Earnings call transcript: Bpost NV’s Q4 2024 results show mixed signals

Bpost NV reported its Q4 2024 earnings, highlighting a 10% year-over-year increase in operating income to €1.335 billion. The company’s stock experienced a significant decline, dropping 21.54% to €2.08, after announcing a net loss due to a €300 million impairment on its Radial US unit. Trading at just 0.4 times book value and a P/E ratio of 4.04, InvestingPro analysis suggests the stock is currently undervalued. The company did not declare a dividend for 2024, signaling caution amid ongoing restructuring efforts.

Key Takeaways

• Bpost’s Q4 operating income rose by 10% year-over-year.
• The company reported a net loss due to a €300 million impairment.
• Stock price fell by 21.54% following the earnings announcement.
• No dividend was recommended for 2024.
• Strategic focus is shifting towards mid-sized clients and digital logistics.

Company Performance

Bpost NV’s performance in Q4 2024 reflected growth in operating income, driven by strategic shifts and restructuring efforts. The company’s decision to focus on mid-sized clients and enhance its digital logistics capabilities has started to show results. However, the financial impact of the €300 million impairment on Radial US overshadowed these gains, resulting in a net loss for the quarter.

Financial Highlights

• Total (EPA:TTEF) operating income: €4.3 billion for 2024
• Adjusted EBIT: €224.9 million, representing a 5.2% margin
• Q4 operating income: €1.335 billion, up 10% year-over-year
• Group net result: Negative due to Radial US impairment

Outlook & Guidance

Looking ahead to 2025, Bpost anticipates high single-digit growth in total operating income. The company projects adjusted EBIT between €150 million and €180 million. While the Last Mile segment is expected to see a slight revenue decline, the 3PL segment, buoyed by the Stasi acquisition, is projected to grow 20-25%. Cross-border operations are expected to achieve mid-single-digit organic revenue growth.

Executive Commentary

CEO Chris Peters emphasized the company’s strategic transformation: "2024 was about accepting our new identity, integrating its consequences and from this, building a strategic vision for the future." CFO Philippe D’Arcien added, "We are gaining the necessary perspective on the operational, strategic and financial implications of the recent events."

Risks and Challenges

• Impairment costs: The €300 million write-down on Radial US highlights ongoing challenges in the North American market.
• Market contraction: The US market continues to contract, with a 20-25% decline in 2023.
• Postal mail decline: Structural decline in postal mail is expected to continue, affecting traditional revenue streams.
• Competitive pressures: Intensifying competition in the 3PL and cross-border segments could impact market share.
• Potential strikes: Labor disputes could disrupt operations and affect future performance.

Q&A

During the earnings call, analysts inquired about the ongoing parcel volume growth, which Bpost confirmed is in the high single digits. Questions also focused on Radial US’s warehouse utilization, currently at 70%, and the challenges posed by declining mail volumes and potential labor strikes.

Full transcript - bpost NV (EBR:BPOST) Q4 2024:

Ben, Conference Coordinator: Ladies and gentlemen, hello, and welcome to the BPOXX Group Fourth Quarter twenty twenty four Analyst Call. My name is Ben, and I will be your coordinator for today’s event. Please note that this conference is being recorded and for the duration of the call, your lines will be in listen mode only. However, you will have the opportunity to ask questions at the end of the call. I will now hand you over to your host, Mr.

Chris Peters, CEO of BIPOST Group. Please go ahead,

Chris Peters, CEO, BPOXX Group: sir. Good morning, ladies and gentlemen. Welcome to all of you, and thank you for joining us. Today, I will be presenting our fourth quarter and full year twenty twenty four results as CEO of BPOXX Group. With me, I have Philippe D’Arcien, our CFO as well as Antoine Levesque from Investor Relations.

We posted the materials on our website this morning. We will walk you through the presentation and will then take your questions. As always, two questions each would ensure everyone gets the chance to be addressed in the upcoming hour. Let’s get to the highlights of the full year results, and Filip will then walk you through our fourth quarter ’twenty four results. On page three, you can see that BPO’s group delivered results in line with its full year guidance with Total operating income exceeding EUR 4,300,000,000.0, our group’s adjusted EBIT reached EUR 224,900,000.0, representing a margin of 5.2% at the upper end of the million to million guidance reaffirmed in November with our third quarter results.

Our overall performance reflects the strong contribution of Stasi. We are pleased with Stasi’s performance over the past five months, delivering approximately million in revenues and million in EBIT, corresponding to an EBIT margin of 12%, ranking among the highest in the logistics industry. This solid performance aligns with our expectation despite a seasonally softer start in August. However, when excluding Stasi’s strategic contribution and looking at performance on a like for like basis, the overall picture is different. Revenues declined approximately EUR $270,000,000, driven mainly by two key factors, a reduction of EUR 50,000,000 in press revenues following the new press contracts that took effect after the end of the press concession on June 30 and a decline of more than $210,000,000 in radial U.

S. Revenues impacted by a softer U. S. Market environment with lower market volumes and increased competition among 3PL providers. Despite these pressures, domestic parcel volume continued to grow, delivering a solid performance in 2024 with an increase of more than $30,000,000 in revenue.

However, this is, of course, remained insufficient to offset the top line decline. Profitability was also impacted with EBIT declining by approximately EUR65 million year over year. In Belgium, EBIT decreased by EUR45 million with EUR33 million of this decline in the second half of the year, primarily due to the press impact mentioned earlier. And in North America, top line pressure at Radial and Landmark was partly offset by Radial strong productivity gains helping to mitigate the impact. Also in these adverse market conditions in The U.

S, we have recently learned of the departure of several customers, some of whom are significant in size and have a material impact on Radial’s top line going forward. We therefore had to reflect the departure of these customers in our future growth projections as well as the challenging market conditions translating into lower sales from existing clients and a more cautious outlook regarding the contribution of future customers. This led us to recognize an impairment of million on radial U. S, bringing the book value from million to million. Consequently, our reported group net result stands at minus million.

And based on this, the board of directors will recommend to the general meeting in May not to distribute a dividend this year. Before handing over to Philippe for the fourth quarter results, I’d like to take a moment to company, arrived in November 2023. I discovered very quickly a great deal of capabilities and expertise within BIPOST Group. BIPOST Group and BIPOST in Belgium suffered from an identity crisis. We are international but not global.

We still have a lot of postal products, but we are no longer a postal company. 2024 was about accepting our new identity, integrating its consequences and from this, building a strategic vision for the future. We built synergies throughout the group and leverage those capabilities to create a better service offering to all our clients, whether they are operational in Europe, North America or Asia. We no longer pursue big clients with big volumes to simply fill up our warehouses. We still cherish our big clients, but we want to become less vulnerable.

That’s why we now focus on SMEs. We focus on diversified verticals and we want to fill our warehouses with multiple clients. We want to create value for our clients. We have a clients. We have a range of capabilities.

Combined, we can create a broad range of solutions with which would be almost impossible for the client to recreate by themselves. In 2024, we laid the Fundeisen for this big shift in 2025. BIPOS becomes a digital expert in parcel size logistics operational in two regions, North America and Europe. And what has then changed for the group since then? So what you can see here is that we launched our strategic vision to become this regional digital expert in parcel size logistics.

And therefore, we have now organized the company around three dedicated business units that each strengthen the group and also can become really leaders in the respective sectors that they are present. We also leverage the capabilities across the group to make sure that we can bring good solutions to our clients and we diversify our portfolio with clients in the B2B space. And the Stasi acquisition, as you can see, in the biggest was very successful. We’re integrating it today. It’s on track.

And also in terms of the synergy creation, we’re fully on track for this. Meanwhile, we have developed a transformation roadmap. We have launched several pilots meanwhile, and we will be ready to scale some of them later down the year. And we have, again, engaged in investing in some of our mail products so that we can prolong the lifetime going forward. If we then zoom into the different PUs that we have at the 3PM side, looking at North America.

There, the focus is that we shift the portfolio to ensure that, it’s more diversified and less dependent of enterprise clients, of which you also have seen that one of those risks was materialized and led to the impairment. So the strategy is still the same as the one that we discussed last year. We will have an intensified focus to realize that. Don’t forget that meanwhile, we also drastically reduced the cost and continue to reduce the cost structure and the efficiency of our operation over there. And we have launched a new offering specifically focused on mid sized companies, which is called Radial Fast Track, that we are piloting as we speak with our first clients in The U.

S. Meanwhile, as well, synergies between Stasi Americas and Radial have been realized or are on the way of being realized in the coming months. If you look at at European sites, the integration between Stasi Active Ants and Radial Europe is on track, meaning that meanwhile, they’re already exchanging clients, bringing to those clients the best of capabilities we have in into the group and also ensuring that we have a higher fill rate of our different warehouses. If we then zoom into Benet last mile, there we need to accelerate, of course, from a company which is mainly a postal company in its DNA towards a parcel size logistic operator. And for that, we are now exploring new market segments that could create a new trajectory of growth.

So we don’t limit ourselves to the B2C segment. We continue to focus on that and we continue to focus on postal, but we add to that the B2B segment and the C2C segment. And as said before, we launched several pilots

: in this area, which look very

Chris Peters, CEO, BPOXX Group: promising and some of them pilots in this area, which look very promising and some of them will be scaled in the second half of this year. Also, we extend our out of home delivery network. We have already a strong Pluto network, but we will increase it also with parcel machines, automatic parcel machines and lockers so that we have can create full convenience whatever the client need is at that moment. And then we have, of course, as well, evolved the press concession towards a press contract in the distribution model, which is on its full way, and that transformation is also happening today in Flanders. And we’re preparing to do the same in the South in the coming years.

And also, we have modernized some of our mail products, making them more convenient for the clients so that we can count on an extension of a lifetime going forward. And at the cross border side, we have further integrated activities in the other of the other business units into the service offering that we have so that we have a complete end to end service offering. And of course, we further defend our lanes, meaning that also there, we have a higher focus on mid sized clients. And also, we are actively looking at a couple of additional inbound lanes that we can develop in the coming years. From here, I will then hand over to Filip, who will lead us through the results.

Philippe D’Arcien, CFO, BPOXX Group: Thank you, Chris, and good morning to all of you. As you can see on the highlights on Page five, our group operating income for Q4 stood at €1,335,000,000 and increased year over year by close to 10%. Percent. At constant perimeter, excluding the $240,000,000 consolidation impact of Stasi, our operating income decreased by 8% or 96,000,000, mainly due to ongoing pressures in North America, lower price revenue tied to the new price concession started on July 1. While on the other hand, domestic mail remained resilient with less than 3% decline in revenue, and our domestic parcel revenue grew by more than 7%.

Our group adjusted EBIT stood at €84,000,000 with a margin of 6.3% or at 57,600,000 while excluding the 26,400,000.0 EBIT contribution of Stasi. On the like for like basis, this represents a decline of 16,500,000.0 compared to last year. In line with Q3, and as Chris had just explained, for the full year, the decline is mainly attributable to press where where the lower revenue have a direct impact on EBIT and to a lesser extent to North America where our peak management and our profit gains helped attenuate the top line pressures. Before diving into the financial performance of our business unit, you will note on slide six that our reported EBIT amount to a negative €220,000,000, which mainly reflects the €300,000,000 impairment loss on radial as mentioned by Chris. Let’s move now to the details of our three segments.

I’m on page seven with the last mile segment. We see that revenues declined by 24,000,000 to $591,000,000. In line with Q3, domestic mail recorded close to $28,000,000 decline in revenues, of which $21,000,000 are coming from press, mainly due to the new contracts with the editors following the end of the press concession on June 30. Excluding press, mail recorded an underlying volume decline of 8.1% for the quarter with a good resilience in advertising mail thanks to our commercial efforts and contribution of new customers. The decline in mail volume led to a revenue impact of minus €19,200,000 overall, though this was partially offset by a positive price and mix impact of plus 5.3% or plus €12,600,000.

As a result, the domestic mail revenue decline was limited to under three percent or roughly minus million year over year. Parcels bedroom recorded in Q4 an increase of €10,700,000 in revenue or plus 7.4%. Parcel volume grew by 6.9% year over year following 8.7% in q three and mark marking a strong uptick compared to the plus 2.9 and plus 2.5% growth in q one and q two, respectively. The strong volume growth was driven by significant contribution of major marketplaces within our customers’ portfolio and their outperformance relative to overall market growth. This bring our full year 2024 volume growth to plus 5.3% despite ongoing challenging market condition, including negative consumer confidence index in ’24 with further deterioration in the fourth quarter, and inflation in Belgium still ex exceeding 3% and facing continued upward pressure.

As our volume grew, growth was mainly driven by live customers. The price mix only improved by plus 0.6% in Q4. Proximity and convenience retail network revenue decreased by €4,000,000 with lower banking revenues offsetting the indexation of the management contract. And revenues from value added services remain operationally stable. However, this was offset by the repricing of tech service, which is now accounted for within value added services instead of in other revenue as in the previous year.

This is the last time we will have to represent this restatement as from now on, next quarter onwards, we’ll have again a clear view of the performance without this reclassification impact. Our personal revenue at Dyna remained nearly stable in the quarter, supported by supported in the mix by a recovery of both one man and two man delivery. Let’s move now to the P and N of last mile on page eight. In our intersegment and other revenue, beside the restatement impact of repricing of the state I just explained, we have on that line some higher segment revenue from inbound cross border volumes handled in the domestic network from the cross border segment. Altogether, this brings our total operating income down by 3.6% or minus 23,000,000.

On the cost side, our OpEx including G and A slightly decreased by 1.9% or €11,000,000, mainly driven by, on one hand, some high salary cost as our cost plus FTE increased by 3.4% year over year following the impact of two salary indexation in December 2023 and June 2024, while FTEs slightly decreased despite higher parcels volume and on the other end, lower cost of sales and lower D and A. To summarize, our adjusted EBIT declined by 11,500,000 year over year, mainly due to a drop in press revenue. While the recent joint revenue and the solid parcel volume growth could not fully compensate the increased payroll cost driven by inflation. Moving on to 3PL on page nine. 3PL revenues increased by 151,000,000 but declined by 62,000,000 or minus 15% while excluding the 240,000,000 contribution from Stasis consolidation in the quarter.

In 3PL Europe, a constant perimeter, radial and active end sales were up 14.6% year over year, continuing the trend of previous quarters. This growth was fueled by customers onboarding as part of our international expansion efforts and upselling activities targeting existing customers. In Sri Pure North America, revenue decreased by €69,000,000. At constant exchange rate, this correspond to a decrease of 20% in line with previous quarters. As the lower sales from existing customers and the in year contribution of new customer wins cannot compensate the client churn we announced last year in the context of economic softness and market overcapacity.

Let’s move to the P and L of 3PL on Slide 10. Excluding Stasi, while the operating income decreased by 14.9%, our operating expenses and G and A decreased by 15.3%, primarily driven by lower variable OpEx in line with radius US revenue trends and a sustained improvement of radial US variable contribution margin rate. Our VCM has increased by around 5.5% year over year, reaching a record high in peak periods and delivering an impact of around $18,000,000 compared to last year. Year to date, this correspond to a cumulative efficiency gain of more than 45,000,000. This efficiency gains help alleviate the top line pressures of minus 62,000,000, and we see that at constant parameter, we manage to protect our adjusted EBIT with a limited EBIT decline of 1,300,000, bringing it down to 20,200,000.

In terms of reported EBIT, we see that the 300,000,000 impact relating to the impairment of radio US brings a book value from $9.12 to €612,000,000 Regarding Stasi, the EBIT contribution totaled 26,400,000.0 with a margin of 12.3%, clearly highlighting the strategic importance of the acquisition to the group’s performance. Before moving on to our cross border activities, I would like to take a moment to review the performance of Stasi and retail US. On one hand, Stasi has only been consolidated within the group for five months, and we want to provide you with more perspective on its full year performance. On the other hand, rad Radial US has faced top line pressure over the past two years. We would like to take a step back and put it into perspective the impact of the protective measures that we have implemented.

Let’s start with Tasi on slide 11. In the first graph, we illustrate three years three years of revenue progression from ’23 to ’25 with a CAGR of approximately two three to 5%. This is fully in line with our plan despite a slight slowdown in ’24 when Stettie was still focused on its state process until August as well as some deceleration during the integration phase of their acquisition in The US, where the growth strategy right now seems to be back on track. Looking forward beyond ’25, we anticipate a gradual acceleration in growth reaching to its full potential in 2027. This will be driven by cross selling opportunities between Stasi, Retail Europe, and ActiveVentz and also other parts of the group, leveraging the complementary of our B2C, e commerce logistics and B2B offering as well as our geographical footprint.

Also in this graph, we see the EBITDA margin on the French GAAP, three f r 16, so excluding the leasing impact. Given Stasi local accounting framework, this is the only common metric that will allow us to benchmark several years of performance before and after the acquisition by BIPOST as we report on the IFRS. We observed that the margin was around 12.5% in 2023. And after a slight decline in ’24 linked to the transition phase I just mentioned, we expect margin improvement towards up to 13% in 2025. To benchmark, this is an in IFRS framework that we are familiar with.

The second graph showed that this local cap EBITDA margin translate into IFRS EBITDA margin of nearly 20% for the five months consolidated in our IFRS account, which outperforms, as Chris mentioned it already, industry margin in logistic industry. In terms of CapEx intensity, we’re around two to 2.5% of revenues. And finally, it’s also worth noticing that part of the rationale behind this acquisition was to unlock value creation at Radio Europe and active events by leveraging stasis management expertise and people’s competencies in ecommerce logistic. We see strong potential for both growth and profitability in this area as well. Now turning to Radio US on page 12.

For several quarters now, we are delivering the same message. We are experiencing revenue pressure, and we are working on productivity improvement to mitigate the impact on EBITDA and EBIT as much as possible. Taking a step back and looking at several years of data, this is exactly what the following graph illustrates. We can see a continuous improvement in IFRS EBITDA margin increasing by 9% from three point one percent five years ago to 12.1% in 2024. And despite a $390,000,000 revenue revenue decline equivalent to eight 28% over two years, EBITDA has only decreased by $12,000,000 revenues in ’25.

And despite deployment effort targeted to midsize customers in the diversified portfolios, we will not be able to reverse the trend in the short term. Now our focus is not on size, but on profitability and resilience of our portfolio. To put this in in perspective with the three point US market, some industry reports indicate that the market contracted by approximately minus 20 to 25% in ’23. Our case is therefore not an isolated one. Additionally, other sources project research show a growth towards twenty twenty twenty 02/1930, sorry, with a high single digit CAGR.

We are therefore convinced that we will emerge from this downturn better equipped thanks to efficiency improvement and a more robust and rebalanced customer portfolio. Finally, in terms of CapEx, we see that compared to Stasi, Radial US has a higher CapEx intensity around 4% to 5% of revenue. Over the coming years, we will work towards bringing this down to the range 3% to 4% while continuing to refine the profile of our customer portfolio. Moving now to our cross border business on page 13. Cross border Europe revenue rose by 2,400,000 or plus 2.4%.

This growth was driven by increased volume from China to Belgium, our expansion efforts in Europe, and improving market condition in UK. This was nevertheless partially offset by Asian consolidator shifting away from untracked services where we are well positioned. Similar to previous quarters, our top line in North America remains under pressure. Cross border North America revenue declined by €15,300,000 or minus 18 declined by €15,300,000 or minus 18%. As Landmark Global reported its eighth consecutive quarter of year over year revenue decline and continue to face commercial headwinds.

However, this was partially mitigated in the quarter by strong peak volume growth, further boosted by a volume transfer during Canada Post strike. Overall, our global cross border operating income decreased by €13,000,000 or 7% year over year. As shown on page 14, our OpEx and D and A decreased at the same time by 5.8%, reflecting lower volume driven transportation costs, reflecting lower North American volume alongside alongside higher volume shipped to Belgium, which has a positive impact in terms of mix and slightly higher salary cost tied to the ramp up of our international activities, inflationary pressures to the extent, absorption of unexpected peak volume tied to Canada post strike. Overall, from a profitability standpoint, the 4,000,000 EBIT decline and year over year margin dilution reflects ongoing challenges at landmark US. Moving on to the corporate segment on page 15.

Both the external operating income and the next OpEx and D and A remain stable despite higher FTE and inflationary pressures resulting from two salary indexations. Adjusted EBIT therefore remained stable at around minus 10 million. Then let’s move to the cash flow on Slide 16. The main items to flag here are the following. Cash flow from operating activities before changes in working capital stood at 160,000,000 and increased by 30,570,000.00 versus last year, mainly reflecting higher EBITDA generation.

Change in working capital and provision stood at plus 96,000,000. This variation primarily stood from a shift in accounts receivable due to the termination of the press concession, which was typically settled in the following year and was still recorded on the balance sheet last year. The net cash outflow from investing activities totaled $6,063,000,000, which CapEx reaching 64,000,000 for the quarter. On a full year basis, CapEx amounted to 147,000,000, aligning with our 150,000,000 guidance. This guidance has been tied up by 30,000,000 from our initial outlook, reflecting the financial discipline amid unfavorable market conditions.

This item consists of our free cash flow and on the level of the net cash outflow from financing activities that amount to minus $75,000,000 an improvement of plus of $126,000,000 year over year driven by the repayment of our term loan in December and higher payment related to lease liabilities in 2024. Chris, this brings us to the strategic priorities of 2025.

Chris Peters, CEO, BPOXX Group: Thank you, Philippe. As you can see, we faced in the early part of the year a couple of important challenges. First of all, there was in the context of the social unrest in Belgium, mainly driven by an overall social climate with the new government. We had a strike that impacted the company to some extent. And secondly, of course, the churn of a few clients in U.

S, of which one enterprise size client made as well an impact and led to the impairment. That being said, I think that we have also many positive elements that also reinforce for us the confidence that we have developed last year the right strategy, a strategy that is focused on creating more resilience in our portfolio and also to be focused again and reconnect to growth of this company and profitable growth going forward. And for that, we are now convinced that 2025 will be a year where we will accelerate that transformation

: of

Chris Peters, CEO, BPOXX Group: the company to ensure that we have that. What are the highlights that we already have seen this year? First of all, Stasi has been for us a real good acquisition that we’ve done, both on the side of the speeds that we do today, the integration with rest of the business, but also in their organic business, we see a very good conversion of their sales pipeline in the early months of this year, which makes us very optimistic about the further forecast of this company. Second, we have had the best peak ever. We focused last year on creating more resilience in peak performance end of year, both in North America and in Belgium.

We’ve seen that we have treated much higher volumes at high quality. So we see that operationally, this company is fit to do the things that they need to do. So we’re very enthusiastic about that. And lastly, we launched a couple of pilots, some of them that are now in the evaluation stage. And there we see as well very promising elements that make us believe that the transverse capabilities that we have can lead to solutions that are value adding to our client and also, of course, value adding to the group.

And that’s where we want to focus the growth of the company. And in that perspective, we also will take a couple of steps now to reinforce the group. First of all, we will integrate the BPO’s group management with the BPO’s Belgium management, meaning as well that I myself will take the BPO’s Belgium CEO position as of May to have even a more strengthened and focus on the transformation of this company because, of course, an important part of the BIPOS group transformation will be situated in Belgium. And it’s important that we put sufficient effort also that will be Exco members being focused fully on the operations in Belgium and on the commercial success within Belgium. And we really look forward to accelerate with that the transformation.

And secondly, we had an interim CEO, Craig Simon, in U. S. Who did an excellent job in managing the company and helping us to further increase efficiency in that company. Of course, on a portfolio that is still in transition, but we’re happy to announce that Thomas Schmidt will join the company as of the March 17. And after the transition period between Craig and, Thomas, he will take the helm in radial U.

S, also accelerating there the increase of resilience portfolio and the shift towards the mid market. If we then zoom in on the different businesses that we have, so within the radial Europe and active ends. And there, we see a lot of capabilities that complement each other. And so we can now offer even more adequate solutions to our clients using the best of capabilities to bring to those clients. And secondly, we also ensure now that we have those same methodologies that Stasi has in building up a profitable, resilient client base that is multi client on a warehouse.

That is a capability that we’re bringing in on the other sides, ensuring that we have the same resilience on our different warehouses. North America, as said, we will soon onboard our new CEO. And also there, we will accelerate with radial fast track the onboarding of mid sized clients. It will take some time. As we have said already six months ago, we have a portfolio which still has vulnerabilities towards enterprise size clients that will move over time.

But what we see is actually that with the progress over the coming months, we will see that this risk is going down and that those clients are complemented more and more with smaller sized clients that give us less vulnerability on that market. In Benny last mile, as said, we will reinforce the leadership in that We will have a strong CEO focused on the transformation of task that we have within our operations. We will also have a CCO dedicated to that, and I will myself take over from Jose Donville, in the month of May to ensure also that the transformation is driven through in that organization. We continue to launch pilots, pilots that integrate the full capability also including the capabilities of the other BUs to ensure that we have a strong offer towards the segments that we don’t don’t serve yet, the B2B and the C2C segment. And also, we triple our capacity in lockers to ensure also that we have a 20 fourseven offering for all our clients.

And then finally, for the retail network, we are in preparation of the aid management agreement to ensure that we have a good offering that we can negotiate with the government in the second half of this year. And on the cross border side, we also will focus on more mid sized clients in the existing lanes to ensure that we can combine, our cross border offering with, the last mile areas that we have. So both in Belgium and in Canada, we have a last mile offering, and we see that that is a very attractive offering for our client. And second thing, what we do is we combine the cross border activity with 3PL activities. And there we have products like, for instance, launching new markets of certain oversupply.

So we have today people that use or 3PL capabilities in a certain market and then ask us that in a start up of a new market that we help them with cross borders to bring the parcels to this market and ensure that they can start before they’re investing in real 3PL capabilities in that new market. And finally, of course, we will, of course, open new lanes. We are opening, as we speak, new lanes that also are supported by the Stasi presence in certain countries in the South Of Europe. And so we look forward to a year of transformation. A lot of things will happen in the coming year.

You have seen in the figures that we have that we’re not yet fully there, but on the other hand, that we’re on the right track and that we look forward that this year will prove that we are on the right track and that we will make big steps towards a parcel sized logistics leader in the European and North American market. And I give now the word back to Philippe so that he can give us the outlook for 2025.

Philippe D’Arcien, CFO, BPOXX Group: Thank you, Chris. You have heard that transformation is a complex and lengthy process, and we cannot expect immediate results. From a financial perspective, 2025 will be a challenging year. While our transformation is well underway, we are also facing external headwinds, both anticipated and unexpected, over which we have varying degrees of controls and whose impact we can only mitigate to a certain extent. However, this must not distract us from our objective.

We remain resilient and stay the course. The contribution of Tasi, one of the first visible positive effect of our transformation, will help will help us navigate the challenges ahead. In Belgium, where we are managing the disruption caused by the end of the press concession in 2024 and more globally, the necessary reorganization in response to mail and parcel volume trends and evolving customer needs. In North America, where with a difficult market environment, we are also dealing with the unexpected loss of enterprise customers that we will address with the implementation of additional cost cutting measures and rebalancing our customer portfolio. While the group total operating income is expected to grow by high single digit percentage, the group adjusted EBIT in ’20 adjusted EBIT in ’twenty five is expected to range between 150,000,000 to 180,000,000, a decrease of 45,000,000 to 75,000,000 year over year despite the full year contribution of TES.

For the last mile segment, we expect a slight decline in total operating income reflecting a further €55,000,000 reduction in price revenues due to the new press contract that structural mail volume transactional and advertising driven by a structural mail volume decline of between 7% to 9%, only partially offset by price mix impact of between 4% to 5%. While the price increases are intent to offset some of the volume decline and inflationary pressures, they cannot only they can only partially mitigate this combined impact. While on the other end, parcel revenue are expected to grow benefiting from an underlying volume growth in the mid to high single digit range, complemented by low single digit price mix improvement. However, it’s important to emphasize that this does not account for any direct or indirect commercial impact of the strike we face in January as Chris mentioned it since it’s still too early to quantify them. As a reminder, in response to our planned organization of deliverance aiming at aligning with evolving main and parcel volume, our postal workers went on strike.

What began on February 5 was a few localized distribution centers gradually escalated, spreading in Wallonia to other distribution center and ultimately leading to shutdown of three of our five national sorting centers. The strike only ended last Wednesday evening on February 19. During this period, some parcels volume were redirected to competitors, which beyond this direct impact could have a long term consequences if they do not return totally or even partially to be post. We have now cleared the majority of the backlog accumulated during the strides and are very closely with our teams working to restore service quality and rebuild customer trust. Adjusted EBIT margin is expected to range between 2% to 3%.

Beyond the impact of structural demand decline, this reflects margin erosion from the new press contracts. As we mentioned, light July, with the gradual transfer of volume to MP is expected to align margins more closely with those under press concession. Nevertheless, in the early stages, we could not absorb the impact of lower press revenue on EBIT. The impact of two additional salary indexation of 2% each. Depending on the timing of the second indexation later this year, this currently represent represent an estimated cost increase of more than 30,000,000.

Delays in in plant sorry. Excuse me. So the total demand is delays in plant reorganization due to the strikes affecting our efficiency improvement targets. These headwinds highlight the urgent need to move forward with our reorganization efforts in Belgium. For the third party logistics segment, we expect revenue growth of between 20% to 25% in ’25, primarily driven by the full year contribution of Stasi compared to only five months in 2024.

On a pro form a basis, Stasi is expected to grow by a mid single digit percentage in 2025. While our European ecommerce logistics activities are expected to remain on their growth trajectory, we anticipate a net revenue decline at Radial US. This reflects the impact of recent enterprise customer losses we have just informed of and the contribution from new mid market customers, which is not yet sufficient to offset those losses. From an EBIT margin perspective, we expect a range of 4% to 6% for the segment. Stasis margin is projected to be between 1012%.

At Radial, we will continue to accelerate productivity gains, building on the strong progress we made over the past quarters and will further reinforce this with additional cost reduction measures to help mitigate the impact of top line pressure. At At cross border, we anticipate a mid single digit organic revenue growth driven by a gradual top line recovery of line landmark in U. S, supported by customer wins as well as continued growth in Europe and Asia with notably the expansion of new leads. The EBIT margin is expected to remain in the 11% to 13% range, reflecting slight dilution due to a shift of product mix with higher commercial revenue and lower postal revenues. It’s important to highlight that our guidance does not yet account for any potential impact from The US tariff on Canada announced on February 4.

The scope and their potential effect are still uncertain, and their implementation is currently on hold as negotiation are still ongoing. At the corporate level, we anticipate higher payroll costs due to two salary reduction in Belgium compounded by an increase of FTEs and higher operating expense to support our transformation initiative. Finally, we can expect our growth CapEx to be around $180,000,000 Gross CapEx remains a key priority to build our future, especially in the context of our transformation. However, given the current challenges, we will deploy growth CapEx investment as in the past within strict financial discipline and prudence. We are gaining the necessary perspective on the operational strategic and financial implication of the recent events.

We will reflect them in our projection and plan to hold a Capital Market Day beginning of June this year to present our strategy and financial trajectory in more detail. We are now ready to take your question. Again, two questionnaires will allow get the chance for everyone to be addressed in the coming thirty minutes. Operator, please open the line.

Ben, Conference Coordinator: The first question comes from the line of Mikael De Claire calling from KBCS. Please go ahead.

Mikael De Claire, Analyst, KBCS: Yes. Hi. Thanks for taking my questions. The first question would be on the Benet last mile. I’m just trying to understand the guidance a bit more there.

If I take the midpoint of your EBIT guidance and assume some revenue declines there, there is quite a big step down in the absolute adjusted EBIT of around $70,000,000, 80 million dollars according to my calculations. I understand, of course, that there is a bit of an impact from the press. I would assume $30,000,000 as what you have seen this year as well. But this still leaves a big gap, especially given that you also will likely have some tailwinds from the reversal of the strike impacts last year as the strikes from this year are not yet included. So this all seems a bit like an acceleration in the profitability decline.

I’m just wondering what is driving this acceleration? And maybe can you also elaborate a bit on what your current estimate would be on the strike impact in Belgium for this year? Last year, we had $11,000,000 but this year it takes a bit longer. So I think the impact will be a bit higher. And yes, just looking forward towards, let’s say, 2026 with mail volumes further decreasing, have we come at a bit of a tipping point?

What measures are you taking there? So that would be my first question. And just on the third party logistics, if I look at your outlook and the growth forecast for Stasi, I would assume that based on some maps that you expect Radio U. S. Again to decline by at least mid teen levels.

I’m just wondering if this is roughly a correct assumption. And if you can talk a bit more about the loss of these big customers and which were unexpected of course. And maybe also on the customer wins of SMEs, is that going a bit as planned or is that also lagging? Those would be my questions please.

Philippe D’Arcien, CFO, BPOXX Group: I start and you compliment. So, on Belenasmile, indeed, the, what we expect in 2025 is, again, an impact of the price concession. Also, keep in mind that we are transitioning from one model to another model, and there is always a lag between the moment we see the decrease in volume and the reorganization, the alignment of the cost structure that we could apply. There is always a lag, and this will still have any weight on the profitability in Vanilla Smile. The mail will continue to decrease not only in terms of natural trend, but also the price mix is only 4% to 5%.

So the net of the two will be negative while we had in certain previous years an offset from the price to the volume decrease. We will not expect that one. On parcels, the underlying volume, I expected, of course, to increase. No discussion on that one. So and it’s indeed, as you rightly pointed out, it does not include impact of the strike.

And I want to come back on the on the amount that you mentioned of, 11,000,000 in 2024. Just want to remind that this 11,000,000 were referring to a four day strike. We are in a totally different scenario right now. And what is really important to keep in mind, there is not only the volumes that you have lost during the strike, meaning that they’ve been redirected, our competition, our competitors, but there is or there might be a mid to long term impact in the sense that which speed these customers will come back either totally or partially. And then it’s really too early to, to, to assess it.

So, if you allow me, I would not make a quick computation saying 11 for four days, and you would multiply it for the number of days that we had we were in strike this year because it’s by far more complex this time, since it might have more impact on the midterm on customers. The question on ’26, for mail, we do not expect a slowdown in mail decrease. The the the trend should be the same. Nevertheless, as Chris mentioned it, we are investing to rejuvenate or to what functional it is to the, to the main product that remains a very profitable product, adjusting also our sales to the customer needs that should also partially, help reducing the speed of the decrease. When it come to your question on, three p l, yes, we expect a decrease of the top line of, of radial in The US.

It would be more, more than what you were expecting. Would be more in the 10 to 20% range. I think I covered most of it.

Chris Peters, CEO, BPOXX Group: Yeah. Maybe a couple of things. Yes. On, your tipping point in mail, I think it’s, at this point still a bit too early. We of course are preparing for a new usual discussion with the government going forward.

That being said, today, we still see that, mail, although the decline remains for us a profitable activity, that’s also why you see that certain specific products where we see also that profitability, which is good that we do some level of defense that will not say that we’re naive, that they will not decline, but that we can slow down the decline to some extent. And of course, obviously, now we have an operational model, which is dense, non dense, and we think that this is still profitable until the end of the current Uzo. And now we are doing the reflections on what would it mean in in terms of Uzo definitions going forward in case that the decline is continued as it said. And likely, that is the case, of course, as we see that the same is happening, in with other postal operators. There may be on the side of, radial on what has happened there.

We can, of course, not mention client names, but it is the vulnerability that we have discussed last year. So we said that radial in the COVID period has taken on board in, at that moment, a low capacity market, a number of enterprise sized clients, which in the moment that they churn actually create for us a cost that we, on the one hand, operationally very good are in reducing, but there are a couple of fixed costs that we cannot reduce that fast. That is part of the portfolio that we have over there. And so we can just mention that one of those enterprise clients that Justus’ swing capacity just recently stopped its operation or will stop its operation with us. And so that has the impact and that led to the impairment combined with some less relevant clients compared to this situation.

Therefore, we are convinced that this transformation that we’re doing in The U. S, which is a transformation towards multi client sites where we operate for mid sized clients is really the right one. We are over last year, we have worked on a operational model, that works. We also have worked on a tech stack. We are piloting it as we speak.

So we have signed up a number of clients that do the buyouts together with us. There’s a new client with whom we’re doing this. And also we have actually very extensive client pipeline of potential clients that could be signed up. But this is, of course, something that will be accelerated at the moment that we see that our operational model and our tech stack is doing what it should do and is creating the value that we’re looking for. And then we will, of course, full force focus on that in a market where, of course, the change of the president can play in or advantage or disadvantage something also that we have something that we will have to look forward for, how we manage that going forward.

At this point of time, it looks at least that for activity, 3PL, that we have into The U. S, there might be some opportunities for local brands and further increase it. Of course, other businesses from our side could be challenged based on cross border tariffs.

Ben, Conference Coordinator: The next question comes from The next question comes from the line of Othmane Brisa calling from BofA. Please go ahead.

Othmane Brisa, Analyst, BofA: Hello, good morning. Thanks for taking my questions. I have a few. First on the Radial U. S, can you quantify the revenue contribution from new SME clients?

And then on cross border, can you explain more in detail the impact of Asian consolidators shifting away from Interact Services, the impact on cross border division? And how should we think about that in 2025? Also, how do you see the potential impact of a potential regulation on non EU parcel volumes? Then on out of home parcel delivery, which is an objective for you. I think you have close to 1,300 locations of lockers in 2024.

How are you thinking about additions in 2025? And do you see competition heating up in this space? And then lastly on cash flow for 2025, how do you see working capital given in 2024, I think you had contribution, if I’m not mistaken, close to EUR 40,000,000. So how should we think about the impact on cash? Thank you very much.

Chris Peters, CEO, BPOXX Group: Let me maybe first take the business questions, then I’ll hand over to Philippe to complement it with some financial figures. If you look at the revenue contribution for new clients in 2025 in regional U. S, we’re very conservative at this point of time given the fact that we’re in the piloting phase. So we are optimistic about that, but it’s a bit too early to radiate that optimism already in the figures. And why is that?

We’re piloting as we speak. We see a nice pipeline of clients that could be interested in that. But of course, it’s only the success of the pilot that will actually put us full force into starting to onboard these clients. And if you then look at the timeline of these things, now we think it’s something where you will see success. We can probably show to you that this is the right trajectory that we’re following.

But if you look at financial impact, it will be beyond 25% horizon. A couple of elements you probably will see in the peak of this year if we have some of these clients, but the real impact is actually for a bit later just because of the state where we are in that in that, transformation. If you look at the local capacity, we wanted to take the financial part on that one. Yes. So

Philippe D’Arcien, CFO, BPOXX Group: I would like to propose under the new format or the new pilot that Chris explained. And considering a prudent deployment or implementation or adaptation of this one, you could make yourself a guess of what we could be if we have included into 25 figures.

Chris Peters, CEO, BPOXX Group: Good. And I move to your question around the locker capacity. In terms of number of locations, we more or less doubled this year. And in number of capacity, we tripled this year because we have a higher focus on large scale parcel machines. And secondly, we also shifted the location strategy towards those areas where we see that clients are really looking for 20 fourseven solutions, while I would say what has been developed over time was more a testing across the full geography.

Now we really have a very focused strategy towards those areas where we have most of the clients that are looking for an out of home delivery option, which is not, let’s say, equally participated over the the geography. And so that’s for us important that we focus on that. And yes, indeed, I think that having an out of home solution, everybody knows that, that becomes critical if you want to be a good parcel logistics provider. So you see that other of our competitors also are looking at that. I think it only confirms the fact that this is the right direction and we will for sure do everything to be in the lead of the pack in this development.

Philippe D’Arcien, CFO, BPOXX Group: So there was additional question on cross border, which is a trend where Chinese platform move away from, tracked product, which is something we were very strong in into untracked product that we could also offer, but, we are not the only one on the market. So meaning it opens more room or gives more rooms to the competition on that one. I think with that, we have covered.

Othmane Brisa, Analyst, BofA: Thank you. And, no, just an additional, I think you, there were two other questions. One on potential regulations of non EU parcel volumes and another question was on working capital. And I know I’m asking a bit too many, but if I can one just on the radio U. S.

Just to help us understand where things are. Can you give us a measure of what is the current warehouse utilization? Is it like below 50, 70 percent? I think to have a decent profitability, you need at least 90%, if not 90%. So just to help us understand where you are right now.

Thank you.

Philippe D’Arcien, CFO, BPOXX Group: On EU, we’ll see how it comes. We are not really difficult for us to predict what could happen. On retail, what I would say, it’s, we are not in the 90%. Would we be in the 90%? I think profitability would be higher than what is right now.

We’re also above the 50%. I think you announced a number which is not too far away from reality. But I would also be careful with that one because if we would if we are operating a warehouse that doesn’t belong to us, which is the case in some of our customers. It could boost, in fact, utilization of the capacity. And the flip side of the capacity non utilization is the cost that we have to bear and the revenue that we could build to our customers.

When we operate in our house from four customer, yes, we use the full we use it full, but also the cost also bears in the price of the customer. So it doesn’t fully reflect the impact

: on profitability and risk that we are bearing

Philippe D’Arcien, CFO, BPOXX Group: on this on profitability and risk that we are bearing on this portfolio. But indeed, we are not at the 90% ish. We are more in the seventies as you refer to.

Othmane Brisa, Analyst, BofA: Thank you. And working capital? Thank you.

Philippe D’Arcien, CFO, BPOXX Group: I suggest that, that one, you take it with Antoine because they try to details after this call if you will.

Othmane Brisa, Analyst, BofA: Okay. Yes, for sure. And thank you very much.

: Have a

Othmane Brisa, Analyst, BofA: good day.

Philippe D’Arcien, CFO, BPOXX Group: Welcome.

Ben, Conference Coordinator: The next question comes from the line of Mark Zwartsenburg calling from ING. Please go ahead.

: Yes. Good morning, everybody. A couple of questions left. First, on the trend that you see in the Parcels business. So September was still up double digits, now it’s high single digits.

Can you give a bit more color how that trended in Q4 and into Q1 this year? And what we should expect a bit going forward? That’s my first question. And then a question on Stasi. You’re guiding for an EBIT margin of between 1012%, if I’m correct, IFRS that is.

How much how many synergies are in that number that you foresee already for ’25? And then my last question is, a bit on the balance sheet and the cash flow. Do you think you will be cash flow positive in 2025? And linked to that, the leverage ratio based on your guidance and probably the guidance will be even a touch lower with the strikes in there. Yes, it seems that your leverage ratio will go to four, five times.

Would it be an issue for your lenders or any confidence you would have in your bolt?

Philippe D’Arcien, CFO, BPOXX Group: Okay. So I start in the order you asked me to jump in, Chris. Yes, parcels growth sometimes goes up and down. It depends quarter to quarters. I think it’s a bit premature to comment on what was happening in the first ten or eight weeks of the year, especially in the context of the strike that we experienced.

But we will for sure come back in details when we’ll be announcing Q1 results. So Stasi, indeed, we are guiding between the 1012%. There is One second.

: You can maybe give a bit of a color on the parcel volumes because we had December and January as well without strikes. So can you give a bit more color there?

Chris Peters, CEO, BPOXX Group: Well, what you’ve seen is that in peak, there was a quite strong increase of parcel size. So there you clearly are at the higher single digit level that you were on the peak. Performance. Of course, if we, then see over the full year that might be a different picture because you also see an effect of concentrating around these sales periods where parcels are. So it’s not necessarily a full representation of the representation of the reality that we have.

But what we see in the market is that we still have on that dimension. Well, I’m not talking about The U. S. Market, but in the European market, we see higher single digits that we still see today happening also with our clients. If we look at same store sales, you still see that the increase is in that range, especially in those ones that can benefit from platform effects.

Which are growing faster than the market.

: So we’re still trending on high single digit growth. Is that what you’re saying?

Chris Peters, CEO, BPOXX Group: That’s what we see. Of course, if you look at The U. S, there you’ve seen a same store sales, which has been slightly negative over the last period. So that is something that we’ve seen. Most of the analyst reports that we see on that market is that there was an expectation that, that’s rent will be reversed soon with some unclear starting dates of when that will happen.

At this point of time in or fulfillment activity of the clients that we have, we don’t see yet the shift of the same store sales trend that we’ve seen. So there is something where probably in the coming months, we will have to report further what’s what’s happening in same store sales as well. Of course, when we onboard new clients, we as well can’t report on what we see happening with those new type of clients.

Philippe D’Arcien, CFO, BPOXX Group: So on stat on statcy, the 10 to 12% range is indeed what we are guiding on. There is some synergies into it, but they are still limited. They will materialize more in ’26, but there are some included into it.

Chris Peters, CEO, BPOXX Group: So we

: should maybe assume that you have 1% of synergies, let’s say. That’s a high single digit to low double digit EBIT number. Is that a bit the number we’re looking for? Because the initial guidance, I think, was between 11%, twelve %. So we came down a little bit.

So that is the underlying margin a little bit softer? Is that correct to assume?

Philippe D’Arcien, CFO, BPOXX Group: Not really. Not really. Not really. No. No.

No. Not really. Okay. So another way of seeing it, the upper part of the range is still the same. So we are we are still confident in the level of margin that we benefit, yielding from from Stasi.

Your question on the balance sheet and the cash flow, yes, the cash flow will be positive in 2025. Indeed, it will have an impact on on the leverage, maybe not to the extent that you are mentioning, but indeed, it will have an unfavorable impact. And on your question on the loan, no. There is no impact whatsoever. There is no covenant attached to any leverage or rating or any condition in any shape or form on the bond that we issued last fall.

: It also doesn’t trigger higher interest payments? No. Nope.

Philippe D’Arcien, CFO, BPOXX Group: X rate.

: So okay. So the cash flow you said is positive in 2024? Yes. Yes. Okay.

All right. Thank you very much.

Philippe D’Arcien, CFO, BPOXX Group: Thank you.

Ben, Conference Coordinator: Ladies and gentlemen, there are no further questions. So I will hand it back to Chris to conclude today’s conference. Thank you.

Chris Peters, CEO, BPOXX Group: Well, we would like to thank everybody in the call for having taken the time to be with us and for your interesting questions. We will hear from you at the conference we’re going to attend in London in March. And please note also that we will release our annual report 2024 on March 26. And we will soon announce the exact date early June of the Capital Markets Day, and we look forward to stay in touch. And our first quarter results will be released in May.

Thank you very much and have a nice day. Thank you.

Ben, Conference Coordinator: Thank you for joining today’s call. You may now disconnect.

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