Rafał Brzoska: InPost has had an encouraging start to 2024

InPost Group has reported a strong quarter with notable improvements across sales, profitability and free cash flow generation.

Executive summary Q1 2024

 UK & Italy improved profitability: In the UK and Italy, InPost successfully delivered 22.0 million parcels in Q1 2024 (+114% YoY). The UK and Italy recorded another profitable quarter on the Adjusted EBITDA level that for the total segment reached PLN 14.7 million (GBP 2.9 million) in Q1 2024 vs a loss of PLN 46.2 million (GBP 9.3 million) a year earlier.

 Group volume increase: The Group parcel volume reached 242.6 million, representing a significant YoY increase of 22%. Both Poland and InPost’s international markets^[1] contributed to this growth, recording YoY improvements of 20% and 26%, respectively.

 Group revenue growth: The Group delivered another quarter of substantial revenue growth, reaching PLN 2,425.7 million and marking a 21.5% YoY improvement (a 25.6% increase excluding FX effect). Particularly robust performances have been observed in Poland and the UK as well as in the B2C segment in Mondial Relay markets.

 Significant Adjusted EBITDA increase: Group Adjusted EBITDA reached PLN 760.1 million in Q1 2024, representing an increase of 36.4% YoY. Adjusted EBITDA margin reached 31.3%, a rise of 340bps vs Q1 2023. The higher nominal profit was primarily driven by Poland, while the significant improvement in margins was mainly attributed to the enhanced profitability in both the UK and Italy.

 Positive Free Cash Flow and further deleverage: InPost achieved positive Free Cash Flow (FCF) of PLN 213.2 million at the Group level. In Poland, FCF amounted to PLN 459.3 million, corresponding to a 68% FCF/Adjusted EBITDA conversion (56% in Q1 2023), which allows for financing the Group’s rapid expansion in rest of Europe. The Group’s net leverage decreased from 2.2x at 2023 YE to 2.0x at the end of Q1 2024.

 Poland volumes exceeding market growth: In Poland, during Q1 2024, InPost volumes achieved 159.0 million parcels, up by 20% YoY, exceeding the pace of e-commerce market volume, which was 12%. Adjusted EBITDA reached PLN 1,483.1 million and was 26.2% higher YoY.

 Mondial Relay gaining market share through strong B2C: Mondial Relay parcel volume amounted to 61.6 million, showed a 9% YoY growth in volumes during Q1 2024, which was primarily driven by further dynamic increase in the B2C segment. Adjusted EBITDA margin slightly improved YoY despite gaining market share^[3] and investing in future growth.

Trading update Q2: So far in Q2 2024 we are running at volume growth of c. 20% at the Group level, with volume in Poland growing mid-teens and total international volume growing at a faster rate than Q1.

Rafał Brzoska, Founder and CEO of InPost Group, commented: InPost Group has had an encouraging start to 2024 in line with our ambitions and expectations.  Volume growth in Q1,  significantly outpaced the market across all our geographies, while  also delivering strong year-on-year progress in EBITDA and cash flow generation. We remain very much on track in implementing our strategic priorities. These include continuing to expand our Pan-European locker network with a particular focus on APM deployment levels in the UK and France. In parallel we are making good progress in building our B2B business in Mondial Relay, in driving profitable growth in the UK and Italy and in enhancing our already market leading position in Poland with the launch of new services such as InPost Pay. Looking ahead we remain confident in our full-year outlook.

UK & Italy: Maintaining profitable top line momentum

In Q1 2024, the UK parcel volumes again more than doubled YoY (+147%) to 17.2 million. Revenue rose even stronger by 194.1% YoY to PLN 175.3 million (GBP 35.2 million) driven by the C2C segment and product mix. In Q1 2024, InPost’s UK network expanded to over 8,460 OOH points (+59% YoY), including 6,800 locker machines, which further solidifies InPost’s position as the leading APM network in the UK.

In Italy in Q1 2024, parcel volumes went up to 4.8 million (+41% YoY) and revenues reached PLN 61.0 million (EURO 14.3 million) marking a 39% increase YoY, driven mainly by B2C volume and marketplaces. Our OOH network widened to over 6,800 points (+40% YoY).

Adjusted EBITDA in the Other international segment (UK and Italy) improved to PLN 14.7 million (GBP 2.9 million), which is a significant development from a loss of PLN 46.2 million (GBP 9.3 million) as reported in Q1 2023.

Poland: Strengthening leadership position while maintaining high profitability

In Q1 2024, our parcel volumes in Poland reached 159.0 million (+20% YoY). As in previous quarters, we outpaced the domestic e-commerce market growth, which was of 12% YoY^[7]. APMs volumes improved by 18% YoY, with both marketplaces and merchants from the fashion segment serving as the main drivers of this growth. ‘To-door’ deliveries grew dynamically by 34%, which were propelled by the marketplaces.

The revenue generated in Poland in Q1 2024 was 26.2% higher YoY and reached PLN 1,483.1 million due to higher volume YoY and single digit repricing. Adjusted EBITDA rose in line with revenues by 26.5% to PLN 673.0 million.

The strength of our Polish business was reflected in free cash flow generation. FCF for the Q1 2024 amounted to PLN 459.3 million (+53.0% YoY), and FCF conversion reached 68% (vs 56% a year earlier). This highly cash generative business model in Poland is expected to continue to provide the Group with the necessary financial funds to fuel its international expansion.

InPost continued its network expansion in Poland, reaching a total of 22,654 APMs (+13% YoY) with almost 700 machines added in the last quarter. This maintains our undisputed leading position in Poland in terms of network coverage.

Continued expansion led to more APM users rising to 18.3 million at the end of Q1, gaining over 1 million users in the last 12 months. Our top-rated mobile app, a key tool in enhancing customer experience reached 12 million users.

Mondial Relay: Gaining market share and consumer trust

In Q1 2024, Mondial Relay’s parcel volumes totalled 61.6 million, representing a year-on-year growth rate of 9%, and thereby significantly surpassing the e-commerce market which decreased by 4%^[8]. In the returns and B2C segment, which is our strategic focus, we attained an encouraging 28% YoY rise in volumes.

Total revenue reported by Mondial Relay in Q1 2024 reached PLN 706.3 million, reflecting a +7.1% increase in local currency and a 1.5% decrease in PLN. Adjusted EBITDA amounted to PLN 72.4 million, which translated into a +10.7% YoY in EUR and a +1.1% YoY in PLN.

In Mondial Relay, our focus is on building scale, improving consumer trust, enhancing logistics quality and increasing network density. Our out-of-home (OOH) points reached nearly 27,800 by the end of Q1 2024 (+20% YoY). In France, we boast the largest network of APMs, which has been a key driver of our higher volume.

Mondial Relay’s most recent customer NPS continued to improve, reaching 27. This score is industry-leading among our peers in France and is clear proof of customers’ trust in our high-quality service.