Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bpost SA de Droit Public (BPOSY, Financial) reported a 5% year-over-year increase in group operating income, reaching EUR 1 billion.
- Domestic parcel revenue grew by 9%, driven by strong demand in fashion and apparel sectors.
- The company successfully refinanced its bridge financing through a EUR 1 billion dual-tranche senior unsecured bond offering, which was oversubscribed by 4.4 times.
- Staci's EBIT contribution for the quarter was EUR 11.3 million, with a margin of 9.2%, indicating a positive impact from the acquisition.
- The company reaffirmed its 2024 EBIT outlook, projecting an adjusted group EBIT in the range of EUR 205 million to EUR 230 million.
Negative Points
- Operating income decreased by 8% when excluding the consolidation impact of Staci, mainly due to pressures in North America.
- Adjusted EBIT stood at EUR 10.3 million, representing a decline of EUR 29 million compared to the previous year.
- The group reported a negative EBIT of EUR 0.9 million, reflecting an adjustment for a cost of EUR 8 million incurred during the quarter.
- Cross-border North America revenues declined by 15%, with Landmark Global reporting its seventh consecutive quarter of year-over-year revenue decline.
- The company faced challenges in the US market, with ongoing competition and pricing pressures affecting revenue growth.
Q & A Highlights
Q: Can you provide an update on the 3PL North American segment, particularly regarding the onboarding of new customers and its impact on margins?
A: Philippe Dartienne, CEO and CFO, explained that while there is pressure on Radial US due to customer churn and negative same-store sales, the strategy to shift towards mid-sized customers will take time to show benefits, expected after the 2025 peak. Despite revenue challenges, Radial has managed its costs effectively, maintaining high variable contribution margins.
Q: There have been complaints in Belgium regarding new press distributions. Can you comment on this and any potential financial impact?
A: Dartienne acknowledged the transition challenges with new press distribution contracts, particularly in the northern part of Belgium. He emphasized that improvements are already visible and that they are still within the agreed two-month transition period with editors. No financial impact was discussed, and any changes would be addressed with the editors if necessary.
Q: Staci's Q3 EBIT was below expectations. Is this due to seasonality, and what is the outlook?
A: Dartienne attributed the lower EBIT to seasonal softness, particularly in the American activities. However, he remains confident in achieving the full-year average EBIT margin target of 10-11% for Staci, as the peak season is expected to boost performance.
Q: How is the US cross-border business performing, especially with past insourcing impacts?
A: The US cross-border business continues to face challenges due to customer losses, including Amazon's insourcing. While the impact has stabilized, acquiring new customers remains difficult due to fierce competition, particularly in Canada.
Q: Can you provide more details on the parcel volume trends, especially in September?
A: Dartienne confirmed that parcel volumes in Belgium showed strong growth, driven by major platforms like Amazon. September saw double-digit growth, and recent trends remain positive, although the price mix was affected by the higher weight of large customers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
