C VOLUMES? ANY COMMENTS ON THAT WOULD BE HELPFUL. THANK YOU.

MAYBE I CAN COMMENT. GOOD MORNING, ROMA. I think on the Chinese volume, I think overall, maybe versus other players in the market domestically, we haven't as concentrated volume against that Chinese. Really, however, it has been healthy growth into the business and quite consistent, but not as, I say, as concentrated as we keep trying to be as diverse as possible with that. Obviously, there has been growth going into locker and out of home business with that. Both outbound and returns has really been a healthy mix between the two. And we see that consistently across most markets today. So it's quite diverse across the portfolio in that basis. I think really as we go forward, we continue to manage that concentration carefully due to a combination of price sensitivity, but also clearly the balance between out-of-home and a to-door offering where the Chinese has prioritized to-door offering up until this point in the vast majority of markets. But clearly, as we work through our density of offering, we've seen a healthy increase in that. And clearly, longer term, the sustainability of the out-of-home is a good offer for increased capacity for the Chinese volume as we look through that for the future. When it comes to Yodel, I still think it's early, really, in terms of commenting further, really on further detailed plans. I think what I would comment on is really the early integration identification has been positive. I think I commented here, really, I think the immediate opportunities really around top line, customer integration, really providing a holistic offer for the UK market has been well received, really both predominantly on the out-of-home coordination, but also having an offer for Tudor sort of to complement the out-of-home as we look to educate merchants and consumers alike on the broader out-of-home offering as we expand that from a merchant-based perspective with Yodel. But I think really we continue to see productivity and operational benefits coming through as we've shared our best practices and learnings from other markets into the Yodel operation. And I think I mentioned at the time of the announcement, we've seen about approximately a 20% increase in our cost to serve. And that trend has continued as we really work through the day-to-day practices and operations of the business. What I would commit to is I'll only have two results as we've really had a full quarter under our belt with Yodel and numbers will be consolidated from May, is give a more detailed update on what we're progressing across the number of different initiatives with that. But progress to date, been very, very encouraging, both from the marketplace perspective and with merchant engagement, team engagement, and then ongoing day-to-day efficiency and operating leverage as we sort of really start to work on a single go-to-market approach. I think the last comment was around Vinted, and I think you asked whether it was accretive, et cetera, or dilutive. I think it's worth first to identify Vinted in itself is really an early renewal. Really, we weren't due to renew until sort of early 26 with the current deal. But I think it's confidence in the sort of partnership between ourselves and Vinted and how Our partnership has developed over the last four years on a multi-market basis, really operating in all geographies that InPost play today and where Vinted want to play, as well as new geographies that we started to help them operate within, maybe not local domestic delivery, but certainly cross-border. and sort of final mile into other countries. Two examples would be Ireland and Germany today, where we're working with them on the solution from either France, Belgium, Benelux, Italy, Spain, into those markets and vice versa. And so what this new agreement really does is expand the existing baseline and really open up new opportunities for how we want to expand the partnership Not saying that we're opening new markets, more how we think about it's cementing our cross-border flows and development linked to that, and Vinted is a really solid partner with us to work with that on. I don't see the deal as being dilutive. I think, you know, certainly, I think as we continue to expand and we open new flows, we'll have a better indication of how creative it will be, but certainly not dilutive and more cementing the existing partnership and really opening up new channel flows for the future as we continue to develop the ecosystem right across Europe.

Thank you very much. Thank you very much. Our next question is from Otmane Brisha from Bank of America. Please go ahead.

Good morning and thanks for taking my questions. First, just a question to Marco on softening market environments, but this time on your other markets. So what trends are you seeing across Europe? in Q2 and expectations for the rest of the year. Then, Rafal, please, can you clarify what you meant during the presentation by tangible versus intangible markets in Poland? And looking specifically at the SME segment in Poland, can you comment on the level of outperformance you've achieved in Q1? And then on Yoder, please, apologies if, Michael, you've already explained this earlier, but when should we expect an infection point on EBITDA from being negative to positive? Thank you very much.

Happy to answer those questions. So, yeah, I mean, based on our guidance as well we shared, We are very clear that continuously, quarter by quarter, we want to beat the e-commerce numbers in each and every market. So when you look at the Q1 and you clearly see that UK is continuously struggling with the e-commerce growth, it's literally flattish, it's zero. In recent four quarters, we see first clear symptoms of acceleration of e-commerce growth in France and more importantly in Iberia. A little bit Italy is wakening up as well. But in each and every market of those, we see that, you know, we are gaining the market share very rapidly. And in terms of the second half of the year, I suspect this will translate into same dynamics. So on one hand, I'm not expecting UK market will start growing, visibly growing. But, you know, again, thanks to the Yodel acquisition, our number three position on the market and the quick acceleration in merchants' discussions and integration of our services, we expect UK, irrespective of the market underperformance, is going to be a strong second half of the year. But Eurozone doesn't seem to slow down in H2. At least, you know, this is our preliminary assumption. As you know, the market is evolving very rapidly. So it's hard to say that something is granted. But granted is one thing. We will continuously win the market share in those geographies. In terms of tangible and intangible assets, you know, it's... is a kind of element that sometimes is ignored, that e-commerce is not only as itself tangible assets, it's also fast-growing services that are part of that e-commerce. That's why it's so important that when we look at the different dynamics, for instance, when you look at the Polish or French or Eurostat information, they say that e-commerce growth was XYZ. E-commerce consist of both elements or services and tangible assets. So we started as well, analyzing those elements and be more specific in what we are referring to, as you know, to the lockers or to door, we deliver tangible assets, not the services. So we need to put that into the proper context. And we have already tools as well, supported by AI to analyze this and be more specific in terms of really total addressable market, we may address our services. And the last point, SME, Javier, I don't know if you have on top of your mind, but this was definitely the strongest Polish segment, accelerating in high double digit in Q1, giving us Again, conviction that our agnosticity, but also very wide offering to smaller merchants and local verticals is very critical in our overall strategy, because as we shared within our presentation, our consumers, our 24 million consumers, they don't shop on one website. they tend to shop on more and more websites right now. Choosing inputs as a preferred delivery method means bringing us as well higher profitability because our pricing structure is linked to the volume. Means, you know, the smaller the merchant is, the higher profit pool we may deliver on our services.

Yeah, Rafal, and that was basically plus 18% compared to the average. So it's a clear outperformance, which again, as Rafal said, it also helps on profit margin, where you see the profit margin increasing in Poland because of the higher profitability we have on SMEs. So that's part of diversification that we do, but also helps on the profit side. Let me link on to the last question on Yodel, Otman, if I may. We've given a clear update when we basically did the Yodel acquisition, and I'm just going to repeat what we said there. In Q2, it's going to be a dilutive impact on the UK, and we're going to be a margin below 10% in the UK. We expect for Q2, Q3 to go back to double-digit margin, and we will be accretive as of Q2 2026, which basically means that within one year, we will triple the profitability of the UK as become accretive. Now, you can look from the numbers and the guidance that we've given that the EBITDA number for the full year is expected to be about zero, which means we go from a loss in Q2 to profitability to EBITDA profit in the second half of the year. And that you can also read from the updated output that we've given. So that is the best I can give you at this point in time. But the key figure for us is if we need 12 months of the acquisition, we'll be tripling profit and be accredited in the UK with the oil acquisition.

Thank you very much.

Thank you. And we will now move to our questions over the webcast. Julian, over to you.

Thanks, Sergey. We had a few questions coming over the webcast, and some of them have already been answered by previous responses, so we won't pick up on all of them. But firstly, starting with JL Dezin, how significant is InPost's recent agreement with Amazon in Poland? What are the prospects of replicating it in France and the UK or other countries?

Yeah, let me comment on that. I think we've had a very strong relationship with Amazon in Poland, and this just further cements really the quality offering we want to bring to the Polish consumers and giving Amazon the ability to get late cutoffs and faster delivery times on top of what they're already doing. But what that does cement is clearly, as we build the relationship with Amazon in Poland, it rolls over into other markets. As I've mentioned before in previous calls, we do work with Amazon in France today as a good example. but really the the testimony or benchmark for working with amazon is quality right and that's a good benchmark for us to really earn that quality status and clearly as we improve on the quality across all of the eurozone and in the future in the uk clearly that will open up the potential to further develop the the amazon relationship so i think really the way we consider this is building the quality and building the offer for the consumer will not just open up the relationship for Amazon, but clearly open up the relationship for all the market as we really demonstrate the viability and the consumer choice to use APMs as a preferred solution. And really what we've seen, you know, in the last 12 months in France is starting that effect of really improving the D plus one quality now to about 65%. And really, we're starting to see that benefit come through. And I wouldn't just comment on Amazon. We can see the growth in all B2C. And that continues to grow quarter over quarter. So specifically, opportunity for Amazon, sure. Opportunity for the rest of the market, considerable. And clearly, it's about a baseline of quality and making sure we replicate that Polish model. And that is at the core of what we're really doing.

Thank you. Jorge Robles from White Oak asks, can you expand on in-post pay performance? The presentation states that 40% of top 100 in-post merchants will be integrated by 2025 year end. What percentage of Polish volumes do those 40% of merchants represent?

Thank you. The answer is short. It will be around one-tenth of our current volume. the most impactful one, I would say, because these are the volume where most of our users are shopping online several times a year. So, yeah, that will be a kind of big acceleration versus 2024. Thank you.

Adrian Gray from Highland Parcels asks, are there plans to introduce your boxes into more rural areas?

Yes, let me comment on that. Yeah, very much so. This is part of obviously from the acquisition of Menzies in particular. We now have really strong coverage in those parts of the rural areas, not just in obviously Highland, but other parts of the UK in terms of southwest of England, parts of Wales, etc., So really those conversations are well underway with actually a lot of our chain partners, such as Lidl, Tesco, and Co-op, up into regions such as Tain and Thorso and Elgin, which I'm sure Adrian understands, for maybe some others on the call, maybe not as familiar as those regions. And clearly this is an opportunity we see where today, as well as what we're doing in obviously high urban areas where there's clearly a high concentration of our lockers in places in the UK, but also in other regions and other markets. We're seeing a growing consumer demand for what I would call the underserved. And this is something that we've actually learned quite well from Poland, that the demand for out of home is probably even stronger in those rural areas because the current service from legacy is weakening. And the actual e-commerce penetration is probably even higher in those rural areas because the high street is diminishing. so these are plans that are well underway and clearly the the asset of such as menzies and our coverage in france in particular the way we've expanded that will has given us a strong footfall to be able to expand there thank you we have a phone question from hank from the idea please go ahead good morning all and thanks for taking my um my questions um

You mentioned during the call that you were reducing the number of PUDOs and even more focusing on APMs. If I look at the map you provided at the year-end presentation and compare it with the presentation deck this morning, it looks as if the PUDOs are disappearing at a faster pace than the APMs. Perhaps you can shed some light what you would see as a perfect mix between the two. Is there a certain strategy behind it? I'm aware that kudos are less popular amongst online buyers than APMs if you look at MPS, but perhaps you can shed some more light on it. Thank you.

Hi, Hank. So Michael will comment, you know, the euros on Dynamics, but I will comment, you know, generally, of course, for us in Northstar, it's 100% of APMs in out-of-home. This solution provides best-in-class customer experience, 24-7 access to the service, loyalization, but also extraordinary good efficiency operating leverage, which then translates into profitability. And I think this is the DNA of the company. Still, even in Poland, we keep some points mostly for the locations where we cannot expand, extend our lockers, let's say in city centers. But This is our way. We know how to do it. We know how to transform it. And also, you know, looking at the consumer adoption on the new markets we developed from scratch, we see consumer preferences. And it's hard to discuss with that. You know, the preference is here. And it's not about lockers itself. It's all about, you know, the ecosystem we've built, giving our end users the confidence that this is the best solution matching their expectations. Yeah.

Sorry to interfere. It is not so that you're giving up locations which could be filled in by competitors, for example.

No, no, no, no.

Okay.

So I think what you identified, Henk, is that has been the core strategy in particular in the Eurozone, which is we inherited a very strong PUDO business, which had a very good coverage. In fact, as we've gone through that journey and because our volume increased, we have actually increased initially some of the PUDO coverage to compensate for that volume. That was a good problem because clearly our volume grew as we really went to market and revitalized the Mondial relay offer. But now we're at that point where you can see the locker development and not just the locations, but the size of lockers are quite considerable where we're at that critical tipping point. And you can start to see how that operating leverage is playing through as we start to sort of optimize the network. But certainly it's not about losing a location, it's about replacing or finding new ones right so it's sometimes we may have to even find new ones that uh that really the current puddle location didn't couldn't serve and maybe couldn't even host a locker so we have to find an adjacency in that region but you know it's all about the density it's all about the coverage and it's all making sure we can serve the customer within that area and clearly that will continue as rafael said we will keep puddles right it North Star will be 100% APM, but there is a pragmatic reality in certain locations. We will still need PUDU coverage for one, because we can't find a locker location for a variety of potential structural reasons, or we need overflow capacity a certain time of year that we feel that the PUDU can help us serve for that particular period. But again, that should be the less than the majority of what we're really servicing through APMs.

And then perhaps a second question, if I may. The ASUS contract you announced earlier this week, D plus one, apparently that's unique for the UK. I was not aware of that as far as Altspalm was concerned. Perhaps you can share some thoughts on that. I can imagine if it is so unique that it will attract other retailers as well.

Yeah. I think the important thing here, it's unique in the terms of clearly it's offering D plus one to lockers and clearly that doesn't exist or has not existed in any market in particular, certainly the UK, because no one's had the locker coverage. And two, when clearly you have the service offering for D plus one to lockers, Your capacity for delivery in Windows is well expanded because from a customer choice point of view, now they have a 24-7, seven days a week solution. And that's quite important. So it's not just D plus one in that capacity. It's seven days a week. And that's also to emphasize. So, you know, clearly it's great to have ASOS on board. It clearly demonstrates the tipping point now we're at in the UK market where brands like ASOS now want to promote that offer actively to their B2C clients. And, you know, that's what's exciting. So, you know, this is what we set out to do. It's what we're now starting to see with the increase in the coverage in the UK and clearly you know, integrating Yodel merchant base into that clearly even expands that opportunity even further.

That's clear. Thank you.

Thank you.

And just back to the webcast questions.

Yeah, just back to the webcast questions. We've got one from Francesco at JP Morgan. Can you please provide your view on the upcoming debt maturities? Do you plan to come back to the market anytime soon to refinance the euro bonds, considering that they stepped down to par in July?

Yeah, I'll take that question. Thanks, Francesco. As you know, we're talking to all of you about this, so this should not come as a surprise. There's been two phases. The first phase has been successful refinancing of the term loan that we had, that we've completed at the beginning of this year. We're now in quarter one. And that's been significantly oversubscribed. So that was very positive. We know there's a second maturity of the bonds ending in 2027. Here, obviously, we'll be looking at all possible opportunities and options we have. There is no urgency today. So we're going to be looking at what happens with interest rates. We'll be looking at the market volatility. Also remember that our current bonds are very attractively priced. So we also have to balance that. So it's going to be a question of looking at market opportunity versus the cost we have today. And we'll be reviewing that internally and with some advisors throughout the year. And when we will action, it will then be a question of maximizing the potential and the right moment to do so. But that will be clearly well above, well before the maturity of the bonds coming out.

Thank you. And Marco from Fairtree asks, can you comment further on the FX loss as this was the main reason to the miss in consensus EPS? The market seems to be taking this very negatively with the share price being down circa 6% since open.

Look, I'm not sure I buy into the conclusion you're making, but let's keep that offline. In terms of FX, I think what's important to note in the results, once you go below the operating profitability and the healthy profit that we're making and progress we're making, I think there's two elements below operating profit that cause a little bit of a quarter one effect, which is a significant phasing of tax payment, and then is the FX. If I just talk about those two instead of just talk about FX, if you eliminate the temporary shift of tax and you assume it would happen in Q2 like last year, then our free cash flows are by 23% and our leverage would be down to 1.8. So the underlying dynamics of the business, again, from a free cash flow generation, we would be in line with last year, we would be plus 23% up and our leverage would have been down. So we have to kind of put that aside and we'll recover that as we look into Q2. We will have the positive effect of not having to pay the taxes this year, whereas we did it last year. So that's on the tax side. On the effects side, first of all, this is a non-cash element. This is a revaluation of a 2.8 billion Polish zloty that we have between bonds, long-term facility, and the RCF. Again, if you exclude that, because we cannot impact FX and we'll see what happens for the rest of the year, then our net earnings will be up by 11% year on year. So a little bit of sanity on the numbers and understanding that FX is something that can quickly reverse and tax, which is just a phasing, you still see that free cash flow plus 23%, leverage 1.8 and net earnings plus 11%, which I still believe are strong numbers for quarter one.

Thank you. And moving on to Michael from Pure Alpha Investments. He says you guide higher revenue growth and volume growth. Is this due to mixed change or inflation of price per parcel? And if the latter, on which markets do you expect to inflate the highest?

Michael, I don't know if you – let me see if I can give a stab on that. Look, on the revenue per parcel and the increases, we see the biggest increases in Eurozone, and that's as what we talked before is the acceleration of B2C. but also the pricing that we've taken gives it there an acceleration. In Poland, it's slightly less as of what we talked about. It's a mixed effect that plays especially a role in Poland. But also, as we said, for the year, we expect for the full year that we'd still see revenue being ahead of parcel growth. And as I said, mainly in the Eurozone.

Yeah, just to comment, Javier, it is a factor of mix, really, at the core of it, because we're seeing a different B2C mix product coming in, which is good and healthy, and clearly at a different price point than historical baseline, which is good for us as we evolve the product mix. Yep.

And the last question for today comes from Peter at PKO. What are the year-on-year dynamics of volumes with Allegro in first and second quarter?

Happy to answer that question. So, as you know, Peter, we don't disclose volume of a particular merchant. What we can comment is that we observe exactly the same trend for the last three to four years. Diversification, Allegro as a person of our volume, is declining while our total volume as a total volume is growing and the growth of non Allegro, other marketplaces, verticals, and SMEs, which is much more dynamic, ensures further diversification and support that better margins what is also visible in Poland results for Q1. So the higher profitability is coming strictly from that point.

Okay, that's it, Rafa, that's all we've got today. So I pass it back to you for your closing remarks.

Thank you. Thank you all for joining today's earnings call. I'd like really quickly to wrap up by highlighting a few key points from today's presentation. So first, we've delivered another strong quarter with double-digit revenue and EBITDA growth. Our 22% year-over-year revenue increase clearly demonstrates the robust fundamentals of our business model and the effectiveness of our strategic initiatives. Our international expansion continues to accelerate and the acquisition of Yodel significantly strengthens our position in the UK, Europe's largest e-commerce market, taking our market share to approximately 8% and creating a solid foundation for future growth. Just a quick reminder, at our IPO, we said our ambition is to have 4% of the UK market. We doubled that already. And post-network expansion remains unmatched. as we've reached an important milestone 50,000 APMs first, 50,000 APMs making us the largest independent local network in Europe. And this growth not only supports our ambitious business objectives, but also addresses increasing customer demand for convenient and sustainable delivery options. In terms of our performance in Poland, despite softer market conditions, remains impressive, driven by strong user growth, customer-loyal merchant relationships. Just a quick reminder, We are 90% of out-of-home markets. So we are the market. We cannot pass this 100% bar of the market being 90% of the out-of-home APM market. And a consistent preference for impulse APMs, underscored by our outstanding net promoter score of 77 points, reaffirms our market leadership and customer-centric approach. Internationally, we continue to significantly outperform market growth, particularly in key markets such as France and the UK. And the shift towards automation, higher quality service and increased adoption of APMs, which is already very visible, are directly contributing to margin expansion and enhanced profitability. And we are also actively working on innovative projects aimed at enhancing customer centricity and loyalty, leveraging AI-driven tools. AI is already proving its value by significantly boosting our operating efficiency, but also enabling us better meet customer expectations. But also something that's very important, and maybe people are missing, AI is changing the way people buy. Last two months, has shown a tremendous change in terms of using AI assistance, AI agents, and our customer behavior will dramatically change in coming quarters. We being the agnostic player, teaming up with the leaders across the globe, strongly believe we'll benefit from that shift. Finally, looking ahead, our upgraded outlook for 2025 reflects our confidence in our strategic direction and growth prospects as well, especially with global integration. While mindful of external market conditions, we remain disciplined in managing our investments, maintaining strong financial discipline, cost structure, but also stable leverage ratio. So thank you again, guys, for your continued support and confidence and impulse. Thank you for your time.