Challenging macro-economic conditions mitigated by strong parcels volumes, price increases and continued focus on productivity and cost control.
First quarter 2023 highlights
The compliance review of the press concessions have been voluntarily extended to other tenders and public contracts. Preliminary results of ongoing reviews revealed that margins on certain services provided to the Belgian State may not be acceptable under applicable Laws and that certain of those services may not have been awarded in accordance with applicable Laws, leading bpostgroup to withdraw its full year 2023 adjusted EBIT guidance of 240-260 mEUR. Pending further legal and financial analysis, preliminary estimates indicate a negative EBIT impact of 25-50 mEUR on the full year 2023 guidance, in relation to the performance of these services in 2023. The results of the first quarter of 2023 include ¼ of the lower end of this range, i.e. a decrease of 6.3 mEUR of revenues has been recognized at Belgium level in the first quarter 2023. bpostgroup is currently not able to provide more information on the impact in relation to past revenues and has no visibility on when any possible cash outflows may occur in this respect, pending further legal and financial analysis. Please refer to the note “Contingent liabilities and contingent assets” for more information.
- Group operating income at 1,048.9 mEUR, +1.0% compared to last year.
- Group adjusted EBIT at 77.6 mEUR (margin of 7.4%) down by -16.5% compared to last year. Group reported EBIT at 74.4 mEUR.
- Total operating income at 566.4 mEUR ( +3.5% excluding Ubiway Retail ).
- Underlying mail volume decline of -8.8%, nearly offset by positive mail price/mix impact.
- Parcels volumes increased by +9.1% and price/mix impact of +4.9%.
- Opex increase – excluding Ubiway Retail – driven by annual impact of 6 salary indexations mitigated by FTE reduction.
- Adjusted EBIT at 63.7 mEUR ( 11.2% margin ) and reported EBIT at 63.5 mEUR.
- Total operating income at 165.9 mEUR ( +.3% ) driven by continued expansion of Radial EU and Active Ants (+.6%) and cross-border sales increase supported by recent customer wins in Asia and IMX integration.
- Opex increase ( +.4% ) from higher transport costs in line with volume development, IMX integration and higher payroll costs, as well as expansion-related expenses.
- Adjusted EBIT at 7.8 mEUR ( 4.7% margin ) and reported EBIT at 6.9mEUR ( 4.2% margin ).
E-Logistics North America
- Total operating income at 338.6 mEUR ( -1.4% or -5.5% at constant exchange rate ), reflecting lower volumes at Radial and Landmark US (Amazon insourcing).
- Opex decrease ( -1.4% or -5.3% at constant exchange rate ) from stronger variable labor management and productivity gains.
- Stable EBIT and profitability despite adverse market conditions. Adjusted EBIT at 15.1 mEUR ( 4.4% margin ) and reported EBIT at 12.9 mEUR.
Philippe Dartienne, CEO a.i. of bpostgroup: “Despite challenging macro-economic conditions bpostgroup continues to perform well, achieving good operational execution and top-line development in this first quarter. Management measures and the commitment of all our employees are paying off and we can all be proud of this collective effort. We continue to execute on our strategy and to progress on our growth and transformation plan.
Unfortunately, further to preliminary results of our compliance review of services provided to the Belgian State, bpostgroup has been caught up last week by some elements of the past and had to withdraw the guidance for 2023. In a spirit of integrity and full transparency, we are taking all necessary measures to get to the bottom of this matter and we will continue to work tirelessly to earn and maintain the stakeholders’ trust in bpostgroup and its employees. I am confident that by continuing to prioritize compliance, we will emerge from this situation stronger and more resilient than ever.”
FY23 EBIT guidance withdrawn despite strong performance in the first quarter
Ongoing process to get clear and exhaustive view of the financial impacts so as to reinstate as soon as possible an updated guidance for 2023
On February 23, 2023 bpostgroup presented its financial guidance for 2023 with adjusted EBIT expected to range between 240-260 mEUR.
The operational performance of this first quarter slightly outperformed the initial plan, and underlying operational parameters remain globally intact. Sales, pricing, cost and productivity levers remain key to face market pressures and the bpostgroup transformation continues as planned.
Following preliminary results of the compliance review of services provided to the Belgian State (in scope 104 mEUR of revenues in 2022), bpostgroup had to withdraw this annual guidance on April 24, 2023. Pending further legal and financial analysis:
preliminary estimates indicate a negative adjusted EBIT impact of 25-50 mEUR for 2023, in relation to the performance of these services in 2023.
bpostgroup is currently not able to provide more information on the impact in relation to past revenues and has no visibility on when any possible cash outflows may occur in this respect.
bpostgroup strives to get as soon as possible a clear and exhaustive view of the financial impacts so as to reinstate an updated guidance for 2023. Given the intrinsic specificities of each of the contracts in scope and the nature of factors under review, the timing of this complex process - which will involve parties external to bpost - remains uncertain.