bpost: we are still evolving in a very uncertain world
bpost has released its second quarter 2020 results – growth driven by Parcels & Logistics performance in North America and Eurasia.
Second quarter 2020 highlights
- Group operating income at EUR 1,052.7 million, +12.5% compared with the same period last year and driven by strong Parcels BeNe and E-commerce logistics growth in both Europe and North America.
- Group reported EBIT at EUR 71.0 million Adjusted EBIT at EUR 75.6 million (margin of 8.1%).
- Mail & Retail
- Reported EBIT at EUR 35.4 million. Adjusted EBIT at EUR 36.0 million (7.7% margin), down by -51.9% mainly from mail evolution (-17.7% underlying mail volume decline) amplified by COVID-19.
- M&R COVID-19 impact estimated at EUR -37.0 million.
- Parcels & Logistics Europe & Asia
- Reported EBIT at EUR 31.6 million. Adjusted EBIT at EUR 32.4 million (11.0% margin), up EUR 13.0 million (+67%) operationally excluding year-over-year negative evolution of terminal dues settlements. EBIT growth mainly driven by thriving e-commerce resulting in Parcels BeNe volume growth of +78.4%. Additional investments in parcels sorting capacity enable to structurally absorb higher peak volumes.
- PaLo Eurasia COVID-19 impact1 estimated at EUR +13.1 million delivering customer needs in challenging times.
- Parcels & Logistics North America
- Reported EBIT at EUR 14.2 million . Adjusted EBIT at EUR 17.6 million (5.0% margin), up EUR 18.1 million fully driven by Radial North America, which recorded high growth from existing customers and clients launched in 2019 (E-commerce Logistics operating income +53.5%).
- PaLo N. America COVID-19 impact estimated at EUR +16.5 million accelerating its performance during the crisis.
- Total COVID-19 impact on Group EBIT estimated at EUR -9.5m for the second quarter 2020. Excluding COVID-19 and last year’s gain on disposal of the HQ building (EUR 19.9m), second quarter 2020 EBIT was favourably impacted by targeted cost containment actions and cost phasing towards the second half of 2020.
- Outlook 2020. Based on the current situation and facts, the initial 2020 Group adjusted EBIT guidance range of EUR 240-270 million is reconfirmed, if no second or important local lockdown in 2020 or any event deriving from COVID-19 uncertainties materialises.
- Dividend 2020. The Board decided not to grant a dividend on the results of FY20 to its shareholders. bpost Group remains fully committed to delivering sustainable shareholder returns. Given the high level of uncertainty that still remains in light of COVID-19 and its impact on the overall economy, bpost Group’s priority is in the current circumstances the strength of bpost’s balance sheet and cash reserves on the long term. A new dividend policy going forward will be decided by the Board when the longer term impact of the COVID-19 crisis becomes more clear.
Jean-Paul Van Avermaet, CEO of bpost Group commented: “We are still evolving in a very uncertain world. However, thanks to the considerable efforts of all our employees, the first half of the year allows us to reconfirm our initial 2020 group EBIT guidance. Visibility remains low, and the broad economic impact of COVID-19 will likely only be felt over the coming years.
“COVID-19 has triggered an acceleration of the digitizing world we are operating in. This is materializing through a significant increase in e-commerce penetration, as witnessed by our huge second quarter organic parcels volume growth above 78% and the steep acceleration in our E-commerce logistics revenues, both in the US at Radial as in Europe. At the same time, these results also confirm that the diversification strategy that bpost Group has put in place over the last years is a sound one for a viable future.
bpost Group will remain an efficient mail operator in the domestic market, while growing in the areas of e-commerce logistics in Eurasia and North America, and capturing the strong development of last-mile parcels delivery in Belgium and The Netherlands. We continued to invest in e-commerce and parcel capacity in Belgium and abroad.”
François Cornelis, Chairman of the Board of Directors, continues: “Our prerogative under these exceptional circumstances, is to preserve a sound financial position in order to be able to face any new COVID-19 developments or downturn in the regional or global economies. Therefore, the Board of Directors has decided not to grant a dividend on the results of 2020 to its shareholders. bpost Group remains fully committed to delivering sustainable shareholder returns. In light of the current circumstances the priority is the strength of bpost’s balance sheet and cash reserves on the long-term. A new long-term dividend and capital allocation policy will be decided by the Board when the longer-term impact of the COVID-19 crisis becomes more clear.”
