bpost third quarter 2020 results
Continued strong Parcels & Logistics performance further accelerates the mix shift and drives outlook upgrade
Third quarter 2020 highlights
Group operating income at EUR 972.9m, +10.4% compared with the same period last year, fully driven by continued strong performance in Parcels & Logistics Europe & Asia and North America.
Group reported EBIT at EUR 65.1m, +81.5%. Adjusted EBIT at EUR 69.5m (margin of 7.1%).
Accelerated mix shift. Strong e-commerce driven performance in Parcels & Logistics Europe & Asia and North America further accelerates the mix shift with their combined adjusted EBIT contributions (EUR 38.5m) exceeding Mail & Retail adjusted EBIT (EUR 35.7m) for the second consecutive quarter.
Mail & Retail reported EBIT at EUR 35.1m. Adjusted EBIT at EUR 35.7m (7.7% margin), down only EUR 2.7m explained by stellar growth in parcel volumes handled through the mail network for Parcels & Logistics Europe & Asia. Underlying mail volume decline proving resilient at -8.2% and better than pre-COVID-19 guided -9 to -11% range.
Parcels & Logistics Europe & Asia reported EBIT at EUR 29.0m. Adjusted EBIT at EUR 29.7m (11.3% margin), up EUR 19.4m thereby nearly tripling. Strong margin improvement is driven by stellar growth in parcel volumes handled through the mail network. Parcels B2X volumes up +49.0% year-over-year.
Parcels & Logistics North America reported EBIT at EUR 5.6m. Adjusted EBIT at EUR 8.7m (2.9% margin), up EUR 14.0m mainly driven by Radial North America, which recorded continued high growth from existing customers and clients launched in 2019 (E-commerce logistics operating income +25.2%), thereby benefitting from positive operating leverage.
COVID-19. Key priority is to protect the health and safety of our employees and customers. As from this quarter, COVID-19 impacts are no longer separately disclosed since disentangling its effects from the observed business developments has become increasingly artificial and therefore less meaningful.
Ransomware attack. On October 15th, 2020, Radial North America experienced a ransomware attack impacting some of its US operations. Meanwhile, Radial has managed to regain sufficient functionality to allow it to restart fulfilment operations at all of its locations. For more details, refer to note 22 (Events after the reporting period).
Outlook 2020. Based on the current situation and facts and including the estimated financial impact of the ransomware attack, the previously reconfirmed 2020 group adjusted EBIT guidance of EUR 240-270m can be revised upwards to at least EUR 270m. Due to the second wave of the pandemic and lockdown measures taken, the visibility for the fourth quarter is however limited.
Strategic update and revised capital allocation framework, including new dividend policy, will be communicated to the market on December 8th, 2020.
S&P reaffirms the long- & short-term credit rating at A/A-1, outlook stable.