bpost third quarter 2020 results

Continued strong Parcels & Logistics performance further accelerates the mix shift and drives outlook upgrade

Third quarter 2020 highlights

  1. Group operating income at EUR 972.9m, +.4% compared with the same period last year, fully driven by continued strong performance in Parcels & Logistics Europe & Asia and North America.
  2. Group reported EBIT at EUR 65.1m, +.5%. Adjusted EBIT at EUR 69.5m (margin of 7.1%).
  3. Accelerated mix shift. Strong e-commerce driven performance in Parcels & Logistics Europe & Asia and North America further accelerates the mix shift with their combined adjusted EBIT contributions (EUR 38.5m) exceeding Mail & Retail adjusted EBIT (EUR 35.7m) for the second consecutive quarter.
  4. Mail & Retail reported EBIT at EUR 35.1m. Adjusted EBIT at EUR 35.7m (7.7% margin), down only EUR 2.7m explained by stellar growth in parcel volumes handled through the mail network for Parcels & Logistics Europe & Asia. Underlying mail volume decline proving resilient at -8.2% and better than pre-COVID-19 guided -9 to -11% range.
  5. Parcels & Logistics Europe & Asia reported EBIT at EUR 29.0m. Adjusted EBIT at EUR 29.7m (11.3% margin), up EUR 19.4m thereby nearly tripling. Strong margin improvement is driven by stellar growth in parcel volumes handled through the mail network. Parcels B2X volumes up +I.0% year-over-year.
  6. Parcels & Logistics North America reported EBIT at EUR 5.6m. Adjusted EBIT at EUR 8.7m (2.9% margin), up EUR 14.0m mainly driven by Radial North America, which recorded continued high growth from existing customers and clients launched in 2019 (E-commerce logistics operating income +.2%), thereby benefitting from positive operating leverage.
  7. COVID-19. Key priority is to protect the health and safety of our employees and customers. As from this quarter, COVID-19 impacts are no longer separately disclosed since disentangling its effects from the observed business developments has become increasingly artificial and therefore less meaningful.
  8. Ransomware attack. On October 15th, 2020, Radial North America experienced a ransomware attack impacting some of its US operations. Meanwhile, Radial has managed to regain sufficient functionality to allow it to restart fulfilment operations at all of its locations. For more details, refer to note 22 (Events after the reporting period).
  9. Outlook 2020. Based on the current situation and facts and including the estimated financial impact of the ransomware attack, the previously reconfirmed 2020 group adjusted EBIT guidance of EUR 240-270m can be revised upwards to at least EUR 270m. Due to the second wave of the pandemic and lockdown measures taken, the visibility for the fourth quarter is however limited.
  10. Strategic update and revised capital allocation framework, including new dividend policy, will be communicated to the market on December 8th, 2020.
  11. S&P reaffirms the long- & short-term credit rating at A/A-1, outlook stable.

Jean-Paul Van Avermaet, CEO of bpost group

“I’m proud to announce excellent third quarter results of bpost group where operating profit nearly doubled from last year. This is in the first place thanks to our fully committed employees worldwide, who have contributed in the most outstanding manner and who also today in very difficult circumstances bring out daily the best of themselves for our customers worldwide. In light of this continued positive earnings momentum we can raise our full year 2020 group adjusted EBIT guidance to at least EUR 270m. The world is changing at an astonishing pace, where COVID-19 has boosted e-commerce affinity and adoption and fuelled strong performance in our European and North American Parcels and Logistics divisions. Parcels & Logistics Europe and Asia EBIT nearly tripled while being positive in North America for the second consecutive quarter, resulting in a higher combined contribution of these business units to the group EBIT than Mail & Retail. This demonstrates that our business transformation is the right way forward for a viable and sustainable future.”

“We continue to invest in additional capacity with a new fulfilment site announced in the US, 2 additional parcel sorting machines installed over the summer and now fully operational in Belgium as well as plans to expand Active Ants in our home country over 2021. As we continue to navigate the unknown with the second wave of the pandemic and new lockdown measures taken, we at bpost group are fully ready for the end of year peak to successfully meet our customers’ expectations during the most important season of the year. Of course, our key priority is to protect the health and safety of our employees and customers.”

“Since early this year, I’ve been working with the executive management team on the future strategic directions for bpost group. We’ll be happy to present the outcome of this exercise to you on December 8th, 2020.”

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Source: bpost

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