Bpost : Q1/2020 roadshow presentation

Investor presentation

First quarter 2020

May - June 2020

Investor presentation

First quarter 2020

Contents

Highlights & guidance

1Q20 Highlights - 4

Outlook 2020 - 5

bpost Group at a glance

Investment rationale - 7

Dividend policy - 8

Overview - 9

LT vision & strategic aspirations - 10 Management - 11

Sustainability - 12

Mail & Retail - 13-21

Disclaimer

Parcels & Logistics Eurasia - 22-29 Parcels & Logistics N. America - 30-35

1Q20 results

EBIT bridge - 37

Key financials - 38

Results by segment - 39

Mail & Retail - 40 & 41

Parcels & Logistics Eurasia - 42 & 43 Parcels & Logistics N. America - 44 & 45 Corporate - 46

Cash flow - 47

Balance sheet - 48

Financing Structure & Liquidity - 49

Additional Info

Key financials FY19 - 51 Results by segment FY19 - 52 Relationship with State - 53 USO & SGEI - 54 European mail market - 55 Key contacts - 56

Financial Calendar

13.05.2020

Ordinary General Meeting of Shareholders

04.08.2020 (17.45 CET)

Quarterly results 2Q20

03.11.2020 (17:45 CET)

Quarterly results 3Q20

More on corporate.bpost.be/investors

This presentation is based on information published by bpost Group in its First Quarter 2020 Interim Financial Report made available on May, 4th 2020 at 5.45pm CET and in its 2019 Annual Report available on corporate.bpost.be/investors. This information forms regulated information as defined in the Royal Decree of 14 November 2007. The information in this document may include forward-looking statements1, which are based on current expectations and projections of management about future events. By their nature, forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside the control of the Company. Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements. Accordingly, no assurance is given that such forward-looking statements will prove to have been correct. They speak only as at the date of the Presentation and the Company undertakes no obligation to update these forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements. This material is not intended as and does not constitute an offer to sell any securities or a solicitation of any offer to purchase any securities.

1 as defined among others under the U.S. Private Securities Litigation Reform Act of 1995

2	1Q20 Roadshow presentation

Highlights 1Q20 Guidance 2020

Highlights of 1Q20

1Q20 above expectations excluding COVID-19

1Q20

Group operating income

€ 934.6m

Group adjusted

EBIT

€ 75.6m

8.1% EBIT margin

Mail & Retail

€ 65.2m

13.0% EBIT margin

• Total operating income at € 500.0m (-5.2%) driven by COVID-19 impact on Advertising Mail & on retail and by deconsolidation of Alvadis
• Underlying mail volume decline at -9.9% driven by cancelled advertising campaigns (COVID-19)
• Adjusted EBIT decline (-29.6%) from COVID-19 mail evolution and additional opex. M&R COVID-19 impact: € -14.4m

Parcels & Logistics Eurasia

€ 16.9m

7.9% EBIT margin

• Total operating income at
• • 213.5m (+8.5%), mainly driven by Parcels BeNe (+19.8%). Significant negative impact in Cross- border of COVID-19.
• Parcels BeNe organic volumes +20.5%
• Adjusted EBIT, excl. 1Q19 VAT recovery, YoY negative evolution of terminal dues settlements & COVID-19, up
• • +4.5m (+31%) operationally. PaLo EA COVID-19 impact: € -1.8m

Parcels & Logistics N. Am.

€ -7.4m

-2.8% EBIT margin

• Total operating income at
• • 261.3m (+14.3%) fully driven by E-commerce logistics, in particular growth at Radial from existing customers and new business signed in 2019
• Adjusted EBIT increase
• • 
    (€ +0.4m) driven by positive evolution of E-commerce logistics (mainly Radial), to a large extent offset by continued margin pressure in International mail. PaLo NA COVID-19 impact:
  • -0.3m

1Q20 COVID-

19 impact1 on Group EBIT estimated at € -16.7m

2020 outlook overruled by COVID-19

1 All COVID-19 impacts mentioned in this presentation are best effort estimates based on actuals

4

1Q20 Roadshow presentation

Outlook for 2020 overruled by COVID-19

Outlook FY20

Updated full-year guidance will be issued as soon as the full quantitative impact of COVID-19 can be accurately and reliably estimated. bpost Group is not in position to do so to date.

March and
	-19
on	COVID
issued excluding
Outlook	by
overruled
as
202017,

Mail & Retail

Total operating income up to -5%

‐ -9% to -11% underlying Domestic Mail volume decline

‐ Approved mail pricing impact of +5.1%

8-10% adjusted EBIT margin

Parcels & Logistics		Parcels & Logistics
Eurasia		N. Am.
Low teens % growth in total		Mid-single-digit % growth in
operating income		total operating income
6-8% adjusted EBIT margin		Adjusted EBIT margin positive up
		to 2%

Group

Low single-digit % growth in total operating income

Adjusted EBIT between

€ 240-270m

Gross capex up to € 200m

Dividend

Current dividend policy of 85% of BGAAP net result is suspended.

A new dividend policy will be decided by the Board when the longer term

since	Mail volume impact:	Parcels BeNe YoY volume growth	So far, client volumes met
impacts	lockdown	‐	Advertising > -60%		>20% and strongly trending		expectations; limited operational
	‐	Transactional: impacted to		upwards		disruptions
-19		lesser extent		Cross-border significantly		Additional costs for health &
	Additional costs (safety &		impacted by reduced air freight		safety currently less than ~€ 1m
March
in	premium): ~€ 5.0m on a monthly		capacity and closure of		on a monthly basis, might go up
1Q20 observed	basis			international borders
COVID	startof	bpost Belgium absenteeism		Additional costs (safety, premium,
		doubled at the start of the crisis		absenteeism & transport):
		in March		~€ 1.5m on a monthly basis

We strive to reduce gross capex by at least € 50m to € 150m maximum

impact of the COVID-19 crisis becomes clear.

5	1Q20 Roadshow presentation

bpost Group

at a glance

bpost Group offers a strong investment rationale

at a glance - Group

bpost Group aims at being a responsible company, delivering a sustainable dividend to its shareholders

What?

We continue to transform the mail and proximity business in the home market to sustain solid cashflows

We develop sustainable activities in the high growth e-commerce logistics & parcels business in our Belgium/Netherlands home market and key geographies in Europe and North America

How?

Multiple levers for		Experienced		Growth in		A solid balance
transformation of		management		e-commerce		sheet with single
the legacy		team with		logistics &		'A' credit rating
business: natural		embedded		parcels: aspired
attrition,		financial discipline		sizeable share of
alternating		and a strong		revenues
distribution		business
model, stable and		transformation
predictable		track record
regulation,
network
optimization,…

7	1Q20 Roadshow presentation

We create value for shareholders

Capital allocation and dividend policy are under review

Dividend Policy

• IPO dividend policy until 2019: Minimum 85% of BGAAP net profit of the mother company bpost SA/NV (unconsolidated). This policy is now suspended
• Dividend on FY19 results limited to interim dividend due to COVID-19 crisis
• Updated dividend policy: A new dividend policy will be decided by the Board when the longer term impact of the COVID-19 crisis becomes clear

Dividend is constrained by net results of a given year (in BGAAP) + distributable reserves

Distributable reserves (€ 199m end 2019)

built gradually as from 2013, primarily to neutralize the non-recurring impact of exceptional costs

at a glance - Group

1.13	1.26	1.29	1.31	1.31	1.31
0.22	0.24	0.25	0.25	0.25
0.20
						0.62
0.93	1.04	1.05	1.06	1.06	1.06
2013	2014	2015	2016	2017	2018	2019
		Pay-out ratio
91%	85%	90%	85%	90%	100%	72%
Final gross DPS (€)	Interim gross DPS (€)

8	1Q20 Roadshow presentation

A diversified mail operator with a footprint in e-commerce logistics

at a glance - Group

€ 3,837.2m1	€ 310.8m
revenues	8.1%
	EBIT
€ 537.0m	€ 181.2m
14.0%	net profit
EBITDA

35,377

average

# FTE & interims

Mail & Retail

• 1,897m
  49%

Parcels & Logistics Europe & Asia

• 813m
  21%

Parcels & Logistics North America

• 1,098m
  29%

Transactional mail

Advertising mail

Press

Proximity and convenience retail network

Value added services

Parcels Be-Ne

E-commerce logistics

Cross-border

E-commerce logistics

International mail

Revenues		% of total
€ 748m	19%
€ 236m	6%
€ 344m	9%
€ 465m	12%
€ 104m	3%
€ 381m	10%
€ 133m	3%
€ 300m	8%

€ 1,018m	26%
€ 87m	2%

2019 figures (adjusted)

1 49.4% Mail & Retail, 21.2% Parcels & Logistics Europe & Asia, 28.6% Parcels & Logistics North America and 0.8% Corporate revenue

9	1Q20 Roadshow presentation

Long-term vision & strategic aspirations

at a glance - Group

"Beyond mail, be an efficient global e-commerce logistics player anchored in Belgium"

1

Mail services to citizens and State remain core and will continue to generate profit with a more adapted distribution model

2

Drive profitable growth in Parcels BeNe and further develop e-commerce logistics in Europe

3

Optimize Radial to deliver in the promising North American e-commerce market

10	1Q20 Roadshow presentation

Our experienced management team has responsibilities down to the bottom-line

at a glance - Group

Jean-Paul Van Avermaet	Luc Cloet	Kathleen Van Beveren	Henri de Romrée
Group CEO	CEO Mail & Retail	CEO Parcels & Logistics Europe & Asia	CEO Parcels & Logistics North
			America

Mark Michiels	Leen Geirnaerdt	Dirk Tirez	Nico Cools
CHRO	CFO	CLO	CIO
11		1Q20 Roadshow presentation

Sustainability is at the heart of our activities

3-pillar CSR strategy linked to United Nations

at a glance - Group

People	Proximity	Planet
we care about our	we are close to the	we strive to reduce our
employees and engage	society	impact on the
them		environment

Shared Value Creation

• Continuity of our business
• Employee satisfaction and engagement
• Customer satisfaction

•	Employee health &		•	To our community		•	Green fleet
	safety		•	To our suppliers		•	Green buildings
•	Employee training and		•	To our customers		•	Waste management
	talent development			through our services
•	Ethics & diversity
•	Social dialogue

Selected awards and recognition

• IPC EMMS Scorecard 2019 (sector index): #3
• EcoVadis (clients index): Gold rating
• Ethibel Indexes: reconfirmed as a constituent of the Ethibel Sustainability Index (ESI) Excellence Europe since 19/03/2018
• Sustainalytics: score 17.7% (low risk)
• MSCI: Score A
• Vigeo Eiris: 91% (sector average: 71%)
• ISS: Governance Score: 5, Environment Score: 1, Social Score: 3
• Carbon Disclosure Project: Score B (peer average C)

Ambitious CO2 reduction targets

• Since 2007 bpost Group has cut its CO2 emissions by almost 40%
• Target of reducing CO2 emissions from activities by at least 20% by 2030
• By 2030, at least 50% of vehicles will be fully electric

12	1Q20 Roadshow presentation

Mail & Retail

at a glance

Sub-segments

Transactional mail

Advertising mail

Press

Proximity and convenience retail network

Value added services

Total

13

Revenues 2019, €m

748

236

344

465

104

1,897

1Q20 Roadshow presentation

at a glance - M&R

Key facts & figures

~7.1m

letters handled daily

~20.1k

operational FTEs

Servicing 5m

letter boxes

5

industrial sorting centers

~2,300

points of presence in Belgium

Key value drivers for Mail & Retail

Key value drivers	From
Speed of mail volume decline	-7.9%
	in 2019

	Share of mail volume decline compensated	18-45%
	through price increase	over 2014-2017
	Renegotiation/retendering of future 6th	Three contracts
	Management contract and press concessions	until end 2020;
		compensation contractually set
	Evolution of operating model	Fixed D+1
	(mail collect and distribution)	based model
		(everywhere, everyday)
1 58% in 2019
14	1Q20 Roadshow presentation

at a glance - M&R

To

Between 9% - 11%

in 2020 (ex-COVID-19)

>50%1

Extension

Of the 2 press concessions until end 2022

Expected agreement

on 7th Management contract

Flexible, differentiated offering

(prior vs. non-prior.)

Domestic mail volume decline expected to accelerate from	at a glance - M&R
-7.9% in 2019 up to ~-9% to -11% in 2020 (ex-COVID-19impact)

2013 2014 2015 2016 2017 2018 20191 1Q20

	Underlying change		-4.2%
	in domestic mail volume		-4.4%	-5.0%	-5.0%	-5.8%	-5.8%	-7.9%
										-9.9%
		Transactional mail		-3.7%	-5.0%	-5.3%	-5.9%	-8.1%	-5.7%	-9.2%	-8.8%
								1.5%
		Advertising mail		-9.1%	-3.0%	-4.9%	-3.0%		-7.2%	-4.7%
											-16.5%

Press		-3.0%	-2.8%	-2.8%	-2.8%	-3.7%	-3.8%		-5.2%
						-6.5%

1 As of start FY19 Transactional Mail excludes outbound and Press includes Ubiway press distribution

15	1Q20 Roadshow presentation

Key drivers

• E-substitutionat large corporates and SMEs
• Intensifying competition in advertising media
• Shift to digital for newspapers & magazines
• Service level elasticity
  from the implementation of the Alternating Distribution Model

Regulatory aspects

Designated provider of the Universal Service Obligation until end 20231

• Collection, sorting, transport and distribution of postal items up to 2kg and single piece postal packages up to 10kg
• Collect and deliver 5x per week
• Cover full territory of Belgium for collection and delivery of items belonging to universal service
• Apply uniform tariffs and an identical service across the territory

4 key contracts with the Belgian State

• Management contract for the provision of the USO (2019-2023)
• 6th Management Contract (2016-2020):for the provision of certain SGEIs, i.e. maintenance of retail network, cash at counter, cash payment of pensions at home
• 2 press concessions (2016-2020 extended for 2 years until end 2022): (1) for distribution of periodicals and (2) for distribution of newspapers

at a glance - M&R

Postal law of 10 February 2018 provides stable & predictable mail pricing framework

• Single piece mail & USO parcels falling within "small user basket" are subject to a price cap
• • Price cap2 = inflation - (volume evolution + cost reduction factor x efficiency gains sharing factor)
• Volume and operational discounts allowed for other USO products (bulk)
• Price increases done in practice on a yearly basis: +4.4% on average in 2019 on all domestic mail items; +5.1% on average for 2020

1. Refer to slide 53 for more details
2. Exact formula: Price cap = health index April n-1/health index April n-2 * (1 - [expected volume decline/(expected volume decline +1)] - 2.8%*33%) - 1

16	1Q20 Roadshow presentation

New Postal Law (Effective as of February 10, 2018)

at a glance - M&R

provides stable and predictable regulatory framework to increase prices in context of accelerating mail volume decline

		Drivers of the price cap formula
Description	Inflation			Volume decline		Efficiency gains
Compensation for inflation			mail volume decline		efficiency gains target
			Compensation for		Mechanism to share 1/3 of the
						with consumers
Correlation	Higher inflation results in			Larger mail volume decline results		Constant and fixed by law
to price cap	larger allowed price increase			in larger allowed price increase
Calculation	Ratio of the health index as			[V/(V+1)] with V as the expected		Fixed by the law at 0.9%
logic	n-1 and n-2			User Basket		gains target)
	measured in April of the years			negative volume trend on the Small		(i.e., 1/3 of 2.8% efficiency

Illustrative example assuming 2% inflation and -6% average volume decline:	-	0.9% ]
Price cap1: 7.6% = 102%	x	[ 106.4%

1 Detailed formula: Price cap = (1 + inflation) * (1 - [V/(V+1)] - 0.9%) - 1, giving for the above example the following calculation (1+2%) * (1 - [-6%/(-6%+1)] - 0.9%) - 1 = 7.6%

17	1Q20 Roadshow presentation

Price increase and mix effects expected to compensate >50% of mail volume decline

at a glance - M&R

Volume and price/mix impact on revenue €m

	Domestic mail volume	Domestic mail price/mix	%	Share of volume effect compensated by price/mix
72%	45%	30%	31%	18%	>50%
			67	68	71
		60
57
42
		27		20	21
						13
	2013	14	15	16	17	2018-191
				Price increase on small	Building on the New
				user basket rejected by	Postal Law for price
1 2018 was at 70%, 2019 was 58%			regulator	regulated products

Key drivers

• Accelerating domestic mail volume decline
• New price cap mechanism of Postal Law defining max price increase for small user basket, and serving as guideline for price increase on non-pricecapped products
• Price increase partly
  offset by shift to less expensive mail products

18	1Q20 Roadshow presentation

Management has developed an extended set of cost control options

at a glance - M&R

Operating model

• Differentiated offering and Alternating Distribution Model
• Take measures to address absenteeism

Industrial Mail		Collect &
Centers		Transport
• Optimize mail		• Align number of red
sorting centers		boxes to mail
footprint		volume decline
• Pursue continuous		• Stop collect on
improvement		Saturday and
		increase flexibility of
		pick-up, delivery
		and dispatch timing
		constraints
		• Transport
		optimization (fill-in
		rate and routes)

Distribution	FTE Unit cost
• Introduce new	• Further optimize FTE
generation of	mix
Georoute and time
potential
management

• Simplify process for selected transactions
• Enhance customer experience and productivity through digital (e.g., consumer preferences)

19	1Q20 Roadshow presentation

A differentiated offering enables a new distribution model to accommodate changing customer needs

at a glance - M&R

Differentiated offering		Alternating Distribution Model
as of January 1st 2019		as of mid-March 2020

Optimizing drop density

Share of houses receiving mail on any given day, %

D+1	Mail
Available to consumers	Adjusted "day certain" distribution
who need D+1 delivery	frequency: in a given street, mail will be
	distributed on selective days of the week
	D+1 delivery will remain available
	as a separate product ("Prior")

Model until mid-March 2020:

everywhere, everyday

~70

~55 <50

ADM:

D+3 combined

with D+1 ~70

Within D+3			Parcels
Service level agreement (SLA)		D+1 offering	No
"within 3 days"
				Newspapers		change
			Same day delivery

1 Based on a bpost SA/NV study with 1,000 households & 500 businesses (< 200FTE) interviewed in February 2015

20	1Q20 Roadshow presentation

2004

2018

2022

2022

Acceptance for D+3-41

Individuals	94%
Professionals	~92%

Labor cost will benefit from decrease of mail related FTEs and optimized employee mix

at a glance - M&R

Operational FTE evolution1				Age pyramid
Average FTEs and interims, '000					Headcount bpost SA/NV per age, 31/12/19
18.8	19.3	20.0	20.1	9,633		9,739
Allocated			80-85%			6,787
to mail
Allocated
to parcels			15-20%
	2016	17	18	19		0-39	40-49	50+

Non pay-scale contractuals Pay-scale contractuals Civil servants

Natural attrition

Average natural attrition is expected to range from 1,200 to 1,300 FTEs/year

Operational FTE mix evolution1			Average cost per contract type1
								Indexed
Other		8%		10%	10%	9%
Contractual		18%		17%	17%	16%	Contractual			~95
Auxiliary	34%	39%	42%	47%
postman	Auxiliary		~74
								postman
Civil servant	39%	35%	31%	28%	Civil servant				100
		16		17	18	19

1 bpost SA/NV scope, excluding retail network

21	1Q20 Roadshow presentation

Parcels & Logistics Europe and Asia

at a glance

at a glance - PaLo Eurasia

Sub-segments

Parcels BeNe

E-commerce logistics

Cross-border

Revenues 2019 (€m)

381

133

300

• Last-mile B2C delivery in the Benelux
• Total of ~74m parcels in 2019
• Mostly fulfilment & transport activities in Europe spread over 11 locations
• Activities include Radial EU, Active Ants and DynaFix
• International mail & parcels
• Majority of cross-border volume is inbound mail and parcels from Europe and Asia

Key facts & figures Peak days of up to

480k parcels in December

Fulfilment footprint

covers 11 locations across 6 countries in Europe

3 main cross-border activity centers

Total

813

i.e. Brussels brucargo, Heathrow UK and Hong Kong

22	1Q20 Roadshow presentation

Key value drivers for Parcels & Logistics Europe & Asia

at a glance - PaLo Eurasia

Sub-segments

Parcels BeNe

Key value drivers

Ability to capture profitable growth in a competitive environment

BeNe-wideoffering addressing customer requirements

Optimized last-mile operations based on parcels characteristics and in line with delivery requirements

From

Volume growth rate of 20-30% with price/mix effect up to -6% over 2016-2018

Focus on Belgium (sales force, contracts, DHL partnership)

Parcel hubs where enough density

To

Double-digit volume growth rate, address price/mix

BeNe-wide approach

Flexible parcels distribution footprint in close collaboration with Mail & Retail

E-commerce logistics

Cross-border

Ability to organically capture market growth of ~10% p.a. (vs. in-sourcing,pan-European players)

Develop international cross-border parcels, also across continents

Ability to maintain international mail volume

E-commerce logistics in PL, NL & BE and DynaFix

Natural business evolution

Increase scale & skills by leveraging capabilities of Radial US and Active Ants

Developing international parcel flows driven by growing e-commerce activity

23	1Q20 Roadshow presentation

Four strategic initiatives for Parcels BeNe

		Focus on 4 strategic initiatives
Integrated	Differentiate	Attract key foreign
BeNe offering	pricing policy	e-commerce players
•	Dedicated, specialized	• Strategic pricing initiatives	•	Partnerships with
	sales force			e-commerce players
•	Integrated commercial		•	E2E service offering
	offers			("gateway to Europe")

• Partnership with DHL Parcels

24	1Q20 Roadshow presentation

at a glance - PaLo Eurasia

Convenience

& Cost leadership

• Increased convenience through improved receiver journey and additional pick- up drop-offlockers (KPI: Net Promoter Score)
• Flexible distribution footprint in close collaboration with Mail & Retail
• Increase sorting capacity
• Fulfilment infrastructure
• Transport optimization
• Digital excellence

We have an established position in the Belgian B2C/C2C parcels market

at a glance - PaLo Eurasia

2019e parcel market1: 100% = € 1.6bn

B2C

B2B
	C2C
CAGR 2018-20e1, %
~12%
	0-4%
B2C / C2X	B2B

1. Source: Effigy

Unique selling proposition

Offer best last-mileand broadest delivery options, supported by acquisitions and partnerships:

• Home delivery 7/7 & evening delivery, including high-end deliveries (2-man)
• ~2,300 pick-up & drop-off points
• ~250 parcel lockers in Belgium
• Click & Collect
• Non-exclusivepartnerships with DPDHL for B2C parcel delivery into Belgium (from Germany/France & Benelux)

1Q20 Roadshow presentation

Partnership with DHL Parcels NL allows to cover the full	at a glance - PaLo Eurasia
BeNe region and to capture important cross-border flows

Launched in June 2018	Purchasing behavior
	• NL is the most important import country to BE (~20% of import flows)
	• BE consumers mainly buy from NL players such as Bol.com and Coolblue

Large NL-basede-commerce players

• Looking for a BeNe wide offering with regards to last-mile

• Benchmarking prices on a BeNe level

Competitive offering

• Very competitive & dynamic region with many large players such as PostNL, DHL, DPD, FedEx

26	1Q20 Roadshow presentation

The parcels operating model will be continuously optimized

Optimize distribution cost	Evolve towards dedicated
using drop density of mail	parcel infrastructure to match
rounds	customer requirements

at a glance - PaLo Eurasia

Increase sorting capacity

• Maximize parcels in mail rounds
• Cost advantage due to higher drop density leading to lower unit costs

• Nationwide Parcel distribution footprint to accommodate distribution of parcels that are not in mail rounds
• Benefits for customer proximity and special services e.g. late-inservices, "large scale" evening distribution or same day distribution

• Increase sorting capacity in the existing centers of Brussels, Ghent & Antwerp to cope with increasing volume (optimizing sorting footprint mail & parcels)
• Use technology (e.g. address recognition)

27	1Q20 Roadshow presentation

Supported by acquisitions, bpost Group has initial assets	at a glance - PaLo Eurasia
along the entire value chain of e-commerce logistics

1

Order

• Order management
• Payment services, tax services and fraud prevention

4

Customer Care

• Phone, email, social media & chat support
• Advanced analytics

28

Realtime

technology

1Q20 Roadshow presentation

2

Fulfilment

• Order reception in warehouses in the proximity of clients
• Preparation for shipment

3

Delivery

• Hybrid transport network for high-endand urgent delivery
• Last-miledelivery

E-commerce logistics activities in Europe can be	at a glance - PaLo Eurasia
developed thanks to an already strong European footprint

The

UK Netherlands

Germany

Belgium Poland

Italy

Cold chain facility

Fulfilment sites

Personalized logistics

29

11		~1,100
fulfilment centers /		Employees
facilities

6		~€ 133m
Countries		2019 revenue

1Q20 Roadshow presentation

E-commerce logistics in Europe has 2 complementary	at a glance - PaLo Eurasia
engines of growth i.e. Radial Europe and Active Ants

1

Type of clients	E-tailers & click-and-mortar (omnichannel)		Pure e-tailers
Size of clients	Medium/large		Small/medium
Level of automation	Lower, depends on client		High (AutoStore + automated packaging)
Level of Customization	High, product and price tailored by client		Very low
Current locations	UK, Germany, Belgium, The Netherlands, Italy and Poland		The Netherlands
	Leveraging knowledge and		Leveraging NL success story
	experience from Radial US		in other European countries
1 Including Landmark Global and Belgium fulfilment
30	1Q20 Roadshow presentation

Parcels & Logistics North America

at a glance

at a glance - PaLo N. Am.

Sub-segments

Revenues 2019, €m

E-commerce logistics1	1,008

International Mail2		89

Total		1,098

US e-commerce logistics provider fulfilling 72m parcels p.a. with proven client base, IT infrastructure and capabilities along the E2E value chain

International mail solutions and catalogue fulfilment through US companies

Capabilities to support mid-sized e-tailersto expand cross-border and last-mile distribution in Canada and Australia

Objective

• Growth engine for bpost Group, to be a leading e-commercelogistics player in US
• Grow with cross-border commerce
• International mail providers delivering profit through infrastructure optimization

1. Radial North America, Landmark Global, Apple Express and FDM
2. MSI, Imex, Mail Inc. = The Mail Group

31	1Q20 Roadshow presentation

Acquisition of US-based Radial on 16 November 2017

Acquisition rationale

Our growth

• Integrated e-commerce logistics provides access to a larger and more attractive profit pool
• Radial as growth engine and key profit contributor

Presence in the US and Europe

• Strengthen US position building on presence with Landmark Global
• Scale bpost Group's e-commerce logistics capabilities in the Benelux and Europe

Strong growth of e-commerce

• e-commerceis growing rapidly with US being an attractive and advanced space (+15% p.a. growth of online retail over 2004-2022e)
• Transatlantic e-commerce is growing at >25% p.a. with 20% of European parcels coming from the US

Knowledge and experience

• Knowledge and experience of the e-commerce logistics chain increase exponentially with the acquisition of an experienced player

at a glance - PaLo N. Am.

Key acquisition data Radial Global

• Enterprise Value: $ 820m
• Sales 2017: $ 1,082m
• EBITDA 2017: $ 57m (5.3% margin)
• 100% acquisition of the shares
• Financed through a € 650m 8-year bond issue carrying a coupon of 1.25% (issued 4 July 2018)

Key indicators for Radial North America

• TCV of new business went from $ 217m in 2018 to $ 385m in 2019
• ~7,100 average # of FTEs & interims (2019)
• 24 fulfilment centers (mainly US)

32	1Q20 Roadshow presentation

Radial North America offers multiple services across the entire e-commerce logistics value chain

at a glance - PaLo N. Am.

				Revenues	Radial North	Description and key strengths
				share %	America assets
		Payment, Tax,				Fraud Zero software	Processing global payments,	•	98.3% approval rate vs. 97.1% industry average
Technology		and Fraud					maximizing successful authorization	•	1.6% manual review rate vs. 25% industry average
				12,500 Dropship suppliers	and reconciling tax districts and
	Technology				in-storepick-up	•	< 12 weeks to deployment vs. competition 4-6 months
		Prevention	17%		global duties
		Omnichannel	8,700 Stores with fulfilment	Optimizing efficiency of order	•	Ability to handle complex orders
							management, ship-from-store and
								•	Scalability of technology
		Warehousing &				24 fulfilment sites	Adapting warehouse management	•	80%+ orders shipped day 0
		fulfilment				in North America	and parcels preparation to	•	~100% US coverage
					e-commerce with pragmatic
Operations							automation	•	Experience of scaling employees / workforce up to ~20k
		74%
					peak capacity
		Freight				100%	Managing a large network of carriers	•	Rates 5-15%cheaper than in-sourcing for mid-sized players
		Management				Asset light	for a seamless customer experience	•	Clients reached in 2.4 days on average
		Customer Care	9%	3,400+	Having a single view of customer's	•	Advanced data analytics
						Seats across 4 sites	history and profile combined with
						leading self-service tech

33	1Q20 Roadshow presentation

Radial North America market dynamics and competitive landscape

at a glance - PaLo N. Am.

Online revenue e-tailers, US

$ 680bn1 expected US online retail revenue in 2020

Addressable e-commerce logistics sector

~$ 680bn total		Radial's target		$ 45-57bn
US online Retail		audience		addressable
e-commerce		e-commerce		e-commerce
		revenue		logistics
		$ 225-230bn

$ 2,000m

$ 20m

• Mid-marketsegment
  ($ 20-200m online revenue)
• Enterprise segment ($ 200-600m)
• Some selected key accounts ($ 600m-$ 2bn)

Independent e-commerce logistics providers

Omnichannel	Fulfilment	Freight	Customer Care
& PT&F

1 Source: Forrester Data, Online Retail Forecast, 2020

34	1Q20 Roadshow presentation

Positive commercial development at Radial and financial results in line with expectations

at a glance - PaLo N. Am.

Commercially heading in the right direction

• We continue to reap benefits from our customer-focused approach, strong new signings in 2019, along with continued improvement in NPS. Strong 2019 peak with a double-digit increase in shipped parcels vs. 2018.
• Starting in 2Q18 and continuing in FY19, we are seeing a positive contract renewal cycle for existing clients.
• New contracts signed had a TCV of $ 385m for FY19, which was above target and above the previous 3 years ($ 150m in 2016 and 2017, $ 217m in 2018).
• Positive TCV development continued through 1Q20.

FY19 results in line with expectations

• Good end of year 2019 peak management, with productivity gains partly offset by higher costs related to maintaining a sufficient labor pool within a tight US labor market.

FY18 & FY19 results impacted, as expected, by:

• Churn (mostly in Fulfilment & Transport) and repricing, with revenue growth from new and existing customers not compensating revenue loss from clients terminating with Radial.
• Webstore business phase-out complete, impacting FY18 EBITDA by $ -21.2m and FY19 EBITDA by $ -2.6m. Final client exits tailing off in 3Q19.

35	1Q20 Roadshow presentation

1Q20 Results

COVID-19 drove 1Q20 EBIT decline through significant	1Q20
Advertising Mail drop and Group-wide additional costs

€ million

95.8
5.5
					-20.2
	-27.4
					75.6
				8.0	4.6
		-1.2	0.4
90.4
					71.0
	Adjusted1
	Reported
EBIT	Mail &	PaLo	PaLo	Corporate	EBIT
1Q19	Retail	Eurasia	N. America		1Q20

1 Adjusted previously called Normalized, change of terminology "Adjusted" in order to align the label of this APM to the ESMA guidelines, definition and approach remain unchanged. Adjusted excludes items that are non-recurring in nature and significant (> € 20m). All profits or losses on disposal of activities are adjusted whatever the amount they represent, as well as the amortization and impairment on the intangible assets recognized throughout the Purchase Price Allocation (PPA) of the acquisitions. Reversals of provisions whose addition had been excluded from income are also adjusted whatever the amount they represent.

37	1Q20 Roadshow presentation

Key financials 1Q20

	€ million		Reported			Adjusted
		1Q19		1Q20	1Q19		1Q20	% ↑
	Total operating income	906.8		934.6	906.8		934.6	3.1%
	Operating expenses	755.7		797.4	755.7		797.4	5.5%
	EBITDA	151.1		137.2	151.1		137.2	-9.2%
	Depreciation & Amortization	60.7		66.1	55.3		61.5	11.3%
	EBIT	90.4	1	71.0	95.8	1	75.6	-21.0%
	Margin (%)	10.0%		7.6%	10.6%		8.1%
	Financial result	-7.5		-4.3	-7.5		-4.3
	Profit before tax	81.5		71.5	86.9		76.1	-12.4%
	Income tax expense	31.3	1	23.6	31.8	1	23.8
	Net profit	50.2		47.9	55.1		52.2	-5.1%
	FCF	186.1	2	194.2	195.4	2	246.2	26.0%
	Net Debt at 31 March	613.1		619.9	613.1		619.9	1.1%
	Capex	15.7		20.5	15.7		20.5	31.0%
	Average # FTEs and interims	33,966		34,695	33,966		34,695	2.1%

38	1Q20 Roadshow presentation

1Q20

1. Amortization of intangibles recognized during PPA is adjusted, leading to increase in EBIT (€ +4.6m) and income tax expense (€ +0.2m)
2. Adjusted FCF excludes the cash Radial receives on behalf of its customers for performing billing services

Results by segment 1Q20	1Q20

€ million
	M&R	PaLo Eurasia	PaLo N. Am.	Corp	Eliminations	Group
External operating income	457.8	210.5	259.9	6.4	0.0	934.6
Intersegment operating income	42.2	3.0	1.4	90.4	-137.1	0.0
Total operating income	500.0	213.5	261.3	96.8	(137.1)	934.6
Operating expenses	413.8	192.2	250.9	77.5	-137.1	797.4
EBITDA	86.1	21.3	10.4	19.3		137.2
Depreciation & Amortization	21.6	5.1	21.2	18.3		66.1
Reported EBIT	64.6	16.2	-10.8	1.0		71.0
Margin (%)	12.9%	7.6%	-4.1%	1.1%		7.6%
Adjusted EBIT	65.2	16.9	-7.4	1.0		75.6
Margin (%)	13.0%	7.9%	-2.8%	1.1%		8.1%

39	1Q20 Roadshow presentation

Top-line decrease driven by COVID-19 impacts on Advertising	1Q20 - M&R
Mail and on retail and by deconsolidation of Alvadis

M&R external
operating income, € million	Domestic Mail

Transactional

Proximity and convenience

1Q19

1. Transactional
2. Advertising
3. Press

					Operating income decline at € -17.6m i.e.
486.5
			€ +1.0m working days impact, € -29.1m
					volume (-9.9% underlying volume decline,
					i.e. -7.1% YTD Feb-20,-15.6%Mar-20),
				and € +10.5m price/mix.
-2.2
-13.1
					1	2
-2.3

3

-8.8% underlying volume decline of which:

-8.1% YTD Feb-20: no change in structural trends, i.e. continued e-substitution by big senders and SMEs, higher acceptance of e-documents at the receivers' side and digitization of C2B communication through smartphone apps.

-10.2%Mar-20: impact from COVID-19 on
smaller administrative mail volumes and	1
registered letters.

retail network

Decrease mainly driven by:

‐ the deconsolidation of Alvadis (€ -7.6m) as of September 2019

‐ COVID-19 impact on Ubiway retail revenues

‐ Decline in banking & finance revenues from low interest rate

environment4

Proximity and 4 convenience retail network

Value added

5 services

1Q20

-13.2

2.2

457.8

Advertising

-16.5% underlying volume decline:

-3.9% YTD Feb-20, better than FY19 at -4.7%, driven by dedicated marketing & sales efforts to re-boost advertising mail.

-39.4%Mar-20 driven by cancelled campaigns from COVID-19 ban on promotions and enforced closure of all

Press

-5.2% underlying volume decline driven by e-substitution and rationalization.

Value added services

Higher revenue from fines and document management.

-28.7

non-essential items stores.

2

3

5

40	1Q20 Roadshow presentation

M&R EBIT impacted by COVID-19 mail evolution and	1Q20 - M&R
additional opex to guarantee continuity of service

€ million

Mail & Retail	1Q19	1Q20	% ↑
External operating income	486.5	457.8	-5.9%
Transactional	195.5	193.3	-1.1%
Advertising	60.9	47.8	-21.5%
Press	88.4	86.1	-2.6%
Proximity and convenience retail network	116.3	103.1	-11.4%
Value added services	25.3	27.5	8.5%
Intersegment operating income	41.1	42.2	2.9%
Total operating income	527.5	500.0	-5.2%
Operating expenses	414.1	413.8	-0.1%
EBITDA	113.4	86.1	-24.0%
Depreciation & Amortization	21.4	21.6	0.9%
Reported EBIT	92.1	64.6	-29.8%
Margin (%)	17.4%	12.9%
Adjusted EBIT	92.6	65.2	-29.6%
Margin (%)	17.6%	13.0%
Average # FTEs and interims	21,882	22,175	1.3%
Additional KPIs
Underlying Mail volume decline	-9.2%	-9.9%
Transactional	-9.8%	-8.8%
Advertising	-7.6%	-16.5%
Press	-8.7%	-5.2%

Key takeaways 1Q20

• Total operating income decline of € -27.5m primarily driven by domestic mail volume decline and the deconsolidation of Alvadis. Mainly Advertising Mail was significantly impacted by a ban on promotions during the COVID-19 lockdown that started March 18, 2020.
• Despite COVID-19, operating expenses (incl. adjusted D&A) remained nearly stable (€ +0.1m). Higher payroll costs from a.o. COVID-19 premium and higher absenteeism were fully compensated by the favorable evolution of the FTE mix, the decrease of material costs from Ubiway Retail (incl. Alvadis deconsolidation impact) and higher recoverable VAT.
• COVID-19impacted EBIT by an estimated € -14.4m. This is mainly explained by the top-line development on domestic mail as well as additional costs related to a premium for operational staff in duty applicable since March 1st, higher absenteeism and increased health & safety measures.
• M&R adjusted EBIT declined by € -27.4m to € 65.2m.

41	1Q20 Roadshow presentation

Parcels BeNe & E-commerce logistics growth partly offset by COVID-19 impact on Cross-border

1Q20 - PaLo Eurasia

PaLo Eurasia external
operating income, € million		Parcels BeNe
	1Q19					Parcels BeNe volume growth of
		191.7			+20.5%, higher than YTD Feb-20
						17.9% growth, driven by increased
						online sales since the March 18,
1	Parcels BeNe	17.3		2020 lockdown (March 2020
	volumes up 26.0%).
						Parcels BeNe volumes include
						continuous positive volume
2	E-commerce			8.5	development at DynaLogic with a
logistics			strong quarter vs 1Q19.
						Negative price/mix fully mix-driven.
	Cross-border
3			-7.0

1Q20 210.5

+18.7

1

E-commerce logistics

Revenue growth mainly driven by Active Ants organic business development combined with the integration of MCS Fulfilment as from October 1, 2019.

Growth at Radial Europe from new customers gained in 2019.

2

Cross-border

Cross-border revenues impacted by COVID-19 (€ -5.7m). Revenue loss driven by international parcels volume decline and mail volume declines on in- and outbound, with the main impact in March 2020.

Terminal dues settlements showed a negative YoY evolution of € -1.0m.

3

42	1Q20 Roadshow presentation

Lower EBIT through COVID-19, 1Q19 additional VAT	1Q20 - PaLo Eurasia
recovery and YoY unfavourable evolution of terminal dues

€ million

Parcels & Logistics Europe and Asia	1Q19	1Q20	% ↑
External operating income	191.7	210.5	9.8%
Parcels BeNe	87.4	104.7	19.8%
E-commerce logistics	30.8	39.3	27.4%
Cross-border	73.5	66.5	-9.6%
Intersegment operating income	5.1	3.0	-40.7%
Total operating income	196.8	213.5	8.5%
Operating expenses	174.8	192.2	10.0%
EBITDA	22.0	21.3	-3.4%
Depreciation & Amortization	5.7	5.1	-10.4%
Reported EBIT	16.3	16.2	-0.9%
Margin (%)	8.3%	7.6%
Adjusted EBIT	18.0	16.9	-6.4%
Margin (%)	9.2%	7.9%
Average # FTEs and interims	3,096	3,435	10.9%
Additional KPIs
Parcels volume growth	16.9%	20.5%

Key takeaways 1Q20

• Total operating income € +16.7m (+8.5%) primarily driven by Parcels BeNe (€ +17.3m, +19.8%) and E-commerce logistics partly offset by Cross-border largely impacted by COVID-19 (€ -5.7m) and by the unfavourable evolution of terminal due settlements (€ -1.0m).
• Excluding additional VAT recovery in 1Q19 (€ -2.4m YoY) and the unfavourable evolution of terminal due settlements (€ -0.5m YoY), the operating expenses (incl. adjusted D&A) increased by € -14.9m (+8.1%), mainly from higher payroll, interim and transport costs driven by Parcels BeNe & E-commerce logistics volume growth, COVID-19 premium and increase in absenteeism, and negative channel mix (higher use of subcontractors).
• COVID-19had an estimated EBIT impact of € -1.8m, mainly from the partial suspension of Cross-border activities, slightly higher Parcels BeNe revenues offset by the aforementioned additional opex, and increased health & safety measures.
• Adjusted EBIT decreased by € -1.2m to € 16.9m. Excluding the impacts of the 1Q19 additional VAT recovery, YoY terminal dues settlements (€ -1.4m) and COVID-19, adjusted EBIT would be up € +4.5m (+31%) operationally.

43	1Q20 Roadshow presentation

Parcels & Logistics North America driven by 2019 new business and growth at existing clients

1Q20 - PaLo N. Am.

PaLo North America external
operating income, € million	E-commerce logistics
									YoY increase of +16.4%, or +13.2%
	1Q19		227.2						at constant exchange rate.
									Revenue increase mainly driven by
									Radial North America recording
									growth of existing customers as well
1	E-commerce								as new clients launched in 2019 and
		33.5			positive FX development partly
logistics
	International								offset by client churn.
2				-0.7
mail
	1Q20
		259.9
									1
1 Combination IMEX, Mail Inc & MSI	+32.8

International mail

Declining revenues at The Mail Group1 (-3.2%) despite positive FX evolution (-6.1% at constant exchange rate).

No material COVID-19 impact in March 2020 yet.

2

44	1Q20 Roadshow presentation

Positive EBIT evolution of Radial largely offset by continuing margin pressure in International mail

1Q20 - PaLo N. Am.

€ million

Parcels & Logistics North America	1Q19	1Q20	% ↑
External operating income	227.2	259.9	14.4%
E-commerce logistics	204.5	238.0	16.4%
International mail	22.7	21.9	-3.2%
Intersegment operating income	1.4	1.4	-0.4%
Total operating income	228.5	261.3	14.3%
Operating expenses	222.7	250.9	12.7%
EBITDA	5.9	10.4	77.6%
Depreciation & Amortization	16.9	21.2	25.5%
Reported EBIT	-11.0	-10.8	-2.3%
Margin (%)	-4.8%	-4.1%
Adjusted EBIT	-7.8	-7.4	-4.5%
Margin (%)	-3.4%	-2.8%
Average # FTEs and interims	7,349	7,445	1.3%
Additional KPIs, adjusted	187.2	215.1
Radial North America revenue, $m	14.9%
Radial North America EBITDA, $m	-1.9	4.1
Radial North America EBIT, $m	-15.2	-12.9

Key takeaways 1Q20

• Total operating income increase of € +32.8m or +14.3% (+11.2% at constant exchange rate) mainly driven by growth at Radial from existing customers and new customers launched in 2019.
• Operating expenses (incl. adjusted D&A) increased by € -32.4m (€ -25.8m excl. FX) driven by higher variable costs from volume growth, a slightly negative client mix effect, higher payroll costs and increased D&A from the 3 new fulfilment centers last year. International mail business impacted by YoY increase in transport costs.
• COVID-19impacted EBIT by an estimated € -0.3m, mainly related to additional health and safety measures.
• Adjusted EBIT up € +0.4m driven by positive evolution in E-commerce logistics, in particular at Radial. This was largely offset by continuing margin pressure in International mail from higher competition, lower volumes and increased transport costs.

45	1Q20 Roadshow presentation

Corporate EBIT increase driven by higher building sales and lower opex

1Q20 - Corporate

€ million

Corporate	1Q19	1Q20	% ↑
External operating income	1.5	6.4
Intersegment operating income	84.7	90.4	6.7%
Total operating income	86.2	96.8	12.3%
Operating expenses	76.4	77.5	1.4%
EBITDA	9.8	19.3	97.6%
Depreciation & Amortization	16.7	18.3	9.0%
Reported EBIT	-7.0	1.0
Margin (%)	-8.1%	1.1%
Adjusted EBIT	-7.0	1.0
Margin (%)	-8.1%	1.1%
Average # FTEs and interims	1,639	1,640	0.1%

Key takeaways 1Q20

• External revenues up € +4.9m driven by higher building sales (€ +5.2m), partly delays from 2019 which materialized in 1Q20. This was partly offset by lower rental income.
• Operating expenses (incl. D&A) increased by € -2.6m driven by higher reinvoicing of services to the operational Business Units (€ +5.7m intersegment operating income). Especially for IT- related projects, an increase in demand was noticed. Net of the intersegment operating income, the opex (incl. D&A) was down € +3.1m.
• COVID-19impacted EBIT by an estimated € -0.2m, mainly related to additional costs for health and safety measures.
• As a result, adjusted EBIT increased by € +8.0m.

46	1Q20 Roadshow presentation

Positive evolution of FCF1 mainly driven by higher cash flow	1Q20
from investing activities through higher building sales

		Reported - € million
+				1Q19		1Q20	Delta
	Cash flow from operating activities	202.2	203.6	1.4
+		Cash flow from investing activities	-16.1	-9.4	6.7
=		Free cash flow		186.1		194.2	8.1
+		Financing activities	-44.2	-26.6	17.5
=		Net cash movement		141.9		167.6	25.7
		Capex		(15.7)		(20.5)	(4.9)

CF from operating activities	CF from investing activities	CF from financing activities
More cash payments related to "due to" Radial's clients: € -42.6m, mainly phasing	Proceeds from buildings sales: € +11.1m	Commercial papers issuance: € +15.6m
Tax assessments on previous years: € +21.3m YoY variance	Higher capital expenditures: € -4.9m
(€ +7.5m positive settlement in 1Q20 vs. € -13.8m in 1Q19)

Excluding the above, CF from operating activities: € +22.8m, of which:

‐ improvement in working capital evolution: € +35.2m, primarily driven by improvement in payables

‐ partly offset by lower operating results

1 Free cash flow = cash flow from operating activities + cash flow from investing activities

47	1Q20 Roadshow presentation

Balance Sheet

€ million
Assets	Dec 31, 2019	Mar 31, 2020
PPE	1,133.6	1,120.2
Intangible assets	898.3	904.9
Investments in associates and joint ventures	239.5	234.2
Other assets	41.8	38.8
Trade & other receivables	759.0	583.6
Inventories	34.7	36.8
Cash & cash equivalents	670.2	844.4
Total Assets	3,777.1	3,762.9

Main balance sheet movements

Trade & other receivables decreased due to the settlement of the SGEI receivable and the peak sales of year-end 2019.

Cash and cash equivalents increased mainly due to the settlement of the SGEI compensation.

Trade & other payables decreased due to phasing year-end peak 2019. The decrease was partially offset by the increase of other payables mainly due to the advance payment of the SGEI compensation.

1Q20

	€ million
	Equity and Liabilities	Dec 31, 2019	Mar 31, 2020
	Total equity	682.6	731.9
	Interest-bearing loans & borrowings (incl. bank overdrafts)	1,449.9	1,464.2
	Employee benefits	320.6	319.6
	Trade & other payables	1,278.5	1,174.7
	Provisions	29.8	30.7
	Derivative instruments	1.3	0.5
	Other liabilities	14.3	41.3
	Total Equity and Liabilities	3,777.1	3,762.9

48	1Q20 Roadshow presentation

Financing Structure & Liquidity

€ million
Available Liquidity	Dec 31, 2019	Mar 31, 2020
Cash & cash equivalents	670.2	844.4
Cash in network	163.6	156.0
Transit accounts	105.8	45.8
Cash payment transactions under execution	-26.7	-10.8
Bank current accounts	377.4	488.4
Short-term deposits	50.0	165.0
Undrawn revolving credit facilities	375.0	375.0
Syndicated facility - 10/2024	300.0	300.0
Bilateral facility - 06/2024	75.0	75.0
Total Available Liquidity	1,045.2	1,219.4

1Q20

	€ million
	External Funding	Dec 31, 2019		Mar 31, 2020
	Long-ter m	650.0	650.0
	Long-term bond1 (1.25% - 07/2026)
	Bank loans	183.2	187.1
	Amortizing Loan (€ 100m) EIB - 12/2022	18.2	18.2
	Term Loan ($ 185m) Bank of America - 07/2022	165.0	168.9
	Shor t-ter m
	Bank loans: Amortizing Loan (€ 100m) EIB - 12/2022	9.1	9.1
	Commercial Papers	164.5	165.2
	Total External Funding	1,006.8		1,011.3

Liquidity: Cash & Committed credit lines

Total available liquidity at March 31, 2020 consisted out of € 844.4m cash & cash equivalents of which € 653.4m is readily available on bank current accounts and as short-term deposits.

In addition, bpost Group has 2 undrawn revolving credit facilities for a total amount of € 375.0m.

External Funding & Debt Amortization (excl. IFRS16 lease liabilities)

Out of € 1,011.3m external funding on balance sheet at March 31, 2020:

‐ € 165.2m needs to be repaid or will be rolled over between 2Q20 and 4Q20 (i.e. commercial paper with maturity ranging between 1 to 9 months)

‐ € 9.1m during 4Q20 (i.e. the current portion of the EIB loan).

1 € 650m long-term bond with a carrying amount of € 642.8m, the difference being the re-offer price and issuance fees.

49	1Q20 Roadshow presentation

Additional info

Key financials FY19

€ million	Reported		1
			Adjusted
	FY18		FY19	FY18		FY19	% ↑	FY19 IFRS16
Total operating income	3,850.2		3,837.8	3,850.2		3,837.2	-0.3%
Operating expenses	3,279.1		3,300.2	3,279.1		3,300.2	0.6%	+107.6
EBITDA	571.1		537.6	571.1		537.0	-6.0%	+107.6
Depreciation & Amortization	177.7		247.7	146.8		226.2		-105.3
EBIT	393.4	1	289.9	424.3	1	310.8	-26.7%	+2.3
Margin (%)	10.2%		7.6%	11.0%		8.1%
Financial result	-23.8		-61.5	-23.8		-61.5		-9.7
Profit before tax	381.0		244.3	411.9		265.2	-35.6%
Income tax expense	117.4	1	89.6	121.4	1	92.1
Net profit	263.6		154.7	290.4		173.1	-40.4%
FCF	241.2	2	302.0	231.5	2	288.0	24.4%	+112.3
bpost S.A./N.V. net profit (BGAAP)	262.3	3	172.6	262.3		172.6	-34.2%
Net Debt at 31 December	344.8		779.9	344.8		779.9		+432.3
Capex	114.9		162.3	114.9		162.3	41.2%
Average # FTEs and interims	36,109		35,377	36,109		35,377

1 Unaudited figures

51	1Q20 Roadshow presentation

FY19

1. Amortization of intangibles recognized during PPA is adjusted, leading to increase in EBIT (€ +21.5m) and income tax expense (€ +2.4m)
2. Adjusted FCF excludes the cash Radial receives on behalf of its customers for performing billing services
3. bpost net profit BGAAP excludes Centre Monnaie's profit on disposal:
   Since the sales price will be reinvested, the profit on disposal and related taxation will be spread throughout the depreciation of these reinvestments This lowers the tax costs on the profit on disposal as the statutory tax rate decreased as from 2020 to 25%

Results by segment FY19	FY19

€ million
	M&R	PaLo Eurasia	PaLo N. Am.	Corp	Eliminations	Group
External operating income	1,897.1	813.2	1,097.5	30.1	0.0	3,837.8
Intersegment operating income	174.7	17.8	6.8	372.0	-571.2
Total operating income	2,071.7	830.9	1,104.2	402.1	(571.2)	3,837.8
Operating expenses	1,734.2	747.7	1,048.7	340.7	-571.2	3,300.2
EBITDA	337.5	83.2	55.5	61.4		537.6
Depreciation & Amortization	83.7	21.7	71.6	70.8		247.7
Reported EBIT	253.8	61.5	-16.1	-9.3		289.9
Margin (%)	12.3%	7.4%	-1.5%	-2.3%		7.6%
Adjusted EBIT	257.4	65.8	-3.0	-9.3		310.8
Margin (%)	12.4%	7.9%	-0.3%	-2.3%		8.1%

52	1Q20 Roadshow presentation

bpost Group's long-term relationship with the Belgian State

Belgian State

State as a long-term shareholder

• Belgian State has 51% shares
• bpost Group's board is composed of
  5 board members and CEO appointed by the Belgian State and 6 independent directors
• Belgian State supports a regular dividend policy

Shareholder	# shares
Belgian State	102,075,649
Free float	97,925,295

1. SGEI stands for Services of General Economic Interest cfr. slide 16 and 54
2. All amounts need to be adjusted for inflation on a cumulated yearly basis

bpost Group provides SGEIs1 on behalf of the State

2016-2020

• 2 press distribution contracts (newspapers & periodicals)
  - prolonged for 2 years until the end of 2022
• Sixth management contract for other SGEIs
• Contractual amounts (excl. inflation2, volume impact & sharing of efficiency gains) of € 261.0m in 2016 (actual amount: € 264.9m), € 260.8m in 2017 (actual amount: € 270.0m), € 257.6m in 2018 (actual amount: € 271.4m), € 252.6m in 2019 (actual amount: € 271.0m) and
  € 245.6m in 2020

Press

Other SGEIs

State as important customer

• State is a key commercial client to bpost Group
• Several other agreements in place with the State, such as European license plates (won by bpost Group through tender)

53	1Q20 Roadshow presentation

Sixth management contract and press concessions will be renegotiated before 2022

Scope		Universal Service		6th Management Contract
		Obligation (USO)		Services not typically associated with mail operators
		• Collect, sort, transport & distribute letter mail up to		(SGEI), e.g.,
			•	Retail network
			2kg, parcels up to 10kg and parcels up to 20kg			(1,300 postal service points of which
			from other EU member states			at least 650 post offices)
		• 1 access point per municipality		•	Cash at Counter
		•	Collect and deliver 5x/week		•	Election mail (distribution)
		•	Full territory of Belgium		•	Cash payment of pensions at home
		•	USO pricing constraints
		•	Provide adequate information on USO products
			and services
		• Quality control obligation (95% of prior
			mail/parcels D+1, 97% D+2)

USO & SGEI

Press concessions

• Also part of SGEIs
• Newspaper early delivery 6x/week
• Periodical delivery 5x/week
• Quality control obligation of maximum 7 complaints per 10,000 deliveries
• FTEs
• • ~1,700 FTEs for newspaper deliveries which are dedicated rounds
  • Delivery of periodicals is integrated in the regular mail rounds

Timing		•	Complementary management contract granted by
			the State
		•	Runs until end of 2023, renewable by consecutive
			terms of 5 years

State compensation

possible in case of USO being financial burden

54

•	Runs until end of 2020		•	Runs until end of 2022
•	Notified and validated by European Commission		•	Notified and validated by European Commission
	under State Aid rules			under State Aid rules

€ 271m state compensation in 2019

Amount including inflation, volume variance and sharing of efficiency gains

1Q20 Roadshow presentation

A relatively resilient mail market vs. other European operators

Addressed mail volume per capita 2019

operator level*

European mail market

2008-19 CAGR for addressed mail volumes

as reported by major incumbent European postal operators, percent

1																								DE 5
CH											210		-2.2%
5	DE										189				-3.5%								CH 1
11	AU									175					-3.5%								AU 11
10	UK								155	(1)				-4.4%						BE	9
2	FR							136								-5.0%				UK 10	(2)
8	BE							136						-5.4%				SW 3
3	SW						133										-5.7%				FR	2
4	EU					132											-6.0%				EU
NL				102											-8.6%		NL 4
7	IT			45																-9.1%		IT	7
6	DK		42																	-12.9%	DK 6

Note: definition of addressed mail may differ by operator

Source: Company information; Annual reports; Investor presentations; IPC; Eurostat

1	Includes addressed mail	5	Includes mail communication and dialogue marketing
2	Includes addressed mail	6	Includes addressed mail
3	Includes addressed mail	7	Includes addressed mail (publishers services excl.)
4	Includes addressed mail	8	Includes addressed mail excluding press
55			1Q20 Roadshow presentation

9	Includes all domestic mail
10 Includes inland addressed mail
11 Includes letter mail and addressed direct mail / media post	(1) 2018 data
*	Excludes domestic competitors	(2) 2008-18 data

Key contacts

Saskia Dheedene	Stéphanie Voisin
Head of Investor Relations	Manager Investor Relations
Email: [e-mail]	Email: [e-mail]
Direct: [phone]	Direct: [phone]
Mobile: [phone]	Mobile: [phone]
Address: bpost Group, Centre Monnaie, 1000 Brussels, Belgium	Address: bpost Group, Centre Monnaie, 1000 Brussels, Belgium

56	1Q20 Roadshow presentation

Questions