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Cost-saving measures at bpost bear fruit

The postal and e-commerce logistics operator again did better than analysts’ forecasts in the second quarter and is less pessimistic for the full year.

As in the first trimester, bpost did better, from April to the end of June, than analysts’ expectations. The postal and e-commerce logistics operator posted revenue of 1.035 billion euros in the second quarter, down 0.2% year on year, but 19 million higher than the consensus ( 1.016 million).

Bpost generated an adjusted operating profit (Ebit) of 82.6 million euros, down 22.5% (compared to a high comparable basis at the same time in 2021) but 12.2 million higher than analysts’ expectationswho bet on 70.4 million.

25

million

Bpost has reassessed the risk of a drop in its annual forecast, from 40 to 25 million maximum.

The management of the semi-public operator confirms its range of Ebit guidance for the full year, or 280 to 310 million euros. And it reduces its assessment of the risk of a decline in annual forecasts, from a maximum of 40 million euros to 25 million. It will be remembered that this element had weighed heavily in analysts’ comments on bpost’s results in the first quarter: this should therefore be positive news.

That said, bpost achieved these results in a challenging environmentmarked by the high inflation, with, as a consequence, repeated salary indexations (four) as well as the rise in transport and energy costs, more loss of consumer confidencepretty much everywhere in the world.

Management measures

For compensate for these “headwinds”, the Belgian group was able to count on the management measures taken by its leaders in May the latter, which have borne fruit, explained its CEO Dirk Tirez on Thursday evening, during a press briefing. He also benefited Radial’s confirmed health boost in the USA.

Turnover increased by 8.2% at constant exchange rates, to 378.6 million, in e-commerce logistics in North America with +18.3% for Radial alone. Adjusted Ebit there increased by 7.4% to 18.1 million, still mainly thanks to Radial. This is the only one of the three divisions to show rising numbers.

The group’s revenues fell by 8.7% in Belgium (but -3.1% if we exclude Ubiway Retail, which was sold) and by 16.9% in Europe and Asia.



“To compensate for the impact of Amazon’s insourcing, we attract customers who allow a more attractive price mix.”

780 departures not replaced

Among the measures management taken, bpost did not not replaced 780 full-time equivalents (natural attrition and voluntary departures) to adjust its organization to the needs of its customers. Plus a reduction of about sixty positions at its headquarters. The group also has attracted new customers, including the National Lottery and the second-hand clothing platform Vintedand gained market share. In Belgium, he also offset some 40% of lost volumes following the internal resumption of shipments by Amazon.



“Our plan to hunt commercial customers fits into a market which, although it could have two difficult years ahead of it, will continue to grow over time.”

“Our plan to hunt commercial customers fits into a market which, although it could have two difficult years ahead of it, will continue to grow over time“, explained Dirk Tirez. “We want to continue to convince SMEs, commercial companies and large platforms. And to compensate for the impact of insourcing from Amazon, we attract customers who allow a more attractive price mix. So we’re gaining market share.”

According to the CEO, a growing number of these commercial targets consider that the network of factors and deliverers of bpost is a quality guarantee. “They prefer bpost to competitors that I will not name for this reason. And we will focus on this objective of embodying their privileged partners.”

Bpost will also take other measures to try to “stick” to the new European objective, aimed at reduce all energy bills by 15%.

The summary

  • As in the first quarter, bpost did better than analysts’ expectations in the second, with revenue of 1.035 billion euros, 19 million higher than the consensus, and adjusted operating profit (Ebit) of 82, 6 million euros, 12.2 million higher than analysts’ expectations.
  • It was in North America that it achieved its best performance thanks to the confirmed recovery of Radial.
  • The management measures taken in May enabled the group to mitigate the impact of inflation, its consequences on costs and the drop in consumer confidence.
  • The group confirms its Ebit forecasts for 2022 and reduces its assessment of the risk of a decline in these.

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