U.S. Markets close in 1 hr 19 mins

Edited Transcript of BPOST.BR earnings conference call or presentation 18-Mar-20 9:00am GMT

Q4 2019 Bpost SA Earnings Call

Bruxelles Mar 18, 2020 (Thomson StreetEvents) -- Edited Transcript of Bpost SA earnings conference call or presentation Wednesday, March 18, 2020 at 9:00:00am GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Jean-Paul Van Avermaet

bpost SA/NV - CEO

* Leen Geirnaerdt

bpost SA/NV - CFO

================================================================================

Conference Call Participants

================================================================================

* Andre F. M. Mulder

Kepler Cheuvreux, Research Division - Analyst

* David Kerstens

Jefferies LLC, Research Division - Equity Analyst

* Marc Zwartsenburg

ING Groep N.V., Research Division - Head of Benelux Equity Research

* Marco Limite

Barclays Bank PLC, Research Division - Research Analyst

* Ruben Devos

KBC Securities NV, Research Division - Senior Financial Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Ladies and gentlemen, welcome to the bpost Fourth Quarter 2019 Results Call. (Operator Instructions) bpost's CEO, Mr. Jean-Paul Van Avermaet; and bpost's CFO, Mrs. Leen Geirnaerdt, will be the speakers for this event.

I would now like to hand over to them for the start of the conference. Go ahead, please.

--------------------------------------------------------------------------------

Jean-Paul Van Avermaet, bpost SA/NV - CEO [2]

--------------------------------------------------------------------------------

Okay. Good morning, ladies and gentlemen. I am very pleased to be here to present you bpost Group's fourth quarter and full year 2019 results. I want to welcome you and thank you also for joining us on call. With me, I have Leen Geirnaerdt, our CFO, as well as Saskia and Stephanie from our Investor Relations department. I assume you already had the opportunity to read through the materials, which we have posted last night on our website. We will summarize key messages so as to move on to the Q&A rather quickly.

Although the full year and fourth quarter results have not been realized under my CEO mandate, I'm happy to present you the highlights of both. On Page 3, you see that the full year results are in line with the guidance. Group adjusted EBIT stood at EUR 310.8 million. This compares with our full year guidance of above EUR 300 million. Note that in order to align our terminology of alternative performance measures to ESMA guidelines, our previous call normalized figures are now labeled adjusted figures.

The Mail & Retail business contributed for EUR 257.4 million to the group adjusted EBIT. This with a margin of 12.4%, well within the guided 11% to 13% range. Year-on-year, the segment was impacted by accelerating mail volume decline of minus 7.9% due to continued e-substitution and rationalization and this partly mitigated by pricing effects. The cost base increased as a result of the collective labor agreement signed at the end of 2018 and preparatory work for our alternating distribution model and also general cost inflation.

Excluding the effect of earn-out reversals in 2018, our Parcels & Logistics Eurasia's top line growth was driven by good volume development of parcels, Belgium, Netherlands at 20% and growth also in e-commerce logistics. The adjusted EBIT stood at EUR 65.8 million with a margin of 7.9%. Also, this was fully in line with guidance at the high end of the 6% to 8% range and represents a strong increase versus 2018 at 4.8%.

At Parcels & Logistics North America, although new business is gaining pace, top line was still negatively impacted by the 2018 customer churn and repricing at Radial. As expected, adjusted EBIT was slightly below breakeven at minus EUR 3 million, driven by top line developments and setup costs for the 22 newly onboarded customers. Total contract value signed at Radial reached $385 million, well above the initial ambition of $300 million. And partly, we must say, supported by TradeGlobal exiting the business.

CapEx ended up at EUR 162.3 million, which is also in line with the guided range.

I'm now on Slide 4, presenting the dividend. These results allow us to propose a final dividend of EUR 0.11 to the general shareholders meeting, which brings the total gross dividend per share based on a full year 2019 results to EUR 0.73. This represents a payout ratio to 85% of BGAAP net profit fully in line with our dividend policy defined at the IPO.

Moving to Page 5, with highlights of the fourth quarter. We see that group adjusted EBIT at EUR 69.2 million was fully in line with the expectations.

Total operating income at Mail & Retail declined by 2.3% year-on-year, and this mainly as a result of Domestic Mail volume decline limited to minus 5.5% and the deconsolidation of Alvadis sold to Conway end of August 2019. Underlying mail volume decline was rather contained at minus 5.5%, and this supported by a favorable phasing effect in transactional mail and small growth in advertising mail, thanks to our dedicated sales efforts. Adjusted EBIT for the division at EUR 51.5 million was impacted by higher payroll and project-related costs related to the CLA, the end-of-year peak and the alternating distribution model.

At Parcels & Logistics Eurasia, excluding the net impact of earn-out reversals, top line growth reached 8.8% year-on-year driven by strong volume development at Parcels BeNe of 24.3% in the quarter driven by e-commerce growth as well as by growth of DynaLogic. Again, excluding the aforementioned elements and a goodwill impairment in the fourth quarter of 2018, adjusted EBIT showed a EUR 6.6 million business-driven growth, which represents an increase of 115%.

Total operating income at Parcels & Logistics North America was supported by positive foreign exchange and commercial developments still partly offset by the 2018 customer churn and repricing impacts. Fourth quarter results were, as already mentioned, negatively impacted at the EBIT level by the additional setup costs of newly onboarded clients in 3 new facilities. Therefore, adjusted EBIT stood EUR 4.9 million below the fourth quarter of 2018.

Before handing over to Leen, I would like to give a short update on a few topics. First of all, we are satisfied that the end-of-year peak has been well managed, both in Belgium and in the U.S. In Belgium, we were again able to deliver excellent quality. In the U.S., revenues were as expected, and labor management, productivity and quality were also according to the expectations.

Also importantly, in December 2019, the Belgian Federal Council of Ministers has decided to extend the current press concessions. So this means the 2 contracts for newspapers and periodicals, and this for a period of 2 years, at the same conditions as those applicable for the year 2020. This is a positive development for bpost Group. The decision is currently being notified to the European Commission.

Operationally, we have launched the national rollout of our alternating distribution model this week. As from now on, the mail rounds will be split into 2. It means a postman will distribute prior and non-prior products on the first half of his round and prior products only on the second half of his round. After the evaluation period, we will start Phase 3 organization of the mail rounds distribution office by distribution office. The full reorganization cycle can take up to 18 months to be completed. Therefore, savings in 2020 will be fairly limited.

I will now hand over to Leen for more details on the financials. Leen?

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [3]

--------------------------------------------------------------------------------

Yes. Good morning, everybody. Happy to see that you're all in the call and in safe health. So I'm with you on Page 6, showing the EBIT bridge for the fourth quarter. As you can see and as expected, the adjusted EBIT showed a decline of EUR 87.7 million compared to the fourth quarter of 2018. The year-on-year comparison is impacted by a lot of accounting judgments -- sorry, adjustments, which makes it a bit more difficult to see really the pure operating performance. So I'll do my best in the presentation to shape some clarity there.

In Mail & Retail, adjusted EBIT was negatively impacted by the Domestic Mail volume decline of minus 5.5% in the quarter, not fully compensated by pricing as well as cost inflation in the division stemming from payroll costs mainly relating, as you know, to the collective labor agreement and project-related costs like Jean-Paul indicated.

Parcels & Logistics Eurasia. They reported on the first [slide] in the adjusted EBIT, a decline of minus EUR 1.7 million. However, this figure includes 2 important things: First, we see a net negative impact of EUR 16.7 million relating to earn-out reversals and that consists of minus EUR 18.2 million on DynaGroup and on de Buren, which took place in the fourth quarter of 2018, a profit which we do not have in this quarter. In addition, this quarter, we do have EUR 1.5 million on Leen Menken. Secondly, there's also the positive year-on-year effect relating to goodwill impairments, an amount of EUR 8.4 million that was taken in the fourth quarter of 2018. Excluding those 2 impacts, the divisional adjusted EBIT grew by EUR 6.6 million, or an increase of 115%.

Parcels & Logistics North America. Adjusted EBIT declined by EUR 4.9 million versus fourth quarter of 2018. This is primarily as a result of the remaining effect of the past customer churn and the repricing as well as some setup costs relating to the rapid launch of the 22 newly onboarded clients at Radial.

Then in Corporate, the year-over-year results were heavily impacted by several positive elements from the fourth quarter of 2018. To start with, the gain of the sale of the old Brussels X (technical difficulty) and secondly, the IAS19 noncash gain relating to group insurance. Excluding these (technical difficulty) Corporate adjusted EBIT shows a decline of EUR 32.4 million because of lower building sales, some being phased towards 2020, higher payroll and higher project-specific costs at corporate level in procurements and in communication.

The Page 7. It shows the key financials for the quarter at group level. Total operating income was down by 1.6%, negatively impacted by the mail volume decline and by lower building sales. More details on revenue and EBIT developments following the breakdowns per business units.

EBIT was adjusted for noncash amortization charges on several intangible assets that were recognized following the purchase price allocation of acquisitions, same practice as in other quarters. These charges also positively impacted reported income tax. That effect has been adjusted here as well.

The net financial result of minus EUR 26.7 million, a decrease by EUR 18.6 million versus the fourth quarter of 2018, mainly due to the EUR 10.2 million increase of noncash financial charges relating to AIS19 employee benefits as a result of the decrease in the discount rates. Secondly, we have the first application of IFRS 16 for EUR 2.6 million; and thirdly, the EUR 7.3 million fair value adjustment for the purchase of the remaining shares of Active Ants related to the strong performance of that subsidiary. So the adjusted income tax decreased by EUR 21.8 million compared to the fourth quarter of 2018. This is, of course, as a result of the lower profit before tax while the effective tax rate is 35.4% and it increased as a result of lower deferred tax assets being booked.

The normalized free cash flow decreased despite the initial application of IFRS 16 with lease costs moving to the financial activities. I will come back more in detail on the cash flow elements later in this presentation.

Then the BGAAP net profit of the mother company, it was down by EUR 23.7 million to EUR 54.4 million in the quarter. For the full year, BGAAP net profit of EUR 172.6 million, declined by 34.2%, which is broadly in line with the IFRS adjusted EBIT decline of 31.4% when we exclude the gain on disposal on the headquarter. That was a bit the rule of thumb that we communicated to you earlier.

As Jean-Paul already mentioned, based on this net result and also based on the current dividend policy, we will propose a final dividend of EUR 0.11 to the general assembly, bringing the total dividend per share to EUR 0.73 based on the full year '19 results.

The net debt, excluding the effects of the application of IFRS 16, it remained broadly stable compared to end of 2018. I will come back on that, too, in the cash flow movements.

The CapEx for the full year, it amounted EUR 162.3 million, it's an increase of EUR 47.4 million compared to 2018, and that's primarily related to the build-out of the new fulfillment centers in North America as well as mail centers infrastructure, vehicles, ICT and the alternating distribution model.

Page 8. It gives us a view on the different operating segments and how they contribute. For the year as a whole, Mail & Retail generates 82.8% of the group adjusted EBIT. Parcels & Logistics Eurasia were the second contributor of 21.2%, while Parcels & Logistics North America still contributed negatively.

So we can shift to Page 9, which shows the external revenue bridge of Mail & Retail. So in the quarter, Mail & Retail external revenues, they declined by EUR 19.2 to EUR 486.8 million, mainly impacted by a EUR 10.6 million revenue loss in the Domestic Mail. This was driven by an underlying mail volume decline of minus 5.5% for the quarter, partly compensated by a positive price/mix effect. The mail volume decline for the full year stands at minus 7.9%.

In transactional mail, the volume decline is minus 7.2%. It's a slightly better trend than in the 3 previous quarters. We have to point out that in the fourth quarter 2018, we saw an acceleration of the mail volume decline, so the comparatives are a bit more easy. In addition, the 2020 administrative mailings might have been shifted towards December 2019, ahead of the considerable price increases in 2020. I want to add that the structural trends remain with the continued e-substitution by big senders and SMEs, as well the further digitization and rationalization through bundled mailing. So nothing really changed there.

Moving to advertising mail. That volume decline stood at a plus 0.5%, excluding elections that favorably impacted the fourth quarter of last year. Here, we do observe the first visible effects of the marketing and sales projects aimed at re-boosting advertising mail.

Then the press volumes, they're at minus 6.5%. They're quite in line with the full year trends and were driven by continued e-substitution and rationalization.

Proximity and convenience retail network revenues, they increased EUR 3.5 million. This is excluding the deconsolidation of Alvadis, which is a prepaid product distributor, which was sold to Conway at the end of August. This underlying increase resulted from higher sales at Ubiway and the bpost Group retail operations.

Value-added services, a small decline of EUR 1.8 million, as higher revenues from fines management were offset by somewhat lower revenues from document management and the phasing out of e-ID activities.

Then I'll explain a bit more per business units -- sorry, for the EBIT of M&R on Slide 10. The adjusted EBIT amounted to EUR 51.5 million, and the margin is 9.6%. This is a net decrease of EUR 30 million compared to the fourth quarter 2018, explained by decrease in total revenues of EUR 12.7 million, and a EUR 17.8 million increase in operating costs and adjusted D&A.

Looking at that OpEx increase, it was mainly driven by higher payroll and interim costs which are reflecting the impact of the new collective labor agreement that was concluded end of last year as well as some project-related costs and also the negative impact of the unpaid hours that we had in November 2018 when experiencing these strikes. These effects were only partly compensated by a favorable evolution of the FTE mix.

Moving to Parcels & Logistics Eurasia. We recorded an external revenue growth of EUR 11.2 million. This is mainly driven by a EUR 19.7 million increase or 22.4% of Parcels BeNe. That is partly offset by earn-out reversals in the fourth quarter of 2018, the amount being EUR 18.2 million. Organic volume growth was solid at 24.3% for the quarter and 20% for the full year, with a good performance also at DynaLogic. As in the past quarters, we recorded a slightly negative price/mix effect. Still, we see that is fully mix driven.

E-commerce logistics revenues, they increased by EUR 7.3 million, thanks to client wins at Radial Europe and also Active Ants organic business development as well as the acquisition of MCS Fulfilment in October 2019. Like I said, this quarter was positively impacted by EUR 1.5 million earn-out reversal on Leen Menken.

Cross-border increased by EUR 2.5 million to EUR 81.5 million, primarily driven by inbound with a better price/mix and additional revenues in the U.K. and Asia, offset by lower revenues from the rest of Europe and Outbound.

Slide 12. Adjusted EBIT for Parcels & Logistics Eurasia, you can see a decrease by EUR 1.7 million (sic) [EUR 1.6 million], a margin of 5.9%. This is a business unit with the most accounting adjustments and all the elements are explained on this slide. But the message I want to bring across is that all in all, excluding those net year-over-year impacts of earn-out reversals and goodwill impairments, adjusted EBIT actually increased by EUR 6.6 million. This relating to top line increase of 18.8% or 8.8% and the lower increase in operating expenses and depreciation and amortization of EUR 12.2 million when we exclude the IFRS 16 impact.

Then PaLo North America. There, the growth in external operating income was driven by new clients at Radial North America, growth from key existing customers and, very important, positive FX development. This was partly offset by the 2018 client churn as well as repricing on a number of contracts. International Mail was broadly stable with slightly negative business development, also compensated by the FX. Overall, the external revenues were up EUR 15.4 million for the business unit, including a positive EUR 10.9 million foreign exchange impact.

On Slide 14, we see that adjusted EBIT declined by EUR 4.9 million to amount to EUR 10.6 million. Excluding IFRS 16 impact, total adjusted OpEx including depreciation and amortization increased by EUR 19.5 million. That's driven to start with the impact of the foreign currency that is EUR 10.6 million. Higher volumes and setup costs related to onboarding of new clients. However, this was partly compensated by lower medical expenses and reduced fraud chargebacks in our payment business.

Note, when looking at the evolution of the KPIs of Radial North America in U.S. dollar, the positive 1.3% of revenue growth in the quarter compares with minus 17.1% in the first quarter, minus 10.2% in the second quarter and minus 6.1% in the third quarter. So this shows that the negative effect of customer churn and repricing has now leveled off, and we are starting to see the positive effect of the commercial efforts in our numbers. As you know, commercial progress, it continued in the fourth quarter and the total contractual value reached $385 million at the year-end.

Moving to the Corporate segment on Page 15. You will see that the external operating income was lower by EUR 25.2 million compared to the same period in 2018 due to lower building sales. Adjusted EBIT of minus EUR 51.2 million was also impacted by higher costs [from IAS19 because we had non-cash gain in the year of EUR 10.9 million.] We also had higher payroll and project-specific costs at corporate level in procurements and in communication.

Next, cash flows. Slide 16, it's cash flow of the quarter. You can see that reported operating cash flow stood at EUR 217.6 million, a decrease of EUR 6.3 million. Excluding the EUR 25.5 million, that shift of lease-related cash flow from operating to financing activities, the decrease stood at EUR 31.8 million. This results from lower cash flow from operations before changes in working capital, of course, due to lower operating results and also a different timing of the tax prepayments. These elements were partly compensated by a better working capital of EUR 14.4 million, mainly resulting from higher payables on the one hand, and secondly, more collected proceeds in the due to Radial's clients.

The cash flow from investing activities, it decreased by EUR 88.3 million. This was driven by lower building sales compared to the fourth quarter of 2018, a EUR 25 million subordinated loan granted to bpost bank and the higher capital expenditures, primarily related to the new fulfillment centers in the U.S. to additional fleet and also to our alternating distribution model.

For the full year, the CapEx stood at EUR 162.3 million, within the guided range, and EUR 47.3 million above that 2018. In the quarter, excluding IFRS 16 impact, the free cash flow decreased by EUR 120.1 million, reflecting primarily the lower operating results, higher investment outflows and lower building sales.

Cash flow from financing activities is also minus EUR 162 million in the fourth quarter, declined by EUR 83 million -- sorry. So it stands at minus EUR 162 million, and the decline is EUR 83.3 million versus the same period last year. This results from the fact that we have an issuance of commercial papers in the fourth quarter last year for an amount of EUR 165 million and, of course, again, the shift of lease-related cash outflows to financing activities for EUR 25.5 million. These effects were partially compensated by an EUR 88 million lower dividend payments.

So all in all, concluding from this cash flow, the debt remains rather stable because of all the explanations given.

On the next slide, we present the phase of the balance sheet. We already mentioned the net debt standing at EUR 780 million, which remained broadly stable. IFRS 16 also led to an increase in the property, plant and equipment. The right of use of assets stood at EUR 443.4 million end of 2019 versus lease liabilities of EUR 449.3 million. Other than those accounting effects, intangible assets increased by EUR 23.4 million, and that's actually mainly the foreign currency on goodwill. Other assets and other liabilities, they decreased as a result of the sale of Alvadis and de Buren, previously classified as held-for-sale assets.

I will now hand over back to Jean-Paul, who will talk you through the outlook of next year and, of course, happy to come back during the Q&A.

--------------------------------------------------------------------------------

Jean-Paul Van Avermaet, bpost SA/NV - CEO [4]

--------------------------------------------------------------------------------

Thank you, Leen. Before walking you through our outlook for 2020, we can summarize that 2019 was a challenging year. But we have delivered on our promises with full year adjusted EBIT comfortably above the EUR 300 million guidance and contributions by business unit as anticipated.

Over 2019, we witnessed additional pressure on mail volume decline with the percentage stepping up from 5.8% to 7.9%. And we had a very important year in terms of preparing our operations for the national rollout of our alternating distribution model, which we did this week. At the same time, we can say that we continued to record very strong organic parcels volume growth in our home region. And in the U.S., after first promising signs in the second half of 2018, Radial North America continued to turn the tide over 2019 with new client arrivals ahead of expectations, [increased] client satisfaction and also reduced customer churn.

As a new CEO of bpost Group, I understand fully bpost Group's strategy to be a relevant factor in the e-commerce logistics and parcels space while remaining an efficient mail operator in Belgium. The move into e-commerce logistics is also, in my opinion, an important element going forward. The management team has a relentless focus on establishing prominent positions in the parcels and e-commerce logistics space in Europe and also in the U.S.

We can say that important milestones have already been achieved. However, it requires time and investments for these businesses to reach the critical scale. Therefore, we have to be conscious of short to medium-term negative effects on group earnings, mainly as a result of mail volume decline.

This brings me to our outlook for 2020. But before walking you through, I would like to point out that this outlook is based on the 2020 budget that was realized under the previous CEO. I will personally take time over the coming months to look at it with great scrutiny.

In 2020, we expect group adjusted EBIT to be impacted by the structural acceleration in mail volume decline, which will not yet be fully compensated by the growing contribution of our Parcels & Logistics activities. Group total operating income for 2020 is expected to increase by a low single-digit percentage while group adjusted EBIT is expected to range between EUR 240 million and EUR 270 million.

For Mail & Retail, we expect a total operating income decline of up to 5% driven by an expected mail volume decline of 9% to 11%. This will only be partly compensated by an approved mail pricing increase of 5.1%. And the adjusted EBIT margin is expected to range between 8% and 10%.

For the Parcels & Logistics Europe & Asia business, we anticipate a low teens percentage growth in total operating income and the same margin range as of 2019, meaning between 6% and 8%.

Our Parcels & Logistics activities in North America are expected to grow at the operating income level (technical difficulty) percentage, and its adjusted EBIT margin is expected to be positive up to 2%. Growing parcels and e-commerce logistics will also require more investments. Therefore, the budget anticipates a gross CapEx of EUR 200 million for the group in 2020.

The Board and the management team are currently reviewing our long-term capital allocation policy, of which the dividend policy is an integral part. Therefore, we cannot commit as of yet to a dividend for 2020, and we plan to update the market with the revised capital allocation including dividend for 2020 on May 5 before trading hours. During 2020 results analyst call, we will address any questions on that topic.

Note that we are monitoring closely the potential impact of the coronavirus on bpost Group and are putting contingency plans in place in order to safeguard the continuity of our operations. However, it cannot be excluded that there could be negative impacts on 2020 group results. We are currently not really in a position to make more concrete assessments on this.

With this, we are happy to answer your questions. So operator, please open the lines.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Your first question is coming from Ruben Devos, KBC securities.

--------------------------------------------------------------------------------

Ruben Devos, KBC Securities NV, Research Division - Senior Financial Analyst [2]

--------------------------------------------------------------------------------

Yes. I've got 3 questions. First one relates to PaLo Eurasia. It seems that based on the revenue guidance, you're expecting another solid year in terms of parcel volume growth. That's a bit of a divergence versus what has been guided by your peer in the Netherlands, flagging more moderate e-commerce market growth, lower consumer confidence. So could you help us understand where some of the elements that makes you confident for providing that guidance and maybe provide some comments on the growth per region? That's question number one.

The second one relates to corona, any impact on your business? Very curious whether you could give some color on how you're managing the crisis at this stage. On the one hand, some say we could expect an uptake in e-commerce. On the other hand, you may be restricted by the measures that have been taken in the Benelux. So yes, very curious to what degree the levers are affected? That's the second question.

And thirdly, it relates to Amazon. So they're looking to expand their offering in the Benelux. They've recently gone live in the Netherlands. Some say, yes, it's an opportunity. Others say it's a threat. So again, curious whether you could share your thoughts on their launch. Any potential impact on the e-commerce market in the Benelux?

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [3]

--------------------------------------------------------------------------------

Okay. I'll take the question on the guidance on PaLo Eurasia. Perhaps looking first into (technical difficulty) there. So if you look at the current year results, so excluding all the one-offs that related to earn-out reversals, et cetera, we see that the total operating income of PaLo Eurasia increased by plus 6.9%. And if you also exclude the impact in that business unit of terminal use, then the revenues of the segment would have increased by 6.6%. So our full year '20 guidance in which we see the low teens, it refers -- it is actually significantly higher than the underlying percentage for the segment full year. Does that mean that indeed the trends that might have been indicated by peers on that and then indeed do a supplier, some rationalization, perhaps, in how many packages (inaudible) or not. We do see the same trends. But yes, we do think that low teens, even given that, should be possible. Then for the impact on corona, I give the floor to Jean-Paul.

--------------------------------------------------------------------------------

Jean-Paul Van Avermaet, bpost SA/NV - CEO [4]

--------------------------------------------------------------------------------

Yes. To answer your question, we are monitoring the impact closely, but it's very difficult since it changes every day to make concrete assessments on this moment. And definitely not to give an aggregated number on that. Last night, the Belgium government imposed stricter measures against virus that will be applicable as of noon today. But it was also said that bpost will continue its societal role in the crisis and that we are an essential service and, therefore, our services to the citizens in the country remain assured. I can give you some effects that we feel that are possible and where we see possible impacts already or have some feelings about on the Mail & Retail business.

We think there might be an impact on advertising mail since we feel that quite some companies will postpone their advertising budget. It's also seen in, I would say, advertising companies that stay the same. Transactional mail, we do not feel that it will be impacted. For Ubiway, we mainly see, on the last 2 days, impact in the stores that are in travel environments, meaning railway stations and also, of course, airports. And [this too] enormous decreased traffic in those places. On the other stores, it's less impacted since -- also in the government announcement last night, press distribution and press shops stay open and can stay open because they are seen as an essential service to the citizens.

On our own retail network, the post offices, there, they are seen also as an essential service and they will remain open as well. Of course, we've taken, in all these places, the necessary measures to guarantee the health of our employees and of our customers. On the Parcels & Logistics business, Eurasia, we see, on the one hand, an upside from some increased parcel volumes since retail is shifting to online instead of physical shops. But we see also a downside and feel that there is quite some risk on supply chain shortages to fulfill the parcels and the orders by customers.

In the cross-border business, there, we expect impact on the International Mail and also International Parcels seeing that flights are being canceled heavily and borders are being closed, and thus also air freight capacity will be limited or there will be a shortage.

For the Parcels & Logistics business in North America, the same trend when it concerns International Mail. For the e-commerce logistics, we expect mainly impact on the supply chain of customers with regards to sourcing products from China at this moment.

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [5]

--------------------------------------------------------------------------------

Okay. The Amazon question, to be very frank, actually, we don't know. I will give you some color at -- just that you can make your own conclusions out of it. But it's not that we can predict what exactly the impact will be. So it's true that early March this year, Amazon launched amazon.nl with about 20 product categories. And they see a huge potential in the Netherlands to compete with bol.com and coolblue. The fulfillment is expected to continue to be out of Germany for the time being.

If you look at our Dutch operations, we have there DynaGroup. Actually, we do not expect any impact there because Amazon, they do not offer the specialized delivery services. So it could offer opportunities, any fulfillment activities driven by the accelerated growth in e-commerce, generally speaking.

Then moving to what impact might it have on Belgium in the last mile delivery that we do here. Today, bpost delivers close to 100% of the Amazon shipments in Belgium of which the majority is in the southern part, so the French-speaking part. So there, we do not really expect any impact as these customers, they will continue to be served from amazon.fr.

And then for Flanders, yes, that's the difficult part to really have a vision on. We might see it as an opportunity. It could boost organic growth of Amazon in Flanders. It could also cannibalize other e-commerce players delivering in the Flemish market through competitors, what would possibly imply additional volumes for bpost. Of course, if Amazon flourishes very well and they start seeing Belgium because of that also as a new market, then there might be a different side -- flip side on the story, but that's very hard to predict. Just giving some color, but the answer on the -- the honest answer is we don't know really, and we keep a very close eye on what is happening and how we can anticipate on that.

--------------------------------------------------------------------------------

Ruben Devos, KBC Securities NV, Research Division - Senior Financial Analyst [6]

--------------------------------------------------------------------------------

Just to come back on corona, so thanks for the info. The only thing I was wondering is, obviously, you're talking about some constraints on webshops in in-sourcing the products and fulfillment. But curious to know whether there is any impact on the mail deliveries, whether they're constrained or the parcel deliveries, whether you know the new measures that have -- that are -- will go into effect as of noon, whether that will have any impact on the employees? And then what is the absenteeism, for instance, at this point? Yes. So any commentary on your workforce is helpful.

--------------------------------------------------------------------------------

Jean-Paul Van Avermaet, bpost SA/NV - CEO [7]

--------------------------------------------------------------------------------

Well, I shall answer you briefly. As I said in my first answer, we continue to deliver the services. This is also being clearly set by the government, is also instructed by the government. There is an increase of absenteeism like with every company in the country. But until now, we are able to, I would say, keep the airplane in the air and continue to deliver. It might be that deliveries of the mailman are 1 day later than originally foreseen, but this is also in coordination with the government, no issue. We have installed quite some actions and also procedures to avoid maximally or totally any physical contact with the citizens. So we are fully going on with delivering mail and parcels to the citizens.

--------------------------------------------------------------------------------

Operator [8]

--------------------------------------------------------------------------------

Your next question is coming from David Kerstens of Jefferies.

--------------------------------------------------------------------------------

David Kerstens, Jefferies LLC, Research Division - Equity Analyst [9]

--------------------------------------------------------------------------------

I've got 3 questions, please. First of all, on Mail & Retail, you're guiding for another quite significant step down in the profitability by about 350 basis points because of the launch of the new alternating mail distribution model. Do you expect that, that will come back in 2021 when that model has been fully introduced and you will still be back at an EBIT margin, let's say, in the previous range of 11% to 13%? So what are the associated cost savings of this new business model? And just to understand, the 9% to 11% mail volume decline, is 9% your underlying rate of e-substitution and 11% is potential, the additional substitution that you see from this -- on this new mail distribution model?

Then the second question is about the newspaper contract. You said that it's extended by 2 years, but still subject to the review by the European Commission. When will this review take place? And what is the expectation for when this 2-year period finishes? Will that then be a new tender launched for this contract?

And then finally, have you seen any positive impacts from trend towards growing in-sourcing in the U.S. by Amazon Logistics. Is that a trend that is actually benefiting Radial?

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [10]

--------------------------------------------------------------------------------

Okay. Mail & Retail. So you had a lot of questions on the outlook there on. Where shall I start? If we look at the current year and we look at the mail volume decline that we've seen, as you remember, in the first quarter, it was minus 9.2%, then it moved to minus 9.4%, 7.8% in the third quarter, 5.5%. So we end close to 8%. Our guidance was 9%. And actually, when we look at the states today, like I indicated in the presentation, in transactional mail, we do not see any specific positive change in the underlying structural trends. So we expect that we'll continue and indeed that explains also a bit that the minus 9%, like you call it, is at the underlying one. So the answer is yes, let's presume indeed that based on trends that we've seen, that as far as we can predict, we would expect a minus 9%. The (technical difficulty) up to minus 11% is, of course, likely out of prudency because we cannot predict actually what will happen. And you're right, with the alternating distribution model, which has a lot of positives, that especially the advertising mail might be impacted. I think we have been very close to our customers when explaining that new operating model to find solutions for them. But in the end, we will find out together with them during 2020 what choices they will make, if they will choose for the solutions that we offered or not. So it's indeed true that there we say if worse comes worse, it might be minus 11%, starting from the minus 9%. It's also hard to predict that, let me say that.

Then on the EBIT profitability. So indeed, we guide for 8% to 10% on '20. I think you understood correctly that on the one hand, we have a top line decrease that we explained with the volume decline and that will go up to minus 5%. And then on the other hand, we have the operating expenses, which then conclude the profitability. And the first ADM savings that we expect to see in the year, it's hard to predict, but probably there will be sufficient only to absorb the cost inflation and also the salary indexation, which is foreseen as of April 2020, which is a plus 2%. The ADM is a big operational exercise. I do want to repeat perhaps for us as analysts and me as a number lady, it's not always the thing that we discuss about, but we did move it forward with 1 year. So a lot of work has been done by all the operational teams. And today, also by all the mailman to have that thing going. But it's an exercise that we have to see how does it go. We are in an evaluation period to see what works well, what efficiency do really emerge. And based on that, distribution by distribution office, we will start indeed to restructure it. That depends on the evaluation period. That also depends, as you know, about the social dialogue that we have with the trade unions, which is very good for the moment. But we'll have to see, moving forward, how soon we can take the measures that come from the evaluation period on the ADM.

So coming to your question, 2020 indeed will not -- we expect and in the outlook, we guide for -- we will not see much of it yet. And how soon it [drops in] in 2021 or 2022, allow me that we will not give any comments on that. But for sure, it is to support the profitability of mail. Will it come back to the double-digit numbers that we've seen in the past, I think you can make the math for yourself. I think it's not for nothing that we indeed focus a lot on e-commerce logistics and on parcels because indeed we have to substitute EBIT going forward.

Then on the press contracts. So we are busy with -- sorry, excuse me. Jean-Paul?

--------------------------------------------------------------------------------

Jean-Paul Van Avermaet, bpost SA/NV - CEO [11]

--------------------------------------------------------------------------------

Well, on the press contract, to be more clear, we are really in the prenotification phase with the European Commission. It means that they have been informed about the extension of the contract and that they are asking several questions to the Belgium state on several elements, conditions, et cetera. So the real status today is that there are ongoing discussions between the European Commission and the Belgium state. And we have no clear view on what the outcome will be or when the outcome will be there at this stage. On your question, will there be a new tender? Well, probably, yes, that could be normal, unless there would be a new extension. So also that is to be evaluated and is not known today.

--------------------------------------------------------------------------------

David Kerstens, Jefferies LLC, Research Division - Equity Analyst [12]

--------------------------------------------------------------------------------

Okay. But now you have to assume there will be no changes to conditions from what you had in 2020?

--------------------------------------------------------------------------------

Jean-Paul Van Avermaet, bpost SA/NV - CEO [13]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

David Kerstens, Jefferies LLC, Research Division - Equity Analyst [14]

--------------------------------------------------------------------------------

'19, sorry.

--------------------------------------------------------------------------------

Jean-Paul Van Avermaet, bpost SA/NV - CEO [15]

--------------------------------------------------------------------------------

That's correct, yes.

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [16]

--------------------------------------------------------------------------------

And then there was a question on the in-sourcing by Amazon, which I did not really -- so I didn't really get your question or the comment?

--------------------------------------------------------------------------------

David Kerstens, Jefferies LLC, Research Division - Equity Analyst [17]

--------------------------------------------------------------------------------

Amazon Logistics in the U.S. has increased on delivery, I think, up to 50% of their volume last year. And I was wondering if the strong contract wins that Radial had experienced last year was a function of that? Is there any positive correlation?

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [18]

--------------------------------------------------------------------------------

No.

--------------------------------------------------------------------------------

Jean-Paul Van Avermaet, bpost SA/NV - CEO [19]

--------------------------------------------------------------------------------

No.

--------------------------------------------------------------------------------

Operator [20]

--------------------------------------------------------------------------------

The next question is from Mr. Andre Mulder, Kepler.

--------------------------------------------------------------------------------

Andre F. M. Mulder, Kepler Cheuvreux, Research Division - Analyst [21]

--------------------------------------------------------------------------------

First question is on the Parcels Eurasia. If we look at your top line growth, why doesn't that translate into a better margin development? You're already at 7.9%. It looks like you may be even below that this year. So that will be my first question.

Next question is also about the margins, also about Parcels & Logistics North America. You made 2.7% last year. You're now guiding for 0% to 2%. Can you give me some of the arguments behind that?

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [22]

--------------------------------------------------------------------------------

Okay. So for PaLo Eurasia, that was also about the guidance that your question refers to?

--------------------------------------------------------------------------------

Andre F. M. Mulder, Kepler Cheuvreux, Research Division - Analyst [23]

--------------------------------------------------------------------------------

Yes, that's fine.

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [24]

--------------------------------------------------------------------------------

Okay. Yes. So looking at the guidance for the top line -- or you asked actually, especially on the EBIT. So to start with, in PaLo Eurasia, we have a couple of things there. We have different business units, so there's not only parcels, we also have e-commerce logistics which is included. So looking at the guidance, it's, of course, driven on the one hand by growth on the top line. But if we look at the adjusted EBIT in the fiscal year '19 and excluding several nonrecurring elements, excluding all those, the margin would have been at 7.1%. So that's also in the middle of the guidance range for fiscal year '19. If your question is why doesn't it grow further? That is because we're still investing in the company to make it grow too. So I think keeping at that range while investing for growth is a good goal to set for 2020.

Then on North America, so we had a good successful year on the commercial side that will drive in the top line in the course of 2020. And actually, most of the contracts, they go 3 to 5 years to give you a bit of color there on so that you can see what it means to the top line. We have -- in addition to those new customers, we have the existing clients, which is a very mixed bag where we see high growth for some, some declines of others there. So in the mix of the portfolio, it's hard to predict. And will we have same-store sales that go up very rapidly, that's difficult to predict. And the client churn, that's also another factor that we look into. So yes, we gain customers, yes, we see that customer satisfaction is going up. But also there, still being young in this business, I'm not talking about myself but being bpost within e-commerce and within Radial, we had successes in 2019. And we have to see how indeed next year that turns into operating income. For the rest of the (technical difficulty) running on productivity that we're running on the costs, they also keep implemented, and that's why we say EBIT percentage will go up and we expect it to be or it can be up to 2%.

--------------------------------------------------------------------------------

Andre F. M. Mulder, Kepler Cheuvreux, Research Division - Analyst [25]

--------------------------------------------------------------------------------

And last question on your regulated mail margin in Belgium. Where are you compared to what you're allowed to make? And Benelux is calling for hard subsidies because they feel that there will be price increase and losing of volumes. What's your stance in that?

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [26]

--------------------------------------------------------------------------------

Are you referring what room we have for price increases? Is that your question?

--------------------------------------------------------------------------------

Andre F. M. Mulder, Kepler Cheuvreux, Research Division - Analyst [27]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [28]

--------------------------------------------------------------------------------

Yes, based on the formula, we do -- we do have the room. But also there, it's a bit of judgment call, what is wise because we're implementing the alternate distribution model. So there, indeed, we also want to see what effect it -- that has. We have actually big unused headroom, it's 5% -- more than 5%. But actually, we always see there's not a lot of elasticity, but let's look at what we can do operationally and not stress too much. So we do not have plans on the very short term to use that headroom.

--------------------------------------------------------------------------------

Andre F. M. Mulder, Kepler Cheuvreux, Research Division - Analyst [29]

--------------------------------------------------------------------------------

Okay. But where are you in 2019 compared to what you're allowed to make according to the regulator?

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [30]

--------------------------------------------------------------------------------

We could increase further by 5%. We have an additional headroom of 5.4%.

--------------------------------------------------------------------------------

Andre F. M. Mulder, Kepler Cheuvreux, Research Division - Analyst [31]

--------------------------------------------------------------------------------

But -- and in terms of margins, where are you?

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [32]

--------------------------------------------------------------------------------

Margins? No, we don't -- so we are okay. And it's more like we cannot have -- we cannot surpass anything, but that's a fully different story. And not an issue because it's declining.

--------------------------------------------------------------------------------

Operator [33]

--------------------------------------------------------------------------------

(Operator Instructions) There's one additional question coming from Marc Zwartsenburg, ING.

--------------------------------------------------------------------------------

Marc Zwartsenburg, ING Groep N.V., Research Division - Head of Benelux Equity Research [34]

--------------------------------------------------------------------------------

Well, additional -- I'm just starting with my questions. The first question is on free cash flow generation. Can you give us a bit of an indication where we stand on the bridge from '19 to 2020? Because, obviously, you're guiding for a lower EBIT, also higher CapEx versus 2019. Can you give us a bit of a feel where you think the free cash flow might come out for 2020?

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [35]

--------------------------------------------------------------------------------

That's your only question, Marc? Or...

--------------------------------------------------------------------------------

Marc Zwartsenburg, ING Groep N.V., Research Division - Head of Benelux Equity Research [36]

--------------------------------------------------------------------------------

No, I've got a few more.

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [37]

--------------------------------------------------------------------------------

No, go ahead. Please first have your questions.

--------------------------------------------------------------------------------

Marc Zwartsenburg, ING Groep N.V., Research Division - Head of Benelux Equity Research [38]

--------------------------------------------------------------------------------

Okay. Then returning a bit to the corona impact, can you give us an indication of what big campaigns are scheduled for April, May, so for Q2 a bit? Now with a lockdown that might be swapped or phased into the second half, can you give us a bit of a feel for what can happen there? Because it means that cancellation of a campaign, also means that they will not happen in the second half. Will there always be a catch-up or can they also cancel and not come back? And just to get a bit of a feel for your, yes, stress test on your mail business because that's still -- the parcels is doing quite well, there's a lot of people ordering online, but your mail business might come to a standstill. Can you give us a bit of a feel for what you see and what we might see there in the coming months? Those are my 2 questions for now.

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [39]

--------------------------------------------------------------------------------

Okay, very good. On the free cash flow generation, very good and relevant question. So a couple of elements that I gave you to consider when you look at the cash flow, you indicated a couple of them. So we have the -- yes, the reduction in EBIT that we guide for that you have to take into account. We have the effective tax rate, which is also an important one, so we expect it to be lower. It was now 36.7%, but impacted by noncash items, being a DTA that we did not fully recognize, but we also see it. We have a decline in the Belgium statutory tax rate. It goes from 29.58% to 25%. We do think that the full ETR would probably about -- still be around 30% or above slightly. And that depends, of course, on the recognition of the DTA on loss-making subsidiaries. But purely on a cash basis, I think the main message there is that the statutory tax rate in Belgium goes down.

Working capital requirements. There we think it might be minus EUR 50 million, like I said in the explanation of this year. We already expected some negatives there in the current year to happen. But actually, we see with the payment business, et cetera, that it holds up longer than we initially foreseen. It's a bit difficult to forecast that exactly as to when it will materialize. But it's something that we monitor very closely, but that might be the case.

--------------------------------------------------------------------------------

Marc Zwartsenburg, ING Groep N.V., Research Division - Head of Benelux Equity Research [40]

--------------------------------------------------------------------------------

So you're stating that you will see a positive inflow from working capital of EUR 50 million in 2020?

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [41]

--------------------------------------------------------------------------------

No, no. Sorry, positive? We expected it to be more negative in 2019. That's what I say. So therefore, we think that in 2020, it might be negative, up to EUR 50 million. And that is because the product mix is moving away from the payment business. So we do not have that full cash at our disposal anymore. And the new business that we sell is rather more on the invoice side.

You mentioned also the CapEx. It's up to EUR 200 million of CapEx. Also there, it's -- partly of that is also the shift there. So we spend less than we guided for in 2019. Also that has to do a bit with timing. So normally speaking, we expect the investments to be up to EUR 200 million CapEx. And then what we don't know yet is the bpost bank. So in light of any regulatory requirements, there might be also there the question to have an additional loan or a tier 2 loan or whatever. So those are a bit the ingredients, I think, to make your conclusion on the free cash flow.

--------------------------------------------------------------------------------

Marc Zwartsenburg, ING Groep N.V., Research Division - Head of Benelux Equity Research [42]

--------------------------------------------------------------------------------

Can you help me a bit with the bridge of free cash flow for '19 towards 2020? Can you help me a bit with the bridge? Where we start from and where we can get?

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [43]

--------------------------------------------------------------------------------

I think I gave everything to make the cash flow based on (inaudible).

--------------------------------------------------------------------------------

Marc Zwartsenburg, ING Groep N.V., Research Division - Head of Benelux Equity Research [44]

--------------------------------------------------------------------------------

Those are the key moving parts, okay.

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [45]

--------------------------------------------------------------------------------

Yes, exactly. And then for corona, I move back to Jean-Paul.

--------------------------------------------------------------------------------

Jean-Paul Van Avermaet, bpost SA/NV - CEO [46]

--------------------------------------------------------------------------------

Well, your corona question, it's really too early to judge and to look into it. We could also see possibly coming up new campaigns for food stores. But it's really too early. We are looking into it. And I would say it changed only from this week. Last week, there was no view or no feeling that campaigns would stop. It's really started this Monday. And we are putting in place a stress test to do it in the coming week. But okay, we give priority, first of all, to the health and to the instructions to our staff so that we can keep on moving and that we don't have a standstill, as you say, which is definitely -- our first priority is to keep on the operations going.

--------------------------------------------------------------------------------

Marc Zwartsenburg, ING Groep N.V., Research Division - Head of Benelux Equity Research [47]

--------------------------------------------------------------------------------

Just out of curiosity, if you look through your mix of business, could you all of a sudden see a 5% negative impact on your total 2020 mail volumes? Is that possible given that you have more insight in what kind of discretionary mail items are in there?

--------------------------------------------------------------------------------

Jean-Paul Van Avermaet, bpost SA/NV - CEO [48]

--------------------------------------------------------------------------------

With the figures we have regularly, we have no impact yet that we can see.

--------------------------------------------------------------------------------

Operator [49]

--------------------------------------------------------------------------------

(Operator Instructions) There is a question coming from Marco Limite, Barclays.

--------------------------------------------------------------------------------

Marco Limite, Barclays Bank PLC, Research Division - Research Analyst [50]

--------------------------------------------------------------------------------

Can you please give a bit of color also on what we should expect in the corporate center for 2020? So if you foresee additional gains from real estate is the first. And my second question is also about a little bit more color on what's happening in the parcel divisions or, in general, if you see pressure in pricing and/or increasing competition aside from the Amazon topic that we've already covered?

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [51]

--------------------------------------------------------------------------------

Okay. Okay. As to gain building sales -- so if you look at -- it's particularly in Corporate there, but I think you know that. So it mainly includes gains on building sales. Looking at the results of this year, actually, some building sales shifted towards 2020 and, therefore, we expect actually that the operating on building sales will not be materially lower than that we have seen in 2019. Again, this excludes the fact that we don't know if a lot of deals will pass given the new circumstances here. But putting that aside, we also -- and preparing our numbers, we see that some building sales have shifted from '19 moving forward and that's why we expect that normally it should not be materially lower than in 2019.

Color on the parcels, pricing competition. Well, since the last time that we spoke, what changed? I think there has been a lot in the press going on if we look at our peers. Indeed, what will we do with peak? Because the peak is really a moment in which the demand is so high and naturally you expect that at that point in time the prices can go up. If you say that to suppliers of ours, they say, "Oh, no, I should get a volume discount." So that's a bit of discussion that we have. But like all of our peers, we are working hard to make parcels a sustainable business. And for that, we indeed look into, together with our customers, what is feasible to have as extra surcharges. And it also has to do with sustainability. Very often, we are transporting air. There are 2 big boxes in which something very small is. So we could say we could rationalize the number of packages in 1 parcel. That's one thing. Or we say that we surcharge things. That's a discussion that is going on. That is -- I cannot give very clear views on that because everybody is reacting differently at customers. But we see that it's done across-the-board. So if we look at competition, I think everybody is working to make this a sustainable business.

Other questions?

--------------------------------------------------------------------------------

Operator [52]

--------------------------------------------------------------------------------

There are no further questions at this moment.

--------------------------------------------------------------------------------

Jean-Paul Van Avermaet, bpost SA/NV - CEO [53]

--------------------------------------------------------------------------------

Okay, if there are no further questions, I would like to thank you, operator, and I would like to give a final note. I started my mission a few weeks ago now. I must say that I'm very positive and enthusiastic about the challenges and tackling the challenges of the industry. I look forward really to working on a prosperous future with the team and all the colleagues of bpost Group. And I also look forward to meeting you in one of the upcoming road shows or conferences. And let's hope that we all stay healthy and can see each other on those moments. Thank you.

--------------------------------------------------------------------------------

Leen Geirnaerdt, bpost SA/NV - CFO [54]

--------------------------------------------------------------------------------

Thank you, all.

--------------------------------------------------------------------------------

Operator [55]

--------------------------------------------------------------------------------

This concludes the bpost event call. Thank you for attending, and you may disconnect your line now.