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ANNUAL REPORT 2018
Deep roots, strong wings
Contents
(*) Thesechaptersformtheannualreportcf.Article 119oftheBelgianCompaniesCode.
Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Overview of the key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Message from the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
How we create value for all the stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Key events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Financial review* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Financial consolidated statements 2018* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Summary of the financial statements of bpost NV/SA* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Management responsibility statement* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
CSR review* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
CSR consolidated statements* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Corporate governance statement* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Report of the Joint Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
bpost ANNUALREPORT2018 3
PROFILE
Profile
bpostisBelgium’sleadingpostaloperatorandaparcelande-commercelogisticsproviderintheBenelux,North-AmericaandAsia.Wedelivermailandparcelstomillionsofdoorstepsandprovidelogisticservicestobusinessesandconsumers.With34,000 employeesinBelgiumandacrosstheglobe,wegenerateaturnoverofEUR 3,850.2 million,whilereducingourimpactontheenvironmentandthecommunitiesaroundus.
Mail & Retail Parcels & Logistics Europe and Asia Parcels & Logistics North America
Description
• Transactional mail • Advertisingmail • Press • Proximityandconvenienceretailnetwork
• Valueaddedservices
• ParcelsBelgiumandTheNetherlands(lastmile)
• E-commercelogistics(RadialEU) • Cross-border(incl.mailandparcels)
• E-commercelogistics • International mail
7.65 millionlettershandleddaily 417,000parcelsperpeakdayinBelgium
Servicing5.6 millionletterboxes
5industrialsortingcenters
2,300locationsinBelgium
6parcelcenters,1sortinglocation&9fulfillmentcentersin5 countries(UnitedKingdom,Belgium,TheNetherlands,PolandandGermany)
Brands
bpost ANNUALREPORT2018 4
KEY FIGURES
Normalized for the year ended 31 December
Inmillion EUR 2018 2017 Evolution2018-2017
TotalOperatingIncome1 3,850.2 3,023.8 27.3%
Profitfromoperatingactivities(EBIT)2 424.3 501.6 -15.4%
Profitfortheyear(consolidated-IFRS)3 290.4 329.3 -11.8%
Operatingfreecashflow4 231.5 (500.8) -146.2%
Reported for the year ended 31 December
Inmillion EUR 2018 2017 Evolution2018-2017
TotalOperatingIncome 3,850.2 3,023.8 27.3%
Profitfromoperatingactivities(EBIT) 393 .4 492.9 -20.2%
Profitfortheyear(consolidated-IFRS) 263.6 322.9 -18.4%
bpostS.A./N.V.netprofit(unconsolidated-BelgianGAAP) 262.3 291.0 -9.8%
Operatingfreecashflow5 241.2 (485.8) -149.6%
NetDebt/(NetCash)6 344.8 292.4 17.9%
Basicearningspershare,inEUR 1.32 1.62 -18.5%
Dividendpershare,inEUR 1 .31 1.31 0.0%
Numberofemployees(atyearend) 34,074 33,992 0.2%
NumberofFTE(average) 31,201 25,323 23.2%
NumberofFTEandinterim(average) 36,109 26,906 34.2%
Overview of the key figures
(1) Normalizedtotaloperatingincomerepresentstotaloperatingincomeexcludingtheimpactofadjustingitemsandisnotaudited.
(2) NormalizedEBITrepresentsprofitfromoperatingactivitiesexcludingtheimpactofnon-adjustingitemsandisnotaudited.
(3) Normalizedprofitfortheyearrepresentsprofitfortheyearexcludingtheimpactofnon-adjustingitemsandisnotaudited.
(4) Normalizedoperatingfreecashflowfortheyearrepresentsoperatingfreecashflowfortheyearexcludingtheimpactofnon-adjustingitemsandisnotaudited.
(5) Operatingfreecashflowrepresentsnetcashfromoperatingactivitieslessnetcashusedininvestingactivities
(6) NetDebt/(NetCash)representsinterestandnon-interestbearingloanslesscashandcashequivalents
Forfurtherdetailsonreconciliationofnormalizedandreportedkeyfigures,pleaserefertosection”Reconciliationofreportedtonormalizedfinancialmetrics”ofthisdocument.
bpost ANNUALREPORT2018 5
Message from the Board of Directors
Message from the Board of Directors
2018: a challenging year given the disruption in the industry2018wasatoughyearforbpost.Theoperationalresults(EBIT)fellby20.2%andthenetresultsby18.4%.Thesewerecausedbythelettervolumedeclineandageneralriseincosts,particularlypayrollcostsinBelgium.Thiswasnotsufficientlyoffsetbytheincreaseintariffsandthestronggrowthinparcelvolumes.Nevertheless,turnoverwasup27%(toEUR 3,850.2 millionin2018).
Deep roots, strong wings
Asourecologicalfootprintisimportant,bposthasatrailblazingroleinsustainability.In2018,theInternationalPostCorporationnamedbposttheworld’sgreenestpostaloperatorforthesixthyearinarow.Between2007and2017,wereducedourCO2 emissions bynearly40%,followingthereplacementofourmopedswith3,500electricalbikesandinstallationof33,000 solarpanels.In2018,wesetournewtarget:reducingtheCO2 emissions generatedbyouroperationsby20% by 2030, in spite of the expected growth in parcels.Indoingso,bpostwillcontributetotherealisationoftheParisCOP21 climatetargets.
The focus and organisation are based upon bpost’s strategic ambitions
In2018,weenlargedourfocusandorganisationaroundthree strategic ambitions:
• remainingthepreferredproviderofmail,retailandpublicservicesinBelgium;
• becomingamajorplayerinlast-mileparceldeliveryinBelgiumandtheNetherlandsandine-commercelogisticsinEuropeandAsia;and
• furtherdevelopingRadialasasuccessfulplayerintheimportantUSe-commercelogisticsspace.
TheBoardofDirectorsmeteleventimesin2018,todoeverythingwithinitspowertorespondtothedisruptivechangesinthepostalindustry,bysteeringbpost’sstrategy,improvingitsoperatingmodel,andbroadeningitsbusinessportfoliointoe-commercelogistics.
TheBoardofDirectorswillproposetotheGeneralMeetingofShareholdersthepaymentofagrossdividendfor2018ofEUR 1.31pershare,whichisthesameasin2017.
Post is a people business
Thepostalbusinessisapeoplebusiness.Ouremployeesareourbiggestasset.bpostaimstocontinuetobeanattractive employer inahighlycompetitivemarket.Thenew collective labour agreement,enteredintofor2019-2020,willcontributetothis.
In 2018 bpost handled 235,000 parcels per day on average, an increase of 23%.
François CornelisChairmanoftheBoardofDirectors
Koen Van GervenCEO
bpost ANNUALREPORT2018 6
MESSAGE
Towards a new last mile distribution model in Belgium
Givene-substitution,thevolumeoftraditional letters,givene-substitution,fell by 5.8% in 2018.Marketresearchshowsthatcustomersuseothermediatoconveyurgentmessagesandfinditacceptablethattheirregularmailtakesalittlelongertoarrive.Thatobservationisaconvincingsignthatwecanmovetowardsanew distribution model underwhichwewillalternatelydeliverregularmail.Parcelsandnewspaperswillbedeliveredonadailybasis.Thisnewwayofworkingisnotonlymoreefficient,butalsoenvironmentallyfriendlier.Itwillalsoenableustosafeguardthelong-termeconomicviabilityoftheuniversalservice.TheintroductionofPrior and Non Prior stampsfrom2019isthefirststepinthisdirection.
bpostwelcomesthenewPostallawofferingregulatorystability,andhopestoconcludeshortlythemanagementcontractwiththeBelgianStatefortheprovisionofuniversalservicesinBelgiumforthenextfiveyears.
Parcels continue to grow strongly
In 2018, we noted new record volumes for domestic parcels. Onaverage,bposthandled235,000 parcelsperday,anincreaseof23%comparedto2017.Duringtheyear-endholidays,volumespeakedatarecord417,000 parcelsperday.
In2018welaunched“The Benelux Couriers”,apartnershipbetweenbpostandDHL.ItmeansthatBelgianconsumerscancountonnext-daydeliverybybpostoftheirordersmadeatDutchonlinestorestheeveningbefore.
Wewanttomakeitmoreconvenientforourcustomerstoreceivetheirparcels.Thatissomethingweworkedhardonin2018.Wealreadyknowhowa million customers wanttoreceivetheirparcelsiftheyarenotathome.WiththeintegrationoftheKariboo!points,wenowhavea network of 2,300 pick-up points,thelargestinBelgium.Wealsointroducedaninnovation,withapilotinwhichwedeliverparcelsinsidepeople’shomes,basedonanappthatallowsrecipientstoopentheirfrontdoorremotely.
In2018,wealsobroughtourorganisationinlinewiththeoperationaldemandsconnectedwiththedeliveryoflargeparcelswiththeopeningofdedicatedparcel centres.
Enlargement of e-commerce logistics services
bpostaimstobeanimportantprovideronthegrowinge-commercelogisticsmarketinEuropeandNorthAmerica.TheacquisitionoftheUScompanyRadial madethefoundationofthee-commercelogisticsstrategyofbpost.Radialisatopfivesupplierinahighlyfragmentedindustry.In2018,thefocuswasonimprovingthecommercialorganisationandincreasingthecustomercentricity.
In2018,wecontinuedtodevelopoure-commercelogisticsexpertiseinEuropewithamajoritystakeinActive Ants.Thiscompanyusesrobotsinthefulfilmentprocessandishighlyautomated.Withtheacquisitionof Leen Menken, wealsogainedacustomerbaseandknow-howinfooddeliveries,inchilledaswellasinfrozenform.Wearefirmlycommittedtodevelopandfurtherexpandthee-commercelogisticsactivitiesinEurope.
People, talent, culture, innovation and technology will be key drivers of our success
TheBoardofDirectorsandtheBoardcommitteeshavebeenworkinghardin2018,andwillcontinuetodosoin2019byprovidingstrongsupporttobpost’smanagement.Inthisrespect,theBoardandtheBoardcommitteeswillbeincreasinglyinvolvedinkeyprojectswhichhaveanimpactonthelongtermfutureofbpost.Keyprioritieswillincludedevelopingtoptalentandengagementofemployeestocreateacultureofinnovationandaddressingthedisruptivetrendsintheindustrybyofferinginnovativesolutionsusingtechnology.
Wewillensuresthatbpostrealizesitsthreestrategicambitions:toremaintheuniversalserviceproviderformailinBelgium,tobecomeamajorplayerinlast-mileparceldeliveryinBelgiumandtheNetherlandsandaglobale-commercelogisticsplayer,anchoredinBelgium.Thelongtermstrategicfocusisthebestguaranteetocreatelastingvaluefortheshareholdersandthestakeholdersatlarge.
bpostwouldalsoliketothankallitsemployeesfortheirengagementandcommitment,anditsshareholdersandstakeholdersfortheirconfidence.Weareconvincedthatwehavetherightstrategytorewardthemwhilealsoservingsocietyatlarge.
François Cornelis ChairmanoftheBoardofDirectors
Koen Van Gerven CEO
The new collective labour agreement increases the purchasing power of our employees and makes our jobs in the field more attractive.
The fact that customers find it acceptable that their regular mail takes a little longer to arrive is a convincing sign that we are able to move towards a new distribution model.
How we create value for all the stakeholders
Fast-changingconsumerrequirementsandbehavioraredrivingdisruptivetrendsinthepostallandscape.
Changes in the postal landscape
3,850.2millionEUR revenue
4.8Employee engagement score
308,857Teq CO2
Total eq emissions (score 1+2+3)
84Customer satisfaction score
Howwecreatevalue forallthestakeholders
Talent scarcity
Theworkforceisthemost important asset of a postalcompany.However,accordingtotheIPC,theaverageageofpostalemployeesisincreasing:37%oftheworkforceisagedabove50,whileonly11%isunder30(1). Therequiredskillsarechangingduetothenewtechnologiesandnewpostalactivities.Youngpeopleareswitchingjobsquickly(2).Therefore,itisgettinghardertoattractandretaintalentwiththerightskill-set.
Climate change
Becauseofhuman-causedgreenhousegasemissions,theclimateisslowlychanging,bringingsomeriskssuchasnaturaldisastersandhealthissues.Becauseofthisandtheriskofincreasingfuelandcarbonprices,there is pressure on postal companies to increaseefficiencyandto operate in a more environmentallyfriendlyway.
New technologies
Autonomouslydrivingvehicles,mobileapplications,automatedsorting,roboticsandartificialintelligenceareallmakinganentranceinto the postal sector. The purpose of these technologiesistoincreaseefficiencyandtoimproveconvenienceandflexibilityoflast-miledelivery.
E-commerce
Today10%ofglobalretailsalesaremadeonline,withagrowthof20%everyyearinthepastdecade.Thishasresultedinadoublingofthevolumeofparceldeliveriesbypostalcompaniesandhassignificantlyintensifiedcompetitionbetweenparceldeliverycompanies.Consumersaredemandingforfaster,moreflexibleandlowerpricedservices,suchasfreedeliveryandreturns,parceltrackingande-notifications.
Digitization and e-substitution
Moreandmorecommunicationandservicesofbothbusinessesandconsumershappendigitallyoronline,andthetraditionalcore business of postal companies is in fast decline:forbpostthishasresultedinamailvolumedeclineof19%overthepastfiveyearsandanexpectedcontinuingdeclineof9%by2022.
1 IPC(2018)–GlobalPostalIndustryReport2018
2 Forbes(https://www.forbes.com/sites/sarahlandrum/2017/11/10/millennials-arent-afraid-to-change-jobs-and-heres-why/#596876a519a5)
Therapidlychangingworldarounduspresentsbothchallengesandopportunities,whichbposttakesonwithenthusiasm.
Shared value KPIs
1. 2. 3.
How we answer
Wecareaboutouremployeesandengagethem.
Westrivetoreduceour impact on the environment.
Ae are close to thesocietyanditsemergingneeds.
MailservicestocitizensandStateremaincoreandwillcontinuetogenerateprofitwithamoreadapteddistributionmodel.
DriveprofitablegrowthinparcelsinBeNeande-commercelogisticsinEurope.
OptimizeRadialtodeliverontheinvestmentthesisinthepromisingNorthAmericane-commercemarket.
People
Mail & Retail
Planet
Parcels & Logistics Europe and Asia
Proximity
Parcels & Logistics North America
Our impact on society and the Sustainable Development Goals
whilerespectingitsstakeholders
bpostwilldeliveronthreestrategicaspirations
wecontributeinbuildingresilientinfrastructure,promoteinclusiveandsustainableindustrializationandfosterinnovation.
ByprovidingaffordableandreliablepostalservicetoallBelgiancitizensacrossbothruralandurbanareas,
wecontributeinpromotingsustained,inclusiveandsustainableeconomicgrowth,fullandproductiveemploymentanddecentworkforall.
AsoneofthelargestemployersinBelgiumandwithemployeesallovertheglobe,
wecontributeinensuringsustainable consumption andproductionpatterns.
Bysustainablydiversifying,innovatingandgrowingine-commercelogisticsservices,
wecontributeintakingurgentactiontocombatclimatechangeanditsimpacts.
WithourcommitmenttotheParisClimateAgreementviaourScienceBasedCO2 reductionTarget,
wecontributeinmakingcitiesandhumansettlementsinclusive,safe,resilientandsustainable.
Byworkingcloselytogetherwithsuppliers,customersandcommunities,
Stakeholders
Shareholders and investors
Customers Employees and trade
unions
Suppliers NGOs and partners
Authorities
bpost ANNUALREPORT2018 9
KEY EVENTS
Key events
During the first quarter of 2018, bpost acquired the companies Leen Menken Foodservice Logistics BV, IMEX Global Solutions, LLC, M.A.I.L., Inc. and Anthill BVLeenMenkenFoodserviceLogisticsBVisaDutchlogisticsoperatorforthetransportofrefrigeratedandfrozenproductsfore-commerce.IMEXGlobalSolutions,LLC.isa3rdpartylogisticscompanyintheUS,activeincross-borderpublicationandmaildelivery.M.A.I.L.,Inc.isactiveinthefieldofbusinessmail/cataloguedistributionforre/e-tailersandmail-roomservicesaswellasparceldistribution.AnthillBV(ActiveAntsBV)isaDutchcompanywhichprovidese-commercefulfilmentservicesforwebshops.
On May 2, 2018 bpost accelerated its transformation by adapting its structureInordertopreparethecompanyforthefuture,theBoardofDirectorsdecidedtoadaptitsstructureasofMay 2,2018.bpostgroupwillbeorganizedaroundthreebusinessunits:Mail&RetailinchargeofthecommercialandoperationalactivitiesrelatedtomailandretailinBelgium,Parcels&LogisticsEurope&AsiainchargeofthecommercialandoperationalactivitiesofparcelsandlogisticsinEuropeandAsiaandParcels&LogisticsNorthAmericainchargeofthecommercialandoperationalactivitiesinNorthAmerica,includingRadial.
On May 30, 2018 bpost and DHL decided to partner for e-commerce deliveries in the BeneluxThepartnershipisexpectedtoboostcross-bordere-commerce,whileofferinge-tailersacomprehensivelogisticssolution.DHLParcelandbpostjoinedforcesinanon-exclusivepartnershipunderthename“TheBeneluxCouriers”tofacilitateandacceleratethecross-borderonlineshoppingexperienceforconsumersandonlinestores.
On July 4, 2018 bpost successfully issued a EUR 650 million long-term bond to secure the financing of its growthbpostissuedaEUR 650 million8-yearbond,twotimesoversubscribed,withacouponof1.25%.ThetransactionservedtorefinancetheNovember 2017acquisitionofRadialHoldings,LPatverygoodfinancialconditionsfollowingthegrantingofanAcreditratingbyStandard&Poor’sinJune 2018.
On November 28, 2018 bpost decided to offer two separate services enabled by the “Prior” and “Non Prior” stampsAsperJanuary 1,2019bpost’sclientshavetwodifferentoptionsforsendingtheirletters:theycanchoosebetweenthedistributionwithinthethreeworkingdays(NonPrior)orthenextworkingday(Prior).
On December 20, 2018 the management of bpost and the trade unions approved a new collective labor agreement for 2019-2020Thecollectivelaboragreementcontainsaseriesofmeasurestostrengthenthepurchasingpowerofbpostpostmen,toreducetheworkloadandtoimprovetheattractivenessofthefieldjobs.Aseriesofmeasurestoimprovetheremunerationhavealsobeenagreedupon.
FINANCIAL REVIEW
bpost ANNUALREPORT2018 10
Financial review
1.1Consolidatedincomestatement
Thefollowingtablepresentsbpost’sfinancialresultsfortheyears2017and2018:
For the year ended 31 December
Inmillion EUR 2018 2017 Evolution2018-2017
Revenue 3,774 .4 2,972.2 27.0%
Otheroperatingincome 75.8 51.6 46.9%
Total operating income 3,850.2 3,023.8 27.3%
Material costs (257.5) (240.7) 7.0%
Servicesandothergoods (1,556.2) (972.8) 60.0%
Payrollcosts (1,455.6) (1,206.7) 20.6%
Otheroperatingexpenses (9.8) (5.6) 74.2%
Total operating expenses excluding depreciations/amortizations (3,279.1) (2,425.9) 35.2%
EBITDA 571.1 598.0 -4.5%
Depreciation,amortization (177.7) (105.1) 69.2%
Profit from operating activities (EBIT) 393.4 492.9 -20.2%
Financialincome 6.1 5.8 5.3%
Financialcosts (29.9) (19.5) 53.4%
Shareofprofitofassociates 11 .5 9.6 19.9%
Profit before tax 381.0 488.7 -22.0%
Incometaxexpense (117.4) (165.8) -29.2%
Profit for the year (EAT) 263.6 322.9 -18.4%
FINANCIAL REVIEW
bpost ANNUALREPORT2018 11
Total operating incomeTotal operating incomeincreasedbyEUR 826.4 millionor27.3%fromEUR 3,023.8 milliontoEUR 3,850.2 million.ThisincreasewasdrivenbyParcels(EUR 765.3 million,explainedbytheorganicvolumegrowthofDomesticParcelsandtheintegrationofRadialforacompleteyearinLogisticSolutions),alongwiththeintegrationofIMEXandM.A.I.L.inInternationalmail,whichwas
For the year ended 31 December
Inmillion EUR 2018 2017 Evolution2017-2018
Domestic mail 1,339.5 1,353.4 -1.0%
Transactional mail 809.3 807.9 0.2%
Advertisingmail 244.2 252.9 -3.4%
Press 286.0 292.6 -2.2%
Parcels 1,561.4 796.1 96.1%
Domestic parcels 262.3 224.2 17.0%
International parcels 242.9 222.6 9.1%
LogisticSolutions1 1,056.2 349.2 -
Additional sources of revenues 911.0 831.5 9.6%
International mail 240.9 160.4 50.1%
Valueaddedservices 110.7 101.5 9.0%
Bankingandfinancialproducts 167.1 182.6 -8.5%
Distribution 101.0 98.1 3.0%
Retail & Other 291.4 288.9 0.9%
Corporate (Reconciling post) 38.3 42.9 -10.7%
Total 3,850.2 3,023.8 27.3%
RevenuesfromDomestic MaildecreasedbyEUR 13.8 milliontoEUR 1,339.5 millionin2018withareportedandunderlyingvolumetrendof-5.2%and-5.8%respectivelycomparedtoanunderlyingvolumedeclineof-5.8%lastyear.TransactionalMailvolumescontinuedtobeimpactedbye-substitutionandrationalization,neverthelessrevenuesincreasedbyEUR 1.4 millionfollowingthepriceincreasefornon-regulatedproductsasfromJanuary 1,2018andthepriceincreaseforthesmalluserbasketasfromMarch 1,2018.ExcludingelectionsthattookplaceonOctober 14th,AdvertisingMailwasimpactedbythecompetitivemarketinUnaddressedaswellastheunfavorablemediamixevolutioninDirectmail.OverallAdvertisingvolumesduringtheyearwereimpactedbyashifttowardsthecategoriesofTransactionalmailandPress.Pressvolumesdecreasedby3.8%withthenewspaperstrendbetterthan2017whenexcludingdifferencesindistributiondayswhileperiodicalswereimpactedbydigitizationandrationalization.
TheoverallvolumedeclineamountedtoEUR 70.7 million
andwaspartiallycompensatedbytheimprovementofthepriceandmix(EUR 49.6 million),theimpactofmoreworkingdays(EUR 2.0 million)andtheoccurrenceoflocalelections(EUR 5.2 million).
ParcelsgrewbyEUR 765.3 milliontoreachEUR 1,561.4 milliondrivenby:
• ExcellentDomesticParcelsvolumegrowthof23.3%in2018versus28.2%in2017.Thisincreasewasdrivenbytheconsistente-commercegrowthandtheonlineC2Cproductoffering.Priceincreasesweremorethanoffsetbytheevolutionoftheclientandproductmix(fastergrowthoflargee-tailerswithhighvolumesandlowerpricescomparedtosmallercustomers),resultinginanegativepricemixeffectof-5.1%.OverallDomesticParcelscontributedEUR 38.1 milliontotheincome increase.
• GrowthinInternationalParcels(EUR 20.3 million),drivenbytheUSandEurope,especiallyUK.
• LogisticSolutionsincreasedbyEUR 707.0 million,mainlyduetothefullyearintegrationofRadialaswell
themaincontributortotheincreaseofAdditionalsourcesofrevenues(EUR 79.5 million).AlltheseeffectswerepartiallyoffsetbythedecreaseofDomesticMail(EUR 13.8 million)andCorporate(EUR 4.6 million).
Theevolutionperproductlinecanbesummarizedasfollows:
(1) LogisticSolutionscontainsRadialconsolidatedasofNovember16,2017
FINANCIAL REVIEW
bpost ANNUALREPORT2018 12
astheintegrationofLeenMenkenandActiveAnts.
TotaloperatingincomefromtheAdditional sources of revenuesincreasedbyEUR 79.5 milliontoEUR 911.0 millionin2018.TheintegrationofIMEXandM.A.I.L.aswellashighervolumesfromAsiaandInboundMailresultedinanincreaseofInternationalMail(EUR 80.4 million).FurthermoretheincreaseofValueaddedServices(EUR 9.1 million),drivenbythemanagementofcross-borderfinesonbehalfoftheBelgianState,theincreaseofDistribution(EUR 2.9 million)andtheincreaseofRetail&Other(EUR 2.6 million)mainlyduetothefavorableevolutionofthecontingentconsiderations(EUR 10.3 million)werepartlyoffsetbythelowerrevenuesofBankingandfinancialproducts(EUR 15.5 million).ThisdecreasewasmainlyduetothelowerrevenuesfromfinancialtransactionsmanagedonbehalfoftheBelgianStateandthelowercommissionofbpostbankonsavingaccountsduetothelowinterestrateenvironment.
TheevolutionoftotaloperatingincomeofCorporate (reconcilingcategory)decreasedbyEUR 4.6 milliontoEUR 38.3 million.
Operating expenses (including depreciation)Operatingexpenses,includingdepreciation,amortization,andimpairmentcharges,amountedtoEUR 3,456.8 million(2017:EUR 2,530.9 million)andincreasedbyEUR 925.9 millioncomparedtolastyearofwhichEUR 827.9 millionwasduetotheintegrationofnewsubsidiaries.Excludingthesesubsidiaries,operatingexpensesincreasedbyEUR 98.0 millionasthedecreaseofmaterialcosts(EUR 4.3 million)andotheroperating
expenses(EUR 7.3 million)wereoffsetbytheincreaseofservicesandothergoods(EUR 74.8 million),depreciationandamortization(EUR 22.6 million)andpayrollcosts(EUR 12.3 million).
Material costsMaterialscosts,whichincludethecostofrawmaterials,consumablesandgoodsforresale,increasedbyEUR 16.8 milliontoEUR 257.5 million(2017:EUR 240.7 million)duetotheintegrationofthenewsubsidiaries.
Services and other goodsThecostofgoodsandservicesincreasedbyEUR 583.3 millionorEUR 74.8 millionexcludingtheintegrationofthenewsubsidiaries.Thisincreasewasmainlyduetoincreasedtransportcosts(EUR 38.9 million),rentandrentalcosts(EUR 11.0 million),insurancecosts(EUR 5.8 million),energycosts(EUR 4.4 million),otherservices(EUR 3.7 million)andmaintenanceandrepairs(EUR 3.0 million).
Notethatinterimcostsareanalyzedtogetherwithpayrollcosts,astheyareabetterperformanceindicatorofhumancapitalutilization.Incertaincasesofnaturalattrition,personnelisreplacedbyinterimstoanticipatereorganizationsandproductivityimprovementprograms.
For the year ended 31 December
Inmillion EUR 2018 2017 Evolution2017-2018
Rentandrentalcosts 148.6 104.3 42.5%
Maintenanceandrepairs 108.3 86.9 24.6%
Energydelivery 45.9 40.7 12.7%
Othergoods 38.6 26.2 47.6%
Postalandtelecomcosts 21.2 8.9 137.3%
Insurance costs 19.7 11.8 67.7%
Transport costs 686.8 374.2 83.5%
Publicityandadvertising 24.4 18.7 30.6%
Consultancy 21.7 19.4 12.1%
Interimemployees 192.5 107.1 79.8%
Thirdpartyremuneration,fees 145.9 132.3 10.3%
Otherservices 102.6 42.4 142.0%
Total 1,556.2 972.8 60.0%
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bpost ANNUALREPORT2018 13
• RentalcostshaveincreasedbyEUR 44.3 millionorexcludingtheintegrationofthenewsubsidiariesbyEUR 11.0 million,mainlyduetothenewBrusselssortingcenter(NBX)andthegrowingfleet.
• TheincreaseofmaintenanceandrepairsbyEUR 21.3 millionwasmainlycausedbytheintegrationofthenewsubsidiaries(EUR 18.3 million).
• EnergydeliverycostsincreasedbyEUR 5.2 millionorEUR 4.4 millionexcludingtheintegrationofthenewsubsidiaries,mainlyduetohigherfuelpricesandthegrowingfleet.
• TransportcostsamountedtoEUR 686.8 million,EUR 312.6 millionhighercomparedtopreviousyear,mainlyduetoscopechange(EUR 273.7 million),theevolutionofinternationalactivitiesandhigherdomesticparcelvolumes.
• Thegrowthininterimcostswasdrivenbytheintegrationofthenewsubsidiaries,seealsosectionpayrollcosts.
• OtherservicesincreasedbyEUR 60.2 millionmainlyduetotheintegrationofthenewsubsidiaries(EUR 56.5 million).
Payroll costsPayrollcosts(EUR 1,455.6 million)andinterimcosts(EUR 192.5 million)in2018amountedtoEUR 1,648.1 million.PayrollandinterimcostsincreasedbyEUR 334.4 million(EUR 249.0 millionforpayrollandEUR 85.4 millionforinterimcosts)comparedtolastyearandthiswasmainlydrivenbytheintegrationofthenewsubsidiaries(EUR 314.6 million).
Thereportedaverageyear-on-yearstaffshowedanincreaseof9,203FTEandinterims,generatingextracostsofEUR 334.6 million,explainedbytheintegrationofFTEandinterimsofthenewsubsidiaries,higherparcelsvolumesandabsenteeismpartlycompensatedbybetterproductivity.
ApositivemixeffectreducedcostsbyEUR 12.3 millionandwasmainlydrivenbytherecruitmentofauxiliarypostmen.
Furthermorethesalaryindexation,meritincreases,lastyear’snon-cashgainofEUR 15.3 millionrelatedtotheterminationofthetransportbenefitandlastyear’sreversalofsomeprovisions(EUR 6.8 million)werepartiallycompensatedbyanIAS 19non-cashgainrelatedtogroupinsurance(positiveimpactofEUR 10.9 millionin2018),taxshiftandunpaidhoursduetostrikes.
Other operating expensesOtheroperatingexpensesincreasedbyEUR 4.2 millionversuslastyear.Excludingtheintegrationofthenewsubsidiaries,operatingexpensesdecreasedbyEUR 7.3 million,mainlyduetothereversalofprovisions.
Depreciation and amortizationDepreciation,amortizationandimpairmentchargeshaveincreasedbyEUR 72.7 millionor69.2%toEUR 177.7 millionin2018(2017:EUR 105.1 million),mainlydrivenbytheintegrationofthenewsubsidiariesbyEUR 50.0 million.ThelatterwasmainlyduetodepreciationatRadialwhichisimpactedbytheCAPEXinvestmentsfromthepast.
EBITNottakingintoaccounttheimpactofthenewsubsidiaries,therevenueincreasewasoutpacedbytheincreaseincostsfromservicesandothergoods,payrollanddepreciationandamortization.AsaresultEBITexcludingtheintegrationofnewsubsidiariesdecreasedbyEUR 57.2 millionwithoverallEBITdecreasingbyEUR 99.5 million.
Net financial resultNetfinancialresultdecreasedbyEUR 10.1 millionmainlyduetotheincreaseininterestsonloansandthebond.
Share of results of associatesTheshareofresultsofassociatesrelatedtobpostbankandincreasedbyEUR 1.9 milliontoEUR 11.5 million.
Income tax expenseIncometaxexpensedecreasedfromEUR 165.8 millionin2017toEUR 117.4 millionin2018.bpost’seffectivetaxratedecreasedfrom33.9%in2017to30.8%in2018.ThisdecreasewasdrivenbytheloweredBelgiancorporatetaxratefrom33.99%in2017to29.58%in2018.In2017,astheBelgianandUScorporatetaxreformshadbeensubstantiallyenacted,bpostreassesseditsdeferredtaxpositionunderIFRStakingintoconsiderationthesenewmeasures,thisledtoataxexpenseofEUR 7.0 millionin2017.
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(1) RestatedinordertoshowcomparativeinformationfollowingthepurchasepriceallocationofRadial.
1.2Statementoffinancial position
As at 31 December
Inmillion EUR 2018 2017restated1 2017
AssetsNon-current assetsProperty,plantandequipment 708.0 752.8 710.3Intangibleassets 874.9 890.4 910.6Investmentsinassociates 251.2 329.2 329.2Investmentproperties 18.7 5.7 5.7Deferredtaxassets 31.5 31.4 31.5Tradeandotherreceivables 11.2 9.4 9.4
1,895.7 2,018.8 1,996.6Current assetsInventories 36.9 39.1 39.1Incometaxreceivable 5.7 1.6 1.6Tradeandotherreceivables 712.0 714.9 719.4Cashandcashequivalent 680.1 466.0 466.0
1,434.7 1,221.6 1,221.6Assetsheldforsale 14.7 0.6 0.6
Total assets 3,345.1 3,241.0 3,223.3
Equity and liabilitiesIssuedcapital 364.0 364.0 364.0Reserves 271.4 310.1 310.1Foreigncurrencytranslation 12.7 (11.5) (11.5)Retainedearnings 51.6 110.9 110.9Equity attributable to equity holders of the Parent 699.7 773.5 773.5Equityattributabletonon-controllinginterests 2.5 4.3 4.3
Total equity 702.3 777.8 777.8
Non-current liabilitiesInterest-bearingloansandborrowings 849.1 55.4 58.4Employeebenefits 308.4 326.9 326.9Tradeandotherpayables 17.5 45.2 45.2Provisions 22.6 38.1 24.2Deferredtaxliabilities 7.3 12.3 12.3
1,204.8 478.0 467.0Current liabilitiesInterest-bearingloansandborrowings 175.7 699.9 699.9Provisions 16.8 28.4 21.2Incometaxpayable 21.4 38.6 39.3Derivativeinstruments 0.8 0.0 0.0Tradeandotherpayables 1,212.5 1,218.4 1,218.2
1,427.3 1,985.3 1,978.5Liabilitiesdirectlyassociatedwithassetsheldforsale 10.8 0.0 0.0
Total liabilities 2,642.9 2,463.3 2,445.5
Total equity and liabilities 3,345.1 3,241.0 3,223.3
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bpost ANNUALREPORT2018 15
Preliminarynote:in2018thepurchasepriceallocationofRadialhasbeenfinalized.Asaconsequencethe2017figuresofthestatementoffinancialpositionhavebeenrestatedinordertoshowcomparativeinformation.Allvarianceshereaftercompare2018with2017restatedexceptindicatedotherwise.
AssetsProperty, plant and equipment
Property,plantandequipmenthavedecreasedbyEUR 44.8 millionfromEUR 752.8 milliontoEUR 708.0 million.Thisdecreasewasmainlyexplainedby:
• depreciationandimpairmentamountingtoEUR 110.0 millionandhigherthanlastyear(2017:EUR 80.2 million);
• disposals-mainlyrelatedtosalesofbuildings-forEUR24.8million;
• transfertoassetsheldforsale(EUR 1.2 million)andtoinvestmentproperty(EUR 13.0 million),partiallyoffsetby
• theintegrationofnewsubsidiariesforEUR 9.2 million; • acquisitions(EUR 88.9 million)relatedtoproductionfacilitiesforsortingandprintingactivities(EUR 23.3 million),mailandretailnetworkinfrastructure(EUR 13.5 million),ATMandsecurityinfrastructure(EUR 1.7 million),transportationrelatedinfrastructure(EUR 36.9 million)andITandotherinfrastructure(EUR 13.5 million).
Intangible assetsIntangibleassetsdecreasedbyEUR 15.4 million,mainlydueto:
• amortizationandimpairmentsamountingtoEUR 67.8 millionincludingtheimpairmentofEUR 16.3 millionongoodwillofdeBuren,CertipostandBubblePost;
• partiallycompensatedbytheacquisitionofLeenMenkenFoodserviceLogistics,IMEX,M.A.I.L.andActiveAntsforEUR 5.3 millionand;
• theevolutionoftheexchangerate(EUR21.6million); • investmentsinsoftwareandlicenses(EUR 13.5 million),developmentcostscapitalized(EUR 12.7 million)andotherintangibleassets(EUR 0.4 million).
Investments in associatesInvestmentsinassociatesdecreasedbyEUR 77.9 milliontoEUR 251.2 million.ThisdecreasewasmainlyduetoIFRS 9FinancialInstrumentswhichreplacedIAS 39FinancialInstrumentsRecognitionandMeasurementasofJanuary 1,2018atbpostbank.AsaresultamajorpartofitsbondportfoliohasbeenreclassifiedfromtheIAS 39available-for-salecategorytotheIFRS 9amortisedcostcategory,leadingtoadecreaseofbpostbank’sequitybyEUR 119.8 millionasof1 January 2018andconsequentlybpost’sinvestmentinassociatesbyEUR 59.9 million.ThisdecreasewasalsodrivenbylowerunrealizedgainsonthebondportfoliointheamountofEUR 25.5 millionrecognizedinothercomprehensiveincome,reflectinganaverageincreaseoftheunderlyingyieldcurveby2basispoints(bps)comparedtoDecember 31,2017andlowerdividendsreceivedfrombpostbankforEUR 4.0 million.Thiswaspartiallyoffsetbybpost’sshareofresultofassociatesforanamountofEUR 11.5 million.End 2018,investmentsinassociatescomprisedunrealizedgainsnetofdeferred
taxesinrespectofthebondportfoliointheamountofEUR 38.8 million,whichrepresented15.4%oftotalinvestmentsinassociates.Theunrealizedgainsweregeneratedbythelowerlevelofinterestratescomparedtotheacquisitionyieldsofthebonds.Unrealizedgainsarenotrecognizedintheincomestatement,butdirectlyinequityintheothercomprehensiveincome.
Investment propertiesInvestmentpropertiesincreasedfromEUR 5.7 millionin2017toEUR 18.7 millionin2018,asthenumberofsquaremetersrentedoutincreased.
Deferred Tax assetsDeferredtaxassetsamountedtoEUR 31.5 million(2017:EUR 31.4 million)andmainlyrelatetothetimingdifferencebetweentheaccountingandthetaxvalueoftheemployeebenefits.
InventoriesInventoriesslightlydecreasedbyEUR 2.1 millionandamountedtoEUR 36.9 million(2017:EUR 39.1 million).
Current trade and other receivablesCurrenttradeandotherreceivablesareinlinewithlastyearandslightlydecreasedbyEUR 2.9 milliontoEUR 712.0 million(2017:EUR 714.9 million),drivenbyariseintradereceivablesofEUR 21.6 millionoffsetbythedecreaseofotherreceivablesofEUR 22.6 milliongivenlastyear’soutstandingreceivablerelatedtothepurchaseofRadial.
Cash and cash equivalentsCashandcashequivalentsincreasedbyEUR 214.1 milliontoEUR 680.1 million,thisincreasewasmainlyduetofreecashflowgenerationofEUR 241.2 millionandtheissuanceofthebondandcommercialpaper,partiallyoffsetbythepaymentofEUR 262.0 millionindividendsandthereimbursementofthebridgeloanrelatedtotheacquisitionofRadial.
Equity and liabilitiesEquityEquitydecreasedbyEUR 75.5 million,or9.7%,toEUR 702.3 millionasofDecember 31,2018fromEUR 777.8 millionasofDecember 31,2017.Therealizedprofit(EUR 263.6 million)andtheexchangedifferencesontranslationofforeignoperations(EUR 24.2 million)wereoffsetamongstothersbytheimpactatbpostbankofthetransitiontoIFRS 9FinancialInstruments,whichreplacedIAS 39,thefairvalueadjustmentinrespectofbpostbank’sbondportfolio,thepaymentofadividendandtheeffectivepartofacash-flowhedgeenteredintoforcashflowriskonthebond,respectivelyfortheamountsofEUR 59.9 million,EUR 25.5 million,EUR 262.0 million(grossdividendofEUR 0.25pershare,paidinMayandgrossdividendofEUR 1.06pershare,paidinDecember)andEUR 14.0 million.Thiscash-flowhedgereservewillbereclassifiedtoprofitorlossoverthe8-yeardurationofthebondfromtheissuancedate.
Non-current interest-bearing loans and borrowingsNon-currentinterest-bearingloansandborrowingsincreasedbyEUR 793.6 milliontoEUR 849.1 millionmainlyduetotheissuanceofaEUR 650.0 million8-yearbond,twotimesoversubscribed,withacouponof1.25%andaUSDtermloanofUSD 185.0 millionwithenddate
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September 2021andafloatingratestructure.ThesetransactionsservedtorefinancetheNovember 2017acquisitionofRadialHoldings,LP.bpostborrowedapartinUSDtomitigatetheriskonforeignexchangeratedifferenceshencebpostperformedanetinvestment
hedge.ThisincreasewaspartiallyoffsetbyadecreaseofEUR 9.1 millioncorrespondingtotheportionoftheloanoftheEuropeanInvestmentBanktransferredtocurrentliabilities.
Employee benefits
As at 31 December
Inmillion EUR 2018 2017
Post-employmentbenefits (32.8) (50.7)
Long-termemployeebenefits (113.5) (108.2)
Terminationbenefits (8.5) (6.6)
Otherlong-termbenefits (153.5) (161.5)
Total (308.4) (326.9)
EmployeebenefitsdecreasedbyEUR 18.6 million,or5.7%,toEUR 308.4 millionin2018fromEUR 326.9 millionin2017.Thedecreasemainlyreflects:
• ThepaymentofbenefitsforanamountofEUR 30.7 million.
• Operationalactuarialgain(EUR 5.2 million)partiallycausedbyupdatingtheinflationassumption.
• Additionalservicecosts(EUR 25.5 million),anincomingtransferrelatedtopensionsavingdays(EUR 5.6 million),interestcosts(EUR 4.0 million)andapositivepastservicecosts(EUR 10.9 million).ThelatterwasduetoanIAS 19non-cashgainongroupinsurance.
• FinancialactuarialgainofEUR 1.0 millioncausedbychangesinthediscountrates.
• Aremeasurementgainrelatedtopost-employmentbenefitsofEUR 5.8 million(beforetax),recognizedthroughothercomprehensiveincome.
AfterdeductionofthedeferredtaxassetrelatingtoemployeebenefitswhichamountedtoEUR 23.6 million,thenetliabilityamountedtoEUR 284.8 million(2017:EUR 294.5 million).
Non-current trade and other liabilitiesNon-currenttradeandotherliabilitiesdecreasedbyEUR 27.7 million(2017:EUR 45.2 million),mainlyduetothedecreaseofthecontingentconsiderationsforDynaGroupanddeBuren.
Non-current provisionsNon-currentprovisionsamountedtoEUR 22.6 millioncomparedtoEUR 24.2 millionin2017orEUR 38.1 millionrestatedforthepurchasepriceallocationofRadial.
Deferred tax liabilitiesDeferredtaxliabilitiesdecreasedbyEUR 5.0 millionfromEUR 12.3 millionin2017toEUR 7.3 millionin2018.
Current interest-bearing loans and borrowingsCurrentinterest-bearingloansandborrowingsdecreasedbyEUR 524.2 milliontoEUR 175.7 millionduetothereimbursementofthebridgeloanenteredintoin2017tobuyRadial.Thebridgeloanhasbeenrefinancedviatheissuanceofabondandatermloan.ThisdecreasewaspartiallyoffsetbytheissuanceofcommercialpaperforEUR 165.1 million.
Current provisionsCurrentprovisionsamountedtoEUR 16.8 millioncomparedtoEUR 21.2 millionin2017orEUR 28.4 millionrestatedforthepurchasepriceallocationofRadial.
Income tax payableIncometaxpayabledecreasedbyEUR 17.2 millionandwasmainlyexplainedbythelowertaxesandthehigheradvancesonincometaxespaid.
Current trade and other liabilitiesCurrenttradeandotherliabilitiesdecreasedbyEUR 5.8 milliontoEUR 1,212.5 millionin2018.ThisvariancewasmainlyduetotheincreaseoftradepayablesbyEUR 38.0 million,partiallyoffsetbythedecreaseofpayrollandsocialsecuritypayablesbyEUR 14.7 million,taxpayablesbyEUR 2.2 millionandotherpayablesbyEUR 27.0 million.ThedecreaseofotherpayableswasmainlyduetothepaymentofcontingentconsiderationstoDynaGroupandFDM(EUR 45.4 million)partiallyoffsetbythetransferofthecontingentconsiderationforDynaGroupfromnon-currenttradeandotherpayables.
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1.3Statement ofcash flows
In2018,bpostgeneratedEUR 211.7 millionofnetcash.ThiswasanincreaseofEUR 280.6 millioncomparedtothenetcashoutflowofEUR 68.9 millionin2017.
FreecashflowamountedtoEUR 241.2 millionandwasEUR 727.0 millionhigherthanlastyear.
CashflowfromoperatingactivitiesresultedinacashinflowofEUR 362.0 million,EUR 95.8 millionhigherthanin2017.Cashgenerationfromoperatingactivitieswasimpactedbybpostbankdividend(EUR -7.8 million)andcollectedproceedsduetoRadial’sclients(EUR -5.4 million).Excludingtheseelementsthepositivevarianceinworkingcapitalevolution(EUR +143.8 million,mainlythankstoimprovedclientsbalancesandpaymentoftransactionexpensesrelatedtoRadialacquisitionin2017)waspartiallyoffsetbythedecreasedoperatingresults(EUR -34.8 million).
CashusedininvestingactivitiesresultedinacashoutflowofEUR 120.8 millionin2018comparedtoEUR 751.9 millionlastyear.CashoutflowsrelatedtoacquisitionswereEUR 605.2 millionlowerthanlastyearwhichcombinedwithhigherproceedsfromsaleofbuildings(EUR +31.5 million)andlowercapitalexpenditures(EUR +6.4 million)contributedtothedecreasedcashoutflow.Thiswastoalimitedextentoffsetbyinvestmentsecuritiesin2017(EUR -12.0 million).
ThecashflowrelatingtofinancingactivitiesamountedtoEUR -29.5 million(EUR +416.8 millionin2017).In2018theissuanceofthebondandcommercialpaper,alongwiththeloansenteredintoduringthethirdquarterof2018wasmorethanoffsetbythereimbursementofthebridgeloanfortheRadialacquisition,theunwindingofthepre-hedgeinterestrateswaprelatedtothebondandthedividends.Financingactivitiesgeneratedcashinflowin2017asthebridgeloanenteredintoforthepurchaseofRadialwashigherthandividendspaid.
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bpost ANNUALREPORT2018 18
1.4Reconciliationofreportedtonormalizedfinancialmetrics
bpostalsoanalyzestheperformanceofitsactivitiesonanormalizedbasisorbeforeadjustingitems.Adjustingitemsrepresentsignificantincomeorexpenseitemsthatduetotheirnon-recurringcharacterareexcludedfrominternalreportingandperformanceanalyses.bpostusesaconsistentapproachwhendeterminingifanincomeorexpenseitemisadjustingandifitissignificantenoughtobeexcludedfromthereportedfigurestoobtainthenormalizedones.
AnadjustingitemisdeemedtobesignificantifitamountstoEUR 20.0 millionormore.Allprofitsorlossesondisposalofactivitiesarenormalizedwhatevertheamounttheyrepresent,aswellasallnon-cashPurchasePriceAllocation(PPA)accountingimpactsrelatedtoacquisitions.Reversalsofprovisionswhoseadditionhadbeennormalizedfromincomearealsonormalizedwhatevertheamounttheyrepresent.
ThepresentationofnormalizedresultsisnotinconformitywithIFRSandisnotaudited.Thenormalizedresultsmaynotbecomparabletonormalizedfiguresreportedbyothercompaniesasthosecompaniesmaycomputetheirnormalizedfiguresdifferentlyfrombpost.Normalizedfinancialmeasuresarepresentedbelow.
Income Statement relatedOperating income for the year ended 31 December
Inmillion EUR 2018 2017 Evolution2018-2017
Totaloperatingincome 3,850.2 3,023.8 27.3%
Normalized total operating income 3,850.2 3,023.8 27.3%
Operating expenses for the year ended 31 December
Inmillion EUR 2018 2017 Evolution2018-2017
Totaloperatingexcludingdepreciation,amortization (3,279.1) (2,425.9) 35.2%
Normalized total operating expenses excluding depreciation, amortization (3,279.1) (2,425.9) 35.2%
EBITDA for the year ended 31 December
Inmillion EUR 2018 2017Evolution2018-2017
EBITDA 571.1 598.0 -4.5%
Normalized EBITDA 571.1 598.0 -4.5%
EBIT for the year ended 31 December
Inmillion EUR 2018 2017 Evolution2018-2017
EBIT 393 .4 492.9 -20.2%
Non-cashimpactofpurchasepriceallocation(PPA)1 30.9 8.7 252.9%
Normalized profit from operating activities (EBIT) 424.3 501.6 -15.4%
(1) InaccordancewithIFRS 3andthroughoutthepurchasepriceallocation(PPA)fordeBuren,DynaGroup,Ubiway,RadialandIMEX,bpostrecognizedseveralintangibleassets(brandnames,know-how,customerrelationships, …).Thenon-cashimpactconsistingofamortizationchargesontheseintangibleassetsisbeingnormalized.
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Profit (EAT - Earnings After Taxes) for the year ended 31 December
Inmillion EUR 2018 2017 Evolution2018-2017
Profitfortheyear 263.6 322.9 -18.4%
Non-cashimpactofpurchasepriceallocation(PPA)1 26.8 6.3 324.8%
Normalized profit of the year 290.4 329.3 -11.8%
Cash Flow Statement relatedFor the year ended 31 December
Inmillion EUR 2018 2017 Evolution2018-2017
NetCashfromoperatingactivities 362.0 266.1 36.0%
NetCashusedininvestingactivities (120.8) (751.9) -83.9%
Operating free cash flow 241.2 (485.8) -149.6%
Collectedproceedsduetoclients (9.7) (15.0) -35.8%
Normalized operating free cash flow 231.5 (500.8) -146.2%
Operatingfreecashflowrepresentsnetcashfromoperatingactivitieslessacquisitionofproperty,plantandequipment(netofproceedsfromsaleofproperty,plantandequipment),acquisitionofintangibleassets,acquisitionofotherinvestmentsandacquisitionofsubsidiaries(netofcashacquired).
InsomecasesRadialperformsthebillingandreceivingpaymentsonbehalfoftheircustomers.Underthisarrangement,Radialroutinelyremitsbilledamountsbacktotheclient,andperformsamonthlysettlementwiththeclientonamountsowedtoorfromRadialbasedonbillings,fees,andamountspreviouslyremitted.NormalizedoperatingfreecashflowsexcludesthecashRadialreceivedonbehalfoftheircustomersasRadialhasnoorlittleimpactontheamountorthetimingofthesepayments.
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bpost ANNUALREPORT2018 20
1.5FromIFRSConsolidatedNetProfittoBelgianGAAPUnconsolidatedNetProfit
For the year ended 31 December
Inmillion EUR 2018 2017
IFRS Consolidated Net Profit 263.6 322.9
Resultsofsubsidiariesanddeconsolidationimpacts (1.7) (23.3)
Differencesindepreciationandimpairments (2.2) (2.0)
Differencesinrecognitionofprovisions (1.4) (0.1)
EffectsofIAS19 (21.3) (38.8)
DepreciationintangiblesassetsPPA 30 .9 8.7
Deferredtaxes (2.8) 20.3
Other (2.8) 3.2
Belgian GAAP unconsolidated net profit 262.3 291.0
bpost’sunconsolidatedprofitaftertaxespreparedinaccordancewithBelgianGAAPcanbederivedfromtheconsolidatedIFRSprofitaftertaxesintwostages.
Thefirststageconsistsofun-consolidatingtheprofitaftertaxesunderIFRS,i.e.:
• Subtractingtheresultsofthesubsidiaries,i.e.removingtheprofitaftertaxofthesubsidiaries;and
• EliminatinganyotherIncomeStatementimpactthe
For the year ended 31 December
Inmillion EUR 2018 2017
ProfitoftheBelgianfullyconsolidatedsubsidiaries(localGAAP) (6.1) (11.8)
Profitoftheinternationalsubsidiaries(localGAAP) 59 .5 (25.1)
Shareofresultsofassociates(localGAAP) (12.1) (13.0)
Otherdeconsolidationimpacts (43.1) 26.6
Total (1.7) (23.3)
subsidiarieshadonbpost(suchasimpairments)andaddingthedividendsreceivedfromthesesubsidiaries.
Thetablebelowsetsforththebreakdownoftheabovementionedimpacts:
• Theevolutionoftheotherdeconsolidationimpactsin2018comparedto2017wasmainlyexplainedbythereversalofstatutoryimpairments,whichmainlyoffsetthelowerresultsoftheinternationalsubsidiariesandthehighergainsoncontingentconsiderations.
ThesecondstageconsistsofderivingtheBelgianGAAPfiguresfromtheIFRSfiguresandisachievedbyreversingallIFRSadjustmentsmadetolocalGAAPfigures.Theseadjustmentsinclude,butarenotlimitedtothefollowing:
• Differencesinthetreatmentofdepreciationandimpairments:BelgianGAAPallowsdifferentusefullives(andhencedepreciationrates)forfixedassetsfromIFRS.GoodwillisamortizedunderBelgianGAAPwhileIFRSrequiresimpairmenttestingforgoodwill.IFRSalsoallowsintangibleassetstoberecordedonthebalance
sheetunderdifferentconditionsfromBelgianGAAP; • RecognitionofprovisionsissubjecttodifferentcriteriaunderBelgianGAAPandIFRS;
• IFRSrequiresthatallfutureobligationstopersonnelarerecordedasaliabilityunderIAS 19,whereasBelgianGAAPhasnosuchobligation.ThemovementsintheIFRSliabilityarereflectedonbpost’sincomestatementunderpayrollcosts(EUR 21.2 millionin2018versusEUR 41.7 millionin2017)orprovisions(EUR 3.1 millionin2018versusEUR 3.2 millionin2017),exceptfortheimpactofchangesinthediscountratesforthefutureobligations,whichwasrecordedasafinancialresult(negativeEUR 3.0 millionin2018versusnegativeEUR 6.0 millionin2017);
• TheevolutionofIAS 19in2018comparedto2017wasmainlyexplainedbylastyear’sincreaseofnon-cash
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financialchargesrelatedtoemployeebenefitsduetothecurtailmentofthetransportbenefitsforbpost’sretirees;
• InaccordancewithIFRS 3bpostfinalizedin2018thepurchasepriceallocation(PPA)forRadialandIMEXandrecognizedseveralintangibleassets(mainlytradenamesandcustomerrelationships, …),hencetheincreaseofdepreciationcomparedtolastyear;
• DeferredtaxesrequirenoaccountingentriesunderBelgianGAAP,butarerecordedunderIFRS.AstheBelgianandUScorporatetaxreformshadbeenenactedbeforeDecember 31,2017bpostreassesseditsdeferredtaxpositionunderIFRStakingintoconsiderationthesenewmeasuresin2017.
bpost ANNUALREPORT2018 22
OUTLOOK FOR 2019
Outlook for 2019
The2019ambitionistoachieveastable Group total operating incomeincludingbuildingsales,aGroup normalized EBIT above EUR 300.0 million,andtodistributeatleast85%of2019BGAAPnetprofitofbpost NV/SA as dividend.
Morespecificallyforour4businessunits:
Mail & Retail:
• Weexpectalowsingle-digitpercentagedeclineintotaloperatingincome.
• TheunderlyingDomesticMailvolumedeclineisanticipatedatupto-7%,partlyoffsetbyanaveragepriceincreaseof+4.4%.
• EBITmarginofMail&Retailisexpectedtorangebetween11%and13%.
Parcels & Logistics Europe & Asia:
• Weexpecttorecordhighsingle-digitpercentagegrowthintotaloperatingincome,ofwhichmid-teensforParcelsBelgium-Netherlands.
• EBITmarginofParcels&LogisticsEurope&Asiaisexpectedtorangebetween6%and8%.
Parcels & Logistics North America:
• Totaloperatingincomeisexpectedtodeclinebyalowsingle-digitpercentage,mainlyexplainedbythefull-yearimpactofthe2018 clientchurnandrepricingatRadial.Radialishoweverontrackforthe2022guidanceaspresentedattheCapitalMarketsDay.
• Parcels&LogisticsNorthAmericaisexpectedtobreak-evenatEBITlevel.
Corporate:
• ExpectedtobeneutralatEBITlevel.
GrosscapexisexpectedtobearoundEUR 150.0 million.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 23
Financial consolidated statements 2018
1. Consolidated income statement
2. Consolidated statement of comprehensive income
3. Consolidated statement financial position
4. Consolidated statement of changes in equity
5. Consolidated statement of cash flows
6. Notes to the consolidated financial statements
6.1Generalinformation
6.2Basisofpreparation
6.3Significantaccountingjudgmentsandestimates
6.4Summaryofsignificantaccountingpolicies
6.5Riskmanagement
6.6Businesscombinations
6.7Segmentinformation
6.8Revenue
6.9Otheroperatingincome
6.10Otheroperatingexpense
6.11Servicesandothergoods
6.12Payrollcosts
6.13Financialincomeandfinancialcost
6.14Incometax/deferredtax
6.15Earningspershare
6.16Property,plantandequipment
6.17Investmentproperty
6.18Assetsheldforsale
6.19Intangibleassets
6.20 Lease
6.21Investmentinsecurities
6.22Investmentinassociates
6.23Tradeandotherreceivables
6.24Inventories
6.25Cashandcashequivalents
6.26Financialliabilities
6.27Employeebenefits
6.28Tradeandotherpayables
6.29Provisions
6.30Financialassetsandfinancialliabilities
6.31Derivativefinancialinstrumentsandhedging
6.32Contingentliabilitiesandcontingentassets
6.33Rightsandcommitments
6.34Relatedpartytransactions
6.35Groupcompanies
6.36Eventsafterthestatementoffinancialpositiondate
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 24
For the year ended 31 December
Inmillion EUR Notes 2018 2017 Evolution2018-2017
Revenue 6.8 3,774 .4 2,972.2 27.0%
Otheroperatingincome 6.9 75.8 51.6 46.9%
Total Operating Income 3,850.2 3,023.8 27.3%
Material costs (257.5) (240.7) 7.0%
Servicesandothergoods 6.11 (1,556.2) (972.8) 60.0%
Payrollcosts 6.12 (1,455.6) (1,206.7) 20.6%
Otheroperatingexpenses 6.10 (9.8) (5.6) 74.2%
Depreciation,amortization (177.7) (105.1) 69.2%
Total operating expenses (3,456.8) (2,530.9) 36.6%
Profit From Operating Activities (EBIT) 393.4 492.9 -20.2%
Financialincome 6.13 6.1 5.8 5.3%
Financialcosts 6.13 (29.9) (19.5) 53.4%
Shareofprofitofassociates 6.22 11 .5 9.6 19.9%
Profit Before Tax 381.0 488.7 -22.0%
Incometaxexpense 6.14 (117.4) (165.8) -29.2%
Profit From Continuing Operations 263.6 322.9 -18.4%
Profit For The Year (EAT) 263.6 322.9 -18.4%
Attributableto:
OwnersoftheParent 264.8 324.9 -18.5%
Non-controllinginterests (1.2) (2.0) -38.5%
EARNINGS PER SHARE
In EUR 2018 2017
Basic,profitfortheyearattributabletoordinaryequityholdersoftheparent 1 .34 1.62
Diluted,profitfortheyearattributabletoordinaryequityholdersofthe parent 1 .34 1.62
1 .Consolidated income statement
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 25
For the year ended 31 December
Inmillion EUR Notes 2018 2017
Profit for the year 263.6 322.9
Other comprehensive income
Othercomprehensiveincometobereclassifiedtoprofitorlossinsubsequentperiods(netoftax):
Changeofothercomprehensiveincomeofassociates 6.22 (25.5) (42.1)
Netgain/(loss)onhedgeofanetinvestment 6.31 (5.7) 2.5
Netgain/(loss)oncashflowhedges 6.31 (14.0) 0.0
Exchangedifferencesontranslationofforeignoperations 29.8 (16.5)
Net other comprehensive income/(loss) to be reclassified to profit or loss in subsequent periods (15.3) (56.0)
Othercomprehensiveincomenottobereclassifiedtoprofitorlossinsubsequentperiods(netoftax):
Remeasurementgain(losses)ondefinedbenefitplans 6.27 4.6 3.1
Net other comprehensive income/(loss) not to be reclassified to profit or loss in subsequent periods 4.6 3.1
Other comprehensive income/(loss) for the year, net of tax (10.7) (53.0)
Total comprehensive income for the year, net of tax 252.9 270.0
Attributableto:
OwnersoftheParent 254.1 271.9
Non-controllinginterest (1.2) (2.0)
2.Consolidated statement of comprehensive income
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 26
3 .Consolidated statement financial position
As at 31 December
Inmillion EUR Notes 2018 2017restated1 2017
AssetsNon-current assetsProperty,plantandequipment 6.16 708.0 752.8 710.3Intangibleassets 6.19 874.9 890.4 910.6Investmentsinassociates 6.22 251.2 329.2 329.2Investmentproperties 6.17 18.7 5.7 5.7Deferredtaxassets 6.14 31.5 31.4 31.5Tradeandotherreceivables 6.23 11.2 9.4 9.4
1,895.7 2,018.8 1,996.6Current assetsInventories 6.24 36.9 39.1 39.1Incometaxreceivable 6.14 5.7 1.6 1.6Tradeandotherreceivables 6.23 712.0 714.9 719.4Cashandcashequivalent 6.25 680.1 466.0 466.0
1,434.7 1,221.6 1,226.1Assetsheldforsale 6.18 14.7 0.6 0.6
Total assets 3,345.1 3,241.0 3,223.3
Equity and liabilitiesIssuedcapital 364.0 364.0 364.0Reserves 271.4 310.1 310.1Foreigncurrencytranslation 12.7 (11.5) (11.5)Retainedearnings 51.6 110.9 110.9
Equity attributable to equity holders of the Parent 699.7 773.5 773.5Equityattributabletonon-controllinginterests 2.5 4.3 4.3
Total equity 4 702.3 777.8 777.8Non-current liabilities Interest-bearingloansandborrowings 6.26 849.1 55.4 58.4Employeebenefits 6.27 308.4 326.9 326.9Tradeandotherpayables 6.28 17.5 45.2 45.2Provisions 6.29 22.6 38.1 24.2Deferredtaxliabilities 6.14 7.3 12.3 12.3
1,204.8 478.0 467.0Current liabilities Interest-bearingloansandborrowings 6.26 175.7 699.9 699.9Provisions 6.29 16.8 28.4 21.2Incometaxpayable 6.14 21.4 38.6 39.3Derivativeinstruments 6.30 0.8 0.0 0.0Tradeandotherpayables 6.28 1,212.5 1,218.4 1,218.2
1,427.3 1,985.3 1,978.5Liabilitiesdirectlyassociatedwithassetsheldforsale 6.18 10.8 0.0 0.0
Total liabilities 2,642.9 2,463.3 2,445.5
Total equity and liabilities 3,345.1 3,241.0 3,223.3
(1) RestatedinordertoshowcomparativeinformationfollowingthepurchasepriceallocationofRadial.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 27
4 .Consolidated statement of changes in equity
AttributabletoequityholdersoftheparentNon-
control-ling
interests
Total equity
Inmillion EURAuthorized&issued
capital
Treasuryshares
Other reserves
Foreigncurrency
translation
Retainedearnings Total
As per 1 January 2017 364.0 0.0 274.2 2.5 135.5 776.3 3.1 779.3
Profitfortheyear2017 324.9 324.9 (2.0) 322.9
Othercomprehensiveincome 96.5 (14.0) (135.5) (53.0) (53.0)
Total comprehensive income 0.0 0.0 96.5 (14.0) 189.4 271.9 (2.0) 270.0
Dividends(Pay-out) (50.0) (212.0) (262.0) 0.0 (262.0)
Other (10.7) (2.0) (12.7) 3.2 (9.5)
as per 31 December 2017 364.0 0.0 310.1 (11.5) 110.9 773.5 4.3 777.8
As per 1 January 2018 364.0 0.0 310.1 (11.5) 110.9 773.5 4.3 777.8
ImpactofIFRS 9onbpostbank (59.9) (59.9) (59.9)
As per 1 January 2018 (Restated) 364.0 0.0 250.2 (11.5) 110.9 713.6 4.3 717.9
Profitfortheyear2018 264.8 264.8 (1.2) 263.6
Othercomprehensiveincome 76.1 24.2 (110.9) (10.7) (10.7)
Total comprehensive income 0.0 0.0 76.1 24.2 153.9 254.1 (1.2) 252.9
Dividends(Pay-out) (50.0) (212.0) (262.0) 0.0 (262.0)
Other (4.8) (1.2) (6.0) (0.5) (6.6)
As per 31 December 2018 364.0 0.0 271.4 12.7 51.6 699.7 2.5 702.3
OtherreservesperDecember 31,2018(EUR 272.2 million)arecomposedofgroupreservesamountingtoEUR 221.4 million,ofwhichEUR 172.8 milliondistributableretainedearningswithin
bpostNV/SA,andlegalreservesofEUR 50.8 million.
AtDecember 31,2018,theshareholdingofbpostisasfollows:
Number of shares Total TheBelgianState1 Freefloat
As per 1 January 2018 200,000,944 102,075,649 97,925,295
Changesduringtheyear - - -
As per 31 December 2018 200,000,944 102,075,649 97,925,295
Theshareshavenonominalvalueandarefullypaidup.
(1) DirectlyandviatheFederalHoldingandInvestmentCompany.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 28
Distributions made and proposed:
Inmillion EUR 2018 2017
Cash dividends on ordinary shares declared and paid:
Finaldividendfor2017:0.25 EURpershare(2016:0.25 EURpershare) 50.0 50.0
Interimdividendfor2018:1.06 EURpershare(2017:1.06 EURpershare) 212.0 212.0
262.0 262.0
Proposed dividends on ordinary shares
Finalcashdividendfor2018:1.31 EURpershare(2017:1.31 EURpershare) 262.0 262.0
Proposeddividendsonordinarysharesaresubjecttoapprovalattheannualgeneralmeetingandarenotrecognizedasaliabilityasat31 December.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 29
As at 31 December
Inmillion EUR Notes 2018 2017
Operating activities
Profitbeforetax 1 381.0 488.7
Depreciationandamortization 177 .7 105.1
Impairmentonbaddebts 6.10 10 .5 3.3
Gainonsaleofproperty,plantandequipment 6.9 (30.0) (15.9)
Othernon-cashitems (4.2) (8.1)
Changeinemployeebenefitobligations 6.27 (12.8) (29.1)
Shareofprofitofassociates 6.22 (11.5) (9.6)
Dividendsreceived 6.22 4 .0 11.8
Incometaxpaid (126.1) (125.2)
Incometaxpaidonpreviousyears (11.8) (15.0)
Cash flow from operating activities before changes in working capital and provisions 376.8 405.9
Decrease/(increase)intradeandotherreceivables 14 .7 (91.1)
Decrease/(increase)ininventories 6.24 0 .3 (0.3)
Increase/(decrease)intradeandotherpayables (10.9) (48.3)
Increase/(decrease)incollectedproceedsduetoclients 9 .7 15.0
Increase/(decrease)inprovisions (28.6) (15.2)
Net cash from operating activities 362.0 266.1
Investing activities
Proceedsfromsaleofproperty,plantandequipment 55.6 24.0
Acquisitionofproperty,plantandequipment 6.16 (88.9) (96.7)
Acquisitionofintangibleassets 6.19 (26.5) (24.7)
Acquisitionofotherinvestments 0 .5 12.0
Acquisitionofsubsidiaries,netofcashacquired 6.6 (61.4) (666.6)
Net cash used in investing activities (120.8) (751.9)
5 .Consolidated statement of cash flows
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 30
As at 31 December
Inmillion EUR Notes 2018 2017
Financing activities
Proceedsfromborrowingsandfinancingleaseliabilities 994 .0 692.5
Paymentsrelatedtoborrowingsandfinancingleaseliabilities (739.7) (13.7)
Paymentsforderivativeinstruments (21.5) 0.0
Transactionswithminorities (0.3) 0.0
Interimdividendpaidtoshareholders 4 (212.0) (212.0)
Dividendspaid 4 (50.0) (50.0)
Net cash from financing activities (29.5) 416.8
Net increase in cash and cash equivalents 211.7 (68.9)
Net foreign exchange difference 2.5 (3.9)
Cashandcashequivalentlessbankoverdraftasof1st January 6.25 466.0 538.9
Cashandcashequivalentlessbankoverdraftasof31st December 6.25 680.1 466.0
Movements between 1st January and 31st December 214.1 (72.9)
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 31
6.Notes to the consolidated financial statements
6.1GeneralinformationBusiness activitiesbpostNV/SAanditssubsidiaries(hereinafterreferredtoas‘bpost’)providenationalandinternationalmailandparcelsservicescomprisingthecollection,transport,sortinganddistributionofaddressedandnon-addressedmail,printeddocuments,newspapersandparcels.
bpostNV/SA,throughitssubsidiariesandbusinessunits,alsosellsarangeofotherproductsandservices,includingpostal,parcels,bankingandfinancialproducts,e-commercelogistics,expressdeliveryservices,proximityandconvenienceservices,documentmanagementandrelatedactivities.bpostalsocarriesoutServicesofGeneralEconomicInterest(SGEI)onbehalfoftheBelgianState.
Legal statusbpostNV/SAisalimitedliabilitycompanyunderpubliclaw.bposthasitsregisteredofficeatMuntcentrum-CentreMonnaie,1000Brussels.bpostsharesarelistedontheNYSE-EuronextBrusselssinceJune 21,2013(sharetickerBPOST).
6.2BasisofpreparationTheconsolidatedfinancialstatementsofbposthavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS),asadoptedforusebytheEU.AllstandardsandinterpretationsissuedbytheInternationalAccountingStandardsBoard(IASB)andtheInternationalFinancialReportingInterpretationsCommittee(IFRIC)effectiveyear-end2018andadoptedbytheEuropeanUnionareappliedbybpost.
TheconsolidatedfinancialstatementsarepresentedinEuro(EUR),allvaluesareroundedtothenearestmillionexceptwhenotherwiseindicated.Theconsolidatedfinancialstatementsarepreparedunderthehistoricalcostconvention,exceptforthemeasurementatfairvalueofthebondportfolioofbpostbankwhichisclassifiedonthebalancesheetofbpostbankasHoldtoCollectfinancialassets.ThefinancialstatementswereauthorizedforissuebytheBoardofDirectorsonMarch 19,2019.
TheaccountingpoliciesadoptedareconsistentwiththoseofthepreviousfinancialyearexceptfortheadoptionofnewstandardsandinterpretationseffectiveasfromJanuary 1,2018.
bpostappliedIFRS 15RevenuefromContractswithCustomersandIFRS 9FinancialInstrumentsforthe
firsttime.Thenatureandeffectofthechangesasaresultofadoptionofthesenewaccountingstandardsaredescribedhereunder.
Apart from IFRS 9andIFRS 15,thefollowingnewstandardsandamendments,enteredintoforceasfromJanuary 1,2018,don’thaveanyeffectonthepresentation,thefinancialperformanceorpositionofbpost:
• IFRS 2 – Amendments–ClassificationandMeasurementofShare-basedPaymentTransactions
• IAS 40 – Amendments–TransfersofInvestmentProperty
• IFRS 4 – Amendments–ApplyingIFRS 9FinancialinstrumentswithIFRS 4
• IFRIC 22 -ForeignCurrencyTransactionsandAdvanceConsideration
• Annual Improvements Cycle 2014-2016
In2017IAS 18Revenuewasappliedbybpost.AsofJanuary 1,2018,theaccountingofrevenuesdescribedbyIAS 18wasreplacedbyIFRS 15-RevenuefromContractswithCustomers.UnderIFRS 15,revenueisrecognizedatanamountthatreflectstheconsiderationtowhichanentityexpectstobeentitledinexchangefortransferringgoodsorservicestoacustomer.IFRS 15establishesafive-stepmodeltoaccountforrevenuearisingfromcontractswithcustomers:theperformanceobligation(s)ofeachcontractneedstobeassignedwithatransactionpriceandrevenueisonlyrecognizedwhentheentitysatisfiestheperformanceobligation(s)ofthecontract.
bpostperformedanassessmentofIFRS 15byanalyzingtheproductsandservicesrenderedtoitscustomers.bpostisinthebusinessofdistributingmailandparcelsdomesticallyandabroadaswellastherenderingofadditionalsourcesofrevenue,includingvalueaddedservices,retailandbankingservicesandfinancialproducts.Productsandservicescaneitherbesoldontheirowninseparateidentifiedcontractsortogetherasabundledpackagewhichcan’tbedistinct.Inconclusionandaftercarefulinvestigationofallproductsandservicesprovidedtoitscustomers,bpostmeasurednoimpactontheresultsof2017or2018regardingtheapplicationoftheIFRS 15requirements:
• Iflowerpricesaregrantedonabundleofservices,thevariousservicesinthecontractaredecreasedatanequalproportionaterate,whichisinlinewithIFRS 15.
• Regardingtheperformanceobligation,whereadistinctionneedstobemadeonwhetherbpostactsasanagentorprincipal,bpostcancontinuetorecognizeandaccountrevenuesinthesamewayasbefore2018asitisinlinewithIFRS 15.
• Eachperformanceobligationinthecontracthasatransactionprice,whichinsomecasescanbevariable(discounts,penalties,etc.).Inlinewith
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 32
IAS39measurementcategory IFRS 9 measurementcategory
FairvaluethroughOCI
In million EUR Carryingamount
Fairvaluethrough
profitorloss
Amortizedcost
Financial assets (cash and receivables)
CashandCashequivalents 466.0 466.0
Tradeandotherreceivables 724.3 724.3
Total financial assets (cash and receivables) 1,190.3 1,190.3
Therearenochangesinclassificationandmeasurementofbpost’sfinancialliabilities.
IFRS 15bpostalreadyperformsanestimationofthevariableconsiderationatcontractinception.
• Furthermoretherevenuerecognitiondidn’tchangeeitherasmostoftherevenuesarerecognizedatapointintime(i.e.whentheservicehasbeenrendered).
bpostadoptedIFRS 15usingthemodifiedretrospectivemethodofadoptionwiththedateofinitialapplicationJanuary 1,2018.Asaresultofthemodifiedretrospectivemethod,2017figuresarepresentedinaccordancewithIAS 18.Iftherewouldhavebeenanyimpacton2017results,theimpactofIFRS 15atthedateofinitialapplicationofJanuary 1,2018wouldhavebeenrecognizedasanadjustmenttotheopeningbalanceofretainedearnings.
AsofJanuary 1,2018,IAS 39FinancialInstruments:RecognitionandMeasurementwasreplacedbyIFRS 9FinancialInstruments.bpostappliedIFRS 9usingthemodifiedretrospectivemethodasofJanuary 1,2018withoutrestatingthecomparatives,2017figuresarepresentedinaccordancewithIAS 39.IFRS 9bringstogetherallthreeaspectsoftheaccountingforfinancialinstrumentsproject:(a)classification
andmeasurement,(b)impairmentand(c)hedgeaccounting.ThemainimpactofIFRS 9relatestobpost’sinvestmentof50%inbpostbankwhosestatementoffinancialpositionismainlycomposedoffinancialinstruments.
TheimpactofIFRS 9 hasbeenassessedasfollows:
(a) Classification & Measurement:classificationandmeasurementoffinancialassetsunderIFRS 9dependsonthespecificbusinessmodelinplaceandtheasset’scontractualcashflowcharacteristics.Thenewrequirementshavenoimpactforthefinancialassetsofbpost.HoweverbpostbankatthetransitiontoIFRS 9reclassifiedamajorpartofitsbondportfoliofromIAS 39available-for-salecategorytoIFRS 9amortisedcostcategory.Thisresultedinadecreaseofbpostbank’sequitybyEUR 119.8 millionandconsequentlybpost’sinvestmentinassociatesandtherelatingreservesdecreasedby50%ofthisamountsoEUR 59.9 milliononthetransitiondatetoIFRS 9.
InsummaryimpactupontheadaptionofIFRS 9onfinancialassets(cashandreceivables)asperJanuary 1,2018:
(b) Impairment: IFRS 9requiresrecognizingexpectedcreditlossesonallofdebtinstruments,eitherona12-monthorlifetimebasis.Theimpactonbpost’stradereceivableswasnotsignificant.OntheotherhandbpostbankwillapplythegeneralapproachthustheIFRS 9stagingwhichwillreplacetheIAS 39incurredbutnotreported(IBNR)provisions,howevertheimpactwasnotsignificant(EUR 0.2 million).
(c) Hedge accounting: bposthasverylimitedhedgeaccountingtransactionsbuthasdecidedtocontinueapplyingIAS 39hedgeaccountingbecausebpostbankwillcontinuetoapplyIAS39hedgeaccountinguntilthemacro-hedgeprojectisfinalizedbytheIASB.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 33
bposthasnotearlyadoptedanyotherstandard,interpretation,oramendmentthatwasissuedbutisnotyeteffective.
6.3Significantaccountingjudgmentsandestimates
AseriesofsignificantaccountingjudgmentsunderliethepreparationofIFRScompliantconsolidatedfinancialstatements.Theyimpactthevalueofassetsandliabilities.Estimatesandassumptionsaremadeconcerningthefuture.Theyarere-assessedonacontinuousbasisandarebasedonhistoricallyestablishedpatternsandexpectationswithregardstofutureeventsthatappearreasonableundertheexistingcircumstances.
Employee benefits - IAS 19Thekeyassumptions,inherenttothevaluationofemployeebenefitliabilitiesandthedeterminationofthepensioncost,includeemployeeturnover,acceptancerate,mortalityrates,retirementages,discountrates,benefitincreasesandfuturewageincreases,whichareupdatedonanannualbasis.Eachyearthereferencedatabaseisenrichedwithoneadditionalyearofhistoricaldatamakingthedatabaseevermorestableandreliable.Actualcircumstancesmayvaryfromtheseassumptions,givingrisetodifferentemployeebenefitliabilities,whichwouldbereflectedasanadditionalprofitorcostintheIncomeStatementorintheothercomprehensiveincomedependingonthetypeofthebenefit.
IFRS 16willreplaceIAS 17Leases,IFRIC 4DeterminingwhetheranArrangementcontainsaLease,SIC-15OperatingLeases-IncentivesandSIC-27EvaluatingtheSubstanceofTransactionsInvolvingtheLegalFormofaLease.IFRS 16setsouttheprinciplesfortherecognition,measurement,presentationanddisclosureofleasesandrequireslesseestoaccountforallleasesunderasingleon-balancesheetmodelsimilartotheaccountingforfinanceleasesunderIAS 17.IFRS 16willbeeffectiveforannualperiodsbeginningonorafter1 January 2019.bpostwilltransitiontoIFRS 16inaccordancewiththemodifiedretrospectiveapproachwithcalculationfromtransitiondate,henceprioryearfigureswillnotbeadjusted.TheanalysisoninitialapplicationperformedbybpostshowedthatIFRS 16 hasamaterialeffectontheconsolidatedstatementoffinancialpositiongiventhefleetandbuildingcommitmentsfortheBelgiancompaniesandthebuildingcommitmentsfortheforeignentities.Asof2019assetswillberecognisedfortherightofusereceivedandliabilitieswillberecognisedforthepaymentobligationenteredintoforalloftheseleases.bpostwillmakeuseofthereliefoptionsprovidedforlow-valueassetsandshort-termleases.TheimpactoftheanalysisledtotherecognitionofaleaseliabilityandarightofuseassetofEUR 417.8 millionperJanuary 1,2019.Contrarytothecurrentpresentationofoperatingleases,depreciationchargesonrightofuseassetsandinterestexpensefromunwindingofthediscountoftheleaseliabilitieswillberecognised,whichwillimprovetheEBITDAastheoperatingleaseexpenseisnolongerincluded.FurthermoreIFRS 16alsoprovidesnewguidanceonthetreatmentofsalesandleasebacktransactions.Theseller/lesseerecognisesarightofuseassetfortheleaseretainedandaccordinglyonlyaproportionalamountofthegainorlossfromthesalecanberecognised.
Standardorinterpretation Effectiveforinreportingperiodsstartingonorafter
IFRS 16–Leases 1 January 2019
IFRIC Interpretation 23-UncertaintyoverIncomeTaxTreatments 1 January 2019
IFRS 9–Amendments-PrepaymentFeatureswithNegativeCompensation 1 January 2019
IAS 28–Amendments-Long-termInterestsinAssociatesandJointVentures 1 January 2019
IAS 19–Amendments-PlanAmendment,CurtailmentorSettlement 1 January 2019
AnnualImprovementsCycle–2015–20171 1 January 2019
IFRS 17-InsuranceContracts1 1 January 2021
(1) NotyetendorsedbytheEUasperdateofthisreport.
Standards and Interpretations issued but not yet applied by bpostThefollowingnewIFRSStandardsandIFRICInterpretations,issuedbutnotyeteffectiveorwhichareyettobecomemandatory,havenotbeenappliedbybpostforthepreparationofitsconsolidatedfinancialstatements.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 34
(1) TheTowersWatsonRATE:linktoolisatooldesignedtoassistcompaniesintheselectionofdiscountratesthataccuratelyreflectthecharacteristicsof their pension schemes.
ThemortalitytablesusedaretheBelgianMortalitytablesMR(formen)andFR(forwomen)withanageadjustmentoftwoyears.bpostdecidedtoreflectthemortalityimprovementsbyadoptinganagecorrectionoftwoyearstotheofficialtables,forbothactiveandinactiveemployees.
RegardingtheAccumulatedCompensatedAbsencesbenefit,theconsumptionpatternoftheillnessdaysisderivedfromthestatisticsoftheconsumptionaverageoveramobileaverageof3 years(years2016to2018forDecember 2018).Thenumberofdaysofillnessdependsontheage,identifiedpersegmentoftherelevantpopulation.Therateofguaranteedsalaryissetat75%incaseoflong-termillness.Thus,thepercentageoftheguaranteedsalaryusedfordeterminingthecostofdaysaccumulatedinthenotionalaccountis25%.Thebalanceofthecumulatedun-usedsicknessdaysforcivilservantsislimitedtoamaximumof63 days.
Bylaw,definedcontributionpensionplansinBelgiumaresubjecttominimumguaranteedratesofreturn.Hence,thoseplansclassifyasdefinedbenefitplanswhichwouldrequirethattheProjectedUnitCreditmethodisappliedinordertomeasurethebenefitobligations.Althoughthereisstillnofullclarityontheapproach,newlegislationdatedDecember 2015broughtmoreclarificationontheminimumguaranteedreturn.TheuncertaintywithrespecttothefutureevolutionoftheminimumguaranteedratesofreturninBelgiumhasbeenremovedwiththechangeintheWAP/LPClawendofDecember 2015.Asfrom2016,theminimumreturnforfuturecontributionsisequaltotheaverageofthepast24 monthsreturnon10-yearlinearbonds,withaminimumof1.75%p.a.bpostcontinuedtoapplytheso-calledPUCmethodology(ProjectedUnitCredit),howeverasof2018withoutprojectionoffuturecontributionsastheplansarenotbackloadedandwithapplicationofparagraph115ofIAS 19.
Thefinancingmethodologyoffamilyallowancesforcivilservantschangedfollowingalawchange(lawof19 December 2014).Asaconsequence,bpostasapublicinstitutionpaysacontributionthatisdefinedbyaprogrammelaw.Theamountisadaptedeachyearproportionallytothenumberofcivilservants(fulltimeequivalents)andissubjecttoinflation.
Formostbenefits,anaveragecostperinactivememberisusedforthevaluationofthebenefits.Thisaveragecosthasbeenestimatedbydividingtheannualcostforinactivemembersbythenumberofinactivebeneficiariesbasedonthereferencedatareceivedfromthepensions’administration.
Thediscountrateshavebeendeterminedbyreferencetomarketyieldsatthestatementoffinancialpositiondate.bpostusedtheTowersWatsonRATE:link1 tool for thedeterminationofthediscountrates,consideringamixoffinancialandnon-financialAAcorporatebonds.
Fair value adjustments for business combinations
InaccordancewithIFRS 3Businesscombinations,theidentifiableassetsacquiredandthecontingentconsiderationsarevaluedatfairvalueattheacquisitiondateaspartofthebusinesscombination.Fairvalueadjustmentsfortheassetsarebasedonexternalappraisalsorvaluationmodels.Whenthecontingentconsiderationmeetsthedefinitionofaliability,itissubsequentlyre-measuredtofairvalueateachreportingdate.Thedeterminationofthefairvalueisbasedondiscountedcashflows.Thekeyassumptionstakeintoconsiderationtheprobabilityofmeetingeachperformancetargetandthediscountfactor.
Deferred revenue and revenue related accruals
bpostrecognizesadvancecustomerpaymentsonitsbalancesheet,predominantlyrelatedtostampsandcreditsonfrankingmachinesoldbutnotyetusedbycustomersatbalancesheetdate.bpostusesamodelbaseduponhistoricaldataofconsumptionpatternsforthevaluationofthisdeferredrevenue.Furthermorebposthandlesandshipsinternationalmailandparcelstoandfromotherforeignpostaloperators.Atbalancesheetdatethebestestimateoftheoutstandingpositionisreflectedintheconsolidatedstatementoffinancialposition,howeverasthefinalsettlementsarebasedupondifferentassumptions(amongwhich“itemsperkilo”)finalsettlementsmightdeviatefromthe initial assessment.
Income taxes and deferred taxes
bpostissubjecttoincometaxesinanumberofjurisdictions.Deferredtaxesarecalculatedatthelevelofeachfiscalentity.bpostrecognizesdeferredtaxassetstotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized.Inordertodeterminethis,bpostusesestimatesoftaxableincomebyjurisdictioninwhichbpostoperatesandtheperiodoverwhichdeferredtaxassetsarerecoverable.Thesameprinciplesapplytotherecognitionofdeferredtaxassetsforunusedtaxlossescarriedforward.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 35
Allassociatesareaccountedforusingtheequitymethod:theparticipatinginterestsareseparatelyincludedintheconsolidatedstatementoffinancialposition(underthecaption“Investmentsinassociates”)attheclosingdateatanamountcorrespondingtotheproportionoftheassociate’sequity(asrestatedunderIFRS),includingtheresultfortheperiod.Dividendsreceivedfromaninvesteereducethecarryingamountoftheinvestment.
The portion of the result of associates attributable tobpostisincludedseparatelyintheconsolidatedincomestatementunderthecaption“Shareofresultofassociates(equitymethod)”.
Unrealizedprofitsandlossesresultingfromtransactionsbetweenaninvestor(oritsconsolidatedsubsidiaries)andassociatesareeliminatedtotheextentoftheinvestor’sinterestintheassociate.
bpostbankisanassociateandisaccountedforusingtheequitymethodasbposthassignificantinfluencebutdoesnotcontrolthemanagementofthiscompany.
Partofthebondportfolioofbpostbankisclassifiedonthebalancesheetofbpostbankas“HoldtoCollectfinancialassets”andpartas”HoldtoCollect&Sellfinancialassets”.Thebondsinclude:
• Fixedincomesecurities(bonds,negotiabledebtinstruments,sovereignloansintheformofsecurities,etc.);
• Variableincomesecurities; • Fixedand/orvariableincomesecuritiescontainingembeddedderivatives(whichareaccountedforseparatelyifnecessary).
Securitiesclassifiedin“HoldtoCollectfinancialassets”aremeasuredatfairvalueandchangesinfairvaluearerecordedinothercomprehensiveincomeunderaspecificheading“Unrealizedordeferredgainsorlosses.”Securitiesclassifiedin“HoldtoCollect&Sellfinancialassets”aremeasuredatAmortisedCost.
Forfixedincomesecurities,interestisrecognizedintheIncomeStatementusingtheeffectiveinterestratemethod.Forvariableincomesecurities,revenuesarerecordedinprofitorlossassoonastheshareholdersgeneralmeetingconfirmsthedistributionofadividend.
Goodwill and negative acquisition differencesWhenanentityisacquired,thedifferencerecordedonthedateofacquisitionbetweentheacquisitioncostoftheinvestmentandthefairvalueoftheidentifiableassets,liabilitiesandcontingentliabilitiesacquiredisaccountedforasgoodwill(ifthedifferenceispositive)ordirectlyasaprofitintheIncomeStatement(ifthedifferenceisnegative).
Acontingentconsideration,ifany,ismeasuredatfairvalueatthetimeofthebusinesscombinationandincludedintheconsiderationtransferred(i.e.recognizedwithingoodwill).Iftheamountofcontingentconsiderationchangesasaresultofapost-acquisitionevent(suchasmeetinganearningstarget),thechangeinfairvalueisrecognizedinprofitorloss.
Goodwillisnotamortized,butistestedforimpairmentannually.
6.4Summaryofsignificantaccountingpolicies
Allaccountingestimatesandassumptionsthatareusedinpreparingthefinancialstatementsareconsistentwithbpost’slatestapprovedbudget/long-termplanprojections,whereapplicable.Judgmentsarebasedontheinformationavailableoneachstatementoffinancialpositiondate.Althoughtheseestimatesarebasedonthebestinformationavailabletothemanagement,actualresultsmayultimatelydifferfromthose estimates.
Consolidation
Theparentcompanyandallthesubsidiariesitcontrolsareincludedintheconsolidation.Noexceptionispermitted.
Subsidiaries
Assetsandliabilities,rightsandcommitments,incomeandchargesoftheparentandthesubsidiariesfullycontrolledareconsolidatedinfull.Aninvestorcontrolsaninvesteewhentheinvestorisexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvesteeandhastheabilitytoaffectthosereturnsthroughitspowerovertheinvestee.
Controlisassumedtoexistwhenbpostholdsatleast50%,plusoneshareoftheentity’svotingpower;theseassumptionsmayberebuttedifthereisclearevidencetothecontrary.Theexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhetherbpostcontrolsanentity.
Consolidationofasubsidiarytakesplacefromthedateofacquisition,whichisthedateonwhichcontrolofthenetassetsandoperationsoftheacquireeiseffectivelytransferredtotheacquirer.Fromthedateofacquisition,theparent(theacquirer)incorporatesintotheconsolidatedincomestatementthefinancialperformanceoftheacquireeandrecognizesintheconsolidatedstatementoffinancialpositiontheacquiredassetsandliabilities(atfairvalue),includinganygoodwillarisingontheacquisition.Subsidiariesarede-consolidatedfromthedateonwhichcontrolceases.Intragroupbalancesandtransactions,aswellasunrealizedgainsandlossesontransactionsbetweengroupcompaniesareeliminatedinfull.
Consolidatedfinancialstatementsarepreparedusinguniformaccountingpoliciesforliketransactionsandothereventsinsimilarcircumstances.
AssociatesAnassociateisanentityinwhichbposthassignificantinfluence,butwhichisneitherasubsidiarynorajointventure.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutnottocontrolthosepolicies.Itisassumedtoexistwhenbpostholdsatleast20%oftheinvestee’svotingpowerbutnottoexistwhenlessthan20%isheld;theseassumptionsmayberebuttedifthereisclearevidencetothecontrary.
Consistentaccountingpoliciesareappliedwithinthewholegroup,includingassociates.
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Borrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofanassetthatnecessarilytakesasubstantialperiodoftimetogetreadyforitsintendeduseorsalearecapitalizedaspart of the cost of the asset.
Thedepreciableamountisallocatedonasystematicbasisovertheusefullifeoftheasset,usingthestraight-linemethod.Thedepreciableamountistheacquisitioncost,exceptforvehicles.Forvehicles,itistheacquisitioncostlesstheresidualvalueoftheassetattheendofitsusefullife.Theapplicableusefullivesare:
Property,plantandequipment Useful life
Land N/A
Centraladministrativebuildings 40 years
Networkbuildings 40 years
Industrialbuildings,sortingcenters 25 years
Fitting-outworkstobuildings 10 years
Tractorsandforklifts 10 years
Bikesandmotorcycles 4 years
Allothervehicles(cars,trucks,etc,) 5 years
Machines 5-10 years
Furniture 10 years
Computerequipment 4-5 years
Lease transactionsAfinancelease,whichtransferssubstantiallyalltherisksandrewardsincidenttoownershiptothelessee,isrecognizedasanassetandaliabilityatamountsequaltothepresentvalueoftheminimumleasepayments(=sumofcapitalandinterestportionsincludedintheleasepayments)or,iflower,thefairvalueoftheleasedassets.Leasepaymentsareapportionedbetweenthefinancechargeandthereductionoftheoutstandingliabilityinordertoobtainaconstantrateofinterestonthedebtovertheleaseterm.Thedepreciationpolicyforleasedassetsisconsistentwiththatforsimilarassetsowned.
Rentalspaid/receivedunderoperatinglease(onesthatdonottransfersubstantiallyalltherisksandrewardsincidentaltoownershipofanasset)arerecognizedasanexpensebythelesseeandasanincomebythelessoronastraight-linebasisovertheleaseterm.
Investment propertiesInvestmentpropertymainlyrelatestoapartmentslocatedinbuildingsusedaspostoffices.
Investmentpropertiesarecarriedatacquisitioncostlessanyaccumulateddepreciationandlessanyimpairmentloss.Thedepreciationamountisallocated
Intangible assetsAnintangibleassetisrecognizedontheconsolidatedstatementoffinancialpositionwhenthefollowingconditionsaremet:
(i) theassetisidentifiable,i.e.eitherseparable(ifitcanbesold,transferred,licensed)oritresultsfromcontractualorlegalrights;
(ii) itisprobablethattheexpectedfutureeconomicbenefitsthatareattributabletotheassetwillflowtobpost;
(iii)bpostcancontroltheresource;and
(iv)thecostoftheassetcanbemeasuredreliably.
Intangiblefixedassetsarecarriedatacquisitioncost(includingthecostsdirectlyattributabletothetransaction,butnotindirectoverheads)lessanyaccumulatedamortizationandlessanyaccumulatedimpairmentloss.TheexpensesinrelationtotheresearchphasearechargedtotheIncomeStatement.Theexpensesinrelationtothedevelopmentphasearecapitalized.Withinbpost,internallygeneratedintangibleassetsrepresentmainlyITprojects.
Intangibleassetswithfinitelivesareamortizedonasystematicbasisovertheirusefullife,usingthestraight-linemethod.Theapplicableusefullivesare:
Intangibleassets Useful life
Patent1 12 years
Know-how1 5 years
Pointsofsalenetwork(replacement costs)1 20 years
ITdevelopmentcosts 5 yearsmaximum
Licensesforminorsoftware 3 yearsmaximum
Tradenames/brandnames1 Between5 yearsandindefinite
Customerrelationships1 Between5and20 years
Intangiblefixedassetswithindefiniteusefullivesarenotamortizedbutaretestedforimpairmentannually.Forbpostthatisthecaseforgoodwillandtradenames.
Property, plant and equipmentProperty,plantandequipmentarecarriedatacquisitioncost,lessanyaccumulateddepreciationandlessanyaccumulatedimpairmentloss.Costincludesanydirectlyattributablecostofbringingtheassettoworkingconditionforitsintendeduse.
ExpenditureonrepairandmaintenancewhichserveonlytomaintainbutnottoincreasethevalueoffixedassetsarechargedtotheIncomeStatement.However,expendituresonmajorrepairandmajormaintenance,whichincreasethefutureeconomicbenefitsthatwillbegeneratedbythefixedasset,areidentifiedasaseparateelementoftheacquisitioncost.
(1) Usefullifecanbedifferentcasepercaseanddependsontheassessmentdoneatthetimeofthepurchasepriceallocation
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impairmentwasrecordedceasetoexist,andsolelytotheextentthatthecarryingamountoftheassetdoesnotexceedtheamountthatwouldhavebeenobtained,afterdepreciation,hadnoimpairmentbeenrecorded.
InventoriesInventoriesaremeasuredatthelowerofcostandnetrealizablevalueatthestatementoffinancialpositiondate.
TheacquisitionpriceofinterchangeableinventoriesisdeterminedbyapplicationoftheFIFOmethod.Inventoriesofminorimportancewhosevalueandcompositionremainstableovertimearestatedinthestatementoffinancialpositionatafixedvalue.
Thecostofinventoriesfinishedproductscomprisesallcostsincurredinbringinginventoriestotheirpresentlocationandcondition,includingindirectproductioncosts.Inparticular,thecostpriceofstampsincludesthedirectandindirectcostsofproduction,excludingcostsofborrowingandoverheadsthatdonotcontributetobringingthemtothepresentlocationandcondition.Theallocationoffixedcostsofproductiontothecostpriceisbasedonnormalproductioncapacity.
Awrite-downisnecessarywhenthenetrealizablevalueatthestatementoffinancialpositiondateislowerthanthecost.
Revenue recognitionbpost’snormalbusinessoperationsconsistofthedeliveryofnationalandinternationalmailandparcelsservicescomprisingthecollection,transport,sortinganddistributionofaddressedandnon-addressedmail,printeddocuments,newspapersandparcels.Furthermorebpostalsosellsarangeofotherproductsandservices,includingpostal,parcels,bankingandfinancialproducts,e-commercelogistics,expressdeliveryservices,proximityandconvenienceservices,documentmanagementandrelatedactivities.bpostalsocarriesoutServicesofGeneralEconomicInterest(SGEI)onbehalfoftheBelgianState.Allincomerelatedtonormalbusinessoperationsisrecognizedasrevenueintheincomestatement.Allotherincomeisreportedasotheroperatingincome.
Revenueisrecognizedwhentheperformanceobligation(thepromisetotransferagoodorservicetoacustomer)issatisfiedatapointintime.Thisiswhenthecontrolofthesegoodsorservicesaretransferredtothecustomer,ingeneralonthedeliveryofmail,parcelsoranyotherserviceorgood,atanamountthatreflectstheconsiderationtowhichbpostexpectstobeentitledinexchangeforthosegoodsorservices.
bpostgenerallyconsidersthatitistheprincipalinitsrevenuearrangements,exceptforpressdistribution,fulfilmentservices(consistingoffollowingperformanceobligations:receiving,storing,pickingandpackingandreturningactivitiesforgoods),commissionforbpostbankproductsandallothercommissionsreceivedwherebpostactsasagentandonlynetamountexpected(feeorcommission)isrecognized.
bposthasdifferentpricinggridsfordifferentproducts,providinganinstantadvantagetocustomers.Somecontractsforeseevolumerebatesoncethequantity
onasystematicbasisovertheusefullifeoftheasset,usingthestraight-linemethod.Theapplicableusefullivescanbefoundinthetablethatisincludedinsection“Property,plantandequipment”.
Assets held for saleNon-currentassetsareclassifiedasassetsheldforsaleunderaseparateheadinginthestatementoffinancialpositioniftheircarryingamountisrecoveredprincipallythroughsaleratherthanthroughcontinuinguse.Thisisdemonstratedifcertainstrictcriteriaaremet(activeprogramtolocateabuyerhasbeeninitiated,propertyisavailableforimmediatesaleinitspresentcondition,saleishighlyprobableandisexpectedtooccurwithinoneyearfromthedateofclassification).
Non-currentassetsheldforsalearenolongerdepreciatedbutmaybeimpaired.Theyarestatedatthelowerofcarryingamountandfairvaluelesscoststo sell.
Stamp collectionThestampcollectionthatisownedbybpostanduseddurablybyitisstatedatthere-evaluatedamountlessdiscountforthelackofliquidity.Therevaluedamountsaredeterminedperiodicallyonthebasisofmarketprices.bpostproceedstothereevaluationofitscollectioneveryfiveyears.Thestampcollectionisrecordedinthecaption“OtherProperty,PlantandEquipment”ofthestatementoffinancialposition.
Impairment of assetsAnimpairmentlossisrecognizedwhenthecarryingamountofanassetexceedsitsrecoverableamount,whichisthehigherofitsfairvaluelesscostsofdisposal(correspondingtothecashthatbpostcanrecoverthroughsale)anditsvalueinuse(correspondingtothecashthatbpostcanrecoverifitcontinues to use the asset).
Whenpossible,thetestshavebeenperformedonindividualassets.Whenhoweveritisdeterminedthatassetsdonotgenerateindependentcashflows,thetestisperformedatthelevelofthecash-generatingunit(CGU)towhichtheassetbelongs(CGU=thesmallestidentifiablegroupofassetsthatgenerateinflowsthatarelargelyindependentfromthecashflowsfromotherCGUs).
Animpairmenttestiscarriedoutannuallyforgoodwill.ForaCGUtowhichnogoodwillisallocated,impairmenttestisonlycarriedoutwhenthereisanindicationofimpairment.Forthepurposeofimpairmenttesting,goodwillacquiredinabusinesscombinationis,fromtheacquisitiondate,allocatedtogroupsofcash-generatingunits,thatareexpectedtobenefitfromthesynergiesofthecombination.
Whereanimpairmentisidentified,itisfirstallocatedtoreducethecarryingamountofanygoodwillallocatedtothegroupofCGU.AnyexcessisthenallocatedtoreducethecarryingamountofotherfixedassetsoftheCGUinproportiontotheirbookvalues,butsolelytotheextentthatthesellingpriceoftheassetsinquestionislowerthantheircarryingamount.
Impairmentongoodwillmayneverbereversedatalaterdate.Impairmentonotherfixedassetsisreversediftheinitialconditionsthatprevailedatthetimethe
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thetradereceivabledoesnotcontainasignificantfinancingcomponentbpostoptedtoapplythesimplifiedapproachtocalculatetheexpectedcreditlossratewiththeuseofaprovisionmatrix,basedonthehistoricaldefaultratesadaptedforcurrentandforwardlookinginformation.
Prepaymentsandaccruedincomearealsopresentedunderthiscaption.
Investment securitiesFinancialassetsareassignedtothedifferentcategoriesoninitialrecognition,dependingonthecharacteristicsoftheinstrumentanditspurpose.Afinancialinstrument’scategoryisrelevantforthewayitismeasuredandwhetheranyresultingincomeandexpensesarerecognizedinprofitorlossordirectlyinequity.
Therearedifferentcategoriesoffinancialassets:
(1) Financialassetsheldfortradinginclude(a)derivativesand(b)assetsthatbposthasvoluntarilydecidedtoclassifyinthecategory“atfairvaluethroughprofitorloss”atthetimeofinitialrecognition.Thesefinancialassetsaremeasuredattheirfairvalueateachstatementoffinancialpositiondate,changesinfairvaluebeingrecognizedintheIncomeStatement.
(2) Held-to-maturityfinancialassetsarefinancialassets,otherthanderivatives,withfixedordeterminablepaymentsandfixedmaturitydates,whichbposthasthepositiveintentionandabilitytoholdtomaturity.Theseassetsaremeasuredatamortizedcostusingtheeffectiveinterestmethod.
(3) Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Afterinitialrecognitionthesearemeasuredatamortizedcostusingtheeffectiveinterestmethod.
(4) Available-for-salefinancialassetsconstitutearesidualcategorythatincludesallthefinancialassetsnotclassifiedunderoneofthepreviouscategories,forinstanceinvestmentsinequityinstruments(otherthansharesinsubsidiaries,jointlycontrolledentitiesandassociates),investmentsinopen-endedmutualfundsandbondsthatbposthasneithertheintentionnortheabilitytoholdtomaturity.Theseavailable-for-salefinancialassetsaremeasuredatfairvalue,withchangesinfairvaluerecognizeddirectlyinequityuntilthefinancialassetsarederecognized,atwhichtimethecumulativegainsorlossespreviouslyrecognizedinequityarerecycledinprofitorloss.
Regularwaypurchasesorsalesoffinancialassetsarerecognizedandde-recognizedusingsettlementdateaccounting.Thefairvaluesofthefinancialassetsaredeterminedbyreferencetopublishedpricequotationsinanactivemarket.
Cash and cash equivalentsThiscaptionincludescashinhand,atbank,valuesforcollection,short-terminvestments(withmaturitydatenotexceedingthreemonthsasfromacquisitiondate)thatarehighlyliquidandarereadilyconvertibleintoaknownamountofcashandthataresubjecttoaninsignificantriskofchangesinvalue.
ofproductsorservicespurchasedexceedscertainthresholdsforeseeninthecontracts,whichgiverisetoavariableconsideration.bposthasanestimateatcontractinceptionofthetargetoftheperformanceobligationandaccruesthediscountamountmonthly,basedontheexpectedvalueprinciple.
bpostprovidesservicesthatareeithersoldseparatelyorbundledtogether,everyperformanceobligationhasastand-alonesellingpriceperunit.Ifalowerpriceisgrantedonabundleofservices,thevariousservicesinthecontractaredecreasedatanequalproportionaterate.
TheremunerationoftheSGEIisbasedonthecontractualprovisionsofthemanagementcontractandtherevenueisrecognizedwhentheservicesarerendered.bpostalsoreceivescommissionsonsalesofpartnerproductsthroughitsnetwork.Commissionincomeisrecordedatthetimetheservicesareprovided.Foraminorityoftheservices,mainlythoseservicesforwhichtheconsiderationisasubscriptionortherentofbuildings,revenueisrecognizedoverthedurationofthecontract.
Therevenuerelativetothestampsaleandfrankingmachineactivityisrecognizedinincomeatthetimethemailisdelivered.Therefore,bposthassetuparevenuerecognitionmodeltorecognizethepredictedamountofrevenues,basedonhistoricdata.
Forthehandlingandshipmentofinternationalmailandparcelstoandfromotherforeignpostaloperatorscertainpenalties(e.g.qualityfortimelydelivery)giverisetovariableconsideration.Atbalancesheetdatethebestestimateoftheoutstandingpositionisreflectedintheconsolidatedstatementoffinancialpositionbasedontheexpectedvalueprinciple.
Radial,asubsidiaryofthegroup,earnsrevenueforitsomnichanneltechnologyandoperationseitherthrougharevenue-sharingmodel(chargesapercentageofclientmerchandise)orviaanactivity-basedmodel(e.g.customerservicecentercallsthatarebilledatarateperminuteorpercall,fulfillmentoperationsbilledatarateperfulfilledorder/item,etc.).IfRadialalsoperformsPayment,FraudandTax(PT&F)services,forpotentialpaymentsrelatedtothefraudservices,Radialrecognizesarefundliabilitybasedupontheexpectedvaluemethod.
bpostperformstheserviceofprocessingreturnedgoodsonbehalfofthesupplier,butbpostdoesnottakeonanyliabilityhencenoliabilityforreturnisbookedatbpost.
Interestincomeisrecognizedusingtheeffectiveyieldmethodandtherevenuerelatedtodividendsisrecognizedwhenthegroup’srighttoreceivethepaymentisestablished.
Rentalincomearisingfromoperatingleasesorinvestmentpropertiesisaccountedforonastraightlinebasisovertheleaseterm.
ReceivablesReceivablesareinitiallymeasuredattheirfairvalueandlaterattheiramortizedcost,i.e.thepresentvalueofthecashflowstobereceived(unlesstheimpactofdiscountingisnotsignificant).
bpostrecognizesonallofitstradereceivablesanallowanceforexpectedcreditlossesbasedonthelifetimeexpectedcreditlosses(ECL)model.As
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takenintoaccountinvaluingthebenefitsgrantedandtheobligationspertainingthereto.Thediscountrateusedistheyieldofhigh-qualitycorporatebondsorisbasedongovernmentbondswithamaturitysimilartothatofthebenefitsbeingvalued.
Servicecostscomprisecurrentservicecosts,past-servicecosts,gainsandlossesoncurtailmentsandnon-routinesettlements.
Pastservicecostsresultingfromaplanamendmentorcurtailmentshouldberecognizedattheearlierofthedatewhen(1) theplanamendmentorcurtailmentoccurs;and(2) theentityrecognizesrelatedrestructuringcostsinaccordancewithIAS 37.PastservicecostsarerecognizedintheIncomeStatement.
Netinterestiscalculatedbyapplyingthediscountratetothenetdefinedbenefitliabilityorassets.NetinterestcostsarealsorecognizedintheIncomeStatement.
Theplanassetsrelatedtothepost-employmentbenefitsaremeasuredattheirfairvalueattheendoftheperiodinthesamedefinitionusedinIFRS 13.
Long-term benefitsLong-termemployeebenefitsarevaluedusinganactuarialvaluationmethodandprovisionsaresetupforthem(underdeductionofanyplanassets)insofarasbposthasanobligationtoincurthecostsinrelationtothesebenefits.Thisobligationcanbealegal,contractualorconstructiveobligation(“vestedrights”onthebasisofpastpractice).
Aprovisioniscreatedforlong-termbenefitstocoverbenefitsthatwillonlybepaidinanumberofyearsbutthatarealreadyearnedbytheemployeeonthebasisofthepastservice.Here,aswell,theprovisioniscalculatedaccordingtoanactuarialmethodimposedbyIAS 19.
Theprovisioniscalculatedasfollows:
Re-measurements,comprisingofactuarialgainsandlossesarerecognizedimmediatelythroughprofitorlossintheperiodinwhichtheyoccur.
Actuarialassumptions(concerningthediscountrate,mortalityfactor,costsoffuturebenefits,inflation,etc.)areusedtoassessemployeebenefitobligationsinconformitywithIAS 19.Actuarialgainsandlossesinevitablyappear,resulting(1) fromchangesintheactuarialassumptionsyearonyear,and(2) deviationsbetweenactualcostsandactuarialassumptionsusedfortheIAS 19valuation.TheseactuarialgainsandlossesarerecognizeddirectlyintheIncomeStatement.
Thecalculationoftheobligationisdoneusingtheprojectedunitcreditmethod.Eachyearofserviceconfersentitlementtoanadditionalcreditunittobetakenintoaccountinvaluingthebenefitsgrantedandtheobligationspertainingthereto.Thediscountrateusedistheyieldofhigh-qualitycorporatebondsoralternativelyisbasedongovernmentbondswithamaturitysimilartothatofthebenefitsbeingvalued.
ActuarialvaluationoftheobligationunderIAS 19
– Fairvalueoftheplanassets
= Provisiontobeconstituted (orassettoberecognisedifthefairvalueoftheplanassetsishigher)
Forthepurposeoftheconsolidatedstatementofcashflows,cashandcashequivalentsconsistofcashandshort-termdeposits,asdefinedabove,netofoutstandingbankoverdrafts.
Share capitalOrdinarysharesareclassifiedunderthecaption“issuedcapital”.
Treasurysharesaredeductedfromequity.MovementsoftreasurysharesdonotaffecttheIncomeStatement.
Otherreservescomprisetheresultsofthepreviousperiods,thelegalreserveandtheconsolidatedreserve.
RetainedearningsincludetheresultofthecurrentperiodasdisclosedintheIncomeStatement.
Employee benefitsShort-term benefitsShort-termbenefitsarerecognizedasanexpensewhenanemployeehasrenderedtheservicestobpost.Benefitsnotpaidforonthestatementoffinancialpositiondateareincludedunderthecaption“Payrollandsocialsecuritypayables”.
Post-employment benefitsPost-employmentbenefitsarevaluedusinganactuarialvaluationmethodandprovisionsaresetupforthem(underdeductionofanyplanassets)insofarasbposthasanobligationtoincurthecostsinrelationtothesebenefits.Thisobligationcanbealegal,contractualorconstructiveobligation(“vestedrights”onthebasisofpast practice).
Inapplicationoftheseprinciples,aprovision(calculatedaccordingtoanactuarialmethodlaiddowninIAS 19)issetupinthecontextofthepost-employmentbenefitstocover:
• thefuturecostsrelativetocurrentretirees(aprovisionrepresenting100%ofthefutureestimatedcostsofthoseretirees);
• thefuturecostsofpotentialretirees,estimatedonthebasisoftheemployeescurrentlyinservice,takingaccountoftheaccumulatedserviceoftheseemployeesoneachstatementoffinancialpositiondateandtheprobabilitythatthepersonnelwillreachthedesiredagetoobtainthebenefits(theprovisionisconstitutedprogressively,asandwhenmembersofthepersonneladvanceintheircareers).
Re-measurements,comprisingofactuarialgainsandlosses,arerecognizedimmediatelyinthestatementoffinancialpositionwithacorrespondingdebitorcredittoretainedearningsthroughOCIintheperiodinwhichtheyoccur.Re-measurementsarenotreclassifiedtoprofitorlossinsubsequentperiods.
Actuarialassumptions(concerningthediscountrate,mortalityfactor,costsoffuturebenefits,inflation,etc.)areusedtoassessemployeebenefitobligationsinconformitywithIAS 19.Actuarialgainsandlossesinevitablyappear,resulting(1)fromchangesintheactuarialassumptionsyearonyear,and(2)deviationsbetweenactualcostsandactuarialassumptionsusedfortheIAS 19valuation.
Thecalculationoftheobligationisdoneusingtheprojectedunitcreditmethod.Eachyearofserviceconfersentitlementtoanadditionalcreditunittobe
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Servicecostscomprisecurrentservicecosts,past-servicecosts,gainsandlossesoncurtailmentsandnon-routinesettlements.
Pastservicecostsresultingfromaplanamendmentorcurtailmentshouldberecognizedattheearlierofthedatewhen(1)theplanamendmentorcurtailmentoccurs;and(2)theentityrecognizesrelatedrestructuringcostsinaccordancewithIAS 37.PastservicecostsarerecognizedintheIncomeStatement.
Netinterestiscalculatedbyapplyingthediscountratetothenetdefinedbenefitliabilityorassets.NetinterestcostsarerecognizedintheIncomeStatement.
Termination benefitsWherebpostterminatesthecontractofamemberofitspersonnelpriortohisnormalretirementdateorwhereanofferofbenefitsismadeinreturnfortheterminationofemploymentthatcannolongerbewithdrawn,aprovisionisconstitutedinsofarasthereisanobligationonbpost.
ProvisionsAprovisionisrecognizedonlywhen:
(1) bposthasapresent(legalorconstructive)obligationasaresultofpastevents;
(2) itisprobable(morelikelythannot)thatanoutflowofresourceswillberequiredtosettletheobligation;and
(3) areliableestimateoftheamountoftheobligationcanbemade.
Wheretheimpactislikelytobematerial(mainlyforlong-termprovisions),theprovisionisestimatedonanetpresentvaluebasis.Theincreaseintheprovisionduetothepassageoftimeisrecognizedasafinancialexpense.
Aprovisionforrestoringpollutedsitesisrecognizedifbposthasanobligationinthisrespect.Provisionsforfutureoperatinglossesareprohibited.
Ifbposthasanonerouscontract(theunavoidablecostsofmeetingtheobligationsunderthecontractexceedtheeconomicbenefitsexpectedtobereceivedunderit),thepresentobligationunderthecontractisrecognizedasaprovision.
Aprovisionforrestructuringisonlyrecordedifbpostdemonstratesaconstructiveobligationtorestructureatthestatementoffinancialpositiondate.Theconstructiveobligationshouldbedemonstratedby:(a) adetailedformalplanidentifyingthemainfeaturesoftherestructuring;and(b) raisingavalidexpectationtothoseaffectedthatitwillcarryouttherestructuringbystartingtoimplementtheplanorbyannouncingitsmainfeaturestothoseaffected.
DividendspayableinrespectofyearNareonlyrecognizedasliabilitiesoncetheshareholders’rightstoreceivethesedividends(duringthecourseofyearN+1)areestablished.
Income taxes and deferred taxationIncometaxincludescurrenttaxationanddeferredtaxation.Currenttaxationistheamountoftaxestobepaid(recovered)onthetaxableincomeforthecurrentyeartogetherwithanyadjustmentinthe
taxespaid(toberecovered)inrelationtopreviousyears.Itiscalculatedusingtherateoftaxonthestatementoffinancialpositiondate.
Deferredtaxationiscalculatedaccordingtotheliabilitymethodonthetemporarydifferencesarisingbetweenthecarryingamountofthestatementoffinancialpositionitemsandtheirtaxbase,usingtherateoftaxexpectedtoapplywhentheassetisrecoveredortheliabilityissettled.Inpractice,therateinforceonthestatementoffinancialpositiondateis used.
Deferredtaxesarenotrecognizedinrespectof:
(1) goodwillthatisnotamortizedfortaxpurposes;
(2)theinitialrecognitionofanassetorliabilityinatransactionthatisnotabusinesscombinationandthataffectsneitheraccountingprofitnortaxableprofit;and
(3)investmentsinsubsidiaries,branches,associatesandjointventuresifitislikelythatdividendswillnotbedistributedintheforeseeablefuture.
Adeferredtaxassetisrecognizedforalldeductibletemporarydifferencestotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized.Thesameprinciplesapplytorecognitionofdeferredtaxassetsforunusedtaxlossescarriedforward.Thiscriterionisreassessedoneachstatementoffinancialpositiondate.
Deferredtaxesarecalculatedatthelevelofeachfiscalentity.Thedeferredtaxassetsandliabilitiesofvarioussubsidiariesmaynotbepresentedonanetbasis.
Deferred revenueDeferredrevenueistheportionofincomereceivedduringthecurrentorpriorfinancialperiodsbutwhichrelatestoasubsequentfinancialperiod.
Transactions in foreign currenciesTransactionsinforeigncurrenciesareinitiallyrecordedinthefunctionalcurrencyoftheentitiesconcernedusingtheexchangeratesprevailingonthedatesofthetransactions.Realizedexchangerategainsandlossesandnon-realizedexchangerategainsandlossesonmonetaryassetsandliabilitiesonthestatementoffinancialpositiondatearerecognizedintheIncomeStatement.
Onconsolidation,theassetsandliabilitiesofforeignoperationsaretranslatedintoEuroattheexchangerateprevailingatthereportingdateandtheirincomestatementsaretranslatedatexchangeratesprevailingatthedatesofthetransactions.Theexchangedifferencesarisingontranslationforconsolidationarerecognizedinothercomprehensiveincome.Ondisposalofaforeignoperation,thecomponentofothercomprehensiveincomerelatingtothatparticularforeignoperationisrecognizedinprofitorloss.
Derivative financial instrumentsbpostusesderivativefinancialinstrumentstohedgeitsexposuretoforeignexchangeandinterestraterisksarisingfromitsoperationalandfinancialactivities.Inaccordancewithitstreasurypolicy,bpostdoesnotholdorissuederivativefinancialinstrumentsfortradingpurposes.
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Derivativefinancialinstrumentsareinitiallyrecognizedatfairvalueatthedatethederivativecontractsareenteredintoandaresubsequentlymeasuredtotheirfairvalueattheendofeachreportingperiod.Dependingonwhetherhedgeaccounting(seebelow)isappliedornot,anyresultinggainorlossontheremeasurementofthederivativefinancialinstrumentiseitherrecognizeddirectlyinothercomprehensiveincome or in the income statement.
Hedge accountingbpostdesignatescertainhedginginstruments,whichincludesderivativesandnon-derivativesinrespectofforeigncurrencyrisk,ashedgesofnetinvestmentsinforeignoperationsandascashflowhedgesrespectively.
Atthebeginningofthehedgerelationship,bpostdocumentstherelationshipbetweenthehedginginstrumentandthehedgeditem,alongwithitsriskmanagementobjectivesanditsstrategyforundertakingvarioushedgetransactions.Furthermore,atthebeginningofthehedgeandonanongoingbasis,bpostdocumentsandassesstheeffectivenessofthederivativeinstruments.
Cash flow hedgesTheeffectiveportionofchangesinthefairvalueofderivativesthataredesignatedandqualifyascashflowhedgesisrecognizedinothercomprehensiveincomeandaccumulatedundertheheadingofcashflowhedgingreserve.Thegainorlossrelatingtotheineffectiveportionisrecognizedimmediatelyinprofitor loss.
Amountspreviouslyrecognizedinothercomprehensiveincomeandaccumulatedinequityarereclassifiedtoprofitorlossintheperiodswhenthehedgeditemaffectsprofitorloss,inthesamelineastherecognizedhedgeditem.
Hedgeaccountingisdiscontinuedwhenbpostrevokesthehedgingrelationship,whenthehedginginstrumentexpiresorissold,terminated,orexercised,orwhenitnolongerqualifiesforhedgeaccounting.Anygainorlossrecognizedinothercomprehensiveincomeandaccumulatedinequityatthattimeremainsinequityandisrecognizedwhentheforecasttransactionisultimatelyrecognizedinprofitorloss.Whenaforecasttransactionisnolongerexpectedtooccur,thegainorlossaccumulatedinequityisrecognizedimmediatelyinprofitorloss.
Hedges of net investments in foreign operationsHedgesofnetinvestmentsinforeignoperationsareaccountedforsimilarlytocashflowhedges.Anygainorlossonthehedginginstrumentrelatingtotheeffectiveportionofthehedgeisrecognizedinothercomprehensiveincomeandaccumulatedundertheheadingofforeigncurrencytranslationreserve.Thegainorlossrelatingtotheineffectiveportionisrecognizedimmediatelyinprofitorloss.
Gainsandlossesonthehedginginstrumentrelatingtotheeffectiveportionofthehedgeaccumulatedintheforeigncurrencytranslationreservearereclassifiedtoprofitorlossonthedisposaloftheforeignoperation.
6.5Riskmanagement
Approach and methodologybposthasdefinedandimplementedanEnterpriseRiskManagement(“ERM”)frameworktoembedcompany-wideriskmanagementprocessesinkeymanagementactivities,suchastheGroupExecutiveCommittee’srevisionofthestrategyorquarterlyreviewsoftheoperations.
Risksareidentifiedatdifferentlevelsintheorganization(including,inter alia,operationalandfinancialmanagement;corporate2nd linefunctions,suchasLegalandRegulatory,HealthandSafety,SecurityandIntegrity;andtheGroupExecutiveCommittee).Itcoverstheentirebusiness.
bpostdisclosestherisksanduncertaintiesinthreecategories:
• Regulatory/Legal risks:Regulatoryevolutionsandlegalcomplianceissuesthatcouldimpacttherealizationofbpost’sstrategy.
• External Business risks:Externaleventsthatmayaffectthegrowthstrategy.
• Operational risks:Mostlyinternallyorientedrisksorunforeseendisastersthatmayresultinanimpactonbpost’sresults.Thesealsoincludefinancialrisks.
Basedonformalizedriskevaluationcriteria,approvedbytheBoardofDirectors,bpostprioritizesriskstoallowappropriatecommunicationofrisksthroughoutthecompany(top-downandbottom-up).Forthemainrisksineachofthecategories,bpostdefinedadedicatedmitigationandmonitoringapproach.TheGroupExecutiveCommittee,AuditCommitteeandBoardofDirectorsreviewtheapplicationofthisapproachonaregularbasis.
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bpost ANNUALREPORT2018 42
Anyofthefollowingriskscouldhaveamaterialadverseeffectonbpost’sbusiness,financialpositionandoperatingresults.Theremaybeadditionalrisksofwhichbpostiscurrentlyunaware.Theremayalsoberisksthatarecurrentlyconsideredtobeimmaterial,butthatmayultimatelyhaveamaterialadverseeffect.Theriskmitigation,asdescribedbelow,ismeanttoprovideahigh-leveloverviewofpotentialandinitiatedactionpointsinresponsetotherisksandshouldnottobeinterpretedasacomprehensivelistofriskresponses.Inaddition,themitigationeffortsdescribedbelowarenoguaranteethatriskswillnotmaterialize.Noriskmanagementorinternalcontrolsystemcanprovideabsolutesafeguardsagainstfailuretoachievecorporateobjectives,fraudorbreachofrulesandregulations.
Regulatory/legal risksAppropriatepolicies,processesandinternalcontrolproceduresareimplementedinordertolimittheexposuretocomplexregulatoryandlegalrequirements.Inaddition,bpoststrivesforaconstructivestakeholdermanagementtowards,inter alia,government,decisionmakersandregulators.
bpostoperatesinmarketsthatareheavilyregulated,includingbynational,EUandglobalregulatorybodies.ItisuncertainwhetherBelgianorEuropeanregulatorsorthirdpartieswillraisematerialissueswithregardtobpost’scompliancewithapplicablelawsandregulationsorwhetherfuturelegislative,regulatoryorjudicialchangesorotherregulatorydevelopmentswillhaveamaterialadverseeffectonbpost’sbusiness,financialcondition,operatingresultsandprospects.
Related to our mail and parcel businessInNovember 2015,BelgianMinisterDeCroo,responsibleforthepostalsector,announcedhisintenttoadoptanewPostalLawduringthecourseofhislegislature.ThisnewPostalLawwasapprovedbytheParliamentonJanuary 18,2018 andenteredintoforce
inFebruary 2018.bpostwelcomesthislegislativeinitiativeasthenewPostalLawprovidesafuture-proof,stableandpredictablelegalframeworkfortheBelgianpostalsector.
In2012,theEuropeanCommissionrequiredbposttorepayallegedstateaidfortheperiod1992to2012.OnMay 2,2013,theEuropeanCommissionapprovedthecompensationgrantedtobpostunderthetermsofthe5thmanagementcontractcoveringtheperiod2013to2015.AlthoughtheEuropeanCommission’sdecisionsonstateaidprovidebpostwithadegreeofcertaintyregardingthecompatibilityofthecompensationitreceivesfortheprovisionofservicesofpubliceconomicinterest(“SGEIs”)withstateaidrulesfortheperiodfrom1992through2015,itcannotbeexcludedthatbpostcouldbesubjecttofurtherstateaidallegationsandinvestigationsinrespectofthisperiodinrelationtoSGEIs,otherpublicservicesandotherservicesitperformsfortheBelgianStateandvariouspublicentities.
InaccordancewiththeBelgianState’scommitmenttotheEuropeanCommission,theBelgianStateorganizedacompetitive,transparentandnon-discriminatorytenderingprocedurewithrespecttothedistributionofrecognizednewspapersandperiodicalsinBelgium,followingwhichtheserviceconcessionwasawardedtobpostonOctober 16,2015toprovidetheservicefromJanuary 1,2016untilDecember 31,2020.InrespectoftheperiodcommencingasofJanuary 1,2021,itisuncertainwhetheranothercallfortenderwillbeissuedandwhethertheconcession,ifany,willoncemorebegrantedtobpost.
OnDecember 3,2015,bpostandtheBelgianStatesignedanewmanagementcontract(“6thmanagementcontract”)withrespecttotheotherSGEIs(interalia, themaintenanceofaretailnetwork,distributionofpensions,cashatcounterandotherservices).This6thmanagementcontractprovidesforacontinuedprovisionoftheseSGEIsforaperiodoffiveyears,endingonDecember 31,2020,andforaremunerationinlinewiththeprinciplesofthe5thmanagement
• Actionplans/Projectstomitigatetherisks(partoftheBUobjectivesandbudgetprocess)
• Briefstatus&EmergingriskevolutionsarereportedduringtheQuarterlyReview(QR)
• Annualupdateontheriskevolution(CorporateRisk)
• Trackingoftheeventswhichinfluencetheriskassessment
• Networkingandinfluencing(ifdeemeduseful)
• DefinitionofPlanB(ifdeemeduseful)
• AnnualstatusreportingasinputfortheAnnualReport(EOY)
• Immediatereportingofimportantevolutionspotentiallyimpactingthestrategy
• MaintainingaconstructiverelationshipwiththeAuthoritiesandRegulators
• Annualstatusreporting(Legal/regulatory)
• Immediatereportingofimportantevolutionspotentiallyimpactingthestrategy
Mitigation Monitoring
Operational Risks
External Business Risks
Regulatory/Legal Risks
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bpost ANNUALREPORT2018 43
regulationoncross-borderparceldeliveryservices.Afterageneralagreementonthetextwasachievedattheendof2017,theregulationwasadoptedbytheCouncilandEUParliamentin2018 andimposesincreasedpricingtransparencyandregulatoryoversightforcross-borderparceldeliveryoperatorssuch as bpost.
bpostwasdesignatedbytheBelgianStateastheUSOproviderforaneight-yeartermcommencingin2011.InthenewPostalLaw,bpostisdesignatedasUSOprovideruntiltheendof2023.ThespecialtermsandconditionsoftheUSOmustbedefinedinanewdedicatedmanagementcontractwhichshouldenterintoforcein2019.TheobligationtoprovidetheUSOmayrepresentafinancialburdenonbpost.AlthoughthenewPostalLawprovidesthatbpostisentitledtocompensationbytheBelgianStateintheeventtheUSOhascreatedanunfairburden,therecanbenoassurancethattheentirenetcostoftheUSOwillbecovered.Furthermore,goingforward,inabsenceofadedicatedmanagementcontractdefiningthetermsandconditionsofbpostdesignationasUSOprovider,thereisstilluncertaintyregardingthetermsandconditionsandfinancingmechanismthatwouldapplytotheprovisionoftheUSO.
Related to bpost bank, bpost’s associatebpostbankoperatesinaheavilyregulatedmarket.Theregulatorylandscapeforfinancialinstitutionshaschangedconsiderably(e.g.,increasedfocusoncustomerprotection,anti-moneylaundering,etc.)andprudentialsupervisionhasbeenreinforced(e.g.,qualityandlevelofcapital,liquidity,corporategovernance).ItisuncertainwhetherandtowhichextentBelgianorEuropeanregulatorsorthirdpartiesmayraisematerialissueswithregardtobpostbank’scompliancewithapplicablelawsandregulationsorwhetherfuturelegislative,regulatoryorjudicialchangesorotherregulatorydevelopmentsmayhaveamaterialadverseeffectonbpostbank’sbusiness,financialcondition,resultsofoperationsandprospects.bpostbankmayalsoberequiredtoincreaseitscapital,inparticularasaresultofnewcapitalrequirements.
Related to other regulatory & legal requirementsTheinteractionbetweenthelawsapplicabletoallprivatelimitedliabilitycompaniesandthespecificpubliclawprovisionsandprinciplesapplicabletobpostmaypresentdifficultiesininterpretationandcauselegaluncertainty.Forinstance,bpostissubjecttocertainspecificrisksinrelationtoemploymentmattersderivingfromtheapplicationofcertainpubliclawprovisionsandprinciples.Inparticular,bpostwasinvolvedinalitigationinitiatedbyanumberofauxiliarypostmen(whichincludeallpostmenrecruitedfromJanuary 1,2010performingcertaincorefunctionssuchascollection,sorting,transportanddistributionofmail).InMay 2016,theMonsLaborCourtofAppealsfoundinfavorofbpostandrejectedallclaims.Furtherappealsarenolongerpossible.
Amendmentsto,ortheintroductionofnew,legislationandregulations,includinglegislationandregulationsrelatingtostatepensions,couldresultinadditionalburdensforbpost.Therecanalsobenoassurancethatbpostwillnotfacechallengesregardingcertainemploymentmattersonstateaidgrounds.Finally,bpost’scontractualemployeescouldalsochallengetheiremploymentstatusandclaimdamagesto
contract,asapprovedbytheEuropeanCommissiononMay 2,2013.FortheperiodcommencingJanuary 1,2021,theBelgianStatemayceasetoprovide(oramendthescopeandcontentof)certainpublicservices,mayconcludethatsuchservicesdonotconstituteSGEIsandhencedoesnotwarrantcompensationormaynotentrusttheseservicestobpost.
OnJune 3,2016,theEuropeanCommissionapprovedthe 6thManagementContractandtheconcessionagreementsunderthestateaidrules.InOctober 2016,theVlaamseFederatievanPersverkopers(“VFP”)soughttheannulmentoftheEuropeanCommission’sclearancedecisionbeforetheGeneralCourtonproceduralgrounds.InFebruary 2019,theGeneralCourthasremovedthecasefromtheregisterfollowingtherequestbyVFPtodiscontinuetheproceedings.
bpostmayberequiredtoprovideotherpostaloperatorsaccesstospecificelementsofitspostalinfrastructure(suchasinformationonrequestsformailre-directionincaseofaddresschange),accesstoitspostalnetworkand/ortocertainuniversalservices.Itcannotbeexcludedthatcompetentauthoritiesimposeaccessatuneconomicpricelevelsortheaccessconditionsimposeduponitmayotherwisebeunfavorableforbpost.Intheeventbpostweretofailtocomplywiththeserequirements,itmayalsobesubjecttofines(underthecompetitionlawrulesandpostalregulation)and/orotherpostaloperatorsmayinitiateproceedingsseekingdamagesinnationalcourts.
bpostisrequiredtodemonstratethatitspricingfortheservicesfallingwithintheUSOcomplieswiththeprinciplesofaffordability,costorientation,transparency,non-discriminationanduniformityoftariffs.TariffincreasesforcertainsinglepiecemailandUSOparcelsaresubjecttoapricecapformulaandpriorcontrolbytheBIPT.TheBIPTmayrefusetoapprovesuchtariffsortariffincreasesiftheyarenotincompliancewiththeaforementionedprinciplesorpricecapformula.ItshouldbenotedthatthenewPostalLaw,whichenteredintoforceinFebruary 2018,providesforanewpricecapformulaaspartofastableandpredictablepricecontrolmechanism.
Inaddition,inrelationtoactivitiesforwhichbpostisdeemedtohaveadominantmarketposition,itspricingmustnotconstituteanabuseofsuchdominantposition.Failuretoobservethisrequirementmayresultinfines.bpostmayalsobeorderedbynationalcourtstodiscontinuecertaincommercialpracticesortopaydamagestothirdparties.
bpostisalsosubjecttotherequirementofnocross-subsidizationbetweenpublicservicesandcommercialservices.Inaddition,accordingtostateaidrules,ifbpostengagesincommercialservices,thebusinesscaseforprovidingsuchservicesmustcomplywiththe“privateinvestortest,”thatis,bpostmustbeabletodemonstratethataprivateinvestorwouldhavemadethesameinvestmentdecision.Iftheseprinciplesarenotcompliedwith,theEuropeanCommissioncouldfindthatcommercialserviceshavebenefitedfromunlawfulstateaidandordertherecoveryofthisstateaidfrombpost.
AccordingtotheEuropeanCommission,cross-borderparceldeliveryisoneofthekeyelementsimpactinge-commercegrowthinEurope.InMay 2016,theEuropeanCommissionpreparedaproposalfora
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adeclineinmailvolumesmaytranslateintoasignificantdeclineinprofit,unlessbpostcanreduceitscosts.Accordingly,bposthasintroducedmultipleleversfortransformationofthelegacybusiness(e.g.alternativedistributionmodel,networkoptimization,etc.).However,therecanbenoassurancethatbpostwillrealizeallofthebenefitsexpectedfromsuchinitiatives.Someofthecriticalelementsforsuccessarechangemanagement,projectprioritizationandstakeholderalignment.
Related to Information and Communication TechnologybpostreliesonInformationandCommunicationTechnology(“ICT”)systemstoprovidemostofitsservices.Thesystemsaresubjecttorisks,suchaspoweroutages,disruptionsofinternettraffic,softwarebugsandproblemsarisingfromhumanerror.Thismayresultinlossofdataorsignificantdisruptionofbpost’soperations.Inaddition,inaworldofconstantconnectivityanddependencyoninformationthatisprocessedandstoredelectronically,thelackofprotectionofconfidentialand/orsensitiveinformationmayresultininappropriateinformationsharing.
Related to the integration of recent acquisitionsTopursueitsgrowthambitions,bposthasboughtseveralcompaniesduringthelastfewyears.ThemostimportantacquisitionwasRadialintheUS.However,eventhoughbposthasstrengtheneditspost-mergerintegrationactivities,itremainsuncertainwhetherbpostwillbringtheintegrationstoasuccessfulendandwhetherbpost’ssubsidiarieswillactuallyrealizetherelatedbusinessplans.
Related to the attractiveness of bpost as employerbpostmayfacedifficultiestoattractandretaintheoperationalworkforceitneedstoensureday-to-daydeliveryofmailandparcels.Inaddition,asanylargeemployer,talentmanagementinviewofeffectivesuccessionplanningforcriticalfunctionsandsuccessfulin-sourcingcertainnewcapabilitiesmayalsobechallenging.
Related to the business continuitybpost’sabilitytoserveitscustomersandthepublicingeneraldependshighlyonthesortingcenterswherebpostcentralizes,sortsandpreparesthemailandparcelsfordistribution.InBelgium,bpostoperatessixsortingcenters.Ifoneormoreofthesefacilitiesweretoshutdownforaperiodoftimedueto,e.g.,poweroutage,accident,strikeaction,naturaldisasterresultinginfireorflooding,terroristattackorotherwise,bpostmaybeunabletodistributeorcomplywithdeliverytimesforaperiodoftime.Thiscouldhaveanegativeimpactonbpost’sreputation,customersatisfactionandfinancialperformance.
Related to “Force Majeure”Theriskofapotentialprolongedinterruptionofoperationsduetoextremenaturaleventsasaresultofclimatechange(e.g.,fire,flood,storm,andincreaseinemployees’healthissuesduetopollution)hasincreased.bpostseekstopreventdamagetobuildingsandinterruptionstooperationsasmuchaspossiblethroughpreventionandcontingencyprograms.The
compensatethemforbeingdeprivedofstatutoryemploymentprotectionandbenefits.
Regulatorychangesmay(directlyorindirectly)impacttheattractivenessofmailasawayofcommunicatingandhencebpost’sturnover.Suchchangescouldinclude,inter alia:
• theentryintoforceoftheGeneralDataProtectionRegulationonMay 25,2018,deterringcompaniesfromcontinuingtoengageincommercialprospectingactivities;
• theenactmentoflegislationpromotingdigitalgrowth,electroniccommunicationande-governmentinitiativescouldalsoadverselyaffectbpost’sbusiness.In2016,legislationgrantingregisterede-mailthesamelegalstatusasregisteredmailundercertainconditionsenteredintoforce.
External business risksTherisksmentionedinthesectionbelowareconsideredinlightofthelongtermstrategy.bpostassignedclearownershipforeachoftherisks.Theownermonitorstherisk,observestrendsandinitiatesmitigatingactionsifandwhenneeded.Moredetailsontheinternalcontrolandriskmanagementsystemcanbefoundinthecorporategovernancestatement.
Related to substitution and competition in the mail and parcel sectorsTheuseofmailhasdeclinedinrecentyears,primarilyasaresultoftheincreaseduseofe-mailandtheinternet.bpostexpectsthatthemailvolumeswillcontinuetodecline.E-governmentinitiativesorothermeasuresintroducedbytheBelgianStateorotherpublicauthoritiesorprivateenterprisesthatencourageelectronicsubstitutioninadministrativemailmayalsoaffecttherateofdeclineinmailvolumes.Managementhastakenactiontoaddressthedigitalizationrisk(e.g.launchof‘prior’stamp).However,boththespeedofchangeaswellashowourcustomerswillreacttothenewproductofferingsandnewwaysofworkingremains uncertain.
Thisnew“digital”areaalsoimpactstheparcelsindustryinthesensethatthee-commerceclientshavealimitedwillingnesstopayforthedeliverywhilerequestingadditionalservices(e.g.samedaydelivery).Thisputspressureonthemarginsandoverallprofitabilityintheparcelsindustry.Assuchexternalfactorstriggeredbytheindustry,competitionandclientscouldchallengethegrowthinparcels(bothinBelgiumandabroad).Inaddition,aslowdowninthegrowthofthee-commercemarketcouldalsoimpactthegrowthintheparcelsdistributionandfulfillmentbusiness.Finally,theuncertaintiesrelatedtotheBrexitmightalsoimpactourEuropeanparcelactivities.
Operational risks – Business risksbpostfacessomeoperationalchallengesthatrequireanappropriatelevelofmanagementattention.bpostinitiatesmitigatingactionplansifandwhenneeded.MoredetailsontheinternalcontrolandriskmanagementsystemcanbefoundintheCorporateGovernanceStatement.
Related to the agility and flexibility of the bpost networkDuetotherelativefixednatureofitscostbase,
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bpost ANNUALREPORT2018 45
Interest rate riskbpost’sassociatebpostbankis,likeanyotherbank,subjecttotheinterestraterisk,whichdirectlyinfluencesitsmargin.Interestrateslikewiseinfluencevaluationofbpostbank’sbondportfolio,whichisclassifiedonthestatementoffinancialpositionofbpostbankasHoldtoCollectfinancialassets.Changesinvaluationarereflectedasfairvaluethroughothercomprehensiveincome.Sincebpostbankisanequity-accountedentity,50%ofthechangeinitsequitydirectlyinfluencestheconsolidatedequityofbpost.Thefollowingtableillustratestheimpactofarelativechangeininterestratesof1%(from1%to1.01%forinstance)onbpostbank’sequityand,throughtheequitypickup,onbpost:
As at 31 December
Inmillion EUR 1% -1%
Equitybpostbank (0.2) 0.2
Equitybpost (0.1) 0.1
bpostisalsodirectlyexposedtointerestratefluctuationsthroughitsexternalfinancing.However,bpostmitigatesthisriskachievingabalancebetweenfixedandvariablerates.Thisbalancecurrentlyconsistsmainlyoffixedratesbutmayevolveaccordingtomarketsituation.
Inordertomanagetheinterestratestructureofitsdebt,bpostmayusehedginginstrumentssuchasinterestrateswaps.AnysubstantialchangeintheratestructurerequirespriorvalidationfromtheGroupExecutiveCommittee.
Thetablebelowillustratestheimpactofachangeininterestratesof100bp(from1%to2%forexample)onthedebtexposedtofloatingrates(i.e.thetermloaninUSDandtheEuropeanInvestmentBankloanin EUR).InterestiscalculatedasEuribor/USDLiborplusmargin.Asthemarginisdeterminedinthecontract,thesensitivityanalysisonlyappliesontheEuribor/USDLibor,knownasthe”baserate”.AstheEuriboriscurrentlyflooredatzerointhecontracts,adecreaseof100bpontheEuriborhasasignificantlylowerimpactthananincreaseof100bp.Consequentlythesensitivityanalysisisasymmetrical.
detrimentalconsequencesoftheserisksarecoveredbyinsurance policies.
Itshouldbenotedthatbpost’sCorporateSocialResponsibilitystrategyincludesambitioustargetstoreducebpost’sGreenhouseGas(“GhG”)emissions.Thisshouldlimitclimatechangeandtheoccurrenceofextremenaturalevents.
Operational risks - Financial risksClimate change riskNexttotheriseofnaturaldisastersandhealthissuesassociatedtoclimatechangeandwhichcouldaffectouroperations,carbontaxes,emissionstradingschemesandfueltaxesarealsoexpectedtofeatureprominentlyinthecomingregulations.AveragecarbonpricescouldincreasemorethansevenfoldtoUSD 120permetrictonby2030.
Theeffectsofrisingcarbonpricesoncompanieswillbebothdynamicandcomplex:
• Companies’costswillriseinproportiontothetotalemissionsgeneratedbythemselvesandpossiblytheir suppliers.
• Sellingpricesarelikelytorisetooffsetcostincreasesatanindustrylevel.
• Demandcouldfallreflectingthepricesensitivityofcustomersineachmarketaffected,shrinkingcompanies’salesandcosts.
bpostmonitorsthecarbonpriceriskandtakesmeasurestoreduceitscarbonfootprintwithintheframeworkofitsCorporateSocialResponsibilitystrategy.
Byadoptingcarbonpricingforecastsandestimatedinternalcarbonprices,bpostisabletooutpacethecostofintensifyingcarbonregulationsandadapttobusinessinalow-carboneconomy.
Nexttotheforecastingofcarbonpricing,bpostisalsoworkingateffectivelyreducingitsemissions.Awareoftheecologicalimpactofthegrowingparceldistribution,bposthasdrawnupanewCO2reductionobjectiveaimedatreducingemissionsfromtheactivitiesoftheentirebpostGroupbyatleast20%by2030,comparedto2017.Theobjectivehasbeenapprovedbythe‘ScienceBasedTarget’initiativethatguaranteesthatthecompanyisinlinewiththeclimatetargetsoftheParisAgreement.Toachievethisgoal,bpostwill,amongothers,replace50%ofitsdieselvehiclesbyanelectricalternativeby2030.
Exchange rate riskInitsoperationalandfinancialactivities,bpostisexposedtoforeignexchangeratefluctuationswhichimpactsthebalancesheetandtheincomestatement.
Theseexchangeraterisksconsist(i) oftransactionriskrelatedtooperationalactivitieswithcashflowsinforeigncurrencyorrelatedtoinvestmentsand(ii) oftranslationriskrelatedtotheconsolidationinEuroofsubsidiarieswhosefunctionalcurrencyisnottheEuro(bpost’sfunctionalcurrency).Themainexposuretoforeignexchangerateriskcorrespondstoassetsin USD.
Hedginginstrumentsareusedtomitigatetheseimpacts.
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bpost ANNUALREPORT2018 46
Theageinganalysisofthetradereceivablesandthecreditriskexposurefollowingtheprovisionmatrixisasfollows:
As at 31 December
Inmillion EUR 2018 2017
At 1 january 17.5 13.4
Impairments:Additionsthroughbusinesscombinations 0.2 3.9
Impairments:Additions 1 .0 2.2
Impairments:Utilization (0.4) (1.3)
Impairments:Reversal (1.1) (0.5)
Impairments:Translationdifferences 0.6 0.0
At 31 december 18.5 17.5
losses(ECL)model.Astradereceivablesdonotcontainasignificantfinancingcomponentbpostoptedtoapplythesimplifiedapproachtocalculatetheexpectedcreditlossratewiththeuseofaprovisionmatrix,basedonthehistoricaldefaultratesadaptedforcurrentandforwardlookinginformation.PriortotheadoptionofIFRS 9anindividualassessmentoftherecoverabilityofthereceivableswasmadeandanimpairmentwasrecognizedwherecashsettlementwaswhollyorpartiallydoubtfuloruncertain.
Thefollowingtablesummarizesthemovementintheprovisionforexpectedcreditlosses:
Operational activities
Thecreditriskbydefinitiononlyconcernsthatportionofbpost’sactivitiesthatarenotpaidupfrontincash.bpostNV/SAactivelymanagesitsexposuretocreditriskbyinvestigatingthesolvencyofitscustomers.Thistranslatesintoacreditratingandacreditlimit.BotharefolloweduponadailybasisforallBelgianandforeigncustomers.
AsfromJanuary 1,2018withtheadoptionofIFRS 9Financialinstruments,bpostNV/SArecognizedonallofitstradereceivablesanallowanceforexpectedcreditlossesbasedonthelifetimeexpectedcredit
As at 31 December
Inmillion EUR 2018 2017
Heldtomaturityfinancialassets 0 .0 0.0
CashandCashequivalents 680.1 466.0
Tradeandotherreceivables 712.0 719.4
Credit risk classes of financial assets 1,392.1 1,185.4
Credit riskbpostisexposedtocreditrisksthroughitsoperationalactivities,intheinvestmentandmanagementofitsliquidities(banks)andthroughitsinvestmentinbpostbank.
Financialresultsofbpostarealsoinfluencedbytheevolutionofthediscountrates,usedtocalculatetheemployeebenefitsobligation.AtDecember 31,2018,anincreaseby0.5%oftheaveragediscountrates,wouldgenerateadecreaseoffinancialchargeofEUR 18.9 million.Adecreaseby0.5%oftheaveragediscountrates,wouldincreasefinancialchargesbyEUR 20.7 million.Forfurtherdetail,seenote 6.27.
As at 31 December
Inmillion EURSensitivitytoa-100bp
movementinmarketinterestrates
Sensitivitytoa+100bpmovementinmarketinterest
rates
Impact on costs -1.9 2.1
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bpost ANNUALREPORT2018 47
Inmillion EUR CURRENT lessthan1 year
NON-CURRENT
within1 yearbutnotlaterthan5 years laterthan5 years
31 december 2017
Financeleaseobligations 1.7 7.5 11.9
Tradeandotherpayables 1,218.2 45.2 0.0
Bankloan 698.1 36.7 0.0
bonds,othersovereignbondsandbondsfromfinancialandcommercialcorporationsaswellasmortgages.PerDecember 31,2018bpostbankhadinvestedthefundsdepositedbyitscustomersininterbankassets(EUR 515.5 million),loansandadvancestocustomers(mainlymortgageandtermloans,EUR 4,936 million)andsecurities(mainlygovernmentbondsandcorporatebonds,EUR 5,242 million).Inaddition,maximumconcentrationlimitsperissuer,persector,perrating,percountryandpercurrencyhavebeenestablishedandareconstantlymonitored.
Liquidity riskbpost’scurrentliquidityriskislimitedduetothehighlevelofcashathandandduetothefactthatasignificantportionofitsrevenuesispaidbyitscustomerspriortobpostperformingtheservice.
Asdisclosedinnote 6.34bpostreservedanamountofEUR 6.5 millionasanoutstandingreceivableforthereductionoftheSGEIcompensationof2015andconsideredthisreceivabletobeindefault.
Investment of liquidities
Regardingbpost’sinvestmentofitsliquidities,whichincludescashandcashequivalentsandinvestmentsecurities,theexposuretocreditriskarisesfromdefaultofthecounterparty,withamaximumexposureequaltothecarryingamountoftheseinstruments.
bpost bank
bpostbankinveststhefundsthathavebeendepositedbyitscustomers.ThebankhasadoptedastrictinvestmentpolicythatdeterminesanoverallallocationoftheinvestmentsacrossBelgianState
As at 31 December
Inmillion EUR Dayspastdue
TotalCurrent <60days 60-120
days >120days
Outstand-ingbalance
SGEIindefault
Estimatedtotalgrosscarryingamountatdefault 568.2 67.7 7.8 14.3 6.5 664.5
Expectedcreditlossrate 0.2% 5.0% 28.6% 35.3% 100.0%
Allowanceforexpectedcreditlosses (1.3) (3.4) (2.2) (5.1) (6.5) (18.5)
Trade receivables 566.9 64.3 5.6 9.3 0 646.0
Thematurityoftheliabilitiesinthepreviousreportingperiodwereasfollows:
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bpost ANNUALREPORT2018 48
As at 31 December
Inmillion EUR 2018 2017restated 2017
Capital
Issuedcapital 364.0 364.0 364.0
Reserves 271.4 310.1 310.1
Foreigncurrencytranslation 12.7 (11.5) (11.5)
Retainedearnings 51.6 110.9 110.9
Non-controllinginterests 2.5 4.3 4.3
Total 702.3 777.8 777.8
Net Debt / (net cash)
Interestbearingloansandborrowings 1024.8 755.3 758.2
Non-interestbearingloansandborrowings 0 .1 0.1 0.1
-Investmentsecurities 0 .0 0.0 0.0
-Cashandcashequivalents (680.1) (466.0) (466.0)
Total 344.8 289.4 292.4
Inmillion EUR CURRENT lessthan1 year
NON-CURRENT within1 yearbutnot
laterthan5 yearslaterthan5 years
31 december 2018
Financeleaseobligations 1.6 4.1 12.5
Tradeandotherpayables 1,212.9 17.5 0.0
Bankloan 8.6 189.6 0.0
Long-Termbond 0.0 0.0 641.8
Commercialpapers 165.1 0.0 0.0
Other loans 0.3 1.0 0.0
AsatDecember 31,2018,liabilitieshavecontractualmaturitieswhicharesummarizedbelow:
structuremaximizingthevalueforshareholders.Inthiscontext,itmaychoosetoadjusttheamountofdividendspaid,carryouttransactionsimpactingthenumberofsharesorsellassetsscalingbackitsnetdebt.
bpost’spolicyisalsotomaintainanintrinsicsolidinvestmentgradecreditprofile.Oneofthemostthoroughlyfollowedindicatorsistheratiobetween(i) theoperatingcashflowslessfinancialexpensesandpaidtaxes,and(ii) theadjustednetdebt.
Thetablebelowgivesanoverviewofthenetdebt/netcashpositionaswellastheequityposition:
Theabovecontractualmaturitiesarebasedonthecontractualundiscountedpayments,whichmaydifferfromthecarryingvaluesoftheliabilitiesatthestatementoffinancialpositiondate.
Theliquidityriskisfurthermitigatedbycommittedcreditlinesscaledaccordingtothemagnitudeofbpost operations.
Capital management policies and proceduresbpostseeksanoptimalbalancebetweenitsnetdebtanditsoperatingcashflowandmanagesthefinancial
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 49
6.6Businesscombinations
Acquisition of non-controlling interest ParcifyInJanuary 2018,bpostNV/SAacquiredtheremainingsharesinParcifyNV,toreachatotalof100%sharesforanamountofEUR 0.3 million.
Contingent consideration for DynaGroupInJanuary 2018,bpostNV/SApaidEUR 42.0 millioninexecutionofthecontingentconsiderationagreement.Thefairvalueofthecontingentconsiderationwasrecognizedasaliability.Thepaymenthadnoimpactontheoriginallycalculatedgoodwillnorontheresultoftheyear.Theremainingcontingentconsideration,payablein2019,wascappedatEUR 9.0 million(amongstothersbaseduponfinancialresults)andforwhichEUR 5.4 millionwasrecordedasacurrentliabilityatyearend2018.
Contingent consideration for Freight Distribution Management (FDM)InFebruary 2018,bpostNV/SApaidAUD5.0 million(EUR 3.3 million)inexecutionofthecontingentconsiderationagreementandbasedupontheDecember 2017performanceofFreightDistributionManagementSystemsPtyLtd.andFDMWarehousingPtyLtd.Thefairvalueofthecontingentconsiderationwasrecognizedasaliability.Thepaymenthadnoimpactontheoriginallycalculatedgoodwillnorontheresultoftheyear.
Purchase price allocation for the entities Bubble PostOnAugust 7,2017bpostNV/SAenteredintoanagreementfortheacquisitionofBubblePostNV/SA.Besidesitsexperienceinsustainableurbandelivery,BubblePostalsohasextensiveknowledgeofrefrigeratedandfrozentransportforamongothershospitalitywholesalersanddeliveryofpreparedmealsandfoodboxes.
bpostacquired100%ofthesharesofBubblePostforanamountofEUR 1andcommittedtomakeEUR 4.0 millionoffundsavailable.InadditiontheagreementincludesacontingentconsiderationarrangementandforeseesanadditionalremunerationbasedontheEBITachievedin2020.Basedonthelastforecast,noliabilityforthecontingentconsiderationwasrecognized.Thereisnomaterialsensitivityforbposttovariationsinthecontingentconsideration.ThecompanywasconsolidatedwithintheP&Loperatingsegmentusingthefull-integrationmethodasfromAugust 2017.Transactioncostswereexpensedandwereincludedintheoperatingexpensesin2017.
Thecalculatedgoodwillispresentedasfollows:
Fair value of the assets acquired and liabilities assumed in the acquired entities
Inmillion EUR
Non-Current Assets 0.7
Property,plantandequipment 0.1
Intangibleassets 0.5
Tradeandotherreceivables 0.0
Current Assets 1.2
Inventories 0.0
Tradeandotherreceivables 1.1
Cashandcashequivalents 0.1
Non-Current Liabilities (1.7)
Interest-bearingloansandborrowings (1.7)
Tradeandotherpayables 0.0
Current Liabilities (4.4)
Incometaxpayable 0.0
Tradeandotherpayables (4.4)
Fair value of net assets acquired (4.2)
Goodwillarisingonacquisition 4.2
Purchase consideration transferred 0.0
ofwhich:
-Cashpaidin2017 -
-Contingentconsideration 0.0
Analysis of cash flows on acquisition
Inmillion EUR
Netcashacquiredwiththesubsidiaries 0.1
Cashpaidin2017 -
Net cash outflow 0.1
ThefairvalueofthetradereceivablesamountedtoEUR 1.1 millionanditisexpectedthatthefullcontractualamountscanbecollected.
For2018BubblePostcontributedEUR 2.1 millionofrevenueandEUR -8.0 milliontoprofitbeforetaxfromcontinuingoperationsoftheGroup.
TheresultedgoodwillofEUR 4.2 millionderivesfromexpectedsynergiesfromcombiningoperationsofbpostanditssubsidiaries.Noneofthegoodwillisexpectedtobedeductibleforincometaxpurposes.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 50
Purchase price allocation for the entities of RadialOnNovember 16,2017bpostNV/SA,throughitssubsidiarybpostNorthAmericaHoldings,Inc.,acquired100%oftheissuedandoutstandingequityinterestsoftheRadialHoldings,L.P.andRadialIIIGP,LLC(“Radial”)afterhavingobtainedallnecessaryapprovalsfromtherelevantcompetitionauthorities.TheacquisitionofRadial,aleadingproviderofintegratede-commercelogistics,perfectlyfitswithinbpost’sgrowthstrategy.ItallowsbposttoscaleitsexistingUSpresenceand
expanditsproductofferingintovalue-addedactivitiesthatcovertheentirevaluechainine-commercelogisticsandomnichanneltechnology.RadialwasconsolidatedwithintheP&Loperatingsegmentusingthefull-integrationmethodasfromNovember 16,2017.Thepurchasepricefor100%ofthesharesamountedtoUSD 804.6 million,whichhasbeenpaidin2017.TransactioncostsofUSD 3.3 millionwereexpensedandwereincludedintheoperatingexpensesin2017.
Thecalculatedgoodwillispresentedasfollows:
Fair value of the assets acquired and liabilities assumed in the acquired entities
In million USD
Preliminarygoodwill Finalgoodwill
Non-Current Assets 177.9 354.0
Property,plantandequipment 151.5 202.2
Intangibleassets 19.2 144.6
Tradeandotherreceivables 7.2 7.2
Current Assets 290.8 285.3
Inventories 0.2 0.2
Tradeandotherreceivables 164.1 158.6
Cashandcashequivalents 126.5 126.5
Non-Current Liabilities (23.0) (36.1)
Interest-bearingloansandborrowings (21.4) (17.9)
Tradeandotherpayables (1.3) (1.3)
Provisions 0.0 (16.7)
Deferredtaxliabilities (0.2) (0.2)
Current Liabilities (312.9) (314.6)
Interestbearingloansandborrowings (0.7) (0.7)
Provisions 0.0 (8.7)
Incometaxpayable (1.5) (0.8)
Tradeandotherpayables (310.7) (304.4)
Fair value of net assets acquired 132.8 288.6
Goodwillarisingonacquisition 671.7 516.0
Purchase consideration transferred 804.6 804.6
ofwhich:
-Cashpaidin2017 804.6 804.6
-Contingentconsideration
Analysis of cash flows on acquisition
In million USD In million USD
Netcashacquiredwiththesubsidiaries 126.5 126.5
Cashpaidin2017 (804.6) (804.6)
Net cash outflow (678.0) (678.0)
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 51
Thefairvalueofthecurrentandnon-currenttradereceivablesamountedtoUSD 165.7 millionanditisexpectedthatthefullcontractualamountscanbecollected.
TheinitialgoodwillhadbeenreducedbyUSD 155.7 millionfollowingthefairvalueimpactsandthepurchasepriceallocation.Theadjustmenttofairvalueconsistedamongstothersoftherecognitionofintangibleassets:customerrelationships(usefullife14-year),in-housedevelopedtechnology(usefullife3 year)andtradename(usefullife10-year),respectivelyforanamountofUSD 85.0 million,USD 14.0 millionandUSD 33.4 million.Thenetimpactoffairvalueadjustmentoffixedasset,non-currentprovisionsandtradepayablesamountedtoUSD 23.4 million.Assetswerefairlyvaluedwiththeassistanceofanexternalindependentexpert.Theincreaseddepreciationchargesonthefairvalueimpactonintangibleassetswaspartiallyoffsetbythelowerdepreciationchargesonthefairvalueimpactontangibleassetsastheusefulliveofthetangibleassetshasbeenprolonged,theimpactofthesefromacquisitiondateto31 December 2017werenotmaterial.
For2018RadialcontributedEUR 887.5 millionofrevenueandEUR–26.6 milliontoprofitbeforetaxfromcontinuingoperationsoftheGroup.
TheresultinggoodwillofUSD 516.0 millionderivesfromfuturegrowthandexpectedsynergies.Noneofthegoodwillisexpectedtobedeductibleforincometaxpurposes.
Acquisition of M.A.I.L., Inc.InJanuary 2018,LandmarkGlobal’sMailDivisionMSIacquired100%ofthesharesofM.A.I.L.,Inc.Thiscompanyisactiveinthefieldofbusinessmail/cataloguedistributionforre/e-tailersandmail-roomservicesaswellasparceldistributionandbpostpaidanamountofUSD 4.0 million.M.A.I.L.,Inc.wasconsolidatedwithintheP&Loperatingsegmentusingthefull-integrationmethodasfromJanuary 2018.Transactioncostswereexpensedandareincludedintheoperatingexpenses.
Thecalculatedgoodwillispresentedasfollows:
Fair value of the assets acquired and liabilities assumed in the acquired entity
Inmillion USD
Current Assets 1.4
Inventories (0.1)
Tradeandotherreceivables 0.6
Cashandcashequivalents 0.9
Non-Current Liabilities (0.1)
Deferredtaxliabilities (0.1)
Current Liabilities (0.5)
Tradeandotherpayables (0.5)
Fair value of net assets acquired 0.9
Goodwillarisingonacquisition 3.1
Purchase consideration transferred 4.0
ofwhich:
-Cashpaid 4.0
-Contingentconsideration
Analysis of cash flows on acquisition
In million USD
Netcashacquiredwiththesubsidiary 0.9
Cashpaid (4.0)
Net cash outflow (3.1)
Thefairvalueofthecurrentandnon-currenttradereceivablesamountedtoUSD 0.6 millionanditisexpectedthatthefullcontractualamountscanbecollected.
For2018M.A.I.L.,Inc.contributedEUR 12.4 millionofrevenueandEUR 1.3 milliontoprofitbeforetaxfromcontinuingoperationsoftheGroup.
TheresultinggoodwillofUSD 3.1 millionderivesfromfuturegrowthandexpectedsynergies.Noneofthegoodwillisexpectedtobedeductibleforincometaxpurposes.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 52
Acquisition of IMEX Global Solutions, LLCInJanuary 2018,LandmarkGlobal’sMailDivisionMSIacquired100%ofthesharesofIMEXGlobalSolutions,LLC.IMEXGlobalSolutions,LLCisa3rdpartylogisticscompanyintheUS,activeincross-borderpublicationandmaildeliveryandbpostpaidanamountofUSD 8.0 million.ThiscompanyisconsolidatedwithintheP&Loperatingsegmentusingthefull-integrationmethodasfromJanuary 2018.
Thecalculatedgoodwillispresentedasfollows:
Fair value of the assets acquired and liabilities assumed in the acquired entity
In million USD
Non-Current Assets 4.8
Property,plantandequipment 0.7
Intangibleassets 3.8
Tradeandotherreceivables 0.2
Current Assets 6.4
Inventories 0.2
Tradeandotherreceivables 6.1
Cashandcashequivalents 0.2
Current Liabilities (5.1)
Tradeandotherpayables (5.1)
Fair value of net assets acquired 6.1
Goodwillarisingonacquisition 2.0
Purchase consideration transferred 8.1
ofwhich:
-Cashpaid 8.1
-Contingentconsideration
Analysis of cash flows on acquisition
In million USD
Netcashacquiredwiththesubsidiary 0.2
Cashpaid (8.1)
Net cash outflow (7.9)
Thefairvalueofthecurrentandnon-currenttradereceivablesamountedtoUSD 6.3 millionanditisexpectedthatthefullcontractualamountscanbecollected.
Theadjustmenttofairvaluefollowingthepurchasepriceallocationconsistedoftherecognitionofintangibleassets:customerrelationships(usefullife7 year)foranamountofUSD 3.8 million.
For2018IMEXGlobalSolutionscontributedEUR 55.7 millionofrevenueandEUR 0.2 milliontoprofitbeforetaxfromcontinuingoperationsoftheGroup.
TheresultinggoodwillofUSD 2.0 millionderivesfromfuturegrowthandexpectedsynergies.Noneofthegoodwillisexpectedtobedeductibleforincometaxpurposes.
Acquisition of Leen Menken Foodservice Logistics BVOnJanuary 11,2018bpostacquiredtheDutchcompanyLeenMenkenFoodserviceLogisticsBV.LeenMenkenFoodserviceLogisticsBVisalogisticoperatorforthetransportofrefrigeratedandfrozenproductsfore-commerce.bpostpaidanamountofEUR 0.85 millionfor100%ofthesharesandfurthermoreperformedacapitalincreaseofEUR 2.35 million.InadditiontheagreementincludesacontingentconsiderationarrangementandforeseesanadditionalremunerationwhichcanamountuptoEUR 1.5 million.ThecompanywasconsolidatedwithintheP&Loperatingsegmentusingthefull-integrationmethodasfromJanuary 2018.Transactioncostswereexpensedandareincludedintheoperatingexpenses.
Thecalculatedgoodwillispresentedasfollows:
Fair value of the assets acquired and liabilities assumed in the acquired entity
In million EUR
Non-Current Assets 4.7
Property,plantandequipment 4.7
Current Assets 4.2
Inventories 1.3
Tradeandotherreceivables 3.1
Cashandcashequivalent (0.2)
Current Liabilities (5.4)
Interestbearingloansandborrowings (0.2)
Tradeandotherpayables (5.3)
Fair value of net assets acquired 3.5
Goodwillarisingonacquisition 1.1
Purchase consideration transferred 4.7
ofwhich:
-Cashpaid 3.2
-Contingentconsideration 1.5
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 53
Analysis of cash flows on acquisition
In million EUR
Netcashacquiredwiththesubsidiary (0.2)
Cashpaid (3.2)
Net cash outflow (3.4)
Thefairvalueofthecurrentandnon-currenttradereceivablesamountedtoEUR 3.1 millionanditisexpectedthatthefullcontractualamountscanbecollected.
For2018LeenMenkencontributedEUR 19.7 millionofrevenueandEUR -0.8 milliontoprofitbeforetaxfromcontinuingoperationsoftheGroup.
TheresultinggoodwillofEUR 1.1 millionderivesfromfuturegrowthandexpectedsynergies.Noneofthegoodwillisexpectedtobedeductibleforincometaxpurposes.
Acquisition of Anthill BVInMarch 2018bpostacquired63.6%ofthesharesoftheDutchcompanyAnthillBV,whichholds100%ofthesharesinActiveAntsBV.ActiveAntsprovidese-fulfilmentandtransportservicestocompaniesactiveine-commerce.ActiveAntsprovidesstorageservices,doesthepick&packactivityandshipstheproducts.Anthillsolelyfunctionsasaholdingcompany.bpostpaidanamountofEUR 4.0 millionfor50%ofthesharesandperformedacapitalincreaseofEUR 3.0 milliontoobtainanadditional13.6%oftheshares.Nexttothat,theagreementforeseesacontingentconsiderationbaseduponthe2018EBITDAwhichcanamountuptoEUR 0.8 million.ThecompanywasconsolidatedwithintheP&Loperatingsegmentusingthefull-integrationmethodasfromMarch 2018.Transactioncostswereexpensedandareincludedintheoperatingexpenses.
Thepreliminarycalculatedgoodwillispresentedasfollows:
Fair value of the assets acquired and liabilities assumed in the acquired entities
Inmillion EUR
Non-Current Assets 5.0
Property,plantandequipment 4.5
Tradeandotherreceivables 0.5
Current Assets 5.3
Inventories 0.1
Tradeandotherreceivables 1.9
Cashandcashequivalents 3.3
Non-Current Liabilities (1.1)
Interest-bearingloansandborrowings (0.8)
Tradeandotherpayables (0.4)
Current Liabilities (6.3)
Interestbearingloansandborrowings (4.1)
Tradeandotherpayables (2.2)
Fair value of net assets acquired 2.9
Goodwillarisingonacquisition 4.9
Purchase consideration transferred 7.8
ofwhich:
-Cashpaid 7.0
-Contingentconsideration 0.8
Analysis of cash flows on acquisition
Inmillion EUR
Netcashacquiredwiththesubsidiaries 3.3
Cashpaid (7.0)
Net cash outflow (3.8)
Thefairvalueofassetsacquiredandliabilitiesassumedatacquisitiondatecouldnotbeassessedyet.Consequently,thedeterminationofthecarryingamountoftheacquiredentityandthepurchasepriceallocationoftheacquisitionarestillunderreviewandwillbefullydisclosedin2019.
Fromthedateofacquisition,AnthillBVcontributedEUR 12.9 millionofrevenueandEUR 0.6 milliontoprofitbeforetaxfromcontinuingoperationsoftheGroup,giventhevolatilityofthefigures,nofiguresaredisclosedfortheperiodstartingfromthebeginningoftheyear.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 54
6.7Segmentinformationbpost’sbusinessisorganizedbasedonbusinessunits,serviceunitsandcorporateunits.EffectiveJanuary 1,2013,ithasoperatedthroughtwobusinessunits:theMRSbusinessunitandtheP&Lbusinessunit.
TheMail&RetailSolutionsbusinessunit(MRS)offerssolutionstobigcustomers,privateandpublic,self-employedworkersandsmallandmediumbusinessesontheonehandandservesresidentialcustomersaswellasallcustomersusingmassmarketchannelssuchasthepostoffices,thePostPoints,pointofsalesofUbiwayorbpost’se-Shoptopurchasetheirmail,pressandotherproductsontheotherhand.ItalsosellsbankingandinsuranceproductsunderanagencyagreementwithbpostbankandAGInsuranceandofferstoitsclientsanumberofotherpaymentproducts.
TheParcels&Logistics(P&L)businessunitspecializesinworldwidemail,parcelande-commercelogisticssolutions(fulfillment,handling,deliveryandreturnmanagement).
bpostprovidesproductsandservicesbasedonthefollowingproductlines:(i) transactionalmail,(ii) advertisingmail,(iii) press,(iv) domesticparcels,(v) internationalparcels,(vi) logisticsolutions,(vii) value-addedservices,(viii) internationalmail,(ix) bankingandfinancialproducts,(x) distributionand(xi) retail&other.Revenuefromthetransactionalmail,advertisingmail,press,distributionandbankingandfinancialproductsareincludedwithintheMRSbusinessunit.Revenuefromtheinternationalmail,logisticsolutionsandparcelsproductlinesareincludedwithintheP&Lbusinessunit.Retail&otherrevenueandvalue-addedservicesareallocatedacrosstheMRSandP&Lbusinessunits.
bposthasserviceunitsthatsupportthebusinesswhosecostsarerechargedtothebusinessandcorporateunitsusingacostallocationmechanism.TheserviceunitsincludetheMailServiceOperations(MSO)unit,InternationalOperations(IOPS)unit,theICTandServiceOperationsunits,theGlobalServiceOrganization(GSO)andtheHumanResources&Organization(HR&O)unit.TheMSOserviceunitisinchargeofcollecting,sortinganddistributingmailandparcelsinBelgium.TheIOPSserviceunitcomprisestheoperationsoftheEuropeanMailCenter,whichislocatedatBrusselsAirportandservesasahubforinternationalmailandparcels.
bpost’scorporateunitsincludeFinance(excludingGSO),Legal/Regulatory/Corporate/M&A/StrategyandInternalAuditandsomecostsrelatedtotheemployeerelatedliabilitiesandprovisions.Thecostsofthecorporateunitsarenotrechargedtootherunitsandarereportedunderthecategory“Corporate”.
Thetwobusinessunits(MRSandP&L)arealsooperatingsegmentsforfinancialreportingpurposes.Operatingincomeatthelevelofeachofthesetwosegmentscapturesexternalsalestothirdparties.Thesumoftheoperatingincomeofthetwosegments,togetherwiththeoperatingincomeofthereconcilingcategory“Corporate”tiesinwithbpost’soperatingincome.bpostcomputesitsprofitfromoperatingactivities(EBIT)atthesegment.
TheoperatingsegmentsarethelowestlevelonwhichperformanceisassessedbytheChiefOperatingDecisionMaker(CODM)underthedefinitionofIFRS 8.22.TheCODMistheBoardofDirectorsandthekeyprofitorlossmeasureusedbytheCODMisEBIT.
ThetablebelowpresentstheevolutionperbusinessunitfortheyearsendedDecember 31,2018and2017:
TotaloperatingincomeattributabletotheMRSoperatingsegmentdecreasedbyEUR 22.2 millionin2018,mainlydrivenbytheunderlyingvolumedecreaseinDomesticmail(-5.8%)andthedecreaseofBankingandfinancialproductspartlyoffsetbytheimprovementofthepriceandmixofDomesticmailandtheincreaseofValueaddedServicesdrivenbythemanagementofcross-borderfinesonbehalfoftheBelgianState.
P&Loperatingincomeincreasedin2018byEUR 853.2 milliontoEUR 1,825.8 million.ThisincreasewasmainlyduetotheintegrationofRadial,excellentorganicvolumegrowthofDomesticParcels,
As at 31 December
Inmillion EUR 2018 2017
MRS 1,986.1 2,008.3
P&L 1,825.8 972.7
Total operating income of operating segments 3,811.9 2,981.0
Corporate(Reconcilingcategory) 38.3 42.9
Total operating income 3,850.2 3,023.8
whichnotedavolumegrowthof+23.3%drivenbye-commercegrowth,alongwiththeincreaseofInternationalParcelsandInternationalMail.
Inter-segmentsalesareimmaterial.Thereisnointernaloperatingincome.
Excludingtheremunerationreceivedtoprovidetheservicesasdescribedinthemanagementcontractandpressconcessions(seenotes 6.8 and6.34),nosingleexternalcustomerexceeded10%ofbpost’stotaloperatingincome.
Theevolutionperproductlinecanbesummarizedasfollows:
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 55
For the year ended 31 December
Inmillion EUR 2018 2017 Evolution2018-2017
Domestic mail 1,339.5 1,353.4 -1.0%
Transactional mail 809.3 807.9 0.2%
Advertisingmail 244.2 252.9 -3.4%
Press 286.0 292.6 -2.2%
Parcels 1,561.4 796.1 96.1%
Domestic parcels 262.3 224.2 17.0%
International parcels 242.9 222.6 9.1%
LogisticSolutions 1,056.2 349.2 -
Additional sources of revenues 911.0 831.5 9.6%
International mail 240.9 160.4 50.1%
Valueaddedservices 110.7 101.5 9.0%
Bankingandfinancialproducts 167.1 182.6 -8.5%
Distribution 101.0 98.1 3.0%
Retail & Other 291.4 288.9 0.9%
Corporate (Reconciling post) 38.3 42.9 -10.7%
Total operating income 3,850.2 3,023.8 27.3%
ThefollowingtablepresentstheoperatingincomefromexternalcustomersattributedtoBelgium,restofEurope,UnitedStatesofAmericaandrestoftheworldfromwhichbpostderivesitsoperatingincome.Theallocationoftheoperatingincomeoftheexternalcustomersisbasedonthelocationoftheentitygeneratingtheoperatingincome.
As at 31 December
Inmillion EUR 2018 2017 Evolution 2018-2017
Belgium 2,481.9 2,459.3 0.9%
Rest of Europe 252.5 175.3 44.1%
USA 1,064.4 323.6 228.9%
Restofworld 51 .5 65.7 -21.6%
Total operating income 3,850.2 3,023.8 27.3%
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 56
Thefollowingtablepresentsthenon-currentassets1 attributedtoBelgium,RestofEurope,UnitedStatesofAmericaandRestoftheworld.
As at 31 December
Inmillion EUR 2018 2017 Evolution 2018-2017
Belgium 703 .4 869.7 -19.1%
Rest of Europe 143.2 61.8 131.6%
USA 735 .1 688.0 6.8%
Restofworld 31.2 16.3 91.5%
Total non-current assets 1,612.9 1,635.9 -1.4%
ThefollowingtablepresentsEBITinformationaboutbpost’soperatingsegmentsfortheyearsendedDecember 31,2018 and2017:
As at 31 December
Inmillion EUR 2018 2017
MRS 368.1 435.4
P&L 35 .3 67.4
Total EBIT of operating segments 403.5 502.8
Corporate(Reconcilingcategory) (10.1) (9.9)
Total EBIT 393.4 492.9
TheEBITattributabletotheMRSoperatingsegmentdecreasedbyEUR 67.2 millionin2018asthelowerrevenuesforDomesticMailcouldnotbecompensatedbycostsavings.
TheEBITattributabletotheP&LoperatingsegmentdecreasedbyEUR 32.1 millioncomparedto2017,fromEUR 67.4 milliontoEUR 35.3 million.Therevenueincreasewasoutpacedbythecostincrease,partially
duetodepreciationatRadialwhichisimpactedbytheCAPEXinvestmentsfromthepast.
TheEBITattributabletotheCorporatereconciliationcategoryslightlydecreasedbyEUR 0.2 millionin2018.
ThefollowingtablepresentsEATinformationaboutbpost’soperatingsegmentsfortheyearsendedDecember 31,2018 and2017:
As at 31 December
Inmillion EUR 2018 2017
MRS 368.1 435.4
P&L 35 .3 67.4
Total EAT of operating segments 403.5 502.8
Corporate(Reconcilingcategory) (139.8) (179.8)
Total EAT 263.6 322.9
(1) Totalnon-currentassetsconsistoutofproperty,plantandequipment,intangibleassets,investmentpropertiesandtradeandotherreceivables(>1 year).
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 57
FinancialdetailsfortheyearendedDecember 31,2018 and2017onthecorporatesegment(reconciliationpost)areasfollows:
As at 31 December
Inmillion EUR 2018 2017
Operating income 38.3 42.9
Centraldepartments(Finance(excl.GSO),Legal,InternalAudit,CEO,…) (62.2) (64.3)
Other reconciliation items 13.8 11.6
Operating expenses (48.4) (52.7)
EBIT corporate (Reconciling category) (10.1) (9.9)
Shareofprofitofassociates 11 .5 9.6
FinancialResults (23.8) (13.7)
IncomeTaxexpense (117.4) (165.8)
EAT corporate (Reconciling category) (139.8) (179.8)
Financialincome,financialcosts,shareofprofitofassociatesandincometaxexpensesareallincludedinthereconcilingcategory“Corporate”.
AssetsandliabilitiesarenotreportedpersegmenttotheBoard.
6.8Revenue
For the year ended 31 December
Inmillion EUR 2018 2017
RevenueexcludingtheSGEIremuneration 3,502.9 2,702.2
SGEIremuneration 271.4 270.0
Total 3,774.4 2,972.2
Disclosuresconcerningthenature,theamount,timinganduncertaintyofrevenueandcashflowsarisingfromcontractswithcustomersrevenuescanbefoundbackinthesections:6.2 basisofpreparation(IFRS 15transition),6.4 summaryofsignificantaccountingpolicies(performanceobligations),6.7 segmentinformation(disaggregationofrevenue)and6.28 tradeandotherpayables(remainingperformanceobligation).Significantjudgementsaredisclosedwithinsection 6.3 significantaccountingjudgementsandestimates.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 58
6.9Otheroperatingincome
Gainsondisposalofproperty,plantandequipment,whichmainlyrelatetothesalesofbuildings,increasedbyEUR 14.6 million.Thisincreasecomparedtolastyearwasmainlyduetothesizeofthebuildingssold(e.g.OldBrusselsX).
ThirdpartycostsrecoverydecreasedbyEUR 1.7 millionandmainlyrelatestothereimbursementsbythirdpartiesofnon-ordinaryservicesprovidedbyUbiwayandothersubsidiariesaswellasthesalesrealizedbybpost’srestaurants.
OnDecember 20,2017 anamendmenttothesharepurchaseagreementofDynaGroupwasmadeforthepaymentofanacceleratedcontingentconsiderationbaseduponwhichbpostreversedoutoftheoutstandingliabilityanamountofEUR 7.9 million.In2018 anamountofEUR 3.6 millionwasreversedoutoftheoutstandingliabilityrelatedtothecontingentconsiderationofDynaGroupascertaincriteriawerenotachieved.Furthermorein2018bpostdecidedtoexittheparticipationindeBurenthroughtheputoptionforeseenintheinitialpurchasecontract,thistriggeredthereversalofthecontingentconsiderationwhichamountedtoEUR 14.6 million.
OtherRetailincomemainlyconsistedofnon-specificproductincomeintheretailchannel.
Othersourcesofoperatingincomemainlyconsistedofreimbursementsbythirdpartiestowardsbpostanditssubsidiariesandincomeofotherservicesprovidedbyitssubsidiaries.
For the year ended 31 December
Inmillion EUR 2018 2017
Gainondisposalofproperty,plantandequipment 30 .5 15.9
Benefitsinkind 0 .1 0.4
Rentalincomeofinvestmentproperty 2.0 1.1
Thirdpartycostrecovery 10 .3 12.0
Gainoncontingentconsiderations 18.2 7.9
Other Retail income 4.8 4.7
Other 9 .9 9.6
Total 75.8 51.6
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 59
6.10Otheroperatingexpense
For the year ended 31 December
Inmillion EUR 2018 2017
Provisions (17.2) (3.9)
Local,realestateandothertaxes 11 .5 5.1
Impairmentontradereceivables 10 .5 3.3
Penalties 0 .3 0.1
Other 4.8 1.0
Total 9.8 5.6
OtheroperatingexpensesincreasedbyEUR 4.2 millionversuslastyear.ExcludingtheintegrationofthenewsubsidiariesoperatingexpensesdecreasedbyEUR 7.3 million,mainlyduetothereversalofprovisions.
6.11Servicesandothergoods
ThecostofgoodsandservicesincreasedbyEUR 583.3 millionorEUR 74.8 millionexcludingtheintegrationofthenewsubsidiaries.Thisincreasewasmainlyduetoincreasedrentandrental
For the year ended 31 December
Inmillion EUR 2018 2017 Evolution2018-2017
Rentandrentalcosts 148.6 104.3 42.5%
Maintenanceandrepairs 108.3 86.9 24.6%
Energydelivery 45.9 40.7 12.7%
Othergoods 38.6 26.2 47.6%
Postalandtelecomcosts 21.2 8.9 137.3%
Insurance costs 19.7 11.8 67.7%
Transport costs 686.8 374.2 83.5%
Publicityandadvertising 24.4 18.7 30.6%
Consultancy 21.7 19.4 12.1%
Interimemployees 192.5 107.1 79.8%
Thirdpartyremuneration,fees 145.9 132.3 10.3%
Otherservices 102.6 42.4 142.0%
Total 1,556.2 972.8 60.0%
costs(EUR 11.0 million),maintenanceandrepairs(EUR 3.0 million),energycosts(EUR 4.4 million),insurancecosts(EUR 5.8 million),transportcosts(EUR 38.9 million)andotherservices(EUR 3.7 million).
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 60
6.12Payrollcosts
For the year ended 31 December
Inmillion EUR 2018 2017
Employeeremuneration 1,185.7 987.8
Socialsecuritycontribution 216.3 202.6
Definedbenefitanddefinedcontributionplans 13 .4 4.0
Other personnel costs 40 .3 12.2
Total 1,455.6 1,206.7
AsatDecember 31,2018,theheadcountofbpostamountedto34,074(2017:33,992)andwascomposedasfollows:
• Statutorypersonnel:9,509(2017:10,296) • Contractualpersonnel:24,565(2017:23,696)
TheaverageFTEnumberfor2018was31,201(2017:25,323).
• RentalcostshaveincreasedbyEUR 44.3 millionorexcludingtheintegrationofthenewsubsidiariesbyEUR 11.0 million,mainlyduetothenewBrusselssortingcenter(NBX)andthegrowingfleet.
• TheincreaseofmaintenanceandrepairsbyEUR 21.3 millionwasmainlycausedbytheintegrationofthenewsubsidiaries(EUR 18.3 million).
• EnergydeliverycostsincreasedbyEUR 5.2 millionorEUR 4.4 millionexcludingtheintegrationofthenewsubsidiaries,mainlyduetohigherfuelpricesandthegrowingfleet.
• TransportcostsamountedtoEUR 686.8 million,EUR 312.6 millionhighercomparedtopreviousyear,mainlyduetoscopechange(EUR 273.7 million),theevolutionofinternationalactivitiesandhigherdomesticparcelvolumes.
• Thegrowthininterimcostswasdrivenbytheintegrationofthenewsubsidiaries,seealsosectionpayrollcosts.
• OtherservicesincreasedbyEUR 60.2 millionmainlyduetotheintegrationofthenewsubsidiaries(EUR 56.5 million).
6.13Financialincomeandfinancialcost
ThefollowingamountshavebeenincludedintheIncomeStatementlineforthereportingperiodspresented:
For the year ended 31 December
Inmillion EUR 2018 2017
Financialincome 6.1 5.8
Financialcosts (29.9) (19.5)
Total (23.8) (13.7)
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 61
Financial income
For the year ended 31 December
Inmillion EUR 2018 2017
InterestincomefromfinancialassetsatfairvaluethroughP&L,designatedassuchuponinitialrecognition 0 .0 0.0
Interestincomefromfinancialassetsheldtomaturity 0 .0 0.0
Interestincomefromshorttermbankdeposits 0 .0 0.0
Interest income from current accounts 0 .4 0.1
Gainfromexchangedifferences 5 .1 5.0
Other 0.6 0.6
Financial income 6.1 5.8
Financial costs
For the year ended 31 December
Inmillion EUR 2018 2017
Financialcostsonbenefitobligations(IAS 19) 3 .0 6.0
Interest on loans 4 .7 0.7
Interestandcostsrelatedtolong-termbond 4 .4 0.0
Unwindingofpre-hedgeinterestswap 2.7 0.0
Lossfromexchangedifferences 8.4 5.7
Impairmentcurrent/financialassets 0 .1 0.1
Unwindingofdiscountandeffectofchangesindiscountrateoncontingentconsideration 1 .3 2.2
Otherfinancecosts 5 .4 4.8
Financial costs 29.9 19.5
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 62
Inmillion EUR 2018 2017
Tax expense using statutory tax rate 112.7 166.1
Profitbeforetax 381.0 488.7
Statutorytaxrate 29.58% 33.99%
Reconciling items between statutory and effective tax
Taxeffectofnontaxdeductibleexpenses 6.1 8.8
Notionalinterestsdeduction 0 .0 0.0
Taxeffectsprioryear (4.4) 0.5
Taxeffectoftaxlossesutilizedbysubsidiariesforwhichnodeferredtaxassetwasrecognizedinprioryear (1.8) (8.2)
Subsidiariesinlosssituationforwhichnodeferredtaxassetwasrecognized 11 .9 10.7
Associates(equitymethod) (3.4) (3.3)
Other:
Taxeffectofsubsidiaryliquidation 0 .0 (3.0)
Taxeffectofthechangesintaxrates 0 .0 7 .0
Otherdifferences (3.7) (12.8)
Total 117.4 165.8
Taxusingeffectiverate(currentperiod) (117.4) (165.8)
Profitbeforeincometax 381.0 488.7
Effectivetaxrate 30.8% 33.9%
Thereconciliationoftheeffectivetaxratewiththeaggregatedweightednominaltaxratecanbesummarizedasfollows:
6.14Incometax/ deferredtax
IncometaxesrecognizedintheIncomeStatementcanbedetailedasfollows:
As at 31 December
Inmillion EUR 2018 2017
Tax expense included:
Currenttaxexpenses (125.6) (145.0)
Adjustmentrecognizedinthecurrentyearinrelationtothecurrenttaxofprioryear 6.0 (0.5)
Deferredtaxexpenses 2.2 (20.3)
Total tax expense (117.4) (165.8)
In2018,theeffectivetaxratehasbeenpositivelyimpactedbytherecordoftaxdeductionsonprioryearbalance(EUR 4.4 million).
In2017,eXboNV/SAhasbeenliquidated,triggeringapositiveimpactofEUR 3.0 million.
AstheBelgianandUScorporatetaxreformshadbeensubstantiallyenactedbeforeDecember 31,2017bpostreassessedtheirdeferredtaxpositionunderIFRStakingintoconsiderationthesenewmeasures,thisledtoataxexpenseofEUR 7.0 millionin2017.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 63
As at 31 December
In million EUR 2018 2017
Deferred tax assets
Employeebenefits 0 .0 0.0
Provisions 0 .0 0.1
Taxlossescarriedforward 2.2 1.0
Other 0 .0 0.0
Total deferred tax assets 2.2 1.1
Deferred tax liabilities
Propertyplantandequipment 1 .3 1.3
Intangibleassets 8.3 11.2
Other (0.1) 0.8
Total deferred tax liabilities 9.5 13.4
Net deferred tax liability (7.3) (12.3)
DeferredtaxassetsrelatedtounusedtaxlossesforRadialhavebeenrecognizedperDecember 31,2018(EUR 39.4 million).
AsofDecember 31,2018,bpostrecognizedanetdeferredincometaxliabilityofEUR 7.3 million.The
As at 31 December
Inmillion EUR 2018 2017
Deferred tax assets
Employeebenefits 23.6 32.4
Provisions 6.2 9.0
Taxlossescarriedforward 41 .1 0.9
Other 29.5 15.8
Total deferred tax assets 100.3 58.0
Deferred tax liabilities
Propertyplantandequipment 31 .1 20.6
Intangibleassets 37 .7 5.9
Other 0 .0 0.1
Total deferred tax liabilities 68.8 26.5
Net deferred tax asset 31.5 31.5
Taxeffectofthepermanentdifferences(excludingnon-deductibleexpenses)isincludedin“Otherdifferences”caption.
Netdeferredtaxpositionsaredisclosedbylegalentity.
Forsomesubsidiariesbpostdidnotrecognizedeferredtaxassetsforunusedtaxlossescarriedforwardasit’suncertainthattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized.Inordertodeterminethis,bpostused
estimatesoftaxableincomebyjurisdictioninwhichbpostoperatesandtheperiodoverwhichdeferredtaxassetsarerecoverable.ThetaxlossesforwhichnodeferredtaxassetwasrecognizedinentitieslocatedinBelgiumcanbecarriedforwardindefinitely,whereasinsomeothercountriestherearelimitationsconcerningthecarryforward.
AsofDecember 31,2018,bpostrecognizedanetdeferredincometaxassetofEUR 31.5 million.Thisnetdeferredincometaxassetiscomposedasfollows:
decreaseinnetdeferredincometaxliabilitymainlyresultedfromthedepreciationsandimpairmentofintangibleassetsrelatedtothepurchasepriceallocation.Thenetdeferredtaxliabilityiscomposedasfollows:
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 64
numberofordinarysharesthatwouldbeissuedonconversionofallthedilutivepotentialordinarysharesintoordinaryshares.
Incaseofbpost,noeffectsofdilutionaffectthenetprofitattributabletoordinaryequityholdersandtheweightedaveragenumberofordinaryshares.
Thetablebelowreflectstheincomeandsharedatausedinthebasicanddilutedearningspersharecomputations:
6.15EarningspershareInaccordancewithIAS 33,thebasicearningspershareamountsarecalculatedbydividingnetprofitfortheyearattributabletoordinaryequityholdersoftheparentbytheweightedaveragenumberofordinarysharesoutstandingduringtheyear.
Dilutedearningspershareamountshavetobecalculatedbydividingthenetprofitattributabletoordinaryequityholdersoftheparent(afteradjustingfortheeffectsofalldilutivepotentialordinaryshares)bytheweightedaveragenumberofordinarysharesoutstandingduringtheyearplustheweightedaverage
For the year ended 31 December
Inmillion EUR 2018 2017
Net profit attributable to ordinary equity holders of the parent for basic earnings 264.8 324.9
Adjustmentsfortheeffectofdilution
Net profit attributable to ordinary equity holders of the parent adjusted for the effect of dilution 264.8 324.9
In million shares
Weighted average number of ordinary shares for basic earnings per share 200.0 200.0
Effectofdilution
Weighted average number of ordinary shares adjusted for the effect of dilution 200.0 200.0
In EUR
Basic,profitfortheyearattributabletoordinaryequityholdersoftheparent 1.32 1.62
Diluted,profitfortheyearattributabletoordinaryequityholdersoftheparent 1.32 1.62
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 65
6.16Property,plantandequipment
Inmillion EUR Landandbuildings
Plantandequipment
Furnitureand
vehicles
Fixturesand
fittings
Otherproperty,plantandequipment
Total
Acquisition cost
Balance at 1 January 2017 836.1 383.9 259.2 129.5 28.9 1,637.7
Acquisitions 0.6 30.8 27.7 22.9 14.7 96.7
Acquisitionsthroughbusinesscombinations 6.7 (0.2) 150.8 41.7 2.4 201.3
Disposals 0.0 (18.9) (15.9) (3.3) 0.3 (37.9)
Disposalsviabusinesscombinations 0.0 0.0 0.0 0.0 0.0 0 .0
Assetsclassifiedasheldforsaleorinvestmentproperty (18.6) 0.0 0.0 (0.5) 0.0 (19.1)
Exchangeratedifference (0.1) (0.4) (2.9) (0.5) 0.0 (3.9)
Othermovements 4.9 28.2 1.0 (5.2) (29.8) (0.9)
Balance at 31 December 2017 restated 829.6 423.4 419.8 184.5 16.4 1,873.9
Balance at 1 January 2018 restated 829.6 423.4 419.8 184.5 16.4 1,873.9
Acquisitions 1.6 25.6 33.0 26.8 1.9 88.9
Acquisitionsthroughbusinesscombinations 5.1 6.6 8.5 0.4 0.0 20.7
Disposals (64.1) (44.9) (16.9) (33.4) 0.0 (159.3)
Disposalsviabusinesscombinations 0.0 0.0 0.0 0.0 0.0 0 .0
Assetsclassifiedasheldforsaleorinvestmentproperty (43.7) (1.3) (1.7) (0.1) 0.0 (46.8)
Exchangeratedifference 0.1 (0.1) 6.6 1.0 0.1 7 .7
Othermovements (10.9) 0.6 0.5 16.6 (5.6) 1 .1
Balance at 31 December 2018 717.9 409.8 449.9 195.8 12.8 1,786.2
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 66
Inmillion EUR Landandbuildings
Plantandequipment
Furnitureand
vehicles
Fixturesand
fittings
Otherproperty,plantandequipment
Total
Revaluation
Balance at 1 January 2017 0.0 0.0 0.0 0.0 7.4 7.4
Assetsclassifiedasheldforsaleorinvestmentproperty 0.0 0.0 0.0 0.0 0.0 0 .0
Exchangeratedifference 0.0 0.0 0.0 0.0 0.0 0 .0
Othermovements 0.0 0.0 0.0 0.0 0.0 0 .0
Balance at 31 December 2017 0.0 0.0 0.0 0.0 7.4 7.4
Balance at 1 January 2018 0.0 0.0 0.0 0.0 7.4 7.4
Assetsclassifiedasheldforsaleorinvestmentproperty 0.0 0.0 0.0 0.0 0.0 0 .0
Exchangeratedifference 0.0 0.0 0.0 0.0 0.0 0 .0
Othermovements 0.0 0.0 0.0 0.0 0.0 0 .0
Balance at 31 December 2018 0.0 0.0 0.0 0.0 7.4 7.4
Depreciation and impairment losses
Balance at 1 January 2017 (475.4) (299.4) (222.8) (82.1) (3.7) (1,083.5)
Depreciationthroughbusinesscombinations (0.2) 2.0 (17.1) (1.3) 0.2 (16.3)
Disposals 0.0 18.8 15.8 3.3 0.0 37 .9
Depreciation (15.5) (21.5) (21.8) (20.6) 0.0 (79.3)
Impairment losses 0.0 0.0 (0.7) (0.2) 0.0 (0.9)
Assetsclassifiedasheldforsaleorinvestmentproperty 11.9 0.0 0.0 0.2 0.0 12.1
Exchangeratedifference 0.0 0.2 0.5 0.1 0.0 0.8
Othermovements (8.8) 1.5 (1.3) 9.6 (0.2) 0.8
Balance at 31 December 2017 restated (487.9) (298.4) (247.4) (91.0) (3.7) (1,128.5)
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 67
Inmillion EUR Landandbuildings
Plantandequipment
Furnitureand
vehicles
Fixturesand
fittings
Otherproperty,plantandequipment
Total
Balance at 1 January 2018 restated (487.9) (298.4) (247.4) (91.0) (3.7) (1,128.5)
Depreciationthroughbusinesscombinations (2.1) (2.2) (7.1) (0.1) 0.0 (11.5)
Disposals 43.6 44.5 16.9 29.5 0.0 134 .5
Disposalsthroughbusinesscombinations 0.0 0.0 0.0 0.0 0.0 0 .0
Depreciation (18.8) (23.4) (45.8) (23.9) 0.0 (111.9)
Impairment losses 1.7 (0.3) 0.1 0.4 0.0 1 .9
Assetsclassifiedasheldforsaleorinvestmentproperty 30.6 0.5 1.3 0.1 0.0 32.6
Exchangeratedifference 0.0 (0.1) (1.2) (0.1) 0.0 (1.4)
Othermovements 9.9 0.2 0.4 (11.8) 0.0 (1.3)
Balance at 31 December 2018 (423.0) (279.2) (282.9) (96.8) (3.7) (1,085.6)
Carrying amount
At31 December 2017restated 341.7 125.0 172.4 93.5 20.1 752.8
At31 December 2018 295.0 130.7 167.0 99.0 16.4 708.0
Property,plantandequipmenthavedecreasedbyEUR 44.8 millionfromEUR 752.8 milliontoEUR 708.0 million.Thisdecreasewasmainlyexplainedby:
• theintegrationofLeenMenkenFoodserviceLogistics,IMEX.,M.A.I.L.andActiveAntsforEUR 9.2 million;
• acquisitions(EUR 88.9 million)relatedtoproductionfacilitiesforsortingandprintingactivities(EUR 23.3 million),mailandretailnetworkinfrastructure(EUR 13.5 million),ATMandsecurityinfrastructure(EUR 1.7 million),transportationrelatedinfrastructure(EUR 36.9 million)andITandotherinfrastructure(EUR 13.5 million);
• depreciationandimpairmentamountingtoEUR 110.0 millionandhigherthanlastyear(2017:EUR 80.2 million);
• disposals-mainlyrelatedtosalesofbuildings-forEUR24.8million;
• transfertoassetsheldforsale(EUR 1.2 million)andtoinvestmentproperty(EUR 13.0 million).
Allamortizationanddepreciationchargesareincludedinthesection“Depreciation,amortization”oftheincome statement.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 68
6.17Investmentproperty
InvestmentpropertymainlyrelatestoapartmentslocatedinbuildingsusedaspostofficesandtherentofsomefloorsofBrusselscentraloffice.Investmentpropertiesarecarriedatacquisitioncostlessanyaccumulateddepreciationandlessanyimpairmentloss.Thedepreciationamountisallocatedonasystematicbasisoverusefullife(ingeneral40 years).
TherentalincomeoftheinvestmentpropertyamountedtoEUR 2.0 million(2017:EUR 1.1 million).TheestimatedfairvalueoftheinvestmentpropertyincreasedfromEUR 5.7 milliontoEUR 18.7 milliongiventheincreasednumberoffloorsoftheCentreMonnaiebuilding(ieheadoffice)beingrentedout.
Inmillion EUR Land and buildings
Acquisition cost
Balance at 1 January 2017 18.2
Acquisitions 0.0
Transferfrom/tootherassetcategories (0.5)
Balance at 31 December 2017 17.6
Balance at 1 January 2018 17.6
Acquisitions 0.0
Transferfrom/tootherassetcategories 43.7
Balance at 31 December 2018 61.3
Depreciation and impairment losses
Balance at 1 January 2017 (12.0)
Depreciations (0.1)
Transferfrom/tootherassetcategories 0.2
Balance at 31 December 2017 (11.9)
Balance at 1 January 2018 (11.9)
Depreciations (0.1)
Transferfrom/tootherassetcategories (30.5)
Balance at 31 December 2018 (42.6)
Carrying amount
At31December2017 5.7
At31December2018 18.7
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 69
6.18Assetsheldforsale
As at 31 December
Inmillion EUR 2018 2017
Assets
Property,plantandequipment 0 .0 0.6
Alvadis 12.1 0.0
deBuren 2.6 0.0
Assets held for sale 14.7 0.6
Liabilities
Alvadis (7.8) 0.0
deBuren (3.0) 0.0
Liabilities directly linked to assets held for sale (10.8) 0.0
Property, plant and equipmentIn2018,assetsheldforsaledecreasedfromEUR 0.6 milliontoEUR 0.0 million.
Thenumberofbuildingsrecognizedinassetsheldforsaleamountedto3attheendof2017versus1attheendof2018.Themajorityoftheseassetsareretailoutletswhicharevacantasaconsequenceoftheoptimizationofthepostofficesandmailcenternetwork.
ProfitsondisposalofEUR 30.5 million(2017:EUR 15.9 million)wereaccountedforintheincomestatementinthesectionotheroperatingincome.In2018,EUR 2.1 millionofimpairmentchargeswererecordedinthesectiondepreciation,amortization.
AlvadisOnDecember 3,2018bpostdecidedtostartupthesalesprocessofAlvadisNV/SA,asubsidiaryofUbiwayNV/SAandAMPNV/SA.
Alvadisprovidesprepaidcards,vouchersandelectronicservicessolutionsforpointsofsale.ThesaleofAlvadisisexpectedtobecompletedwithinayearfromthereportingdate,subjecttoregulatoryapproval.AtDecember 31,2018Alvadis–partoftheMRSoperatingsegment-wasclassifiedasheldforsale.
ThemajorclassesofassetsandliabilitiesofAlvadisclassifiedasheldforsaleareasfollows:
As at 31 December
Inmillion EUR 2018
Assets
Property,plantandequipment 0 .3
Intangibleassets 0 .1
Longtermtradeandotherreceivables 0 .0
Inventories 2.7
Shorttermtradeandotherreceivables 8.5
Cashandcashequivalents 0 .5
Assets held for sale 12.1
Liabilities
Longterminterest-bearingloansandborrowings 0 .0
Deferredtaxliabilities 0 .1
Provisions 0 .0
Shorttermtradeandotherpayables (7.9)
Liabilities directly linked to assets held for sale (7.8)
Net assets directly associated with disposal group 4.3
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 70
Followingtheclassificationtoassetsheldforsale,theintangibleassets(brandnameandcustomerrelationship)originatingfromthepurchasepriceallocationwerewritten-down(EUR 1.0 million)toreducethecarryingamountoftheassetstotheirfairvaluelesscoststosellbaseduponabindingsalesagreement(classifiedaslevel1inthefairvaluehierarchy).Nofurtherwrite-downwasnecessary.
de BurenOnDecember 3,2018bpostdecidedtostartuptheexitintheparticipationindeBurenInternationaalBV,whichoperatesanopennetworkofparcellockersin
theNetherlands,throughtheputoptionforeseenintheinitialpurchasecontract.ThisputoptionallowedbposttoselltheirparticipationindeBurentotheminorityshareholders.ThistransactionwascompletedonFebruary 21,2019.HenceatDecember 31,2018deBuren–partoftheP&Loperatingsegment-wasclassifiedtoheldforsale.
ThemajorclassesofassetsandliabilitiesofdeBurenclassifiedasheldforsaleareasfollows:
As at 31 December
Inmillion EUR 2018
Assets
Property,plantandequipment 0 .9
Intangibleassets 0 .9
Deferredtaxassets 0 .0
Longtermtradeandotherreceivables (0.2)
Inventories 0.8
Shorttermtradeandotherreceivables (0.1)
Cashandcashequivalents 0 .3
Assets held for sale 2.6
Liabilities
Longterminterest-bearingloansandborrowings (1.7)
Deferredtaxliabilities (0.1)
Provisions 0 .0
Shorttermtradeandotherpayables (1.2)
Liabilities directly linked to assets held for sale (3.0)
Net assets directly associated with disposal group (0.4)
Thedivestmentofthe51%stakeindeBurentriggeredthereversalofthecontingentconsiderationwhichamountedtoEUR 14.6 millionasbpostwasliberatedfromanycontingentconsiderationorothersimilarobligation.Thishasbeenreleasedwithinotheroperatingincome(seenote 6.9).Followingtheclassificationtoassetsheldforsale,theintangibleassets(know-how)originatingfromthepurchasepriceallocationwerewritten-down(EUR 5.6 million)aswellasthegoodwill(EUR 4.2 million)toreducethecarryingamountoftheassetstotheirfairvaluelesscosts to sell.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 71
6.19Intangibleassets
Inmillion EUR Goodwill Development Software Otherintangibleassets Total
Acquisition cost
Balance at 1 January 2017 199.2 101.2 129.1 38.7 468.1
Acquisitions 606.4 16.4 8.0 0.2 631.0
Acquisitionsandadditionsthroughbusiness combinations (132.3) 0.5 37.6 144.5 50 .3
Disposals 0.0 0.0 (2.5) (0.3) (2.7)
Disposalsviabusinesscombinations 0.0 0.0 0.0 0.0 0 .0
Assetsclassifiedasheldforsaleorinvestmentproperty 0.0 0.0 0.0 0.0 0 .0
Exchangeratedifference (8.1) 0.0 (1.7) 3.0 (6.7)
Othermovements (0.6) (1.6) 3.8 (0.7) 0 .9
Balance at 31 December 2017 restated 664.6 116.5 174.4 185.4 1,140.9
Balance at 1 January 2018 restated 664.6 116.5 174.4 185.4 1,140.9
Acquisitions 0.0 12.7 13.5 0.4 26.5
Acquisitionsandadditionsthroughbusiness combinations 3.0 0.0 0.2 3.2 6.4
Disposals 0.0 (8.7) (5.7) (3.2) (17.7)
Disposalsviabusinesscombinations 0.0 0.0 0.0 0.0 0 .0
Assetsclassifiedasheldforsaleorinvestmentproperty (4.2) (1.2) (10.0) (2.5) (17.8)
Exchangeratedifference 21.6 0.0 1.6 (0.6) 22.6
Othermovements (1.5) 0.3 (1.3) 1.4 (1.1)
Balance at 31 December 2018 683.6 119.6 172.6 184.0 1,159.8
Depreciation and impairment losses
Balance at 1 January 2017 (24.8) (79.4) (110.8) (28.8) (243.8)
Acquisitionsandadditionsthroughbusiness combinations 0.0 (0.6) 0.9 15.6 15 .9
Disposals 0.0 0.0 2.5 0.3 2.7
Disposalsthroughthesaleofsubsidiaries 0.0 0.0 0.0 0.0 0 .0
Depreciation 0.0 (5.5) (13.8) (5.8) (25.1)
Impairment losses 0.0 0.0 0.0 0.0 0 .0
Assetsclassifiedasheldforsaleorinvestmentproperty 0.0 0.0 0.0 0.0 0 .0
Exchangeratedifference 0.0 0.0 0.5 0.0 0 .5
Othermovements 0.0 (1.2) 0.4 0.0 (0.8)
Balance at 31 December 2017 restated (24.8) (86.6) (120.3) (18.8) (250.6)
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 72
IntangibleassetsdecreasedbyEUR 15.4 million,mainlydueto:
• amortizationandimpairmentsamountingtoEUR 67.8 millionincludingimpairmentofEUR 16.3 millionongoodwillofdeBuren,CertipostandBubblePost;
• partiallycompensatedbytheacquisitionofLeenMenkenFoodserviceLogistics,IMEX,M.A.I.L.andActiveAntsforEUR 5.3 million;
• theevolutionoftheexchangerate(EUR21.6million)and
• investmentsinsoftwareandlicenses(EUR 13.5 million),developmentcostscapitalized(EUR 12.7 million)andotherintangibleassets(EUR 0.4 million).
Allamortizationanddepreciationchargesareincludedinthesection“Depreciation,amortization”oftheincome statement.
Businesscombinationsareaccountedforusingtheacquisitionmethod.Thecostofanacquisitionismeasuredastheaggregateoftheconsiderationtransferredmeasuredatacquisitiondatefairvalueandtheamountofanynon-controllinginterestsintheacquiredentity.
Goodwillisinitiallymeasuredatcost,beingtheexcessoftheaggregateoftheconsiderationtransferredoverthenetidentifiableassetsacquiredandliabilitiesassumed.
Afterinitialrecognition,goodwillismeasuredatcostlessanyaccumulatedimpairmentlosses.
Forthepurposeofimpairmenttesting,goodwillisallocatedtoeachoftheGroup’scash-generatingunits(orgroupsofcash-generatingunits)inaccordancewithIAS 36Impairment of assets.
Until2017,thegoodwillwithinbposthasbeenallocatedtocash-generatingunitsinlinewiththeacquiredbusinesscombinations.PerDecember 31,2017thecarryingvalueofthegoodwillamountedtoEUR 639.8 millionandmainlyrelatedtoacquisitionssuchasRadial(EUR 430.2 million),DynaGroup(EUR 73.6 million),Ubiway(EUR 50.2 million),deBuren(EUR 4.2 million),BubblePost(EUR 11.6 million),LandmarkGlobalInc.(EUR 18.1 million),FDM(EUR 16.3 million)andotherindividualimmaterialgoodwillforEUR 35.6 million.Theimpairmenttestsofthecash-generatingunitsinlinewiththeacquiredbusinesscombinationsdidnotleadtoanyimpairmentof assets.
In2018,bpostreorganizeditssegmentset-uptoenhancestrategiccoherenceandimprovealignment.Asaresult,thecompositionoftheCGUchangedandgoodwillhasbeenreallocatedtotheunitsaffected.
Inmillion EUR Goodwill Development Software Otherintangibleassets Total
Depreciation and impairment losses
Balance at 1 January 2018 restated (24.8) (86.6) (120.3) (18.8) (250.6)
Acquisitionsandadditionsthroughbusiness combinations (0.2) 0.0 (0.1) (0.8) (1.1)
Disposals 0.0 8.7 5.6 3.2 17 .4
Disposalsviabusinesscombinations 0.0 0.0 0.0 0.0 0 .0
Depreciation 0.0 (8.5) (22.0) (14.6) (45.0)
Impairment losses (16.3) 0.1 (5.6) (1.0) (22.8)
Assetsclassifiedasheldforsaleorinvestmentproperty 4.2 0.7 10.0 2.0 16.8
Exchangeratedifference 0.0 0.0 (1.0) 0.1 (1.0)
Othermovements 0.3 (0.2) 0.0 1.2 1 .3
Balance at 31 December 2018 (36.7) (85.9) (133.4) (28.8) (284.8)
Carrying amount
At31 December 2017restated 639.8 29.9 54.1 166.6 890.4
At31 December 2018 646.8 33.7 39.2 155.2 874.9
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 73
inmillion EUR 2017restated
Acquisi-tions&di-vestments
Transfer ImpairmentCurrency
translation differences
2018
Former business combinations:
BubblePost 11.6 (7.3) 0.0 (4.2) 0.0 0 .0
Certipost 7.9 0.0 0.0 (7.9) 0.0 0 .0
Ubiway 50.2 0.0 (50.2) 0.0 0.0 0 .0
DynaGroup 73.6 0.0 (73.6) 0.0 0.0 0 .0
CGU, to which goodwill is allocated as from 2018:
Press 0.0 0.0 21.9 0.0 0.0 21.9
Proximityandconvenienceretailnetwork 0.0 0.0 28.3 0.0 0.0 28.3
Valueaddedservices 0.9 0.0 0.0 0.0 0.0 0 .9
ParcelsBeNe 5.6 0.0 36.9 (4.2) 0.0 38.3
E-commercelogisticsEurope&Asia 8.9 6.0 36.8 0.0 0.0 51 .7
Cross-Border 0.5 0.0 0.0 0.0 0.0 0 .5
E-commercelogisticsNorthAmerica 472.9 0.0 0.0 0.0 20.4 493 .3
International Mail 7.8 4.2 0.0 0.0 0.0 12.0
Total 639.8 2.9 0.0 (16.3) 20.4 646.8
TheCGU“Press”regroupsallactivitiesrelatedtopressdistributionandincludesapartoftheformerbusinesscombinationUbiway.TheCGU“Proximityandconvenienceretailnetwork”includesthebpostandUbiwayretailnetworks.“ParcelsBene”combineslastmileparceldeliveryofbpostNV/SAandtheformerbusinesscombinationsCitydepotandDynaGroup(partially).TheCGU“E-commercelogisticsEurope&Asia”combinestheformerbusinesscombinationsofDynaGroup(partially),LandmarkNetherlands&Poland,thenewlyacquiredcompaniesLeenMenkenandAnthill,togetherwithecommerceactivitiesofbpostNV/SAandRadialEurope.E-commercelogisticsNorth America consists of the former business combinationsRadialUS,LandmarkUS,AppleExpressandFDM.InternationalMailincludestheformerbusinesscombinationsofMSIanditsnewlyacquiredsubsidiariesImexandM.A.I.L..
GoodwillofBubblePost(7.3 million EUR)wasadjustedasaresultofthefinalizationofthepurchasepriceallocation(seenote 6.6businesscombinations).InlinewithIFRS 3businesscombinationadjustmentscanbemadewithinthemeasurementperiod,themeasurementperiodcannotexceedoneyearfromtheacquisitiondate.FurthermorebpostrecognizedanimpairmentforEUR8.4millionbecausebpostdecidedtoselldeBurenandstoptheactivitiesofBubblePostandthefairvaluelesscoststosellwaslowerthanthecarryingvalue.ThegoodwillofCertipost(EUR 7.9 million)hasbeenimpairedastherecoverableamountisnotsupportedanymorebythevalueinuseasthephaseoutofthecurrenteIDcardswillleadtoazerocashflow.
Goodwillisnotamortizedbutistestedforimpairmentonanannualbasis(December 2018).Thetestconsistsofcomparingthecarryingamountoftheassets(orgroupsof)CGU’swiththeirrecoverableamount.
Therecoverableamountsarebasedonthevalueinuse.ThelatterequalsthepresentvalueofthefuturecashflowsexpectedtobederivedfromeachCGUorgroupofCGUandisdeterminedusingthefollowinginputs:
• businessplanandbudgets(includingEBITDA)approvedbyseniormanagement,whichcoversafouryearperiod;
• considerationofaterminalvaluedeterminedfromthecashflowsobtainedbyextrapolatingthecashflowsofthelastyearofthebusinessplanreferredtoabove,affectedbyalong-termgrowthratedeemedappropriatefortheactivityandthelocationoftheassets;
• discountingofexpectedcashflowsataratedeterminedusingtheweightedaveragecostofcapital formula.
Thediscountrateisestimatedbasedonanextensivebenchmarkingwithpeers,soastoreflectthereturninvestorswouldrequireiftheyweretochooseaninvestmentintheunderlyingassets.Asfrom2018,thepeergroupwasdividedintomailrelatedpeersandparcelsrelatedpeers.Besidesthis,thedifferenteconomicenvironmentwasalsofactoredinthedeterminationoftheweightedaveragecostofcapital(WACC).Asaresult,theWACCusedtodiscountfuturecashflowsvariesbetween6.6%and8.4%in2018,whilein2017 anaverageof7.7%wasused.Long-termgrowthratewassetat0%formailactivitiesand2%forparcelsactivities(in2017ingeneral0%).
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 74
As at 31 December
Inmillion EURE-commerce
Logistics North America
E-commerce Logistics Europe &
AsiaParcels Bene
Sensitivitytolong-termgrowthrate-1% (130.2) (41.5) (87.0)
Sensitivitytolong-termgrowthrate+1% 179.6 64.6 135.5
Sensitivitytodiscountrate-0.5% 92.4 31.5 66.2
Sensitivitytodiscountrate+0.5% (78.7) (25.3) (53.2)
SensitivitytoEBITDAmargin-1.0% (171.5) (34.6) (76.0)
SensitivitytoEBITDAmargin+1.0% 171.5 34.6 76.0
6.20 Lease
Finance leaseThefinanceleaseliabilitiesasofDecember 31,2018relatetoleasedbuildings,machineryandequipment.
Thenetcarryingamountandusefullivesoftheleasedassetsareasfollows:
Inmillion EUR Usefullives CarryingamountDec31,2018
LandandBuildings 25 years 14.6
Machineryandequipment 5 years 2.2
Vehicles 5 years 0.0
Thefutureminimumfinanceleasepaymentsattheendofeachreportingperiodunderreviewwereasfollows:
Anunfavorablechangeingrowthrate,discountrateorEBITDAmarginasdisclosedaboveisnotexpectedtoresult in an impairment.
TheimpairmenttestsperformedatCGUleveldidnotleadtoanyimpairmentofassets,astherecoverableamountsofthe(groupsof)CGUsweresignificantlyhigherthantheircarryingamounts.Morespecifically,thedifferencebetweentheCGU’scarryingamountandtheirvalueinuse(headroom)representsinallcasesatleastmorethan42%oftheircarryingamount.Assuch,areasonablechangeinakeyassumptiononwhichtherecoverableamountoftheCGU’sisbasedwouldnotresultinanimpairmentlossfortherelatedCGU’s.
Inthisrespect,forE-commerceLogisticsNorthAmerica,E-commerceEurope&AsiaandParcelsBene,whicharethe3CGU’swhichrepresent90%ofthetotalamountofgoodwill,theworstcasesensitivityanalysisbelowleadstoheadroomthatisstillmorethan18%oftheirrespectivecarryingamounts.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 75
As at 31 December
Inmillion EUR 2018 2017
Minimum lease payments
Within1year 3 .0 1.7
1to5years 8.7 11.1
Morethan5years 17 .0 19.0
Total 28.7 31.7
Less
Future finance costs 10.6 10.6
Present value of the minimum lease payments
Within1year 1.6 1.7
1to5years 4 .1 7.5
Morethan5years 12.5 11.9
Total 18.3 21.1
For the year ended 31 December
Inmillion EUR 2018 2017
Lessthanoneyear 100.8 115.5
Betweenoneyearandfiveyears 232.4 303.0
Morethanfiveyears 128.1 235.3
Total 461.3 653.8
For the year ended 31 December
Inmillion EUR 2018 2017
Lessthanoneyear 1 .3 2.1
Betweenoneyearandfiveyears 3 .7 4.8
Morethanfiveyears 2.9 2.1
Total 7.9 9.0
Theincomethatisrelatedtooperationalleaseagreementsisrecognizedinthesection“Otheroperatingincome”foranamountofEUR 2.0 millionin2018.
Operating Leasebpost’sfutureminimumoperatingleasepaymentsareasfollows:
Theoperationalleaseagreementsincludefixedleasepayments.Therisksandrewardsincidentaltotheownershiparenottransferredtobpost.
ThedecreaseofthefutureoperatingleasescomparedtolastyearwasmainlyduetoachangeaspartoftheadoptionofIFRS 16,whichwillbeapplicableas
ofJanuary 1,2019.Theoutstandingbalance2018isinlinewiththescopetobeusedasofJanuary 1,2019intheframeworkofIFRS 16(excludinganyimpactofdiscounting).
bpost’sfutureminimumoperatingleaseincomeisasfollowsandrelatestobuildings:
Thefinancialleaseagreementsincludefixedleasepaymentsandapurchaseoptionattheendofleaseterm.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 76
6.21Investmentinsecurities
Inmillion EURTotal non
current investments
Financialassetsheldto
maturity
Total current investments Total
Acquisition cost
Balance at 1 January 2017 0.0 12.0 12.0 12.0
Acquisitions 0.0 0.0 0.0 0 .0
Acquisitionsthroughbusinesscombinations 0.0 0.0 0.0 0 .0
Changesinfairvalue 0.0 0.0 0.0 0 .0
Disposals 0.0 (12.0) (12.0) (12.0)
Balance at 31 December 2017 0.0 0.0 0.0 0.0
Balance at 1 January 2018 0.0 0.0 0.0 0.0
Acquisitions 0.0 0.0 0.0 0 .0
Acquisitionsthroughbusinesscombinations 0.0 0.0 0.0 0 .0
Changesinfairvalue 0.0 0.0 0.0 0 .0
Disposals 0.0 0.0 0.0 0 .0
Balance at 31 December 2018 0.0 0.0 0.0 0.0
Impairment losses
Balance at 1 January 2017 0.0 0.0 0.0 0.0
Othermovements 0.0 0.0 0.0 0 .0
Balance at 31 December 2017 0.0 0.0 0.0 0.0
Balance at 1 January 2018 0.0 0.0 0.0 0.0
Othermovements 0.0 0.0 0.0 0 .0
Balance at 31 December 2018 0.0 0.0 0.0 0.0
Carrying amount
At31December2017 0.0 0.0 0.0 0 .0
At31December2018 0.0 0.0 0.0 0 .0
Theinvestmentsecuritiesthatmeetthedefinitionofcash&cashequivalentsasdefinedbyIAS 7 arereportedincash&cashequivalent.Asper
December 31,2018bpostholdsnoinvestmentsecurities.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 77
6.22Investmentinassociates
Inmillion EUR 2018 2017
Balance at 1 January 329.2 373.7
Acquisition/Disposal 0 .0 (0.3)
Shareofprofit 11 .5 9.6
Dividendreceived (4.0) (11.8)
ImpactofIFRS 9ontransition (59.9) 0.0
Othermovementsinequityofassociates (25.5) (42.1)
Balance at 31 december 251.2 329.2
Share of profit/lossIn2018,bpost’sshareintheprofitofbpostbankamountedtoEUR 11.5 million.Lastyear,theshareofprofitinbpostbankandCitieamountedtoEUR 9.6 million.
Dividends receivedIn2018,bpostreceivedadividendofEUR 4.0 millionfrombpostbank.In2017bpostreceivedadividendofEUR 11.8 millionfrombpostbank.
Impact of IFRS 9 on transitionAsofJanuary 1,2018,IAS 39FinancialInstruments:RecognitionandMeasurementwasreplacedby
IFRS 9 FinancialInstruments.AtthetransitiontoIFRS 9bpostbankreclassifiedamajorpartofitsbondportfoliofromIAS 39available-for-salecategorytoIFRS 9amortizedcostcategory.Thisresultedinadecreaseofbpostbank’sequitybyEUR 119.8 millionandconsequentlybpost’sinvestmentinassociatesandtherelatingreservesdecreasedby50%ofthisamountsoEUR 59.9 milliononthetransitiondatetoIFRS 9.
Other movementsTheamountrepresentsthedecreaseinunrealizedgains,netoftaxes,onbpostbank’sbondportfolio(EUR 25.5 million).
Anoverviewoftheselectedfinancialfiguresoftheassociatesispresentedinthefollowingtables.
Inmillion EUR Ownership Total assetsTotal
liabilities (excl.Equity)
Revenues Profit/(loss)
2017
bpost bank 50% 10,658.2 9,999.9 273.2 19.9
Citie 0% 0.0 0.0 0.2 (1.1)
2018
bpost bank 50% 11,045.3 10,542.9 265.7 22.9
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 78
6.23Tradeandotherreceivables
As at 31 December
Inmillion EUR 2018 2017restated 2017
Tradereceivables 0 .0 0.0 0.0
Otherreceivables 11.2 9.4 9.4
Non current trade and other receivables 11.2 9.4 9.4
As at 31 December
Inmillion EUR 2018 2017restated 2017
Tradereceivables 646.0 624.4 628.9
Taxreceivables,otherthanincometax 6.1 8.0 8.0
Otherreceivables 59 .9 82.5 82.5
Current trade and other receivables 712.0 714.9 719.4
As at 31 December
Inmillion EUR 2018 2017restated 2017
Accruedincome 8.3 6.8 6.8
Deferredcharges 45 .7 41.5 41.5
Otherreceivables 5 .9 34.3 34.3
Current - other receivables 59.9 82.5 82.5
Thenon-currentreceivablesareconsideredasareasonableapproximationofthefairvalueofthisfinancialasset,asitisexpectedtobepaidwithinashorttimeframe,makingtheimpactofthetimevalueofmoneynotsignificant.
CurrenttradeandotherreceivablesareinlinewithlastyearandslightlydecreasedbyEUR 2.9 milliontoEUR 712.0 million(2017:EUR 714.9 million),drivenbyariseintradereceivablesofEUR 21.6 millioncompensatedbythedecreaseofotherreceivablesofEUR 22.6 milliongivenlastyear’soutstandingreceivablerelatedtothepurchaseofRadial.
TaxreceivablesrelatetotheoutstandingVATamountstobereceived.
Tradeandotherreceivablesaremainlyshort-term.Thecarryingamountsareconsideredtobeareasonableapproximationofthefairvalue.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 79
6.24Inventories
As at 31 December
Inmillion EUR 2018 2017
Rawmaterials 2.3 2.2
Finishedproducts 6.2 6.2
Goodspurchasedforresale 29.2 35.8
Reductionsinvalue (0.8) (5.1)
Inventories 36.9 39.1
6.25Cashandcashequivalents
As at 31 December
Inmillion EUR 2018 2017
Cashinpostalnetwork 151.2 171.7
Transit accounts 107 .0 83.8
Cashpaymenttransactionsunderexecution (39.4) (19.2)
Bankcurrentaccounts 461.4 229.7
Shorttermdeposits 0 .0 0.0
Cash and cash equivalents 680.1 466.0
Rawmaterialsincludeconsumables,i.e.materialsusedforprintingpurposes.Finishedproductsarestampsavailableforsale.Goodspurchasedforresalemainlyincludepostograms,postcards,suppliesforresale,pressdistributioninventoryandretailinventory(tobacco,beverage,multimedia, …).
Bankcurrentaccountsearninterestatfloatingratesbasedondailybankdepositrates.Shorttermdepositsaremadeforvaryingperiodsofonedaytothreemonths,dependingonimmediatecashrequirementsandearninterestattherespectiveshort-termdepositrates.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 80
6.26Financialliabilities
Inmillion EUR 2017 2017restated
Cashflows
Non-cashchanges
2018Foreignexchange
movement
Newleases
Acqui-sitions
business combina-
tions
Fairvalue
changesTransfer Other
Financial liabilities measured at amortized cost
Bankloans 36.7 36.7 158.8 2.7 0 .0 0 .0 0 .0 (9.2) 0 .4 189.6
Long-termbond 0.0 0.0 641.3 0 .0 0 .0 0 .0 0 .0 0 .0 0 .5 641.8
Other loans 2.2 2.2 (0.8) (0.1) 0.8 0 .4 0 .0 0 .1 (1.7) 1 .0
Financeleaseliabilities 19.4 16.5 (1.7) 0.8 0 .0 0.8 0 .0 (0.7) 1 .0 16.7
Non current liabilities 58.4 55.4 797.7 3.4 0.8 1.2 0.0 (9.8) 0.3 849.1
Non-currentinterest-bearingloansandborrowingsincreasedbyEUR 793.6 milliontoEUR 849.1 millionmainlyduetotheissuanceofaEUR 650.0 million8-yearbondwithacouponof1.25%andaUSDtermloanofUSD 185.0 millionwithanenddateinJuly 2021(possibleextensionuntilJuly 2023)andafloatingratestructure.ThesetransactionsservedtorefinancetheNovember 2017acquisitionofRadial
Inmillion EUR 2017 2017restated
Cashflows
Non-cashchanges
2018Foreignexchange
movement
Newleases
Acqui-sitions
business combina-
tions
Fairvalue
changesTransfer Other
Financial liabilities at amortized cost
Bankloans 698.1 698.1 (700.9) 0 .0 0 .0 0 .9 0 .0 9.2 1.2 8.6
Commercialpapers 0.0 0.0 165.1 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 165.1
Other loans 0.1 0.1 (2.2) 0 .5 0 .0 2.7 0 .0 (0.1) (0.7) 0 .4
Financeleaseliabilities 1.7 1.7 (1.6) 0 .0 0 .0 0 .7 0 .0 0 .7 0 .0 1.6
Current liabilities 699.9 699.9 (539.5) 0.5 0.0 4.4 0.0 9.8 0.5 175.7
Currentinterest-bearingloansandborrowingsdecreasedbyEUR 524.2 milliontoEUR 175.7 millionduetothereimbursementofthebridgeloanenteredin2017tobuyRadial.Thebridgeloanhasbeenrefinancedviatheissuanceofabondandatermloan(bothwithinnon-currentliabilities).ThisdecreasedwaspartiallyoffsetbytheissuanceofsomecommercialpapersforEUR 165.1 million.
Notethatthetotalofthecolumns“cashflow”mentionedinthetwotablesaboveamountedtoEUR 258.2 million,while“thenetflowsrelatedto
Holdings,LP.bpostborrowedapartinUSDtomitigatetheriskonforeignexchangeratedifferencesontheforeignoperation,hencebpostperformedanetinvestmenthedge.ThisincreasewaspartiallyoffsetbyadecreaseofEUR 9.1 millioncorrespondingtotheportionoftheloanoftheEuropeanInvestmentBanktransferredtocurrentliabilities.
borrowingsandfinancingleaseliabilities”intheconsolidatedstatementofcashflowamountedtoEUR 254.2 million.ThedifferenceofEUR 3.96 millionwasmainlyduetointerestsbookedonthetradeandotherpayableaccounts,whicharenotbeingdisclosedin this note.
NotefurthermorethatbpostalsohastwoundrawnrevolvingcreditfacilitiesforatotalamountofEUR 375.0 million,seenote 6.33“rightsandcommitments”.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 81
6.27Employeebenefitsbpostgrantsitsactiveandretiredpersonnelpost-employmentbenefits,long-termbenefits,otherlongtermbenefitsandterminationbenefits.ThesebenefitplanshavebeenvaluedinconformitywithIAS 19.SomeofthemoriginatefrommeasuresnegotiatedintheframeworkofCollectiveLaborAgreements(‘CLA’).Thebenefitsgrantedundertheseplansdiffer
dependingonthecategoriesofbpost’semployees:civilservants(alsoknownasstatutoryemployees),payscalecontractualemployees,auxiliaryagentsandnon-payscalecontractualemployees.
Theemployeebenefitsareasfollows:
As at 31 December
Inmillion EUR 2018 2017
Post-employmentbenefits (32.8) (50.7)
Long-termemployeebenefits (113.5) (108.2)
Terminationbenefits (8.5) (6.6)
Otherlong-termbenefits (153.5) (161.5)
Total (308.4) (326.9)
Netofthedeferredtaxassetsrelatedtothem,employeebenefitsamounttoEUR 284.8 million(2017:EUR 294.5 million).
As at 31 December
Inmillion EUR 2018 2017
Employeebenefits (308.4) (326.9)
Deferredtaxassetsimpact 23.6 32.4
Employee benefits net of deferred tax (284.8) (294.5)
bpost’snetliabilityforemployeebenefitscomprisesthefollowing:
As at 31 December
Inmillion EUR 2018 2017
Presentvalueoftotalobligations (373.7) (380.3)
Fairvalueofplanassets 65.3 53.4
Present value of net obligations (308.4) (326.9)
Unrecognizedactuarial(gains)/losses
Net liability (308.4) (326.9)
Employeebenefitsamountsinthestatementoffinancialposition 0 .0 0.0
Liabilities (308.4) (326.9)
Net liability (308.4) (326.9)
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 82
Thechangesinthepresentvalueoftheobligationsareasfollows:
Inmillion EUR 2018 2017
Present value at 1 January (380.3) (401.2)
Servicecosts (16.3) (4.5)
-Currentservicecost (22.0) (23.1)
-Terminationexpenses (5.2) 0.0
-Pastservice(cost)/gain 10 .9 18.6
Net interest (4.9) (5.5)
Benefitspaid 27.9 36.2
Re-measurementgainsand(losses) 6.3 (1.8)
-Actuarialgainsand(losses)recognizedinIncomeStatement 6.3 (1.8)
Re-measurementgainsand(losses)inothercomprehensiveincome (0.8) 3.9
-Actuarialgainsand(losses) (0.8) 3.9
SettlementContribution 0 .0 10.0
Additionthroughbusinesscombinations 0 .0 (17.4)
Transfer (5.6) 0.0
Defined benefit obligation at 31 December (373.7) (380.3)
Thefairvalueoftheplanassetscanbereconciledasfollows:
Inmillion EUR 2018 2017
Fair value of plan assets at 1 January 53.4 44.5
Contributionsbyemployer 31 .0 34.6
Contributionsbyemployee 1 .4 1.3
Benefitspaid (27.9) (36.2)
Interest income/(cost) on assets (P&L item) 0.8 0.8
Additionthroughbusinesscombinations 0 .0 8.0
Actuarialgain/(loss)onassets(OCIitem) 6.6 0.4
Fair value of plan assets at 31 December 65.3 53.4
Theplanassetrelatestothegroupinsurance’sbenefitinaccordancewithIAS 19.Thisplanassetisheldbyathirdpartyinsurancecompany,andiscomposedofthereservesaccumulatedfromtheemployerandemployeecontributions(assuredcontractswithaguaranteedreturn).
TheexpenserecognizedintheIncomeStatementispresentedhereafter:
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 83
As at 31 December
Inmillion EUR 2018 2017
Servicecosts (14.6) (3.0)
-Currentservicecost (20.3) (21.6)
-Terminationexpenses (5.2) 0.0
-Pastservice(cost)/gain 10 .9 18.6
Net interest (4.0) (4.6)
Re-measurementsgainsand(losses) 6.3 (1.8)
-Actuarialgainsand(losses)reportedasfinancial 1 .0 (1.4)
-Actuarialgainsand(losses)reportedasoperating 5.2 (0.4)
Net expense (12.4) (9.4)
Actuarialgainsandlosses,causedbychangesindiscountrates,arerecordedasfinancialcosts,whereasactuarialgains/lossesforpost-employmentbenefitsarerecordedinothercomprehensiveincome.Inallothercases,actuarialgainsandlossesarerecordedasoperatingexpenses.
Interestcostsandfinancialactuarialgainsorlosseshavebeenrecordedasfinancialcosts.AllotherexpensessummarizedabovewereincludedintheIncomeStatementcaption“Payrollcosts”.
TheimpactonpayrollcostsandfinancialcostsintheIncomeStatementispresentedhereafter:
For the year ended 31 December
Inmillion EUR 2018 2017
Payrollcosts (9.4) (3.4)
Financialcost (3.0) (6.0)
Net expense (12.4) (9.4)
Theexpenserecognizedintheothercomprehensiveincomeispresentedhereafter:
As at 31 December
Inmillion EUR 2018 2017
Re-measurement gains/(losses) 5.8 4.3
-Actuarialgainsand(losses) 5.8 4.3
Net expense 5.8 4.3
Themainassumptionsusedincomputingthebenefitobligationsatthestatementoffinancialpositiondatearethefollowing:
2018 2017
Rateofinflation 1.8% 2.0%
Futuresalaryincrease 2.8% 3.0%
Medicalcosttrendrate 5.0% 5.0%
Mortalitytables MR/FR-2 MR/FR-2
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 84
Thediscountrateshavebeendeterminedbyreferencetomarketyieldsatthestatementoffinancialpositiondate.Thediscountratesusedin2018rangefrom0.00%to1.80%(2017:0.00%to1.80%):
BENEFIT DurationDiscount rate
2017 2018
Familyallowances 6.9 1.05% 1.15%
Bank 14.7 1.70% 1.70%
Funeralexpense 8.1 1.25% 1.30%
Gratification from11.8to14.1 from1.50%to1.60% from1.55%to1.65%
Groupinsurance from10.9to17.9 from1.50%to1.55% from1.55%to1.80%
Accumulatedcompensatedabsences 2.3 0.00% 0.15%
Workerscompensationincaseofaccidents 12.4 1.55% 1.55%
Medicalexpensesincaseofaccidents 17.3 1.80% 1.80%
Pensionsavingdays 9.3 1.30% 1.40%
JubileePremiums from6.8to8.0 from1.05%to1.10% from1.15%to1.30%
DSPRJOR 8.8 1.30% 1.35%
Part-timeregime from1.8to4.0 0.00% 0.45%
Prepension from0.5to1.8 0.00% from0.00%to0.15%
Theaveragedurationofthedefinedbenefitplanobligationattheendof2018is10.8 years(2017:10.9 years).
AquantitativesensitivityanalysisforsignificantassumptionsatDecember 31,2018isoutlinedherebelow:
Assumptions Discount rate MortalitytableMR/FR
Medicaltrendrate
Sensitivitylevel 0.5%increase 0.5%decrease Decreaseby1 year 1%increase
Inmillion EUR
Impactondefinedbenefitobligation(increase)/decrease 18.9 (20.7) (5.8) (2.0)
Thissensitivityanalysishasbeendeterminedbasedonamethodthatextrapolatestheimpactondefinedbenefitobligationasaresultofreasonablechangesinkeyassumptionsoccurringattheendofthereportingperiod.
Post-employment benefitsPost-employmentbenefitsincludefamilyallowances,bankcosts,funerarycosts,retirementgiftsandgroupinsurance.Inthecourseof2017,bpostdecidedtostoptheadvantagefortransport.InactivecivilservantsaswellastheirfamilymemberswereentitledtopersonalvouchersthatcouldbeexchangedforatransportticketforatripinBelgiumorforapricereductiononothertransporttickets.bpostpaidaone-timesettlementcontributionofEUR 10.0 million
toPensocandanon-cashgainofEUR 15.3 millionhasbeenbookedasapastserviceincomein2017.
Family allowancesThecivilservantsofbpost(bothactiveandpensioners)withdependents(youngstersanddisabled)receiveafamilyallowancefromOfficeNationald’AllocationsFamilialespourTravailleursSalariés(ONAFTS)–RijksdienstvoorKinderbijslagvoorWerknemers(RKW).Thefinancingmethodologyoffamilyallowancesforcivilservantshaschangedduetoalawchange(lawof19 December 2014).Asaconsequence,bpostasapublicinstitutionpaysacontributionthatisdefinedbyaprogrammelaw.Theamountisadaptedeachyearproportionallytothenumberofcivilservants(fulltimeequivalents)andissubjecttoinflation.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 85
BankAllactivemembers,pre-pensionersandpensionerscanbenefitfromareductionofthefeeschargedonthecurrentaccountaswellasfavorableinterestratesand/orreductionsonsavingscertificates,investmentfunds,insurancesandloans.In2017,thefavorableinterestratesonsavingsaccountshavebeenreviewedresultinginanon-cashgainofEUR 3.9 million.
Group insurancebpostofferstoitsactivecontractualemployeesagroupinsurancebenefit.SincetheintroductionoftheWAP/LPClegislationinBelgiumtheseplanshavethecharacteristicsofadefinedbenefitplanunderIAS 19.
Theemployerislegallyrequiredtoguaranteeacertainreturnontheplanassets.BeforethechangeintheWAP/LPClawendof2015,bposthadtoprovidethelegalminimumreturnof3.25%onemployercontributions(aftercostsonpremiums)and3.75%onemployeecontributions.Thelegalminimumreturnonemployercontributionsisa“careeraverage”returnandnotayearbyyearreturnwherethelegalminimumontheemployeecontributionsshouldbegrantedonayearbyyearbasis.
Althoughthereisstillnofullclarityontheapproach,newlegislationdatedDecember 2015broughtmoreclarificationontheminimumguaranteedreturn.TheuncertaintywithrespecttothefutureevolutionoftheminimumguaranteedratesofreturninBelgiumhasbeenremovedwiththechangeintheWAP/
LPClawendofDecember 2015.Asfrom2016,theminimumreturnforfuturecontributionsisequaltotheaveragepast24 monthsreturnon10-yearlinearbondswithaminimumof1.75%p.a.
Themethodologyconsistentlyappliedbybpostresultedinaliabilityatthehigherendcomparedtocompanieswithsimilarpensionplans.Althoughthereisnofullconsensusinthemarketconcerningthemethodology,in2018theunderlyingmethodologyusedforIAS 19accountingofthesedefinedcontributionplanshasbeenfinetunedtakenintoaccounttheevolutioninmethodologiesinthemarketbasedonnewinsights.bpostcontinuestousethePUC(projectedunitcredit)methodologybutwithoutprojectionoffuturecontributionsandsalariesastheplansarenotbackloaded(contributionsdonotincreasewithage).Theonlyreasonwhycontributionsmaymateriallyincreaseinalaterstageofacareerislinkedtosalaryincreasesbeinghigherthanindexationsinsteprateplans.Furthermorein2018bpostappliedparagraph115ofIAS 19.Theassetsandliabilitiesaredeterminednottakingintoaccountcontractualinterestguaranteesonmathematicalreserves,guaranteedbytheinsurancecompany.Applyingparagraph115 mayresultinhigherassetswhenguaranteedinterestratesarehigherthanthediscountrate,resultinginalowernetliability.Theimpactoftheaboveresultedinanon-cashgainofEUR 10.9 million.
bpost’snetliabilityforemployeepost-employmentbenefitscomprisesthefollowing:
As at 31 December
Inmillion EUR 2018 2017
Presentvalueoftotalobligations (98.1) (104.0)
Fairvalueofplanassets 65.3 53.4
Present value of net obligations (32.8) (50.7)
Net liability (32.8) (50.7)
Employeebenefitsamountsinthestatementoffinancialposition 0 .0 0.0
Liabilities (32.8) (50.7)
Net liability (32.8) (50.7)
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 86
Thechangesinthepresentvalueoftheobligationsareasfollows:
Inmillion EUR 2018 2017
Present value at 1 January (104.0) (126.6)
Servicecosts 2.6 9.5
-Currentservicecost (8.3) (9.1)
-Terminationexpenses 0 .0 0.0
-Pastservice(cost)/gain 10 .9 18.6
Net interest (1.4) (1.9)
Benefitspaid 5.6 12.0
Re-measurementgainsand(losses) 0 .0 0.0
-Actuarialgainsand(losses)recognizedinIncomeStatement 0 .0 0.0
-Actuarialgainsand(losses)unrecognized 0 .0 0.0
Re-measurementgainsand(losses)inothercomprehensiveincome (0.8) 3.9
-Actuarialgainsand(losses) (0.8) 3.9
SettlementContribution 0 .0 10.0
Additionthroughbusinesscombinations 0 .0 (10.9)
Defined benefit obligation at 31 December (98.1) (104.0)
Thefairvalueoftheplanassetsrelatedtothegroupinsurance’sbenefitandheldbytheinsurancecompanyispresentedasfollows:
Inmillion EUR 2018 2017
Fair value of plan assets at 1 January 53.4 44.5
Contributionsbyemployer 6.2 5.8
Contributionsbyemployee 1 .4 1.3
Benefitspaid (3.1) (7.4)
Interest income/(cost) on assets (P&L item) 0.8 0.8
Additionthroughbusinesscombinations 0 .0 8.0
Actuarialgain/(loss)onassets(OCIitem) 6.6 0.4
Fair value of plan assets at 31 December 65.3 53.4
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 87
For the year ended 31 December
Inmillion EUR 2018 2017
Payrollcosts 4 .3 11.0
Financialcost (0.6) (1.1)
Net expense 3.6 9.9
For the year ended 31 December
Inmillion EUR 2018 2017
Re-measurement gains/(losses) 5.8 4.3
-Actuarialgainsand(losses) 5.8 4.3
Net expense 5.8 4.3
TheexpenserecognizedintheIncomeStatementispresentedhereafter:
As at 31 December
Inmillion EUR 2018 2017
Servicecosts 4 .3 11.0
-Currentservicecost (6.7) (7.6)
-Terminationexpenses 0 .0 0.0
-Pastservice(cost)/gain 10 .9 18.6
Net interest (0.6) (1.1)
Re-measurementgainsand(losses) 0 .0 0.0
-Actuarialgainsand(losses)reportedasfinancial 0 .0 0.0
-Actuarialgainsand(losses)reportedasoperating 0 .0 0.0
Net expense 3.6 9.9
Theimpactonpayrollcostsandfinancialcostsispresentedhereafter:
Theexpenserecognizedinothercomprehensiveincomeispresentedhereafter:
Long-term employee benefitsLong-termemployeebenefitsincludeaccumulatedcompensatedabsences,pensionsavingdaysandpart-timebenefits.
Accumulated Compensated AbsencesCivilservantsareentitledto21sick-daysperyear.Duringthese21 daysandiftheyhavereceivedtheappropriatenotefromadoctor,theyreceive100%oftheirsalary.Ifanygivenyear,acivilservantisabsentlessthan21 days,thebalanceoftheun-usedsicknessdaysiscarriedovertothefollowingyearsup
toamaximumof63 days(seesectionPensionsavingdayshereinafter).Employeeswhoareillformorethan21 daysduringayearwillfirstuseuptheyear’sallotmentandthenusethedayscarriedoverfrompreviousyearsaspertheirindividualaccount.Duringthisperiod,theywillreceivetheirfullsalary.Oncetheallotmentoftheyearandthedayscarriedoverareusedup,theyreceivereducedpayments.
Boththefullsalarypaidunderthe“sick-days”schemeandthereducedpaymentsbeyondthatarecostsincurredbybpost.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 88
Therewasnomodificationtothecalculationmethodologycomparedto2017.Thevaluationisbasedonthefuture“projectedpayments/cashoutflows”.Thecashoutflowsarecalculatedforthetotalityofthepopulationconsidered,basedonacertainconsumptionpattern,derivedfromthestatisticsoverthe12 monthsof2018.Theindividualnotionalaccountsareprojectedforthefutureanddecreasedbytheactualnumberofdaysofillness.
Theannualpaymentisthenumberofdaysused(andlimitedbythenumberofdaysinthesavingsaccount)multipliedbythedifferencebetweentheprojectedsalary(increasedwithsocialcharges)at100%andthereducedpayments.Therelevantwithdrawalandmortalityrateshavebeenappliedtogetherwiththediscountrateapplicabletothedurationofthebenefit.
Pension saving daysCivilservantshavethepossibilitytoconverttheunusedsickdaysabovethe63 daysintheir‘notional’account(seeabove“AccumulatedCompensatedAbsences“benefit)inpensionsavingdays(7sickdaysper1pensionsavingday)andtoconverteachyearamaximumof3 daysofextra-legalholidays.Contractualemployeeswithapermanentcontractareentitledtoamaximumof2pensionsavingdaysperyearandhavethepossibilitytoconverteachyearamaximumof3 daysofextra-legalholidays.Thepensionsavingdaysareaccumulatedyearoveryearandcanbeusedasfromtheageof50.
Themethodologyofvaluationisbasedonthesameapproachasthebenefit“AccumulatedCompensatedAbsences“.Thevaluationisbasedonthefuture“projectedpayments/cashoutflows”.Thesearecalculatedforthetotalityofthepopulationconsidered,basedonacertain“consumption”pattern,derivedfromthestatisticsoverthe12 monthsof2018,asprovidedbythehumanresourcesdepartment.Theindividual“pensionsavingdays”accountsareprojectedperpersonanddecreasedbytheactualnumberofusedpensionsavingdays.
Theannualpaymentisthenumberofpensionsavingdaysusedmultipliedbytheprojecteddailysalary(increasedwithsocialcharges,holidaypay,endofyearpremium,managementandintegrationpremium).Therelevantwithdrawalandmortalityrateshavebeenappliedtogetherwiththediscountrateapplicabletothedurationofthebenefit.
Part-time regime (50+)Theregulatoryframeworkregardingpart-timeregimeforbpost’semployeesisthefollowing:
• FrameworkAgreementofDecember 20,2012:partial(50%)careerinterruptionisaccessibletothedistributorsaged54 andolderandtotheotheremployeesasfrom55 yearsold.bpostmakescontributionsequalto7.5%ofthegrossannualsalaryforamaximumperiodof72 monthsforthedistributorsand48 monthsfortheotherbeneficiariesoftheplan.
• FrameworkAgreementofMay 22,2014:(i) theplanapprovedin2012 andaccessibletothedistributorsisextendedtotheemployeesworkingduringnightand(ii) fortheotheremployees,theplanisaccessibleasfrom55 yearsold.bpostmakescontributionsequalto7.5%ofthegrossannualsalaryforamaximumperiodof72 monthsforthenightworkersand48 monthsfortheotherbeneficiariesoftheplan.
In2016,twonewplanswereapproved:
• FrameworkAgreementofJune 2,2016(validuntilDecember 2016):(i) theplanapprovedin2012fordistributorsandextendedin2014toemployeesworkingduringnightisalsoapplicableforcollectagentsand(ii) fortheotheremployees,theplanisaccessibleasfrom57 yearsold.bpostmakescontributionsequalto7.5%ofthegrossannualsalaryforamaximumperiodof72 monthsforthecollectagentsand48 monthsfortheotherbeneficiariesoftheplan;
• FrameworkAgreementofSeptember 30,2016:(i) forthedistributors,collectagentsandtheemployeesworkingduringnight,theplanisaccessibleasfrom55 yearsoldand(ii) fortheotheremployees,theminimumagerequiredis57 yearsold.bpostmakescontributionsequalto7.5%ofthegrossannualsalaryforamaximumperiodof72 monthsforthenightworkers,distributorsandcollectagentsand48 monthsfortheotherbeneficiariesoftheplan.ThisplanisextendeduntilDecember 2020followingtheFrameworkAgreementofDecember 20,2018.
bpost’snetliabilityforemployeelong-termbenefitscomprisesthefollowing:
As at 31 December
Inmillion EUR 2018 2017
Presentvalueoftotalobligations (113.5) (108.2)
Fairvalueofplanassets 0 .0 0.0
Present value of net obligations (113.5) (108.2)
Net liability (113.5) (108.2)
Employeebenefitsamountsinthestatementoffinancialposition 0 .0 0.0
Liabilities (113.5) (108.2)
Net liability (113.5) (108.2)
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 89
For the year ended 31 December
Inmillion EUR 2018 2017
Servicecosts (13.1) (13.5)
-Currentservicecost (13.1) (13.5)
-Terminationexpenses 0 .0 0.0
-Pastservice(cost)/gain 0 .0 0.0
Net interest (1.0) (1.0)
Re-measurementsgainsand(losses) 2.5 0.6
-Actuarialgainsand(losses)reportedasfinancial 1 .0 (0.4)
-Actuarialgainsand(losses)reportedasoperating 1 .5 1.0
Net expense (11.7) (14.0)
TheexpenserecognizedintheIncomeStatementispresentedhereafter:
Theimpactonpayrollcostsandfinancialcostsispresentedhereafter:
Inmillion EUR 2018 2017
Present value at 1 January (108.2) (107.7)
Servicecosts (13.1) (13.5)
-Currentservicecost (13.1) (13.5)
-Pastservice(cost)/gain 0 .0 0.0
Net interest (1.0) (1.0)
Benefitspaid 11 .9 13.3
Re-measurementgainsand(losses) 2.5 0.6
-Actuarialgainsand(losses)recognizedinIncomeStatement 2.5 0.6
Additionthroughbusinesscombinations 0 .0 0.1
Transfer (5.6) 0.0
Defined benefit obligation at 31 December (113.5) (108.2)
For the year ended 31 December
Inmillion EUR 2018 2017
Payrollcosts (11.6) (12.5)
Financialcost (0.1) (1.4)
Net expense (11.7) (14.0)
Thechangesinthepresentvalueoftheobligationsareasfollows:
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 90
Termination benefitsEarly Retirement schemeIn2018,thepreviousearly-retirementplansbelowareincludedinthesebenefits:
• theplancoveredbytheFrameworkAgreementofJuly 1,2012 andaccessibletothecivilservantsmeetingcertainage,seniorityandserviceorganizationconditionsasatDecember 31,2013atthelatest.TheJointCommitteeofDecember 19,2013 hasextendedthismeasureuntilthenextCollectiveLaborAgreement.
• anearly-retirementplanapprovedbytheFrameworkAgreementofMay 22,2014 andaccessibletothecivilservantsundercertainconditionsofage,seniorityandserviceorganization.TheJointCommitteeofDecember 17,2015extendedthismeasureuntilthenextCollectiveLaborAgreementorJune 30,2016atthelatest.
Intheseearly-retirementschemes,bpostcontinuestopaytothebeneficiariesaportion(between60%and75%dependingonthedurationoftheearly-retirement)oftheirsalaryatdepartureanduntiltheyreachretirementage.Theearly-retirementperiodistreatedasaserviceperiod.
Anearly-retirementplanwasapprovedbytheJointCommitteeofJuly 23,2015linkedtotheAlphaplan.ThisplanwasaccessibletocivilservantswhereofthefunctionwasimpactedbyAlphaandundercertainconditionsofageandseniority.bpostcontinuestopaytothebeneficiariesaportion(between65%and75%dependingonthedurationoftheearly-retirement)oftheirsalaryatdepartureanduntiltheyreachretirementage.Besidesthis,anexceptionalyearly
As at 31 December
Inmillion EUR 2018 2017
Presentvalueoftotalobligations (8.5) (6.6)
Fairvalueofplanassets 0 .0 0.0
Present value of net obligations (8.5) (6.6)
Net liability (8.5) (6.6)
Employeebenefitsamountsinthestatementoffinancialposition 0 .0 0.0
Liabilities (8.5) (6.6)
Net liability (8.5) (6.6)
allowancewaspaid,whereoftheamountdependsonthedurationoftheearly-retirement.Theearly-retirementperiodwastreatedasaserviceperiod.
IncaseacivilservantconcernedbytheAlphaplanhadnotbeenselectedforanewfunction12 monthsafterthepublicationoftheopenfunctions,hewasputinearly-retirement.bpostcontinuedtopaytothebeneficiariesaportion(between60%and70%dependingonthedurationoftheearly-retirement)oftheirsalaryatdepartureanduntiltheyreachedretirementage.Theearly-retirementperiodwastreatedasaserviceperiod.
Twonewearly-retirementplanswereapprovedin2016:
• PlansignedonJune 2,2016 andopenuntilendofDecember 2016:wasaccessibletocivilservantsundercertainconditionsofage,seniorityandserviceorganization.bpostcontinuestopaytothebeneficiariesaportion(between60%and75%dependingonthedurationoftheearly-retirement)oftheirsalaryatdepartureanduntiltheyreachretirementage.
• PlansignedonSeptember 30,2016:isaccessibletocivilservantsundercertainconditionsofage,seniorityandserviceorganization.bpostcontinuestopaytothebeneficiaries75%oftheirsalaryatdepartureanduntiltheyreachretirementage.Thisplanhasanindefiniteduration.
Theemployeebenefitrelatedtotheearlyretirementschemesgivesrisetoaliabilityatbpostbecause(i) theemploymentisterminatedbeforethenormalretirementageand(ii) itistheemployee’sdecisiontoaccepttheoffermadebybpostinexchange.
bpost’snetliabilityforterminationbenefitscomprisesthefollowing:
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 91
Thechangesinthepresentvalueoftheobligationsareasfollows:
Inmillion EUR 2018 2017
Present value at 1 January (6.6) (4.1)
Servicecosts (5.2) 0.0
-Currentservicecost 0 .0 0.0
-Terminationexpenses (5.2) 0.0
-Pastservice(cost)/gain 0 .0 0.0
Net interest 0 .0 0.0
Benefitspaid 3.6 4.0
Re-measurementgainsand(losses) (0.3) 0.2
-Actuarialgainsand(losses)recognizedinIncomeStatement (0.3) 0.2
-Actuarialgainsand(losses)unrecognized 0 .0 0.0
Re-measurementgainsand(losses)inothercomprehensiveincome 0 .0 0.0
-Actuarialgainsand(losses) 0 .0 0.0
Additionthroughbusinesscombinations 0 .0 (6.7)
Defined benefit obligation at 31 December (8.5) (6.6)
TheexpenserecognizedintheIncomeStatementispresentedhereafter:
For the year ended 31 December
Inmillion EUR 2018 2017
Servicecosts (5.2) 0.0
-Currentservicecost 0 .0 0.0
-Terminationexpenses (5.2) 0.0
-Pastservice(cost)/gain 0 .0 0.0
Net interest 0 .0 0.0
Re-measurementgainsand(losses) (0.3) 0.2
-Actuarialgainsand(losses)reportedasfinancial 0 .0 0.0
-Actuarialgainsand(losses)reportedasoperating (0.3) 0.2
Net expense (5.5) 0.2
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 92
Theimpactonpayrollcostsandfinancialcostsispresentedhereafter:
For the year ended 31 December
Inmillion EUR 2018 2017
Payrollcosts (5.5) 0.2
Financialcost 0 .0 0.0
Net expense (5.5) 0.2
Other long-term benefitsWorkers compensation accident planUntilOctober 1,2000,bpostwasself-insuredforinjuriesattheworkplaceandonthewaytoandfromtheworkplace.Asaresult,allcompensationstoworkersforaccidentswhichoccurredbeforeOctober 1,2000 areincurredandfinancedbybpostitself.
SinceOctober 1,2000,bposthascontractedinsurancepoliciestocoversuchrisk.
DSPR/ DVVP for Job Mobility CenterTheFrameworkAgreementofSeptember 30,2016definedaDispensePrécédantlaRetraite/DienstvrijstellingvoorafgaandaandePensionering(DSPR/DVVP)planfortheJobMobilityCenter.Thisplanforeseesforanindefinitedurationthatcivilservantsagedasfrom61 yearsoldwhoareattachedtotheJobMobilityCenterandwhoarestillattachedtoitafteraperiodofoneyearwillbereleasedfromservice.bpostcontinuestopaytothebeneficiaries70%oftheirsalaryatdepartureanduntiltheyreachretirementage,withamaximumof5 years.
bpost’snetliabilityforotherlong-termemployeebenefitscomprisesthefollowing:
As at 31 December
Inmillion EUR 2018 2017
Presentvalueoftotalobligations (153.5) (161.5)
Fairvalueofplanassets 0 .0 0.0
Present value of net obligations (153.5) (161.5)
Net liability (153.5) (161.5)
Employeebenefitsamountsinthestatementoffinancialposition 0 .0 0.0
Liabilities (153.5) (161.5)
Net liability (153.5) (161.5)
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 93
Thechangesinthepresentvalueoftheobligationsareasfollows:
Inmillion EUR 2018 2017
Present value at 1 January (161.5) (162.8)
Servicecosts (0.6) (0.5)
-Currentservicecost (0.6) (0.5)
-Terminationexpenses 0 .0 0.0
-Pastservice(cost)/gain 0 .0 0.0
Net interest (2.4) (2.5)
Benefitspaid 6.8 6.8
Re-measurementgainsand(losses) 4 .1 (2.6)
-Actuarialgainsand(losses)recognizedinIncomeStatement 4 .1 (2.6)
-Actuarialgainsand(losses)unrecognized 0 .0 0.0
Re-measurementgainsand(losses)inothercomprehensiveincome 0 .0 0.0
-Actuarialgainsand(losses) 0 .0 0.0
Defined benefit obligation at 31 December (153.5) (161.5)
TheexpenserecognizedintheIncomeStatementispresentedhereafter:
For the year ended 31 December
Inmillion EUR 2018 2017
Servicecosts (0.6) (0.5)
-Currentservicecost (0.6) (0.5)
-Terminationexpenses 0 .0 0.0
-Pastservice(cost)/gain 0 .0 0.0
Net interest (2.4) (2.5)
Re-measurementsgainsand(losses) 4 .1 (2.6)
-Actuarialgainsand(losses)reportedasfinancial 0 .1 (1.0)
-Actuarialgainsand(losses)reportedasoperating 4 .0 (1.6)
Net expense 1.2 (5.5)
Theimpactonpayrollcostsandfinancialcostsispresentedhereafter:
For the year ended 31 December
Inmillion EUR 2018 2017
Payrollcosts 3 .5 (2.0)
Financialcost (2.3) (3.5)
Net expense 1.2 (5.5)
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 94
6.28Tradeandotherpayables
As at 31 December
Inmillion EUR 2018 2017restated 2017
Tradepayables 0 .0 0.0 0.0
Otherpayables 17 .5 45.2 45.2
Non-current trade and other payables 17.5 45.2 45.2
Non-currenttradeandotherpayablesamounttoEUR 17.5 millionandconsistmainlyoftheworkingcapitalprovidedbybpostbankandthecontingentconsiderationarrangementsrelatedtotheacquisitionsofCityDepotandLeenMenken.
As at 31 December
Inmillion eur 2018 2017restated 2017
Tradepayables 499 .9 461.9 466.6
Payrollandsocialsecuritypayables 332.5 347.2 342.4
Taxpayableotherthanincometax 12.4 14.6 14.6
Otherpayables 367.7 394.7 394.7
Current trade and other payables 1,212.5 1,218.4 1,218.2
Thecarryingamountsareconsideredtobeareasonableapproximationofthefairvalue.Theotherpayablesincludedincurrenttradeandotherpayableincludethefollowingitems:
As at 31 December
Inmillion EUR 2018 2017restated 2017
Advancepaymentsonorders 10 .9 10.5 10.5
Advancepostalfinancialservices 18.8 18.8 18.8
Cashguaranteesreceived 9.6 10.2 10.2
Accruals 122.4 105.1 105.1
Deferredincome 55 .9 59.0 59.0
Depositsreceivedfromthirdparties 0 .1 0.1 0.1
Otherpayables 150 .0 190.8 190.8
Current - other payables 367.7 394.7 394.7
TheconsiderationspaidalreadybycustomersthathavebeenallocatedtotheunsatisfiedremainingperformanceobligationamountedtoEUR 55.9 millionandmainlyrelatedtostampsandcreditsonfrankingmachinesoldbutnotyetusedbycustomersat
balancesheetdate.Thelargemajorityoftheremainingperformanceobligationsatreportingdateisexpectedtoberecognizedwithinoneyear,allotherremainingperformanceobligationsareexpectedtoberecognizedwithintwoyears.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 95
6.29Provisions
Inmillion EUR Litigation Environment Onerous contract
Restructuring& other Total
Balance at 1 January 2017 38.0 0.6 1.6 18.5 58.7
Additionalprovisionsrecognized 3.8 0.1 0.8 4.9 9.6
AdditionthroughBusinessCombinations 0.7 0.0 0.0 0.0 0 .7
Provisionsused (0.1) 0.0 0.0 (4.0) (4.1)
Provisionsreversed (10.2) 0.0 (0.2) (3.1) (13.6)
Othermovements (0.1) 0.0 0.0 (5.8) (5.9)
Balance at 31 December 2017 32.1 0.6 2.2 10.5 45.4
Additionthroughbusinesscombinations 0.0 0.0 21.6 0.0 21.6
Exchangeratedifference 0.0 0.0 (0.4) 0.0 (0.4)
Balance at 31 December 2017 (restated) 32.1 0.6 23.4 10.5 66.5
Noncurrentbalanceatendofyear(restated) 20.4 0.6 14.9 2.3 38.1
Currentbalanceatendofyear(restated) 11.8 0.0 8.5 8.2 28.4
32.1 0.6 23.4 10.5 66.5
Balance at 1 January 2018 (restated) 32.1 0.6 23.4 10.5 66.5
Additionalprovisionsrecognized 1.8 0.0 0.1 4.3 6.2
Provisionsused (1.9) 0.0 (6.6) (3.4) (11.9)
Provisionsreversed (15.8) 0.0 (4.3) (3.0) (23.0)
Exchangeratedifference 0.0 0.0 1.4 0.0 1 .4
Othermovements 0.0 0.0 0.0 0.0 0 .0
Balance at 31 December 2018 16.2 0.6 14.1 8.5 39.3
Noncurrentbalanceatendofyear 11.9 0.6 9.1 0.9 22.6
Currentbalanceatendofyear 4.3 0.0 5.0 7.5 16.8
16.2 0.6 14.1 8.5 39.3
In2018thepurchasepriceallocationofRadialhasbeenfinalized,asaconsequencetheopeningbalancehasbeenrestated.Thisimpactisshownunder“additionthroughbusinesscombinations”.
TheprovisionforlitigationamountedtoEUR 16.2 million.Itrepresentstheexpectedfinancialoutflowrelatingtomanydifferent(actualorimminent)litigationsbetweenbpostandthirdparties.
Theperiodanticipatedforthecashoutflowspertainingtheretoisdependentondevelopmentsinthelengthoftheunderlyingproceedingsforwhichthetimingremains uncertain.
Thereversein2018wasmainlyduetothereassessmentofalitigation.
bpostiscurrentlyinvolvedinthefollowinglegalproceedingsinitiatedbyintermediaries:
• Aclaimfordamagesinanalleged(provisional)amountofapproximatelyEUR 21.1 million(exclusiveoflatepaymentinterest)inthecontextoflegalproceedingsinitiatedbyPublimailNV/SA.TheBrusselscommercialcourtrejectedPublimail’sclaimonMay 3,2016.PublimailappealedthisdecisiononDecember 16,2016.TheappealisnowpendingbeforetheBrusselsCourtofAppeal.
• Aclaimfordamagesinanalleged(provisional)amountofapproximatelyEUR 28.0 million(exclusiveoflatepaymentinterest)inthecontextoflegalproceedingsinitiatedbyLink2BizInternationalNV/SAandpendingbeforetheBrusselscommercialcourt.CertainaspectsofthecontractualrelationshipbetweenLink2Bizandbpostarealsothesubjectofaceaseanddesistorder(adoptedonJune 21,2010),whichbposthasappealedinAugust 2010 andwhichiscurrentlypendingbeforetheBrusselsCourtofAppeal.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 96
Allclaimsandallegationsarecontestedbybpost.
Moreover,onJuly 20,2011theBelgianpostalregulator(“BIPT/IBPT”)concludedthatcertainaspectsofbpost’s2010pricingpolicyinfringedtheBelgianPostalActandimposedafineofEUR 2.3 million.Whilebpostpaidthefinein2012,itcontestedtheBIPT/IBPT’sfindingsandappealedthedecision.TheBrusselsCourtofAppealfoundinfavorofbpostandannulledtheBIPT/IBPT’sdecisiononMarch 10,2016.bpostrecoveredtheEUR 2.3 millionfineinOctober 2016.
Finally,onDecember 10,2012,theBelgianCompetitionAuthorityconcludedthatcertainaspectsofbpost’spricingpolicyovertheJanuary 2010-July 2011periodinfringedBelgianandEuropeancompetitionlawandimposedafineofapproximatelyEUR 37.4 million.Whilebpostpaidthefinein2013,itcontestedtheBelgianCompetitionAuthority’sfindingsand
appealedthedecisionbeforetheBrusselsCourtofAppeal.OnNovember 10,2016,theBrusselsCourtofAppealannulledtheAuthority’sdecision.TheBelgianCompetitionAuthorityappealedthisjudgmentbeforetheSupremeCourtonpointsoflaw.TheSupremeCourtissueditsdecisiononNovember 22,2018.Itpartiallyupheldtheappeal.ThiswillleadtoanewtrialbeforetheBrusselsCourtofAppeal.
TheprovisionrelatedtoenvironmentissuesamountedtoEUR 0.6 million.Itcoverssoilsanitation.
Theprovisionononerous contracts concerns the best estimateofthecostsrelatingtotheclosingdownofmailandretailofficesandtheICTmaintenanceofaphaseoutwebstoreplatform.
OtherprovisionsamountedtoEUR 8.5 million.
6.30Financialassetsandfinancialliabilities
Thefollowingtableprovidesthefairvaluemeasurementhierarchyofbpost’sfinancialassetsandfinancialliabilitiesperDecember 31,2017:
Fairvaluecategorized:
Inmillion EUR Carryingamount
Quotedpricesinactivemarkets
(Level1)
Significantotherobservable
inputs(Level2)
Significantunobservableinput(Level3)
Financial assets measured at amortized cost
Non-Current
Financialassets 9.4 0.0 9.4 0.0
Current
Financialassets 1,182.5 0.0 1,182.5 0.0
Total financial assets 1,191.9 0.0 1,191.9 0.0
Financial liabilities measured at amortized cost
Non-Current
Financialliabilities 100.6 0.0 100.6 0.0
Current
Financialliabilities 1,956.8 0.0 1,956.8 0.0
Total financial liabilities 2,057.5 0.0 2,057.5 0.0
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 97
Thefollowingtableprovidesthefairvaluemeasurementhierarchyofbpost’sfinancialassetsandfinancialliabilitiesperDecember 31,2018:
Fairvaluecategorized:
Inmillion EUR Carryingamount
Quotedpricesinactivemarkets
(Level1)
Significantotherobservable
inputs(Level2)
Significantunobservableinput(Level3)
Financial assets measured at amortized cost
Non-Current
Financialassets 11.2 0.0 11.2 0.0
Current
Financialassets 1,397.8 0.0 1,397.8 0.0
Total financial assets 1,409.1 0.0 1,409.1 0.0
Financial liabilities measured at amortized cost (except for derivatives)
Non-Current
Long-termbond 641.8 629.7 0.0 0.0
Financialliabilities 224.7 0.0 224.7 0.0
Current
Derivativesinstruments-forexswap 0.1 0.0 0.1 0.0
Derivativesinstruments-forexforward 0.7 0.0 0.7 0.0
Derivativesinstruments-crosscurrencyswap 0.0 0.0 0.0 0.0
Financialliabilities 1,409.7 0.0 1,409.7 0.0
Total financial liabilities 2,277.0 629.7 1,635.2 0.0
Thefairvalueofthenon-currentandcurrentfinancialassetsmeasuredatamortizedcostandthenon-currentandcurrentfinancialliabilitiesmeasuredatamortizedcost,approximatetheircarryingamounts.Astheyarenotmeasuredatfairvalueinthestatementoffinancialpositiontheirfairvalueshouldnotbedisclosed.
Duringtheperiodtherewasnotransferbetweenfairvaluehierarchylevelsandtherewerenochangesinthevaluationtechniquesandinputsapplied.
Financial assets measured at amortized costTheincreaseofthefinancialassetsmeasuredatamortizedcostwasmainlyduetotheincreaseofthecashandcashequivalents(EUR 214.1 million).
Financial liabilities measured at fair value - non currentAttheendof2018,thenon-currentfinancialliabilitiesconsistedof:
• USD 185.0 milliontermunsecuredloan.ThisloanstartedonJuly 3,2018withamaturityof3 yearswithtwopossibleextensionsofoneyeareach.
• EUR 650.0 millionbond.The8-yearbondhasbeenissuedinJuly 2018withacouponof1.25%.Inanticipationofthisissuance,inFebruary 2018bpostenteredintoaforwardinterestrateswapfor10 yearswithanominalamountofEUR 600.0 milliontohedgetheinterestriskofthebond.
• EUR 27.3 millionEIB(EuropeanInvestmentBank)loan.bposttookoutaEUR 100.0 millionloanfromtheEIBonMay 5,2007.IthasayearlyreimbursementofEUR 9.1 millionandlastpaymentisforeseenin2022.TheyearlyamountofEUR 9.1 millionisincludedinthesection“Interest-bearingloansandborrowings-current”.
Derivative instrumentsbpostisexposedtocertainrisksrelatingtoitsdailybusinessoperations.Theprimaryriskmanagedusingderivativeinstrumentsistheforeigncurrencyrisk.bpostusesforeignexchangeforwardcontractsandforeignexchangeswapcontractstomanagesomeofitsexposuresinforeigncurrencies.Thosecontractshavebeenunderwritteninordertohedgetheexchangerateriskslinkedtotheintercompanyloansgrantedbybposttoitssubsidiaries.Atyearend2018theimpactofthefairvalueoftheforwardcontractsandforeignexchangeswapcontractsamountedtoanincreaseoftheliabilitiesbyEUR 0.8 million.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 98
6.31Derivativefinancialinstrumentsandhedging
Derivative instrumentsbpostusesforeignexchangeforwardcontractsandforeignexchangeswapcontractstomanagesomeofitsexposuresinforeigncurrencies.Thosecontractshavebeenunderwritteninordertohedgetheexchangerateriskslinkedtotheintercompanyloansgrantedbybposttoitssubsidiaries.Atyearend2018 hadfourforeignexchangeswapsandthreeforeignexchangeforwardsoutstanding.
Interest Rate SwapInFebruary 2018,bpostenteredintoaforwardstartingInterestRateSwapwitha10-yearmaturityandanominalamountofEUR 600.0 million.Thetransactionwascontractedinordertohedgetheinterestrateriskonthecontemplatedissuanceofalong-termbondtorefinancetheacquisitionbridgeloanenteredintoinNovember 2017fortheacquisitionofRadial.
InJuly 2018,bpostfinallyissuedaEUR 650.0 million8-yearbond.DuetothefactthatthedurationandthenominalamountoftheissuedbondhadchangedcomparedtoFebruary 2018,theamountofthecash-flowhedgeineffectiveness(basedonthehypotheticalderivativemethod)amountedtoEUR 1.5 millionanditwasrecognizedinprofitorlossasfinanceexpense.Theeffectivepartofthecash-flowhedge(EUR 20.0 million)hasbeenrecognizedinothercomprehensiveincome(amountnetoftaxisEUR 14.8 million)ascash-flowhedgereserve.Thiscash-flowhedgeisreclassifiedtoprofitorlossduringthesameperiodsasthelong-termbonds’cash-flowswillaffectprofitorlossover8 yearsasfromitsissuancedate.In2018 anamountofEUR 1.2 millionhasbeenreclassifiedtotheprofitandloss statement.
Net investment hedgeInthethirdquarterof2018,bpostenteredintoaUSDtermloan,withamaturityof3 yearswithtwopossibleextensionsofoneyeareach.bpostwithEURasitsfunctionalcurrencyalongwiththeissuanceofthebond,borrowedUSDinordertorefinancetheNovember 2017acquisitionofRadialHoldings,LP.bpostborrowedapartinUSDtomitigatetheriskonforeignexchangeratedifferencesontheforeignoperations,hencebpostperformedanetinvestmenthedge.Consequently,theeffectiveportionofchangesinthefairvalueofthehedginginstrument,isrecognizedinothercomprehensiveincome.ThenotionalamountofthehedgingamountedtoUSD 143.0 million,whereasthecarryingamountconvertedintoEuroamountedtoEUR 124.9 million.AtDecember 31,2018thenetlossontherevaluationoftheUSDloanrecognizedinothercomprehensiveincomeandaccumulatedintheforeigncurrencytranslationreserveamountedtoEUR 5.7 million.TherewasnoineffectivenessintheyearDecember 31,2018.
Financial liabilities measure at amortized cost – currentDuring2018bpostreimbursedthebridgeloanenteredintoin2017tobuyRadial.Furthermoreatyearend
2018theoutstandingcommercialpaperissuedbybpostamountedtoEUR 165.0 million.Thematurityofthedifferentcommercialpapersrangesbetween1to6 months.Giventhecurrentmarketconditions,bpostcanbenefitfromnegativeinterestrates.
6.32Contingentliabilitiesandcontingentassets
Asdescribedundernote 6.29,theBrusselsCourtofAppealannulledtheBelgianCompetitionAuthority’sdecisionimposingafineofEUR 37.4 milliononNovember 10,2016.TheBelgianCompetitionAuthorityappealedthisjudgmentbeforetheSupremeCourtonpointsoflaw.TheSupremeCourtissueditsdecisiononNovember 22,2018,itpartiallyupheld
theappeal.ThiswillleadtoanewtrialbeforetheBrusselsCourtofAppeal.TheforegoingconstitutesacontingentassetshouldtheCourtofAppealannultheBelgianCompetitionAuthority’sdecisionagain,bpostmayrecoverthefineofEUR 37.4 million(excludinginterests).
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 99
6.33Rightsandcommitments
Guarantees receivedAt31 December 2018,bpostbenefitsfrombankguaranteesinasumofEUR 19.4 million,issuedbybanksonbehalfofbpost’scustomers(2017:EUR 13.3 million).Theseguaranteescanbecalledinandpaidagainstintheeventofnon-paymentorbankruptcy.Theythereforeofferbpostfinancialcertaintyduringtheperiodofcontractualrelationswiththecustomer.
Goods for resale on consignmentAt31 December 2018,merchandiserepresentingasalesvalueofEUR 1.7 millionhadbeenconsignedbypartnersforthepurposeofsalethroughthepostalnetwork.
Revolving credit facilitiesbposthastwoundrawnrevolvingcreditfacilitiesforatotalamountofEUR 375.0 million.ThesyndicatedfacilityamountstoEUR 300.0 millionandexpiresinOctober 2022(possibleextensionuntil2024)whilethebilateralfacilityofEUR 75.0 millionexpiresinJune 2023(possibleextensionuntil2025)andallowsforEURandUSDdrawdowns.TheinterestrateofEUR 300.0 millionrevolvingcreditfacilitychangesaccordingtobpost’ssustainabilityratingasdeterminedbyanexternalparty.
Guarantees givenbpostactsasguarantor(EUR 1.1 millionguarantee)intheframeworkoftheDoMyMovecollaborationagreementbetweenbpostandEngieElectrabel.
bposthasanagreementwithBelfius,INGandKBC,accordingtowhichtheyagreetoprovideforuptoEUR 82.1 millioninguaranteesforbpostuponsimplerequest.
Currency SwapAtyear-end2018bposthadfourforeignexchangeswapsandthreeforeignexchangeforwardsoutstanding,sixwithINGandonewithKBC.
OnJanuary 5,2018bpostenteredintoaswapcontracttoexchangeSGD0.5 millionagainstEUR 0.3 milliontocoverthecurrencyriskofaspecificdebtinSGD.OnMarch 28,2018bpostenteredinaforeignexchangeswapwithKBCtoexchangePLN1.9 millionagainstEUR 0.4 milliontocoverthecurrencyriskofaspecificdebtinPLN.TheothertwoforeignexchangeswapsstartedbothonApril 13,2018toexchangeUSD 0.5 millionwithEUR 0.4 million.FurthermoreonMay 2,2018bpostunderwrotethreeforeignexchangeforwardstoexchangeUSD 8.9 millionwithEUR 7.0 million.AlltheUSDcontractsareusedtocoverthecurrencyriskofspecificdebtsinUSD.
Funds of the Statebpostsettlesandliquidatesthefinancialtransactionsofgovernmentinstitutions(taxes,VAT,etc.)onbehalfoftheState.ThefundsoftheStateconstitutetransactions“onbehalfof”andarenotincludedinthestatementoffinancialposition.
6.34Relatedpartytransactions
a) Relations with the shareholdersThe Belgian State as a shareholderTheBelgianState,directlyandthroughtheSociétéFédéraledeParticipationsetd’Investissement/FederaleParticipatie-enInvesteringsmaatschappij(“SFPI/FPIM”),isthemajorityshareholderofbpostandholds51.04%ofbpost.Accordingly,ithasthepowertocontrolanydecisionattheShareholders’Meetingrequiringasimplemajorityvote.
TherightsoftheBelgianStateasbpost’sshareholderaredefinedinthecorporategovernancepolicies(publiclyavailableonbpostwebsite).
The Belgian State as public authorityTheBelgianStateis,togetherwiththeEuropeanUnion,themainlegislatorinthepostalsector.TheBelgianInstituteforPostalservicesandTelecommunications(“BIPT”),thenationalregulatoryauthority,isthemainregulatorofthepostalsectorinBelgium.
The Belgian State as a customerTheBelgianStateisoneofbpost’slargestcustomers.IncludingtheremunerationfortheServicesofGeneralEconomicInterest(“SGEIs”),10.2%ofbpost’stotaloperatingincomein2018wasattributabletotheBelgianStateandStaterelatedentities.
bpostprovidespostaldeliveryservicestoanumberofministries,bothoncommercialtermsandpursuanttotheprovisionsofthemanagementcontract.
bpostprovidesuniversalpostalservicesandSGEIsentrustedtoitbytheBelgianState,coveringpostal,financial,andotherpublicservices.TheLawofMarch 21,1991,thePostalLawofJanuary 26,2018,themanagementcontractaswellasconcessionagreementssetouttherulesandconditionsforcarryingouttheobligationsthatbpostassumesinexecutionofitsuniversalpostalservicesandSGEIs,and,whereapplicable,thefinancialcompensationpaidbytheBelgianState.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 100
2013amendingtheRoyalDecreeofJanuary 12,1970regulatingthepostalservice.
ThecompensationgrantedtobpostinrespectoftheSGEIsisbeingdisclosedinnote 6.8oftheannualreportandamountedtoEUR 271.4 millionfor2018(EUR 270.0 millionin2017).
ThecompensationofSGEIsisbasedonanetavoidedcost(“NAC”)methodology.Thismethodologyprovidesthatcompensationshallbebasedonthedifferencebetween(i) thenetcostfortheproviderofoperatingwiththeSGEIobligationand(ii) thenetcostforthesameproviderofoperatingwithoutthatobligation.
Thecompensationforthedistributionofnewspapersandperiodicalsconsistsofaflatamountandavariablefeebasedupondistributedvolumes.Thiscompensationissubjecttofurtherex-postverificationsandmustbeNACcompliant.
In2015,theBelgianStateunilaterallydecidedtoreducethecompensationfor2015byEUR 6.5 million.Nevertheless,bposthasreserveditsrightsandbookedanequivalentamountofdoubtfuldebtthatisstilloutstandingperendofDecember 2018.Includingthedoubtfuldebtor,theoutstandingamountownedbytheBelgianStatefortheSGEIremunerationonDecember 31,2018amountedtoEUR 107.6 million(EUR 100.2 milliononDecember 31,2017).bposthasalsoprovidedabankguaranteeofEUR 5.4 millionwithrespecttotheSGEIremunerationtotheBelgianState.
ExcludingtheSGEIremuneration,theservicesprovidedtoStaterelatedcustomersdonotexceed5%ofbpost’stotaloperatingincome.
b) Consolidated companiesAlistofallsubsidiaries(andequity-accountedcompanies),togetherwithabriefdescriptionoftheirbusinessactivities,isprovidedinnote 6.35ofthisannual report.
Balancesandtransactionsbetweenbpostanditssubsidiaries,whicharerelatedpartiesofbpost,havebeeneliminatedwithintheconsolidatedfinancialstatementsandarenotdisclosedinthisnote.
c) Relations with associatesbpostbankisa50%associateofbpost.bpostbank’sothershareholderisBNPParibasFortiswiththeremaining50%.
Asaregisteredbankingandinsuranceintermediary,bpostdistributesbankingandinsuranceproductsonbehalfofbpostbank.bpost,initsqualityofserviceprovider,furthermoreprovidesbackofficeactivitiesandotherancillaryservicestobpostbank.Severalagreementsandarrangementsexistinthisrespectamongthethreecompaniesasdetailedbelow.
Themainbankingandinsuranceproductsdistributedbybpostbankthroughbpostarecurrentaccounts,savingaccounts,termaccounts,certificateofdepositsandfundsorstructuredproductsprovidedbyBNPParibasFortis,respectivelyaccidentand/orhealthinsurances,andannuityandpensionproducts,including‘branch21’and‘branch23’lifeinsurancesprovidedbyAGInsurance.
TheSGEIsentrustedtobpostunderthemanagementcontractincludethemaintenanceoftheretailnetwork,theprovisionofday-to-daySGEIs(i.e.,“cashatcounter”servicesandhomedeliveryofpensionsandsocialallowances)andtheprovisionofcertainadhocSGEIs,whichareSGEIsthatbytheirnatureareprovidedwithoutanyrecurrence.AdhocSGEIsincludethesocialroleofthepostman,especiallyinrelationtopersonswholivealoneoraretheleastprivileged(thisserviceisrenderedthroughtheuseofhandheldterminalsandtheelectronicIDcardbymailcarriersontheirround),the“PleasePostman”service,thedistributionofinformationtothepublic,cooperationwithregardtothedeliveryofvotingpaperpackages,thedeliveryofaddressedandunaddressedelectionprinteditems,thedeliveryataspecialpriceofpostalitemssentbyassociations,thedeliveryofletterpostitemsfallingwithinthefreepostsystem,thepaymentofattendancefeesduringelections,thefinancialandadministrativeprocessingoffines,theprintingandsaleoffishingpermitsandthesaleofpoststamps.
TheSGEIsentrustedtobpostunderthemanagementcontractareaimedatsatisfyingcertainobjectivesrelatedtothepublicinterest.Inordertoensureterritorialandsocialcohesion,bpostmustmaintainaretailnetworkconsistingofatleast1,300 postalservicepoints.Atleast650ofthesepostalservicepointsmustbepostoffices.
Tariffsandothertermsfortheprovisionofcertainoftheservicesprovidedunderthemanagementcontractaredeterminedinimplementingagreementsbetweenbpost,theBelgianStateand,whererelevant,theotherpartiesorinstitutionsconcerned.
The5th managementcontractexpiredonDecember 31,2015.OnDecember 3,2015,bpostandtheBelgianStatesignedthe6thmanagementcontract.ThismanagementcontractprovidesforacontinuedprovisionoftheaforementionedSGEIsforanewperiodoffiveyears,endingonDecember 31,2020.
bpostfurthermorecontinuestoprovidetheSGEIsofearlydeliveryofnewspapersanddistributionofperiodicals.UntilDecember 31,2015,theseserviceswereprovidedunderthe5thmanagementcontract.InaccordancewiththeBelgianState’scommitmenttotheEuropeanCommission,acompetitive,transparentandnon-discriminatorymarketconsultationprocedurewithrespecttotheseserviceswasorganized,followingwhichtheprovisionoftheserviceswasawardedtobpostinOctober 2015.Consequently,sinceJanuary 1,2016,theservicesofdistributionofnewspapersandperiodicalsaredeliveredinaccordancewiththeconcessionagreementsexecutedbetweenbpostandtheBelgianStateinNovember 2015.
OnJune 3,2016,theEuropeanCommissionapprovedboth the 6thmanagementcontractandtheconcessionagreementsondistributionofnewspapersandperiodicalsunderthestateaidrules1.
bpostalsoprovidescashaccountmanagementservicestotheBelgianStateandcertainotherpublicentitiespursuanttotheRoyalDecreeofJanuary 12,1970regulatingthepostalserviceasamendedpursuanttotheRoyalDecreeofApril 30,2007regulatingpostalfinancialservicesandtheRoyalDecreeofApril 14,
(1) InOctober 2016,theFlemishFederationofPressVendors(‘VlaamseFederatievanPersverkopers’)soughttheannulmentoftheEuropeanCommission’sclearancedecisionbeforetheGeneralCourtonproceduralgrounds.InFebruary 2019,theGeneralCourthasremovedthecasefromtheregisterfollowingtherequestbyVFPtodiscontinuetheproceedings.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 101
bpostbankhadapproximately735,000 currentaccountsand909,000savingsaccountsasofDecember 31,2018.Allaccountsincludebasicservicessuchasdebitcards,accesstopaymentandmoneytransferservicesandcashwithdrawalsatpostofficetellersorATMs.bpostalsoofferstheMasterCardbpostbankcreditcard.
bpostbank’scustomerlendingactivityconsistsofgrantingorofferingconsumercreditsandmortgagescredits.AsofDecember 31,2018,bpostbankhadapproximatelyEUR 4,936 millioninloansonitsbalancesheet.
bpostbankdoesnotperformanyassetmanagementactivitiesnoranyprivatebankingorcommerciallending.
Banking and insurance partnership agreementThecooperationbetweenbpostbankandBNPParibasFortiswithrespecttobpostbankissetoutinabankingpartnershipagreementthatwasrenegotiatedandsignedonDecember 13,2013.
Theframeworkagreementprovidesinsubstancethat(i) bpostandBNPParibasFortiswillcontinuetocooperatethroughbpostbank,whichwillcontinuetobeanassociateofbpost;(ii) bpostwillremain,subjecttocertainexceptionsprovidedforinthepartnershipagreement,theexclusivedistributorofbpostbank’sproductsandservicesthroughitsnetworkofpostoffices;and(iii) bpostwillcontinuetoprovidebackofficeactivitiesandotherancillaryservicestobpostbank.
TheinsuranceproductsofAGInsuranceareofferedandmarketedviabpostbankusingthedistributionnetworkof bpost.
ThecooperationbetweenAGInsurance,bpostbankandbpostissetoutinaninsurancedistributionagreementthatwasrenegotiatedandsignedonDecember 17,2014.
Thedistributionagreementprovidesforanaccessfee,commissionsonalltheinsuranceproductssoldbybpostandadditionalcommissionsifcertainsalesobjectivesareachieved.
bpostbankpaysbpostacommissiondeterminedinaccordancewithmarketconditionsforthedistributionofbankingandinsuranceproductsandfortheperformanceofcertainback-officeactivities.Theamountofthecommissionforthedistributionofbankingandinsuranceproductsdepends,interalia,ontheinterestmarginrealizedbybpostbank,theassetsundermanagementandthesalesoffinancial/insuranceproductsrealizedbybpost’sretailnetwork.TotalincomerelatedtobankingandfinancialproductsamountedtoEUR 167.1 millionin2018(2017:EUR 182.6 million),ofwhichasignificantamountisrelatedtothecommissionpaidbybpostbank.TheamountowedbybpostbanktobpostonDecember 31,2018amountedtoEUR 7.2 million(2017:EUR 5.7 million).
Working capitalbpostbankhasplacedaworkingcapitalofEUR 12.0 millionatthedisposalofbpostwithoutguaranteeorpaymentofinterestbybpost.Thisworkingcapitalremainsavailabletobpostthroughoutthetermofthebankingpartnershipagreement.Itisintendedtoconstitutetheworkingcapitalenablingbposttoconductbusinessonbehalfofbpostbank.
DividendIn2018bpostreceivedatotaldividendofEUR 4.0 millionfrombpostbank(EUR 11.75 millionin2017).
d) Compensation of key managementKeymanagementpersonnelarethosepersonswithauthorityandresponsibilityforthestrategicorientationofthecompany.Forbpost,keymanagementpersonneliscomposedofallmembersoftheBoardofDirectorsandGroupExecutiveCommittee.
AsfurtherdescribedintheRemunerationReport,theremunerationofthemembersoftheBoardofDirectors(withtheexceptionoftheCEO)wasapprovedbytheGeneralShareholders’Meetingof25 April 2000 andcontinuedtobeapplicablein2018.
TheBoardofDirectors’members,withexceptionoftheCEO,areentitledtoafixedannualremuneration.TheyarealsoentitledtoanattendancefeeperattendedmeetingoftheAdvisoryCommitteemeetings.
In2018,totalremunerationpaidtotheBoardofDirectors’members(excludingtheCEO)amountedtoEUR 0.33 million(2017:EUR 0.35 million).
TheremunerationpackageoftheCEOandthemembersoftheGroupExecutiveCommitteeconsistsof(i) abaseremuneration,(ii) ashort-termincentivevariableremuneration,(iii) apensioncontributionand(iv) variousotherbenefits.
FortheyearendedDecember 31,2018,aglobalremunerationofEUR 4.06 million(2017:EUR 2.88 million)excludingthevariableremunerationwaspaidtoCEOandthemembersoftheGroupExecutiveCommittee,andcanbebrokendownasfollows:
• baseremuneration:EUR 3,489,148.24(2017:EUR 2,458,846.37)
• pensioncontribution:EUR 327,859,56(2017:EUR 227,723.16)
• otherbenefits:EUR 238,206.00(2017:EUR 198,415.74) • insurancecoveringdeath-in-service,disabilityandmedicalcoverage:EUR 90,549.57(2017:EUR 74,685.96)
• representationfees:EUR 29,319.58(2017:EUR 24,529.86)
• leasingcostsforcompanycar:EUR 118,336.85(2017:EUR 99,199.92)
Inaddition,theCEOandthemembersoftheGroupExecutiveCommitteereceivedin2018aglobalvariableremunerationofEUR 1,210,367.99(2017:EUR 1,196,125.45)becausethecorporateobjectivesandtheindividualtargetsfortheyearthatendedonDecember 31,2017weremet(the2017assessmentwasonlycompletedin2018).
Noshares,stockoptionsorotherrightstoawardssharesweregrantedtoorexercisedbytheCEOortheothermembersoftheGroupExecutiveCommitteeorhaveexpiredin2018.Nooptionsunderpreviousstockoptionplanswerestilloutstandingforthefinancialyear2018.
Amoredetailedoverviewofthecompensationofkeymanagementofbpostandbpost’sremunerationpolicyisincludedintheremunerationreport.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 102
6.35GroupcompaniesThebusinessactivitiesofthemainsubsidiariescanbedescribedasfollows:
• Euro-Sprintersoperatesbpost’sspeciallogisticsnetwork,mainlyincludingcourierservices.
• Speos Belgiummanagesoutgoingdocumentflowsforitscustomers,specializingintheoutsourcingoffinancialandadministrativedocuments,suchasinvoices,bankstatementsandsalaryslips.Servicesincludedocumentgeneration,printing(blackandwhiteorfullcolor)andenclosing,electronicdistribution(email,zoomit,webservices)andarchiving.Speosalsooffersbackupandpeaksolutionsforcompanieshavingtheirownprintshop.FurthermoreSpeosoffersdedicatedend-to-endsolutions(e.g.EuropeanLicensePlate).
• Certipostprovidesdocumentsecurity,digitalcertificationandBelgiane-IDactivities.
• Mail Services Incorporated (MSI)basedintheUSA,isacross-bordermailconsolidatorofferingmainlyinternationaloutbounddistributionproducts.In2018IMEX Global Solutions andM.A.I.L.werebought andtogetherwithMSIthey areoperatingastheMailGroup. IMEXGlobalSolutionsisa3rdpartylogisticscompanyintheUS,activeincross-borderpublicationandmaildelivery.M.A.I.L.isactiveinthefieldofbusinessmail/cataloguedistributionforre/e-tailersandmail-roomservicesaswellasparceldistribution.
• Landmark Global (UK) isaUKbasedmail,parcelandtransportcompanyprovidinggloballogisticssolutionstothemarketinUK.BasedneartoHeathrowairport,LandmarkGlobal(UK)hasacustomsbondedfacilityenablingtooffercustomsclearanceservicesandx-raysecurityscreeningservices.LandmarkGlobal(UK)actsasaninboundandoutboundgatewayforotherbpostentitiesaroundtheworld.
• ThroughLandmarkGlobal(UK),bpostisactiveinAsia,operatinginSingaporethroughbpost Singapore Pte andinHongKongthroughbpost Hong Kong.Thesecompaniesoriginallyfocusedondeliveryoffinancialdocuments,butbpostistransformingbpostHongKongtoprovideafullrangeofdeliveryandlogisticssolutions,includingcross-bordermailandparcelsande-commercefulfillment.Theircustomersarespreadacrossthebanking,insurance,assetmanagement,publishingandprintingsectors.SimilartoMSI,theyaremainlyfocusedondirectlycollectingparcelsfromoversease-commercecompaniesandbusinessesfordeliveryinEuropeandotherregions.bpost International Logistics (Beijing) Co.isacompanyaffiliatedtobpost Hong Kong andisestablishedinBeijing(China).Itoffersafullrangeofcross-borderparceldistributionservicestotheChinesee-tailersandconsolidators,withastrongfocusondeliveryofparcelstoEuropeanandotherglobalbuyers.ItisprimarilyactiveinBeijing,ShanghaiandShenzhen.
• Landmark GlobalbasedintheUSAandtheCanada-basedLandmark Trade Services companyareleadinginternationalparcelsconsolidators,activeintheUnitedStatesandCanada.Theyaremainlyfocusedonthedistributionofe-commerceparcelsfromU.S.-basede-tailersintoCanada,EuropaandAustralia.ItalsooffersvariousfulfillmentservicesinlocationsintheUnitedStatesforitse-commercecustomers.
Overthelastyearsithasexpandedinofferingvariouslogisticssolutionstoitsexistingclientbase.
• Landmark Global (PL) providesfulfillment,logisticsanddistributionactivities.ItoperatesaslogisticsanddistributionpartnerfordirectsellingcompaniesacrossWestern,CentralandEasternEurope.
• Landmark Global (Netherlands) providesimportservicesforUScustomerslookingtoselltheirproductsinEurope.Thisincludescustomsclearanceservices,warehousing,pick&packandlastmiledelivery.Landmark Trade Services (Netherlands) is a spin-offcompanyofLandmarkGlobal(Netherlands)whichfocusesonadvisingnewUScustomersonhowtoentertheirproductsintoEurope.Thisincludesbothadviceoncustoms/VATset-upandonproductregistrationinthevariousEuropeancountries.
• Landmark Trade Services (UK) providesimportservicesforgoodsenteringtheUK.ItslocationrightnexttoLondonHeathrowmakesitideallysuitedtoserviceUStoUKairliftimports.Landmark Trade Services USAprovidesimportservicesforgoodsenteringtheUS.
• Freight Distribution Management Systems PTY and FDM Warehousing PTYarespecializedinprovidingapersonalizedcustomerserviceforwarehousing,fulfillmentanddistributingproductsinAustralia.Itsbusinessconsistsofthirdpartylogistics(3PL)warehousing,transport&distribution.
• Apple Express Courier andApple Express Courier’s businessconsistsofthelastmiledelivery,transportationandfulfillmentservicesforclientsinCanadaandtheUS.
• TheactivitiesofUbiway Group relate to press logistics,non-presslogisticsandconvenience&proximityretail.AMPisaprominentplayerintheBelgianpressdistributionmarketwithalargenumberofpointsofsaleservicedandalargenumberoftitlesdistributed.UbiwayGroupalsooffersnon-presslogisticsservicesrelatedtoparcelsandvalue-addede-commercesolutions,suchas3PLlogistics(supplychainservices)andanopenaccessnetworkofparcelpick-upanddeliverypointsinBelgiumundertheKariboo!brand.ConveniencedistributionrelatestoBurnonvillewhichdistributesnon-pressandnon-food(impulse)productstoretailers. Ubiway Retail isasignificantplayerinthenationalpress,tobaccoandconvenienceretailmarketwithanetworkofshopsmostlyoperatedunderthePressShop,Relay,Hello!andHubizbrands.
• Radialisaleadingplayerinintegratede-commercelogisticsandomnichanneltechnology,enablingbrandsandretailerstoprofitablyexceedretailcustomerexpectations.Radial’stechnical,powerfulomnichannelsolutionsconnectsupplyanddemandthroughefficientfulfillmentandtransportationoptions,intelligentfraudprotection,payments,andtaxsystems,andpersonalizedcustomercareservices.HundredsofretailersandbrandsconfidentlypartnerwithRadialtosimplifytheirpost-clicke-commerceandimprovetheircustomerexperiences.Radialbringsflexibilityandscalabilitytotheirsupplychainsandoptimizeshow,whenandwhereordersgofromdesiretodelivery.
• DynaGroup offersarangeofspecializedlogisticalservicesandsoftware,fromtherepairofelectronics(fromsmartphonesanddronestocoffeemachines)topersonalizede-commercedeliveryservices,forbothsmallproducts(rangingfrompassportsto
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 103
smartphoneswithcontractfinalizationonthedoorstep)andlargeconsumerproducts(suchasthedeliveryandinstallationoflargetelevisions,washingmachinesandfurniture).
• Leen Menken Foodservices Logisticsisalogisticoperatorforthetransportofrefrigeratedandfrozenproductsfore-commerce.
• ThebusinessactivitiesofActive Ants consists of productstoring,picking,packing,organizationoftransportactivities,returnshandlingandshippingfore-commercebusinesses.
Name
Shareofvotingrightsin%terms Countryof
incorporation2018 2017
bpostbankNV-bpostbanqueSA 50% 50% Belgium
Name
Shareofvotingrightsin%terms Countryof
incorporation2018 2017
AlterisNV-SA 100.0% 100.0% Belgium
LandmarkGlobal(Belgium)NV-SA 100.0% 100.0% Belgium
CertipostNV-SA 100.0% 100.0% Belgium
Euro-SprintersNV-SA 100.0% 100.0% Belgium
CityDepotNV-SA 99.7% 99.7% Belgium
ParcifyNV-SA1 100.0% 51.0% Belgium
LandmarkGlobal(PL)Spzo.o. 100.0% 100.0% Poland
SpeosBelgiumNV-SA 100.0% 100.0% Belgium
MailServicesINC 100.0% 100.0% USA
LandmarkGlobal(UK)LTD 100.0% 100.0% UK
bpostHongKongLTD 100.0% 100.0% HongKong
bpostSingaporePte.LTD 100.0% 100.0% Singapore
bpostInternationalLogistics(Beijing)Co.,LTD 100.0% 100.0% China
bpostU.S.HoldingsINC 100.0% 100.0% USA
LandmarkGlobal,INC 100.0% 100.0% USA
LandmarkTradeServices,LTD 100.0% 100.0% Canada
LandmarkGlobal(Australia)DistributionPTYLTD 100.0% 100.0% Australia
LandmarkGlobal(Netherlands)BV 100.0% 100.0% Netherlands
LandmarkTradeServices(Netherlands)BV 100.0% 100.0% Netherlands
LandmarkTradeServices(UK)LTD 100.0% 100.0% UK
LandmarkTradeServicesUSA,INC 100.0% 100.0% USA
AppleExpressCourierINC 100.0% 100.0% USA
AppleExpressCourierLTD 100.0% 100.0% Canada
FreightDistributionManagementSystemsPTY,LTD 100.0% 100.0% Australia
FDMWarehousingPTY,LTD 100.0% 100.0% Australia
AMPNV-SA 100.0% 100.0% Belgium
BurnonvilleNV-SA 100.0% 100.0% Belgium
ImportLuxBurnonvilleSARL 100.0% 100.0% Luxemburg
AlvadisNV-SA 100.0% 100.0% Belgium
UbiwayNV-SA 100.0% 100.0% Belgium
Distrisud-BellensNV-SA 100.0% 100.0% Belgium
UbiwayServicesNV-SA 100.0% 100.0% Belgium
InternationaleBoekhandelDistributiedienstNV-SA 100.0% 100.0% Belgium
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 104
DistridijleNV-SA 100.0% 100.0% Belgium
UbiwayRetailNV-SA 100.0% 100.0% Belgium
Kariboo!NV-SA 100.0% 100.0% Belgium
deBurenInternationaalBV1 51.0% 51.0% Netherlands
deBurenNederlandBV1 51.0% 51.0% Netherlands
deBurenAfhaalcentrumBV1 51.0% 51.0% Netherlands
deBurenTechniekBV1 51.0% 51.0% Netherlands
DragstraAutomatiseringBV1 51.0% 51.0% Netherlands
Nuleverbaar.NLBV1 51.0% 51.0% Netherlands
deBurenBelgiumNV-SA1 51.0% 51.0% Belgium
deBurenFinancialBV 51.0% - Netherlands
BubblePostNV-SA 100.0% 100.0% Belgium
BubblePostBV2 - 100.0% Netherlands
ParcifyBV2 - 51.0% Netherlands
WelcomeMediaNV-SA 100.0% 100.0% Belgium
DynagroupBV 100.0% 100.0% Netherlands
DynafixRepairBV 100.0% 100.0% Netherlands
DynalogicBeneluxBV 100.0% 100.0% Netherlands
DynafixCareBV 100.0% 100.0% Netherlands
DynalogicCourierBV 100.0% 100.0% Netherlands
DynafixComputerRepairBV 100.0% 100.0% Netherlands
DynasureBV 100.0% 100.0% Netherlands
DynafixOnsiteBV 100.0% 100.0% Netherlands
DynalinqBV 100.0% 100.0% Netherlands
DynalogicBelgiumNV 100.0% 100.0% Belgium
RadialSolutionsHongKongLTD 100.0% 100.0% HongKong
RadialHoldingsLP 100.0% 100.0% USA
RadialCommerceINC 100.0% 100.0% USA
RadialSouthLP 100.0% 100.0% USA
RadialINC 100.0% 100.0% USA
935HQAssociatesLLC 100.0% 100.0% USA
RadialLuxembourgSARL 100.0% 100.0% Luxembourg
RadialOmnichannelTechnologiesIndiaPrivateLTD 100.0% 100.0% India
TradePortDriveLLC 100.0% 100.0% USA
RadialOmnichannelInternationalSLU 100.0% 100.0% Spain
RadialFullfillmentGmbH 100.0% 100.0% Germany
RadialGmbH 100.0% 100.0% Germany
RadialCommerceLTD 100.0% 100.0% UK
RadialSolutionsSingaporePTELTD 100.0% 100.0% Singapore
RadialE-commerce(Shanghai)Corp.LTD 100.0% 100.0% China
bpostNorthAmericaHoldings,INC 100.0% 100.0% USA
RadialIIIGP,LLC 100.0% 100.0% USA
RadialSouthGP,LLC 100.0% 100.0% USA
IMEXGlobalSolutions,LLC 100.0% - USA
M.A.I.L.(MailingAssistanceInLafayette),INC 100.0% - USA
LeenMenkenFoodserviceLogisticsBV 100.0% - Netherlands
ActiveAntsBV 63.6% - Netherlands
AnthillBV 63.6% - Netherlands
(1) Fullyconsolidated
(2) Liquidatedduringtheyear2018
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 105
50.00%
100.00%
100.00%
100.00%
99.99%100.00%
100.00%
100.00%
99.99%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
63.60%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
0.10%
100.00%
100.00%
100.00%
7.40%
100.00%
100.00%
0.02%
1.00%
100.00%
0.01%
0.02%
99.69%
92.60%
99.98%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
99.98%
100.00%
51.00%
100.00%
99.99%98.39%
99.92%
0.01%
1.61%0.01%
99.99%
100.00%
0.08%
0.01%
0.01%
100.00%
100.00%
100.00%
100.00%
100.00%
99.90%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
99.99%99.00%
100.00%
100.00%
100.00%
GP interest
GP interest
100.00%
100.00% 100.00%
100.00%
100.00%
100.00%
100.00%
bpost NV-SA
bpost group structure
Asper31December2018
FDM Warehousing PTY. LTD
LANDMARK TRADE SERVICES (UK) LTD
Mail Services. INC
LANDMARK TRADE SERVICES. LTD
LANDMARK GLOBAL (Netherlands) BV
LANDMARK GLOBAL. INC
LANDMARK TRADE SERVICES USA. INC
Apple Express Courier. LTD
LANDMARK GLOBAL (PL) Sp z o.o.
BPOST SINGAPORE PTE. LTD
LANDMARK GLOBAL (UK) LTD
DYNAGROUP BV
LEEN MENKEN FOODSERVICE LOGISTICS BV
ANTHILL BV
ACTIVE ANTS BV
BPOST HONG KONG LTD
Freight Distribution Management Systems PTY. LTD
LANDMARK GLOBAL (Australia) Distribution PTY LTD
bpost US Holdings. INC
LANDMARK TRADE SERVICES (Netherlands) BV
Apple Express Courier. INC
M.A.I.L., Inc (Mailing Assistance In Lafayette, Inc)
IMEX GLOBAL SOLUTIONS, LLC
BPOST INTERNATIONAL LOGISTICS (Beijing) CO LTD
DYNALOGIC BELGIUM NV
DYNASURE BV
DYNALOGIC COURIER BV
DYNALINQ BV
DYNAFIX CARE BV
DYNAFIX ONSITE BV
DYNAFIX COMPUTER REPAIR BV
DYNALOGIC BENELUX BV
DYNAFIX REPAIR BV
Radial GmbH
Radial Omnichannel International SLU
Radial Solutions Hong Kong Ltd
Radial Commerce Ltd
Radial Solutions Singapore PTE Ltd
Radial Fulfillment GmbH
Radial e-commerce (Shanghai) Corp. Ltd
Radial Luxembourg S.à.r.l.
Radial III GP. LLC
Radial Commerce. Inc.
935 HQ Associates. LLC
Radial South GP. LLC
Radial. Inc. Trade Port Drive, LLC
bpost North America Holdings. Inc
Radial Holdings. L.P.
Radial Omnichannel Technologies India Private Ltd
Radial South. L.P.
BPOST BANK NV / BPOST BANQUE SA (equity method)
BUBBLE POST NV-SA
DE BUREN NEDERLAND BV
DE BUREN INTERNATIONAAL BV
DE BUREN TECHNIEK BV
NULEVERBAAR.NL BV
DRAGSTRA AUTOMATISERING BV
DE BUREN AFHAALCENTRUM BV
BURNONVILLE NV-SA
ALVADIS NV-SA
IMPORT LUX BURNONVILLE
UBIWAY SERVICES NV-SA
DISTRIDIJLE NV-SA
KARIBOO! NV-SA
UBIWAY RETAIL NV-SA
DISTRISUD-BELLENS NV-SA
Internationale Boekhandel Distributiedienst NV-SA
ALTERIS NV-SA
PARCIFY NV-SA
CITYDEPOT NV-SA
SPEOS BELGIUM NV-SA
CERTIPOST NV-SA
EURO-SPRINTERS NV-SA
LANDMARK GLOBAL (Belgium) NV-SA
WELCOME MEDIA NV-SA
DE BUREN BELGIUM NV-SA
DE BUREN FINANCIAL BV
AMP NV-SA
UBIWAY NV-SA
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 106
6.36Eventsafterthestatementoffinancialpositiondate
InFebruary 2019,bpostagreedtoexititsparticipationindeBuren.IntheprocessbpostacquiredthedeBurenassetsinBelgium.ThiswillallowbposttofurtherboostitslastmileparcelserviceofferinginBelgiumthroughadensenetworkofparcellockerswalls.
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 107
Summary of the financial statements of bpost NV/SA
ThefullversionoftheannualaccountsisfiledwiththeNationalBankofBelgiumandarealsoavailablefreeofchargeonthebpost’swebsite.
Thissectioncontainsasummaryversionofthestatutory(non-consolidated)annualaccountsofbpostNV/SA.ThestatutoryauditorissuedanunqualifiedopiniononthestatutoryaccountsofbpostNV/SAasofandfortheyearendedDecember 2018.
Balance sheet of bpost NV/SA (summary)As at 31 December
Inmillion EUR 2018 2017
Assets
Non-current assets
Intangibleassets(includingformationexpenses) 24.6 14.5
Tangibleassets 302.9 329.3
Financialassets 1,496.7 1,344.5
1,824.2 1,688.3
Current assets
Inventories 8.3 9.1
Tradeandotherreceivables 505.9 444.0
Cashandcashequivalents 490.2 354.2
Deferredchargesandaccruedincome 42.3 22.8
1,046.7 830.1
Total assets 2,870.9 2,518.4
Equity and liabilities
Equity
Issuedcapital 364.0 364.0
Reevaluationsurpluses 0.1 0.1
Reserves 50.8 50.8
Retainedearnings 172.8 172.5
587.7 587.4
Provisions
Pensionrelatedprovisions 29.7 26.3
Provisionforrepairsandmaintenance 0.1 1.2
Otherliabilitiesandcharges 139.4 155.6
169.1 183.1
Non-current liabilities
Longtermdebts 860.3 68.4
860.3 68.4
Current liabilities
Tradeandotherpayables 224.0 206.3
Shorttermdebts 199.9 724.1
Socialdebtspayable 346.4 354.3
Incometaxpayable 24.9 46.3
Otherdebts 328.2 219.3
Accruedchargesanddeferredincome 130.4 129.3
1,253.8 1,679.6
Total liabilities 2,870.9 2,518.4
FINANCIAL CONSOLIDATED STATEMENTS
bpost ANNUALREPORT2018 108
Income statement of bpost NV/SA (summary)For the year ended 31 December
Inmillion EUR 2018 2017
Revenue 2,128.2 2,114.7
Otheroperatingincome 51 .0 40.9
Non-recurringoperatingincome 1.2 0.0
Total operating income 2,180.4 2,155.7
Materials costs 6.2 7.9
Payrollcosts 1,091 .0 1,087.8
Servicesandothergoods 661.2 606.3
Otheroperatingexpenses 10 .5 13.5
Provisions (14.0) (5.6)
Depreciationandamortization 54 .9 53.1
Non-recurringoperatingcharges 1.0 1.1
Total operating expenses 1,810.8 1,764.1
Profit from operating activities 369.6 391.6
Financialgains/(losses) 11 .7 30.7
Nonrecurringfinancialgains/(losses) (15.6) 0.3
Profit before tax 365.8 422.6
Incometaxexpense 103 .5 131.6
Earnings after taxes 262.3 291.0
bpost ANNUALREPORT2018 109
MANAGEMENT RESPONSIBILITY STATEMENT
Management Responsibility StatementKoenVanGerven,ChiefExecutiveOfficerandBaudouindeHepcée,ChiefFinancialOfficeradinterim,declareintitleandfortheentitythattothebestoftheirknowledge:
• theconsolidatedfinancialstatementsforthefinancialyears2017 and2018,preparedinaccordancewith“InternationalFinancialReportingStandards”(IFRS)asacceptedbytheEuropeanUnionupuntilDecember 31,2018,giveatrueandfairviewofthenetassets,thefinancialpositionandtheresultsofbpostNV/SAandtheentitiesincludedintheconsolidationscope;and
• themanagementreportrelatedtotheconsolidatedfinancialstatementsgiveatrueandfairviewofthedevelopmentandtheresultofbpost’sactivities,aswellasthepositionofbpostNV/SAandtheentitiesthatareincludedintheconsolidationscope,togetherwithadescriptionofthemainrisksanduncertainties that bpost faces.
KoenVanGerven BaudouindeHepcée
ChiefExecutiveOfficer ChiefFinancialOfficera.i.
CSR Review
CSR Strategy – People, Planet, Proximity
AsoneofthelargestemployersinBelgium,bpostplaysamajorroleinsociety.Itisourdutytosetanexample.Thisiswhyourambitionistomakeourcompanyprocessesandculturesustainable.Insodoing,weareabletoachieveasustainablegrowthandberecognizedbyourstakeholders(customers,shareholders,government,employees,suppliers,tradeunions,NGOs)asasociallyresponsiblecompany.Itisalsoimportanttousthatourcustomersknowthattheirletters,parcelsandlogisticsareprocessedinaresponsibleway.Oneofthekeyexamplesofbpost’sstrivingforsustainablegrowthisthesustainabilityloanittookoutattheendof2017.TheinterestrateofthisEUR300millionrevolvingcreditfacility(RCF)changesaccordingtobpost’ssustainabilityratingasdeterminedbyanexternalparty.TheloanwasthefirstofitskindinBelgiumandincentivizesourorganizationtobecomeevenmoresustainable.
Togetherwithourstakeholders,weperformedamaterialityassessment,basedonwhichwedefinedourCSRstrategystructuredinthethreefollowingpillars:
• People:wecareaboutouremployeesandarecommittedtothem.
• Planet:westrivetoreduceourimpactontheenvironment.
• Proximity:weareclosetothesocietyanditsemergingneeds.
Moreaboutourmaterialityassessmentmethodologyandourstakeholderdialoguecanbefoundonourwebsite.
Foreachofthesepillars,wehavelinkedourmaterialtopicsandstrategicKPIsonwhichweintendtofocus:
Green fleet
SHARED VALUECREATION
• Employee health and safety
• Employee training and talent development
• Ethics and diversity• Social dialogue
• • Green buildings• Waste management
• To our community• To our suppliers• To our customers
through our services
• Continuity of our business• Employee satisfaction and engagement• Customer satisfaction
PEOPLEWe care aboutour employees
and engage them
PLANETWe strive to reduce
our impact on the
environment
PROXIMITY
We are close tothe society
bpost ANNUALREPORT2018 110
CSR REVIEW
Our CSR priorities (material topics)
Related risk & opportunities Strategic KPI Target Result 2018 vs target Result 2018 vs. external environment
People
Employeehealthandsafety
Casesofinjuryand/orillnesscanrepresentacostforbpostaswellasfortheemployeeconcerned.Also,apreventivewell-beingpolicycanhelpdecreasestresslevelsandhence,absenteeism.
Absenteeism bpostBelgiumhassetanewtargetfor2019-5%decreasecomparedto2018.
bpostBelgium:7.85%
AccordingtoaSecurexstudy1,theBelgianaverageabsenteeismratewas7%in2017.
Employeetrainingandtalentdevelopment
Trainedemployeescandemonstrateanincreaseinefficiencyandpromoteemployeeengagement,whichcanimproveemployeeretention.
Ethicsanddiversity
Theethicalanddiversitypolicyaffectsbpost’sreputation,itsemployee’sengagementandretention.
Employeeengagement
Toexceedor meet the Belgiannationalbenchmarkonengagement(2017:5,10).
Results2017:4.8.Thenextemployeesatisfaction surveywillbeperformedinQ12019.
ThecompanyPulseperformedastudyoverthe2014-2017periodinwhichtheysurveyed81,000 employeesfrom215Belgiancompanies.Theoverallengagementratewasthenbeencorrectedusingspecificcriteria(e.g.worktype,age)andafactorfromtheKULuniversity.Fromthisresearchitappearsthatthenationalbenchmarkforemployeeengagementis5,10.
Social dialogue
Aneffectivesocialdialoguehelpspreventpossiblestrikesandrelatedcostsbutalsoensuresemployeesatisfactionandengagement
Planet
Greenfleet Havingagreenfleethelpsimproveourcarbonfootprintandbringsaboutapositivepublicimageofthecompany.Italsogeneratesfuelcostsavings.Moreover,itisawaytomitigateexpectedrisingcarbontaxes.
CO2 footprint scope 1,2and3
• -20%scope 1and2GHGemissionsby2030comparedto baseline 2017:114,395tCO2-eq.
• -20%scope3GHGemissionsby2030fromUpstream Transportation andDistribu-tioncomparedto baseline 2017:218,016tCO2-eq.
Results2018:Scope 1&2 emissions increasedby2%to116,467 andscope3emissions decreasedto192,390allowingforanoveralldecreaseofCO2 emissions of7%(scope 1,2and3).
Forthesixthtime,bposthasbeenrecognizedgreenestpostaloperatorbytheIPC.Everyyear,IPC’sEnvironmentalMeasurementandMonitoringSystem(EMMS)measuresthecarbonemissionsofagroupoftwentypostaloperatorsworldwide.In2017,thesetwentycompaniesintheEMMSgenerated6,211,000 tonsofCO2forscope 1and2,and17,363,000 tonsofCO2forscope 1,2and3.bpost’semissionsof308,857tCO2-eq(scope 1,2and3
2) are thus betterthanaverage(310,550 tonsofCO2).
Greenbuildings
Greenbuildingsgenerateenergy-relatedcostsavingsandimproveour carbon footprint.
Wastemanagement
Asoundwastemanagementbringsapositiveimageofthecompanyandimprovesourscope3carbonfootprint.Assuch,itcanalsogeneraterevenuesbyvalorizingwasteasarawmaterial.
(1)Source:https://www.securex.be/nl/publicaties/wp/absenteisme-in-2017
(2)Source:https://www.ipc.be/sector-data/sustainability/emissions
bpost ANNUALREPORT2018 111
CSR REVIEW
Our CSR priorities (material topics)
Related risk & opportunities Strategic KPI Target Result 2018 vs target Result 2018 vs. external environment
Proximity
Proximitytooursociety
Proximitytosocietyispartofbpost’smission.Forgettingthelocalcommunitywouldbedetrimentaltobpost’sreputation.
Number of social initiatives
Toberecognizedbyourcommunityasa sustainable partner
13 OurDuoForaJobinitiativewasawarded“CoupdeCœur2018”bythejuryofPostEurop.
Proximitytoour suppliers
Havingaclearoverviewofoursupplychainbringsefficiencyandhelpsavoidsupplyrisks(e.g.financialorsupplystability).Also,includingsustainabilityrequirementshelpsmitigatereputationalriskslinkedtounethicalbehaviororenvironmentaldamage.
Share of significanttier1suppliers coveredbyour Supplier CodeofConduct
100% 100% Since2018,100%ofbpostBelgiumsuppliersarecoveredbythesuppliercodeofconducts(nowincludedinourgeneraltermsandconditionsforallourcontracts).Ecovadissurveyed120 companiesontheirprocurementpracticesin20171.Fromthissurvey,itappearsthatnotmorethan45%ofthecompaniesspend75%ormoreoftheirprocurementvolumeonstrategicsupplierscoveredbytheirsustainableprocurementpolicy.
Proximityto our customers throughourservices
Enhancingourcustomerexperienceandimprovingourofferimprovescustomerretention.Moreover,developingmore sustainable solutions givesanopportunitytogobeyondcustomerexpectations,thusimprovingourmarketpositioning.
Customersatisfaction
Toexceedormeetthelevelofpreviousyear(2017bpostBelgium:86).
bpostBelgium:84One of the reasonsbehindthedeclineof customer satisfaction canberelatedtothestrikesthatoccurredinQ4of2018,whichaffectedthe timeliness andqualityof the mail distribution.
bpost measures customer satisfaction ona7-pointscale.Othercompaniestendtousea5-pointor10-pointscale.Moreover,wemixresultsofbothresidentialandbusinesscustomers in our approach. This makesitdifficulttocompareresultswithothercompaniesorbenchmarks.
(1)Source:Ecovadis-ScalingUpSustainableProcurement,2017.
bpost ANNUALREPORT2018 112
CSR REVIEW
Key achievements in 2018
Our CO2 Science Based Target has been approved
WeareawarethatouractivitiesgenerateasignificantlevelofGHGemissions.Reducingourecologicalimpactispartofthepromisewehavemadetoourcustomersandstakeholders.
Bytheend2017,bposthadsuccessfullyreduceditsgreenhousegasemissionsby-37%since2007.In2018,wewereawarded“greenestpostaloperatorintheworld”forthesixthyearinarowbytheInternationalPostCorporation.Thisyear,tofurtherpushoureffortstomeetthe2015ParisClimateAgreement,wedecidedtosetanambitious“Science-BasedTarget”forthecarbonfootprintoftheentirebpostgroup:-20%CO2emissionsby2030,comparedtoournewbaselineyear2017.
Comparedtobusinessasusual,thisrepresentsareductionofnearly-40%.
Wewereproudtoseeournewtargetapprovedbythe“ScienceBasedTarget”initiative.ThismeansourambitionisrecognizedashavingthepotentialtocontributetokeeptheriseinglobaltemperaturebelowtwodegreesCelsiuscomparedtopre-industrialtemperatures.
Toachievethisgoal,wewillexchange50%ofourdieselvehiclesby2030foranelectricalalternative.InBelgium,therewillbemorethan600 newelectricvehiclesby2022,andmorethan3,400by2030.Thisisambitiouscomparedtotheoverallexpectationsregardingtheelectricalvehiclesmarket.Indeed,accordingtoaBloombergprediction1,55%ofallnew
carsalesand33%oftheglobalfleetwillbeelectricby2040.Butatbpost,weareaimingfor50%by2030.
Otherinitiativesalsoaimtoreduceourcarbonfootprint,suchasthepurchaseofgreenelectricity,“ecodriving”training,electricalcompanycarsandalternativewaystocometowork.Atoursubsidiaries,wewanttoswitchtoelectricalvehicles,purchasegreenelectricity,andswitchtoLEDlightingwhenrelevant.
SDG Roundtable with the QueenbposthascommittedtocontributetotheUnitedNationsSustainableDevelopmentGoals(SDGs).Asanenvironmentallyandsociallyresponsiblepubliclyquotedcompany,weacknowledgeourroleandsharedresponsibilityintheimplementationofthesegoals.Inthiscontext,wehaveendorsedtheBelgianSDGChartersince2016.Morespecifically,ouroperationscontributemosttothefollowingSDGs:9 (Industry,innovationandinfrastructure),12 (Responsibleconsumptionandproduction),8 (Decentworkandeconomicgrowth),13 (Climateaction)and11 (Sustainablecitiesandcommunities).
On14thJune 2018,ourCEOKoenVanGervenparticipatedinaroundtablediscussionontheSDGspresidedbyHerMajestytheQueen.AdozencompaniesattendedtheeventtodiscusstheirideasregardingsustainabilityinlinewiththeUnitedNations’DevelopmentGoals.OurCEOpresentedseveralbpostinitiativestotheQueenandtheMinister.Attheendofthemeeting,KoenofferedQueenMathildeahoneypotfromour“Beepost”production,locatedontherooftopofourheadquartersinBrussels.
(1)Source:Bloomberg(2018)–ElectricVehicleOutlook2018.https://about.bnef.com/electric-vehicle-outlook/
bpost ANNUALREPORT2018 113
CSR REVIEW
bpost signed the Green Deal BiodiversityProximitywithwidersocietyispartofourmission.Weareindailycontactwiththelocalcommunities.Wethereforewanttotakethisopportunitytoimprovethebiodiversityandenvironmentthatsurroundthem.
Tothisend,bpostBelgiumhassubscribedtotheGreenDealBiodiversitywithmorethan110 companies,organizationsandlocalgovernments.
AGreenDealisavoluntaryagreementbetweenpublic/privatepartnersandtheFlemishGovernmenttostartajointgreenproject.ThroughtheGreenDealBiodiversity,bpostcommitstoincreasingbiodiversityinsideandoutsideitscorporatesitesoverthenextthree years.
Specifically,relativelysimplemeasuresarebeingtakentoenhancethenaturalvalueofoursites.AnexampleistheinstallationofaninsecthotelatourheadofficeinBrussels.
Our efforts for more inclusiveness have been awarded “Coup de Cœur 2018” by PostEurop
bpostcaresaboutitspeople,butalsoaboutthecommunityandinclusion.Atbpost,weengagewithsocietybysupportingprojectsandorganizationsthatalignwithourmission.
Asapartofoureffortsforincreasedsocialinclusion,wepartneredwithDuoforaJob.ThisBelgianorganizationmatchesyoungimmigrantjobseekerswithover50-yearolds.Thankstotheirprofessionalskillsandexperiencesinrelatedfields,theseover-50scanaccompanyandsupporttheyoungprofessionalsintheirjobsearch.
Theobjectiveoftheinitiativefor2018wastohave26bpostvoluntarymentorstrainedandoperationalbytheendoftheyear.
Wevaluethisprojectasitisfacilitatingthefutureemploymentofyoungpeoplewithoutanetworkwhilerecognizingthevalueoftheexperienceofolderbpostemployees.Forbothparticipants,theexperiencebringsabouthighmotivation,recognitionandhumanimpact.Theinitiativealsomadeitpossibleforbposttobeawarded“CoupdeCœur2018”bythejuryofPostEurop.
Together towards the future: re-establishing trust through social dialoguebpostprovidesstablefull-timejobswithmeaningfulwork,especiallyforthe70%ofouremployeeswithlowqualifications.Ouremployeesarethusattheheartofourbusiness.Iftheyfeelsatisfiedandenthusiastic,theycan,inturn,enthuseourcustomersandearntheirloyalty.Thisencouragesbposttoworkhardtopromotewell-beingandgoodworkingconditionsforouremployees.
Nevertheless,ourbusinessisconstantlychanging,andnewchallengesariseallthetime.
Ourchallengeistofindtherightbalancebetweenadjustingtomarketchangesandensuringstableworkingconditions.Therefore,wetrytofosteragooddialogueandrelationshipwiththeunionsinordertoreactpromptlytoincidents,avoidescalationandmitigatesocialconflicts.
Weendedtheyearwithimportantagreementsregardingthewell-beingofouremployeesandthefutureofbpost.Theobjectivewastoanswerouremployees’workloaddemandsandtorestoretrust.Thisresultedinanewcollectivelaboragreementfor2019-2020inwhich,measurestoincreasethepurchasingpower,decreasetheworkloadandsecurefuturejobpreservationwerelaiddown.ThisagreementwillimpactbpostBelgium’scostbasebyaboutEUR 20 millionannually.
Intheend,thoseproposalsbringtogethermanypositiveelementswhichrepresentabreakthroughforthewell-beingofouremployeesandforthefutureofourcompany.
Challenge of 2018
bpost ANNUALREPORT2018 114
CSR REVIEW
CSR consolidated statements
About our CSR consolidated statements
ThisCSRreporthasbeenpreparedinaccordancewiththeGRI(GlobalReportingInitiative)Standards(coreoption)andisstructuredbasedonourmaterialaspects.TheGRIContentIndexcanbefoundonourwebsite.
Scope and boundariesTheinformationusedforthisCSRconsolidatedstatementwascollectedfrominternaldepartmentsandismainlybasedoninformationavailablethroughinternalreporting.Theinformationregardsthe2018calendaryearandcoversallofbpost’sactivities,includingthoseofitssubsidiaries,unlessspecificallystatedotherwise.
Thecompletelistofbpost’ssubsidiariescanbefoundinbpost’sFinancialConsolidatedStatements.Wedefineasubsidiaryasanentityinwhichbpostownsmorethan50%ofthesharesandthatissignificantintermsofturnoverandemployees.Subsidiariesincludedforourreporteddataarelistedbelow.
Thesubsidiariesinscopeareincludedasofthedateofacquisition.Ifthesubsidiarywasacquiredin2018,thedataonlycoverstheperiodafterthedateofacquisition.ThisisthecaseforthesubsidiaryActive Ants.
bpost entities Ownership Scope %ofFTE Planet People Proximity
bpostBelgium (bpost SA/NV) 100% Yes 75
Radial 100% Yes 18
LandmarkGroup 100% Yes 2
Dynagroup (incl.LeenMenken) 100% Yes 2
Ubiway(incl.Kariboo!) 100% Yes 1
Speos 100% Yes 1
AppleExpress 100% Yes 1
FDM 100% Yes <1
ActiveAnts 63.6% Yes <1
CityDepot 99.7% Yes <1
Euro-Sprinters 100.0% Materialonlyforsubcontractedtransport n/a n/a n/a
deBuren 51.0% NotmaterialbasedonFTE n/a n/a n/a n/a
bpostbank 50.0% No operational control n/a n/a n/a n/a
Limiteddataavailable forsubsidiary
Data almost complete forsubsidiary
Data complete forsubsidiary
bpost ANNUALREPORT2018 115
CSR CONSOLIDATED STATEMENTS
Data quality and reliabilityThequalityandreliabilityofenvironmentaldataintheCSRconsolidatedstatementisensuredbytheEnvironmentalandEnergyDepartmentofbpostBelgium,whichperformsyearlydatachecksandanalyses,developsreductionplansandworkscloselywiththedifferentauthorities.Weinvolvedvariousexternalpartieswhenassessingthequalityofthereporteddata:CO2Logic,ISWEuropaandDeloitte.
TheHRdataintheCSRconsolidatedstatementaremostlyreportedtoexternalparties,suchastheNationalSocialSecurityOffice.
In2018,wetookfurtheractionsinourinternalreportingprocessesinordertoimprovethereliabilityofdataprovidedbyoursubsidiaries.Tothisend,weformalizedthedefinitionsofourindicators.Asaconsequence,wemadesomerestatementsconcerning2017datapublished.
External verificationDNV,anexternalbody,verifiesthequalityofbpost’s CO2emissionsdataaccordingtotheISO 14064Standards.Also,bposthasobtainedISO 14001certificationforitsstrategicsitesinBelgiumfromAIBVincotte.bpostwantstofurtherformalizethedatareportingofitssubsidiariesbeforesubmittingitsentireCSRreportforexternalverification.
FormoreinformationrelatedtoourCSRgovernanceandawardsandpartnerships,werefertoourwebsite.
PeopleAtbpost,webelieveitisessentialtoengageandenthuseouremployeesinourmissiontobeamajorpartofourcustomers’dailylives.Withemployeesallovertheworld,humancapitalisapriorityforus.Wevaluethewidearrayofskills,competencesandunyieldingloyaltyouremployeesofferourcompany.
Itisourdutytoprovideallofouremployeeswiththebestcorporateculture,safeguardinggoodworkingconditions,ethicalbehavior,health,safetyandwellbeingatwork.Weachievethisbytakingvariousactionswithinthedifferentcountries,businessesandbusinessunitstostrengthenandanchorthis“cultureshaping”process.Forinstance,thebpostCodeofConductwasrevisedin2018toalignourvalueswithinallbpostsubsidiaries.
Bymeasuringtheemployeeengagementscoreandabsenteeismlevel,weareabletokeepaneyeonhowourpeoplefeelabouttheirjobs.Sincetheseindicatorsareoutcomesofouremployee-relatedpolicies,suchashealthandsafety,traininganddevelopment,ethicsanddiversityandsocialdialogue,theyprovidegoodinsightintoourcompanycultureandhelpustomakemodificationswhenandwherenecessary.
People–StrategicKPIs
bpostBelgium Subsidiaries bpost Group
Unit 2016 2017 2018 Trend 2018 2018
Employeeengagement1 Score 4.9 4.8 n/a n/a n/a
Absenteeism2 % 7.61 7.57 7.85 n/a n/a
(1) ThenextbpostBelgiumsurveywillbeperformedinQ12019.Moreover,wearecurrentlyinvestigatingthepossibilitiesforconsolidatingemployeeengagementmeasurementsfromourdifferentsubsidiaries.
(2) Duetodifferentlegislationsandassociateddefinitionsregardinghealthandsafetyfiguresamongoursubsidiaries,wearenotabletoconsolidatethefiguresatthegrouplevel.
bpost ANNUALREPORT2018 116
CSR CONSOLIDATED STATEMENTS
(1) Duetodifferentlegislationsandassociateddefinitionsregardinghealthandsafetyfiguresamongoursubsidiaries,wearenotabletoconsolidatethefiguresatthegrouplevel.
Employee health and safety
People–Employeehealthandsafety
bpostBelgium Subsidiaries bpost Group
Unit 2016 2017 2018 Trend 2018 2018
Health and safety of own employees
Occupationalaccidentsofownemployees
Number 921 918 944 138 1,082
Lostdaysofownemployees
Days 31,432 30,850 30,890 1,313 32,203
Severityrateofownemployees
Lostdaysper1,000hoursworked
0.91 0.9 0.9 0.1 n/a1
Frequencyrateofownemployees
Accidentsper1,000,000hoursworked
26.84 26.83 27.48 8.46 n/a1
Absenteeismofownemployees
% 7.61 7.57 7.85 n/a n/a1
Total number of fatalitiesownemployees
Number n/a 1 0 0 0
Health and safety of temporary staff
Occupationalaccidentsoftemporarystaff
Number n/a 57 86 41 127
Lostdaysoftemporarystaff
Days n/a 365 294 76 370
Severityrateoftemporarystaff
Lostdaysper1,000hoursworked
n/a 0.19 0.14 0.01 0.04
Frequencyrateoftemporarystaff
Accidentsper1,000,000hoursworked
31.23 29.87 42.36 5.16 12.73
Total number of fatalitiestemporarystaff
Number n/a 0 0 0 0
Total number of hours workedbytemporarystaff(actual)
Hoursworked n/a 1,908,050 2,030,019 7,949,699 9,979,718
bpost ANNUALREPORT2018 117
CSR CONSOLIDATED STATEMENTS
(1) Thefiguresonroadsafetyonlycontainthebpostentitieswithadeliveryfleet:bpostNV/SA,DynaGroup,Euro-SprintersandCityDepot.
(2) Restatementbasedonstandardizationofdefinition.
(3) BelgianLaw:Actof4 August 1996onwell-beingofworkersintheperformanceoftheirwork,“Codexoverhetwelzijnophetwerk”or“LeCodesurlebien-être”.http://www.employment.belgium.be/defaultTab.aspx?id=556
(4) “Toezichtophetwelzijnophetwerk”or“Contrôledubien-êtreautravail”:http://www.emploi.belgique.be/cbe.aspx
People–Employeehealthandsafety
bpostBelgium Subsidiaries bpost Group
Unit 2016 2017 2018 Trend 2018 2018
Road safety1
Blameworthyroadtrafficincidentsonbehalfoftheentityper100,000km2
% n/a 3.63 3.44 3.07 3.41
Sharedblameworthyroadtrafficincidentsonbehalfoftheentityoftotalroadtrafficincidents
% 62 772 75 40 75
Numberofroadfatalitiesdrivers/millionkm(duringworkinghours)onbehalfoftheentity
Number per millionkmdriven
n/a 0.012 0.00 0.00 0.00
Thewellbeingofouremployeesisparamountforbpost’soperations.Wethereforehaveastrictpreventionpolicytoavoidoccupationalandroadaccidents,stressandillnessandtoensurethatouremployeesremainsafeandhealthy.Inthisregard,wecomplywithandanticipateregulations,monitorrisksforsafetyandwellbeing,andcontinuouslystrivetoimprovethoseaspects.
InBelgium,ouremployeewellbeingpolicyisbasedontheFederalGovernment’sActof4 August 1996onwell-beingofworkersintheperformanceoftheirwork3.Thisisenforcedbyanexternalcommittee4 thatperformsrandomcomplianceinspections.Italsoperformsregularinspectionsforspecificsubjects.Forinstance,in2018bpostBelgiumwascheckedonitsprocessesforoccupationalaccidents.BothtradeunionsaswellasemployeescanrequestinspectionthroughtheBelgianFederalGovernment.
Lookingatoursubsidiaries,thehealthandsafetyprocessesatRadialarecompliantwithOSHA(OccupationalHealthandSafetyAct).Dynagroup,inTheNetherlands,worksaccordingtotheDutchnationaloccupationalhealth&safetylegislation(Arbo)basedonhealth&safetyRiskInventorieswithassociatedcontrolmeasures.RiskInventoriesarealsoperformedandformallyassessedbyanexternalcompany.Furthermore,AppleExpressinCanadaiscompliantwithOHSAS18001(OccupationalHealthandSafetyAssessmentSeries)requirementsandUbiwayandLandmarkhaveahealthandsafetymanagementsysteminplace.
Themostprevalentsafetyincidentsinourbusinessareslipping,falling,trippingortheimproperuseofvehicles.Tolimittherisksofaccidentsandhealthissues,weperformregularriskanalyses.Theidentifiedrisksarecommunicatedwithintheorganizationtogetherwithclearmeasurestobetaken.In2013,ariskanalysiswasperformedforourbusinessdivision“Mail”.Sincethenumberofparcelsisincreasing,wewillperformanupdatein2019.Thereisalsoaworksafetyandergonomicsanalysisplannedatalloursortingcenters,andariskanalysisforvehicle-relatedincidents.
Weimplementedseveralsuccessfulinitiativesconcerninghealthandsafety,whichledtoasignificantdecreaseinoccupationalaccidentsbetween2010 and2014.Examplesaretheuseofasafetycornerontheshopfloor,encouragingemployeestoreportanytypeofsafetyincident,andsafetycommunicationcampaigns.ASafetyRegisterhelpstofollowsafetychecksinastructuredmanner.FromtheSafetyRegister,wecandrawimportantlessonslearned,whicharethencommunicatedtoouremployees.
Toevenfurtherimprovethisperformanceandboostsafetyculture,bpostlaunchedthreeinitiativesinBelgiumin2018.Thefirstinitiativewasthe“SafetyPerformanceBarometer”,whichisanimprovedwell-beinginstrumentthatmeasuressafetyperformance.Itwastestedin2017 andisnowusedbyourmanagement.
bpost ANNUALREPORT2018 118
CSR CONSOLIDATED STATEMENTS
(1) “FormationRationelleetAcceléréedesConducteurs”
Itworksasfollows:byconsolidatingdifferent,alreadyexisting,safetyperformanceindicators,wegaininsightintheoverallsafetyperformanceofaregionandcanprioritizewhereandforwhichaspectstheneedisgreatest.ThesafetyperformancebarometerislinkedtothebpostSafetyRegister.
Secondly,wetrainedouremployeesonsafetyusingasafetygame.Anapplicationsendsthemtwoquestionsperdayonissuesrelatedtoanyhealthandsafetymattertorefreshtheirmemory.Thereisatotaloffiftyquestions,andtheyvarydependingontheseason.Forinstance,inwintertherewillbequestionsonroadsafety,insummerondrinkingenoughwater.Wealsoincludedquestionsonhealthyfood.Foreverycorrectanswertheemployeecanwintenstamps.Thethirdinitiativein2018isane-learningmoduleaboutfirepreventionforallmembersofafirepreventionteam.Theseemployeesfollowedacompleteonlinetrainingwithanimationsoneverythingrelatedtofirepreventionandsafetyandwhattodoincaseofanemergency.Afterthetraining,theemployeesweretestedonthecontentofthemodule.
Roadsafetyisalsoakeyconcernforus.Weaimtototallyeliminateroadaccidents.In2018,weranalargetrainingprojectconcerningroadsafetyinBelgium.Foreveryvehicle(includinge-bicyclesandinternaltransport),itwasmandatorytoreceivedrivingtrainingatbpost’sdrivingschool(FRAC1).Thetrainingsfocusonimprovingdrivingknowledgeandskills;threedifferentlevelsareproposed,dependingonthecurrentqualificationsofthedriver.
Wealsowanttomakesureouremployeesremainhealthy,andincludepsychosocialaswellasphysicalaspects.Tothisend,bpostpromotesandoffersaccesstonon-occupationalmedicalandhealthcareservices,suchascompanydoctors.OurBelgian“HealthSurveillance”systemprovidesmandatorymedicalcheck-upsforallbpostpostalworkers:athirty-minutecheck-up,includingacardiovascularandmusculoskeletalscreeningeveryfiveyearsfortheunder45sandeverythree yearsforthe45 plus.Weevenaskouremployeesinsortingcenterstogoonanannualbasis.In2018,atotalof6,300 bpostemployeesand1,600 interimworkersgotamedicalcheck-up.bpostemployeescanalsogetvaccinatedagainstthefluintheFall.
Forthepsychosocialwellbeingofouremployees,weorganizeasurveytomeasurethelevelofemployeeengagementandorganizeapersonalized“balancetool”sothatemployeescangaininsightintotheirpersonalstressandmotivationlevels.Basedontheresult,wegivepersonalizedtipsandtricks.OuremployeeAssistanceProgram(externalpsychologists)isavailableformorecomplicatedindividualproblems.Wewillimplementthesetoolsonaglobalscaleinthenearfuture.Employeessufferingfromstresscanaskamemberofourspecializedteamofstresscoachesforhelponavoluntarybasisandstaffmanagementreceivespsychologicaltrainingonrecognizingsignsofdistressintheiremployees.Also,wehaveasecurityline,whichouremployeescancallanytime24/247/7.
Moreover,wehaveamanagerresponsibleforadvisingandintegratingergonomicsintheworkenvironment,bothintheoffice,inoursortingcentersandforourpostmenandpostwomen.Forinstance,acoupleofyearsagoweswitchedfrombikeswithtwowheelstothreewheels.Wealsomeasurethedifferentlightingandairqualitysettings(includinghumidity)toimprovetheworkingenvironment.
Unfortunately,in2018,ourabsenteeismandfrequencyrateofouremployeesandtemporarystaffhaveincreased.ThisismainlyduetoournewsortingcentreNBX,whichwasfullyactivein2018.Thesortingcentreforparcelsdeliveriesentailsnewactivitieswithverydifferentriskprofilethanourcurrentmailactivities.Thefiguresarethereforenotcomparablewithpreviousyears.However,weaimtoworkontheseaspectsinthecomingyears.Ourobjectiveisadecreaseoffrequencyrateby3%comparedto2018andadecreaseof5%ofabsenteeismcomparedto2018.
bpost ANNUALREPORT2018 119
CSR CONSOLIDATED STATEMENTS
Employee training and talent development
People–Employeetrainingandtalentdevelopment
bpostBelgium Subsidiaries bpost Group
Unit 2016 2017 2018 Trend 2018 2018
Training hours
Totaltraininghoursperownemployees
TraininghoursperFTE
n/a 20.89 21.52 12.41 19.25
Totaltraininghourspertemporarystaff
TraininghoursperFTE
n/a n/a 7.71 n/a n/a n/a
Formal training
Formaltraininghoursperownemployees
TraininghoursperFTE
n/a 5.71 5.57 8.93 6.41
Formaltraininghourspertemporarystaff
TraininghoursperFTE
n/a n/a 28.67 n/a n/a n/a
Informal training
Informaltraininghoursperownemployees
TraininghoursperFTE
n/a 15.18 15.95 3.48 12.84
Developingtheskillsandcompetencesofouremployeesissomethingweparticularlyvalueatbpost.Weareconvincedthattrainedemployeescanincreaseefficiencyandcanalsobemoreengaged.Atbpost,wehaveourownacademyforofferingemployeestrainingopportunities.Overthepastyears,wehavetakenfurtherstepstoenhanceourtrainingoffertobettermeettheneedsofspecifictargetgroupsatbpostBelgium(e.g.juniors).
Besidesthejob-specifictrainingsessions,allbpostBelgiumemployeesareofferedtrainingincommunication,sales,languageandleadership.Forexample,theSummerAcademyencouragesemployeestoworkontheirskillsandwellbeingduringthelowseason.There,theylearnaboutarangeofpersonaldevelopmentsubjects.
Since2011,bpostBelgiumhasbeenrunningthe“Futureme”program.Thistwo-yearprogramrecognizestheskillsandknowledgeacquiredonthejob.Assuch,employeesaregiventheopportunitytoearnahighersecondaryschooldiploma,mainlybydistancelearning.
SeniorBelgianbpostemployeescanapplyforvacanciesatotherorganizationsthroughtheco-sourcingplatformExperience@work,bpost’spartnersincelastyear.Theplatformwascreatedin2015tolinkuporganizationsthatneedexperiencedpeoplewithorganizationsthathaveanabundanceofexperiencedpeopleandsenioremployeeswhowanttoputtheirexperiencetobetteruse.Experience@workgivestheseorganizationstheopportunitytohiresenioremployeesatajuniorpaylevel,andallowssenioremployeestousetheirtalent,experienceandexpertiseinanewworkingenvironment,whileremainingonbpost’spayroll.
Lookingatthecareerdevelopmentofourstaff,ouremployeesreceiveabroadrangeofcareerdevelopmentopportunities.Atbpost,internalmobilityisalsovalued.Tothisend,bposthasdevelopedasolidperformancemanagementprocessthatfollowsmostemployeesovertheyear.Assuch,employees’businessobjectives,performanceanddevelopmentsarediscussedannuallywiththeresponsiblemanager.Theagreeddevelopmentplanisreviewedaftersixmonthsduringthemid-yearreview.Attheendoftheyear,theemployeeandhismanagerreviewthetargetsset.Duringthisprocess,informaltouchpointsarealsoorganizedtofollow-uponobjectives,performance,developmentandcareer.
Alongsideourownemployees,weareconstantlyrecruitingnewstaff.OurstrongcollaborationwithVDABandForeminBelgiumhelpsusbeindirectcontactwithcompaniesthatarerestructuringandrecruitingadditionalstaff.
bpost ANNUALREPORT2018 120
CSR CONSOLIDATED STATEMENTS
Ethics and diversity
People–Ethicsanddiversity
bpostBelgium Subsidiaries bpost Group
Unit 2016 2017 2018 Trend 2018 2018
Totalownemployees Headcount 25,371 25,460 25,770 n/a 8,164 33,934
Totalmaleownemployees
Headcount 17,107 17,269 17,585 n/a 4,203 21,788
Totalfemaleownemployees
Headcount 8,264 8,191 8,185 n/a 3,961 12,146
TotalFTE FTE 23,178 23,353 23,658 n/a 7,849 31,507
TotalmaleFTE FTE 16,013 16,202 16,500 n/a 4,085 20,584
TotalfemaleFTE FTE 7,165 7,152 7,158 n/a 3,768 10,926
Diversity of own employees (in headcount)
Shareoffemale(ownemployees)
% 32.6 32.2 31.8 48.5 35.8
Shareofwomeninexecutivelevelpositions
% n/a 0.00 0.00 14.29 13.04
Shareofwomeninmanagementpositions(excl.executivelevel)
% 36 35.06 36.79 37.79 37.23
Headcount by type of contract
Totalownemployeeswithfixedtermcontracts
Headcount 282 607 613 n/a 534 1,147
Totalmaleownemployeeswithfixedterm contracts
Headcount n/a 296 244 n/a 312 556
Totalfemaleownemployeeswithfixedterm contracts
Headcount n/a 311 369 n/a 222 591
Totalownemployeeswithopen-endedcontracts
Headcount 22,896 24,853 25,157 n/a 2,624 27,781
Totalmaleownemployeeswithopen-endedcontracts
Headcount n/a 16,973 17,341 n/a 1,749 19,090
Total female ownemployeeswithopen-endedcontracts
Headcount n/a 7,880 7,816 n/a 875 8,691
bpost ANNUALREPORT2018 121
CSR CONSOLIDATED STATEMENTS
People–Ethicsanddiversity
bpostBelgium Subsidiaries bpost Group
Unit 2016 2017 2018 Trend 2018 2018
Headcount by full-time/part-time
Totalownemployeescontractedonafull-time basis
Headcount 18,901 19,137 19,370 n/a 7,418 26,788
Totalmaleownemployeescontractedonafull-time basis
Headcount n/a 14,039 14,285 n/a 3,905 18,190
Total female ownemployeescontractedonafull-time basis
Headcount n/a 5,098 5,085 n/a 3,513 8,598
Totalownemployeescontractedonapart-time basis
Headcount 6,470 6,323 6,400 n/a 745 7,145
Totalmaleownemployeescontractedonapart-time basis
Headcount n/a 3,230 3,300 n/a 301 3,601
Total female ownemployeescontractedonapart-time basis
Headcount n/a 3,093 3,100 n/a 444 3,544
Headcount by age group
Totalownemployees≤ 30 yearsold
Headcount 3,811 4,205 4,497 n/a 1,912 6,409
Totalownemployeeswithintheagegroup31-50
Headcount 12,922 12,717 12,601 n/a 3,957 16,558
Totalownemployeeswithintheagegroup50+
Headcount 8,638 8,538 8,672 n/a 2,234 10,906
Employee turnover
EmployeeTurnoverofownemployees
% 11.30 10.941 10.49 41.33 17.91
EmployeeTurnoverMaleofownemployees
% 11.44 11.141 10.43 20.99 16.27
EmployeeTurnoverFemaleofownemployees
% 10.97 10.511 10.63 20.34 20.83
VoluntaryEmployeeTurnoverofownemployees
% n/a 5.82 5.75 24.24 10.20
VoluntaryEmployeeTurnoverMaleofownemployees
% n/a 5.96 5.91 11.59 9.11
VoluntaryEmployeeTurnoverFemaleofownemployees
% n/a 5.52 5.40 12.65 12.14
(1) Restatementbasedonstandardizationofdefinition.
bpost ANNUALREPORT2018 122
CSR CONSOLIDATED STATEMENTS
People–Ethicsanddiversity
bpostBelgium Subsidiaries bpost Group
Unit 2016 2017 2018 Trend 2018 2018
Ethics
Numberofregisteredcomplaints on unethicalworkplacebehavior
Number 16 11 10 40 50
Numberofregisteredcases of corruption andbribery
Number n/a 0 0 0 0
Monetaryamountoflegalandregulatoryfinesandsettlementsabove10,000 USDlinkedtodatabreaches,corruptionorenvironmentdamage
Euros n/a 0 0 0 0
Diversity and inclusiveness
Atbpost,weaimtoattractandretainindividualsfromdifferentbackgrounds,cultures,perspectivesandexperiencesbycreatingandsupportingacollaborativeworkplaceculture.Weareconvinceddiversitycontributestoabetterconnectionwithourcustomersandwithourworkforce,tosurroundourselveswiththebesttalentinallcategoriesofthepopulationandtobemoreagile.
WedesignedourDiversityPolicy(availableonthebpostwebsite)basedontheseconvictions.Thepolicyservesasaguidelinetocreateaculturewherediversityandinclusionareadailypracticeandhasbeentranslatedintovariouspoliciesandprograms.
Tocontinuetoexpandourrecruitmentchannels,weformedpartnerships,amongotherthings,withtheVDAB,WannaWork,Diversicom,andPluribusEurope.Theseorganizationsarededicatedtoinclusionintheemploymentmarketbasedonpeople’scompetencesandpromotingdiversityatwork.OnegoodexamplewasourpartnershipwiththeVDABinBelgiumin2018whichaimedtore-integrate20 peoplewithhealthproblemsintothelabormarket.Viathisproject,wetrainedthesepeopletobecometruckdriversatbpostandhence,helpingthemtofullyorpartiallyreturnto work.
In2017,wesetupandreviewedadiversityportaldesignedforpeoplemanagers.Theportalallowsourpeoplemanagerstogetacquaintedwiththeissuesofdiversityandinclusion,toidentifytheapplicableframework,theroletheyneedtoplay,andalsooffersthemtrainingopportunities.Additionally,wearecurrentlycreatingagroupofDiversityambassadorswithintheorganizationwhosefunctionwillbetopromotediversityandpreventdiscrimination.
Sincelastyear,wehaveaspecificculturalexchangeprogram,leading@bpost,whichisaimedatcreatingabalancedleadershipstyleamongbpostgroupleaders.Interalia,theprogramisbasedoncuriosityandopennesstoothersandtheirwayofthinking.
WealsopartnerwithDuoforaJob,aBelgianorganizationmatchingyoungjobseekerswithanimmigrantbackgroundtopeopleover50 yearsold.Theinitiativebringsabouthighmotivation,recognitionandhumanimpact,andwasevenawarded“CoupdeCœur2018”bythejuryofPostEurop.
TheBoardofDirectorsandGroupExecutiveCommitteehavealsotheirroletoplayregardingdiversity.Itistheirresponsibilitytosetthetone.Theydosobyorganizingworkshopsaroundthemesofdiversityandinclusion,andtheBoardofDirectorsassesseseveryyearwhetherdiversitywithinthegrouphasimproved.Also,specialattentionispaidtodiversityinthecompositionoftheBoardofDirectorsandGroupExecutiveCommittee.Variousdiversitycriteriaregardinggender,age,professionalbackgroundandgeographicdiversityaretakenintoaccountwhenconsideringcandidatesforvacancies.Formoreinformationontheboardcomposition,seethecorporategovernancestatement.
Ethics
Atbpostweareproudofourhighprofileinsocietyandoftheroleweplay.Tous,goodconductisimportant to earn trust as part of our responsible corporatevalues.Webelieveeveryhumandeservesthesamerightsand,asacompany,wecannotgetinthewayofthat.Asapubliclistedcompany,wealsoensuremaximaltransparencyintermsofgovernanceanddecision-makingprocesses,inaccordancewiththehigheststandardsinthisarea.
Weadoptazero-tolerancepolicyregardingviolationsofhumanrightsoranti-corruptionlaws,inlinewiththeUniversalprinciplesofHumanRightsandtheILO(InternationalLaborOrganization)conventions.Withthispolicy,bpostwantstopreventthenegativefall-outarisingfromhumanrightsviolations,illegalorfraudulentactsorpracticesonhumanity’swell-being,ourreputation,andthecontinuityofourbusiness.Ifanemployeewitnessesasituationofmisconduct,s/hecancallourSpeak-Upline(thecontactinformationisincludedinourCodeofConduct).TheSpeak-Upline
bpost ANNUALREPORT2018 123
CSR CONSOLIDATED STATEMENTS
isconnectedtoapersonoftrust,available24 hoursadaytoansweranyquestionorsignalfromemployees.
Thisyear,wedecidedtoputdiversityandbusinessethicsforwardandthereforedidadeepstructuralredesignandrevisionofourCodeofConductsothatournewconstructionwouldworkatgroup-level.OurnewCodeofConductwaslaunchedinFebruary 2019fortheentiregroup.Itsetsoutthenorms,valuesandminimalstandardsofbehaviorandconductexpected
ofallouremployees,contractorsandconsultantsatanylevelandinanycompanyofthebpostgroupworldwide.ItfurtherenablesappropriatemeasureswhentheCodeofConductisnotabidedby.Arevisedversionofbpost’s“Religionatwork”brochurewillbelaunchedin2019onGrouplevelaswell.
Social dialogue
People–Ethicsanddiversity
bpostBelgium Subsidiaries bpost Group
Unit 2016 2017 2018 Trend 2018 2018
Averagenumberofstrikeactiondays
strikedaysper1,000employees
n/a 1.55 2.6 0 1.97
ShareofownemployeescoveredbyaCBA
% n/a n/a 96 n/a 5 74
bpostworkshardtopromotewellbeingandgoodworkingconditionsforallemployeesandthusstaysawareofouremployees’needs.Aspectssuchasworkinghoursandwagesareinlinewithlegislationandwerespectouremployees’FreedomofAssociationrights.InBelgium,96%ofouremployeesand5%oftheemployeesatoursubsidiariesarecoveredbyaCollectiveLaborAgreement(CLA).
SincebpostisanautonomousenterprisewiththeBelgianstateasitslargestshareholder,itsarticlesofassociationexplicitlyprovideforastructureandprocessesatvariouslevelstofacilitateefficientnegotiations,consultationsandinformationsharing.Tofosterconstructivedialogueandrelationswiththeunions,bpostBelgiumhasitsownJointCommitteeandseveralotherforums.Moreover,twosenior-leveldirectorshavebeenappointed,whichdemonstratesourmanagement’sinvolvementinthesocialdialogue.Thisclosecollaborationallowsustohearandpromptlyreacttoouremployees’needsinordertomitigatesocialconflicts.
bpost’stransformationfromapostalcompanytoaninternationallogisticsande-commerceplayergivesrisetonewchallenges,impactingbothforourorganizationandouremployees.Theresultingworkloadincreaseunfortunatelyledtoanemployeestrikein2018.Afterconstructivenegotiationswithoursocialpartners,wewereabletocometoanagreementprovidingapositiveresponsetoouremployees’demands.Theresultingplanwillmakethefieldjobsmoreattractiveandwillre-establishtrustinthecompany.Allpartiesinvolvedsharethesamelong-termgoalofmeetingfast-changingcustomerneedsaswellasrespectingbpost’semployees.
bpostBelgium’snewcollectivelaboragreementappliesto2019-2020.Throughthisagreement,measureshavebeentakentoraisepurchasingpowerthroughimprovedfinancialconditions.Furthermore,theincreasedworkloadwillbeaddressedbyattractingadditionalfieldstaff(1,000FTEs),additionaldaysoffandimprovementofourrecruitingchannels.Todoso,wewillestablishconsultingcommitteestotackletheexistingandpotentialfutureissues.Thelastpillaroftheagreementistosecureourfuture,forexamplethroughjobpreservation.ThisagreementwillimpactbpostBelgium’scostbasebyaboutEUR 20 millionannually.
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CSR CONSOLIDATED STATEMENTS
Planetinitiativeapprovedthisemissionsreductionobjective.Thisorganizationaimstopromotecorporateclimate-change-relatedambitionsbysupportingthemtosetobjectivesinlinewithaglobaltemperatureincreasebelow2°Celsius.Todecreasethisenvironmentalfootprint,wefocusonourbuildings,ourfleetandourwaste.
In2018,theCO2footprintscope1,2 and3forbpostBelgiumdecreasedby7%comparedto2017.
Unit2017
(restated)1 bpostGroup
2018 bpostGroup Trend
Scope 1 tCO2 82,826 87,825
Naturalgas&heatingoil tCO2 21,786 22,442
Postal“fleet”diesel&petrol(incl.servicevehicles) tCO2 53,193 57,266
Fuelcompanycars tCO2 7,847 8,117
Scope 2 (net) tCO2 31,569 28,642
Electricity(market-based)2 tCO2 30,938 28,156
DistrictHeating tCO2 631 463
Oilforgenerators tCO2 n/a 23
Scope 1 & 2 tCO2 114,395 116,467
Scope 3 tCO2 218,016 192,390
Employeecommuting tCO2 36,320 34,147
Businesstravel tCO2 1,844 1,349
Subcontractedroadtransport tCO2 117,699 111,939
Subcontractedairtransport3 tCO2 55,459 38,944
Waste tCO2 6,694 6,011
TOTAL CO2 emissions (Scope 1+2+3) tCO2 332,411 308,857
(1) Therestated2017CO2footprintisbasedon100%accountsforRadial’sactivitydata(comparedto16.7%in2017),andusesactual2017consumptionforitselectricity(insteadofanestimation).Inaddition,retroactively,Ubiwaydataoncompanycarshasbeenadded.
(2) Themarket-basedmethodreflectsbpost’schoicesintermsofelectricitysupply,suchasthepurchaseofelectricityfromrenewableenergysources.Thisissetoutindetailincontractsbetweenbpostanditsenergysuppliers.
(3) Subcontractedairtransportfiguresforsubsidiaries,incl.LGIandIMEX,wereexcluded.
Asalogisticservicesprovider,wehaveanimpactontheenvironmentatdifferentlevels:throughourfleet’sCO2emissions,energyconsumption,employeecommutes,wasteproductionorsubcontractedtransport.
bpostmanagesandsteersitsenvironmentalpillar,“planet”,usingourCO2footprintasmetric.In2018,wesetanambitiousobjectivefortheGroup:ourgoalistoachieveby2030a20%reduction-comparedto2017levels-ingreenhousegasemissionsresultingfromouractivities..The“ScienceBasedTargets”
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CSR CONSOLIDATED STATEMENTS
Green fleet
Planet–Greenfleet1
bpostBelgium Subsidiaries bpost Group
Unit 2016 2017 2018 Trend 2018 2018
Share of last mile alternativefuelvehicles(bikes,ebikes,etrikes,EVvans)
% 35 352 33 13 33
ShareofEURO5andEURO6standard
% 782 862 96 100 96
Averagevanfueluse Literper100km
9.3 9.3 9.4 13.58 9.5
Averagetruckfueluse Literper100km
26.8 26.5 26.4 n/a 26.4
andby203050%ofourlast-milefleetshouldbeelectric(about3,400vehicles).Wearealsoinvestinginagreenerfleetbyreplacingourolderconventionaltruckswithnewermodels.Secondly,andinlinewiththeaimtoadaptfurtheritsmodeltotheexpectationsandbehaviorofitscustomers,bposthasintroducedtheNon-Prioritystamps.Thisallowsustobundlethemailvolumesmoreefficientlyand,hence,makethedeliveryschedulemoreefficientandenvironmentalresponsible.Thirdly,wepromoteeco-drivingwithourownandsubcontracteddriversthroughDataLoggers.Finally,weencourageouremployeestocommutetoworkinamoreenvironmentallyfriendlymannerbystructurallysupportingalternativewaystocometowork(incl.carpooling,promotinge-bikes)and/orflexibleworking.
Anextensiveandsolidfleetisoneofthemostimportantassetsforapostalandlogisticscompany.bposthasoneofBelgium’slargestmailandpackagedeliveryfleets.However,thisfleetisalargecontributortocarbonemissionsandclimatechange.Sincebposthasdecidedtobeafrontrunnerinsustainabilityefforts,wearetakingseveralmeasurestoreduceourfleets’impact.
Firstofall,wearetransformingourfleetbyselectingvehicleswithalower-to-nocarbonfootprint,suchas(electric)bicycles,deliverythree-wheelersandelectricvans.ThisyearwestartedapilotprojectinMons,whereweopenedourfirstelectricvansmailcenter,withtwentynewe-vansforthedistributionofmailandpackages.Thisisonlythebeginning,andbposthashighambitions.By2022weaimtohave600newelectricbpostvansdrivingaroundinBelgium
(1) ThefiguresonGreenFleetonlycontainthebpostentitieswithadeliveryfleet:bpostNV/SA,Dynagroup,EurosprintersandCitydepot.
(2) Restatementbasedonstandardizationofdefinition.
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CSR CONSOLIDATED STATEMENTS
Green buildings
Planet–Greenbuildings
bpostBelgium Subsidiaries bpostGroup
Unit 2016 2017 2018 Trend 2018 2018
Energy consumption
Totalenergyconsumption per employee
kWh/Head-count
n/a 5,580 5,370 17,026 8,174
Totalenergyconsumption
kWh n/a 142,055,757 138,382,365 138,997,379 277,379,744
Totalrenewableelectricityconsumed
kWh 69,849,643 65,862,630 67,728,515 10,548,597 78,277,112
Share of renewableelectricity
% n/a 941 95 11 46
Totalnon-renewable/greyelectricityconsumed
kWh n/a 4,029,115 3,840,338 86,272,565 90,112,903
Shareofnon-renewableelectricity
% n/a 6 5 89 54
Totalnaturalgasconsumed
KWh 61,732,115 56,892,060 54,194,732 40,614,887 94,809,619
Totalheatingoilconsumed
KWh 12,418,553 12,049,785 10,110,389 1,512,050 11,622,439
Totaldistrictheatingconsumed
KWh n/a 3,183,941 2,470,491 0 2,470,491
Other(fueloil,diesel)
KWh n/a 38,225 37,900 49,281 87,181
Electricity production
Shareofrenewableelectricityproduced
% n/a 5 5 0.01 2.14
Totalrenewableelectricitycapacityinstalled
MWp 1 3.421 4.83 0.05 4.88
Total surface of solar electricitycapacityinstalled
m2 15,000 22,1331 31,503 354 31,857
Water consumption
Totalwaterconsumed
m3 n/a n/a 144,017 n/a n/a n/a
(1)Restatementbasedonstandardizationofdefinition.
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CSR CONSOLIDATED STATEMENTS
bpostisalsomakinginvestmentstoreducetheenvironmentalimpactofallitsoperations,itsbuildingsandfacilities,allofwhichconsumeelectricity,gasandwater.Whereelectricityisconcerned,bposthasbeenheavilyinvestinginrenewableelectricity.Almost100%oftheelectricityconsumedinBelgiumisrenewableandweproduce5%ofourelectricityconsumptionourselves.Todoso,andtosupportourScienceBasedreductionTarget,wehaveintroducedabout8,000 m2 ofphotovoltaiccellsinourAntwerpXsortingcenter.Wearealsoplanningtobuildourfirstwindturbine(2.5 MW).Itisourambitiontofurthercompensatetheshareofnon-renewableelectricityconsumptionofoursubsidiaries.
Furthermore,bpostisworkinghardtodecreasetheenergyweconsumebyimprovingtheenergyefficiencyofouroperationsandfacilities.Weinvestedatotalof
aroundEUR 450,000inrelightingandheatingprojects,bothinBelgiumandabroad.ExamplesofinvestmentsareswitchingtoLEDlighting,upgradedheatandventilationsystems,andinstallingsensorsandtimersformoreefficientuseoflightandheating.
Forinstance,bpostBelgiumopenedtwostate-of-the-artlow-energybuildingsinMonsandtheVerviersregionin2013.Also,thenewBrussels Xsortingcenter(NBX)thatopenedin2017 has100%LEDlighting.Thishasamassiveimpact,sincethiscenterisbyfarthebiggestsortingcenterinBelgium,withmorethan70,000 m2–theequivalentof14footballfields.Moreover,theretailstoresofUbiwayareexclusivelypoweredbyrenewableenergy,andonlyLEDorhigh-pressurelightingisinstalled.TheUbiwayheadquartersalsoreceivedaBREEAMin-usecertificate.
Waste management
Planet–Wastemanagement
bpostBelgium Subsidiaries bpostGroup
Unit 2016 2017 2018 Trend 2018 2018
Totalwastegenerated
Ton 6,689 7,3731 8,111 38,022 46,133
Totalnon-hazardouswastegenerated
Ton 6,689 7,367 8,067 37,959 46,026
Totalrecycledwaste
Ton 4,214 4,692 5,288 28,589 33,878
Share of recycledwaste
% 63 64 65 75 73
Totalresidualwasteincineratedforenergyrecovery
Ton 2,662 2,6751 2,778 588 3,366
Totalresidualincineratedwithoutenergyrecoveryorland-filled
Ton 0 0 0 8,782 8,782
Totalhazardouswaste
Ton n/a 5.78 44 63 107
(1) Restatementbasedonstandardizationofdefinition.
bpostisconsciousoftheresourcesweuseandthewasteweproduceandmanagesthesewastestreamsasresponsiblyaspossible.Atallourlocationswesortaccordingtothedifferentwastestreamsandworktogetherwitharegisteredwastepartnerforrecycling(paper,drinkcartons,plasticbottles,metal)ordisposalwithenergyrecovery.InBelgium,100%ofallplastic,paperandcardboardwasteisrecycledand100%ofourunsortedwasteisincineratedforenergyrecovery.Weaimtoreachthesamefiguresatourotherlocations.
Wearealwayslookingfornewsolutionstowardsamorecirculareconomy.In2018,welaunchedanew
initiativeregardingouruniforms.bpostuniformshaveahighvisibilitysincearetobeseenalloverBelgiumeverydayanditwouldbeapitytoletthatgotowaste.Tothisend,attheendoftheirlifeatbpost,theuniformsarenowreusedorrecycledbyTerre,asocialorganizationspecializedinrecyclingtextiles.InMarch,wewereabletocollectaboutfivetonsoftextiletobeusedforanewpurpose.ThankstoTerre,thebpostuniformsstillconstitutevaluablerawmaterialsattheendoftheirworkinglife..
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CSR CONSOLIDATED STATEMENTS
Proximityexternalorganizationsworkingforandwithpeople,inBelgiumandabroad,isimportanttous.WealsoencourageoursupplierstoincludeCSRasfaraspossibleintheirbusinesspractices.Forourcustomers,weprovidethemwithservicestofacilitatetheirdaytodaylives.
bpostistransformingintoaninternationallogisticscompany,butalsovaluesitsproximitytothepeoplesurroundingtheorganization.WecollaboratecloselywithbothBelgianandinternationalsociety,withourcustomersandoursuppliers.WevaluetheserelationshipsthatallowustorespondtocurrentandfutureneedsinBelgiumandabroad.Oursupportto
Proximity–StrategicKPIs
bpostBelgium Subsidiaries bpost Group
Unit 2016 2017 2018 Trend 2018 2018
Totaldonations 1,000Euros 229 371 349 41 390
Shareofsignificanttier 1supplierscoveredbytheSupplierCodeofConduct
% 85 90 100 n/a n/a
Customersatisfaction1 Score 87 86 84 n/a1 n/a1
(1) ThecustomersatisfactionmethodologyusedbybpostBelgiumisveryspecifictotheorganization(includesbothresidentialandbusinesscustomersandisbasedona7 pointsscale).Thismakesitdifficulttoconsolidatetheoutcomeswithoursubsidiaries.Wewillinvestigatehowwecandevelopacommon metrics in the future.
Proximity to society
Proximity–Proximitytosociety
bpostBelgium Subsidiaries bpost Group
Unit 2016 2017 2018 Trend 2018 2018
Totaldonations 1,000Euros 229 371 349 41 390
bpostdoesn’toperateinisolation,butwithinsocietyatlarge.Thissocietyconsistsofdifferentcommunities,forwhichwearegrateful:theymakeourworkinterestingandworthwhile.Asbpostgrows,thesecommunitiesgrowwithus:westartedasaBelgianpostaloperator,butourbusinessandcommunitieshaveamoreinternationalcharactertoday.Tostayclosetoourroots,wesupportanumberofsocialandbiodiversityprojectsinBelgium.
bpost Literacy Fund
In1997,thebpostLiteracyFundwasestablishedtoimproveliteracyratesbysupportingnewliteracyprojectsrunbyvariousorganizations.ManagedbytheKingBaudouinFoundation,thebpostLiteracyFundwasboostedin2009,whenwestarteddonatingapartoftherevenueofaChristmasstampsale.Sincethen,theFundhasreceivedaboutEUR1.5 million.In2018,itreceivedEUR130,000 worthofgrants.
Doctors without borders
Asanincreasinglyinternationalorganization,bpostalsowantstohelplocalcommunitiesabroad.Since
2017,wehaveestablishedapartnershipwithDoctorswithoutBorders,anorganizationprovidingmedicalsupporttolocalcommunitiesinemergencies.InadditiontobothbeingorganizationsthatcoordinateourglobaloperationsandactivitiesoutofheadquartersinBrussels,wealsosharecommonvaluesofproximity,neutralityandinclusivity.In2018,wecontributedEUR80,000 toDoctorswithoutBorders.
Ninth edition of Star4U
Star4Uisbpost’sinitiativetoencourageemployeestovolunteerforsocial,culturalorenvironmentalprojectsthatarecloselyrelatedtobpost’svalues.Theprojectsarechosenbyapanelofbpostemployeesandexpertsfromoutsidethecompany.In2018,99 projectsweresupportedthiswayforatotalamountofEUR75,000.
WeLoveBXL
In2018,bpostdonatedEUR35,000 totheMolenbeek-basedorganizationWeLoveBXL.Thisorganizationenablesandfostersyoungtalent.Bycreatingadiverse,dynamicandpositivecommunity-drivenenvironment,theorganizationwantstopush,inspireandstimulate
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CSR CONSOLIDATED STATEMENTS
youngstersintheirpersonaldevelopmentprocess.WeLoveBXLoffersaphysicallocationtoprovideaccesstobothrecreationalandprofessionalactivities.Atbpostwebelievestronglythatsocietybenefitsfromempoweringyouthinthecontextofsocio-economicchallenges,andthisisexactlywhatthisorganizationdoes.
CAP48
CAP48isanassociationactiveintheWallonia-BrusselsFederationandintheGerman-speakingcommunity.Theorganizationaimstochangementalitiestowardsdisabilitiesandchildhoodpoverty.Tothisend,CAP48createsawarenessthroughcampaignsandfundraising,whichallowsthemtomovethingsforwardontheissueofdisabilityandyouthsupport,whilefinancingconcreteprojects.ThroughitsannualcampaignCAP48disseminatesinformationonthedifficultiesfacedbypeoplewithdisabilitiesandyoungpeoplewithintegrationdifficulties.Thisyear,bpostdonatedEUR20,000 toCAP48.
bpost forest
bpost helps to create natural habitats to maintain localbiodiversityandflora.Wecontributedbyfreeingupfora33-yearnochargeleasetwopiecesoflandownedbybpost(onenearEkerenandanotherinUccle)forabiodiversityprotectioninitiative.Ourideaistohavethosepiecesoflandrenovatedtogivethepublicaccesstonature.Inaddition,weplantedaone-hectare“bpostforest”intheWaverforestinLiertogetherwithNatuurpunt,.
Stamps for Child Focus’ twentieth anniversary
ChildFocushasbeenengagedwiththesearchformissingchildrenandthefightagainstchildabusesincethelatenineties.Inhonorofitstwentiethanniversary,bpostlaunchedinMarch 2018astampdedicatedtotheorganization’shardwork.bpostalsostartedtouseitspostofficestohelpsearchformissingchildren.Theydidsobydisplayingall-pointsbulletinsonthescreensinitspostofficestoalertthegeneralpubliclocallyornationally.
Donations through “De Warmste Week’ and ‘Viva for Life”
bpostsupportsseveralcharitiestohelppeopleinneed,amongwhichChildFocus,DoctorswithoutBorders,aswellasitsownLiteracyFund.Duringtheendofyearperiod,bpostsupportedseveralofthesecharitiesbytheVivaforLife(Vivacité)andWarmsteWeek(StudioBrussel)campaigns,andbythreespecialbpostactions.ForeachChristmasstampused,packagesentonDecember18,orMobilepostcardsentbetweenDecember18and24,acertainamountwaspaidtoacharity.
Local initiatives
AsidefromthedonationstocharitybybpostGroup,localBelgianpostofficesandsortingcentersalsocollecteddonationstogivetodifferentinitiativesoftheirchoice.Intotal,morethanEUR8,500 weredonatedthroughtheselocalinitiatives.Non-monetarydonationswerecollectedaswell.Forinstance,throughtheorganizationActie4Kids,80 shoeboxeswerefilled
withschoolmaterials,hygienicproductsandtoysforchildreninlessfortunatecircumstances.
Green deal biodiversity
Togetherwithmorethan110othercompanies,organizationsandlocalauthorities,bposthassubscribedtotheGreenDealBiodiversity.Throughthisvoluntaryagreement,wecommittotakingactiontoenhancebiodiversityandthenaturalvalueinsideandoutsideourcorporatesitesoverthenextthreeyears.Oneofbpost’sactionswithintherequirementsoftheGreendealbiodiversityistheinstallationofaninsecthotelatourheadofficeinBrussels.
Beepost
In2016,inpartnershipwithMadeinAbeillescooperative,wesetuptwobeehivesontheroofsofourBrusselsheadoffice.Theideawastopromoteabetteruseofourroofswhileofferingaresponsetothemassdisappearanceofbeesandtheassociatedlossofbiodiversity.Hostingseveralbeecoloniesenablesbposttostrengthenitsenvironmentalinitiativesandtocontributetomeetingthechallengesofbiodiversitywhilereducingitsecologicalfootprint.
House Martins
Atbpost,wehaveasmallprojectcontributingtothesurvivaloftheHouseMartinsinFlanders.Inthisregion,HouseMartinsareonthe“RedSpeciesList”andconsideredtobevulnerable.Duetochangesinhouseconstructionandroofdesign,andduetobuildingrenovation,nestsarebeingremovedordestroyedandnaturalnestingsitesareindecline.bpostcontributesbyplacingartificialnestsundertheeavesofitspostofficesintheperimeterofcoloniesofHouseMartins,believingthatthiswillencourageHouseMartinstobuildnestsnearby.Wehaveinstalled5x2artificialnestsundertheroofedgeofthepostofficeintheCityHarelbeke,and2x2inAnzegem.
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CSR CONSOLIDATED STATEMENTS
Proximity to our suppliers
Proximity–Proximitytooursuppliers
bpostBelgium Subsidiaries bpost Group
Unit 2016 2017 2018 Trend 2018 2018
Shareofsignificanttier 1supplierscoveredbytheSupplierCodeofConduct
% 85 90 100 n/a n/a
Share of procurement spentonsignificanttier 1suppliersscreenedonCSRbyEcovadis
% n/a n/a 40 n/a n/a n/a
Share of paper procurement spent onpapercomingfromcertifiedforests(e.g.PEFC,FSC,SFI)1
% 99 100 100 n/a1 n/a1
1.Thisindicatorisspecifictothepostalactivities(bpostBelgium)and,thereforenotmonitoredatoursubsidiaries.
Sinceoursuppliersarealsoresponsibleforthequalitywedeliver,it’scrucialtoworkinclosecollaborationwiththem.OurmostcriticalsuppliersinBelgiumarefleet,subcontractorsandinterimandsortingmachines.Often,wearealsooneofoursuppliers’largerclients.Agreeingonhowtoworktogetheristhereforebeneficialtobothparties,asitimprovesourcollaborationtodayandinthefuture.Inthesecollaborations,sustainabilityisanimportanttopicandistakenintoaccount:inourprocurementpolicy,intheproducts,materialsandserviceswebuyandintheassessment of our suppliers.
bpostadherestothehigheststandardsofbusinessethics,including,amongothers,humanrights(laiddown,forinstance,intheUniversalDeclarationofHumanRights,nationallegislationandbpostinternalregulationssuchasitsCodesofConduct).bpostdoesnotintendtodobusinesswiththirdpartieswhichdonotfullycomplywiththesestandards.
Procurement policy
Inbpost’stransitiontowardsamoresustainablebusinessmodel,significantchangeshavebeenmadetotheprocurementprocess.WehavedevelopedasustainableprocurementpolicyatbpostBelgium.Wearenowdiscussinghowwecanimplementitinallofourworldwidesubsidiaries.ThefoundationfortheprocurementpolicyistherequirementsoftheEuropeanCommission’sDGEnvironmentforGreenPublicProcurement(GPP).Intheserequirements,differentproductgroupscanbedifferentiatedbasedontheirtechnicalaspectsandtheirsocialandenvironmentalperformance.Ifacontractexceedsapredefinedvalueandhasasustainabilityimpact,itisheldagainstdifferentsustainabilitycriteria.Wearestrivingtohaveasmanyprocurementcontractsaspossiblecoveredbythesustainableprocurement
policy,takingintoaccountthattheprocurementprocessisdifferentforeverykindofbusinessandgeographicallocation.
Itisimportanttonotethat,sincebpostisasemi-publiccompany,itisnotallowedtoincentivizeorgrantcontractstosupplierswithspecificcriteria.Wecanonlysetcriteriafortheproductorserviceweprocure,butnotthesupplieritself.However,bposthasincludedaclauseintheSupplierCodeofConduct,whichrequiressupplierstoperformaCSRriskassessment.
Asapostaloperator,responsiblepaperconsumptionisoneofourhighestsustainabilitypriorities.WearecommittedtobecomingthebestinclassandworktogetherwithPEFCandFSCtoreachthatobjective.Variousmeasuresareinplace,whichhaveresultedin100%ofpaperthatisPEFCorFSCcertified.Furthermore,100%oforstampsareprintedonFSCcertifiedpaper.
Supplier assessment
Toensurethatthesustainableprocurementpolicyisadheredto,weincludebothanenvironmentalandsocialclauseinourprocurementcontracts,whichreferstoourSupplierCodeofConduct.Allbpost’requirementsregardingitssuppliersareclearlydescribedinitsSupplierCodeofConductanditsSuppliergeneralterms.There,itisexplicitlymentionedthatbpostreservestherighttorequestaninternalassessmentoranassessmentbyanindependentorganizationactingonbehalfofbpost(Ecovadisorequivalent)regardingcompliancewiththisCodeandspecificaspectsofsustainability.Ifasupplierisnotabletocomplywithbpost’srequirements,wemaybeforcedtoterminatethecontractinextremecases.WeareinvestigatingwhetherwecanapplytheSupplierCodeofConducttoallofoursubsidiaries.
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CSR CONSOLIDATED STATEMENTS
WepartnerwithEcovadistoensurethecomplianceofoursupplierstoourSupplierCodeofconduct.ThisexternalpartyconductssupplierCSRRiskassessmentsandtakesintoaccountenvironmental(energy,water,waste,products)andsocialperformance(healthandsafety,workingconditions,childandforceslabor).UsingtheEcovadisassessment,oursuppliersaregivenascorefrom1to100.Iftheyscoretoolow,westarttalkswiththemtoseeifwecanhelpimproveoursupplier’sCSRperformance.
Since2017,inadditiontotheassessmentsperformedbyEcovadis,wealsoperformedon-siteauditsonhigh-riskprofilesuppliers(e.g.textileforournewuniforms).Theseauditsfocusonchildlabor,humanrights,workingenvironment,possibledangers,environmentallyfriendlyproduction,cleanlinessandcompliancewithbpostrequirements.Today,bpostauditsshowthatthereisahighlevelofsafetyandenvironmentalcontrol,thatnochildlaborisallowedandthatbothemployeesandtheenvironmentarerespected.
Proximity to our customers
Proximity–Proximitytoourcustomers
bpostBelgium Subsidiaries bpost Group
Unit 2016 2017 2018 Trend 2018 2018
Customersatisfaction1 Score 87 86 84 n/a1 n/a1
Amount of letters for whichthecustomershaveoffsettheirmailcarbon emissions2
Million letters 148 159 162 n/a2 n/a2
Total carbon emissions offsetforthecustomers2
CO2teq. 2,056 2,404 2,533 n/a2 n/a2
Total number of municipalitiesusingbclose2
Number 13 7 8 n/a2 n/a2
Ouremployeesareintouchwithourcustomersdaily.Becauseofthisproximitytoourcustomers,wemaintainourawarenessoftheircurrentandfutureneeds.Sincecustomerscareabouttheimpacttheymake,weofferthemresponsiblechoices.Wearedoingeverythingwecantoimproveourservicesandmakeourcustomershappy.OurU.S.-basedsubsidiaryRadialisspecializedinservicesrelatedtocustomercare,fromwhichwelearnandwhichwetrytoimplementeverywhereatbpost.
Unfortunately,customersatisfactiondecreasedin2018comparedto2017and2016.OneofthereasonsbehindthisdeclinecanberelatedtothestrikesthatoccurredinQ4of2018,whichaffectedthetimelinessandqualityofthemailandparceldistribution.
Carbon Meter service
WithourCarbonMeter,wehelpourcustomersmakewell-informeddecisionsthatminimizetheirenvironmentalimpact.Depending,forexample,onthetypeofpaper,useofcardboard,sizeandink,theycanmeasurethecarbonfootprintoftheiradvertisingmailflows.
Carbon offsetting service
Inadditiontolettingcustomerscalculatetheircarbonfootprint,weofferthemtheoptiontooffsettheircarbonemissionsgeneratedduringthedeliveryoftheirmailitems.TogetherwithCO2logic,weraisefinancingforGoldStandardcertifiedclimateprojectstocutgreenhouseemissionsinemergingcountries.Foreachoftheseprojects,wealsocontributetokeyUNSDGs,suchasclimateaction,lifeonland,sustainablecommunities,nopoverty,orgoodhealth.Thisyear,weinvestedinefficientcookstovesinMalawi.93%oftheMalawipopulationusesbiomass(wood&charcoal)forthedailycooking.TheMalawiefficientcookstoveenablesaCO2reductionofmorethan50%comparedtotheusual3-stonecooking.Butitalsopreventshealthissueslinkedtoindoorairpollutionanddeforestation.
In-home delivery in collaboration with Zalando
In2018,bpost’sFutureLabcollaboratedwiththeGermane-commercecompanyZalandotocreateasmarthometechnologyallowingtomanagedeliveriesandreturnsremotely.Theideaisthefollowing:thanks
(1) ThecustomersatisfactionmethodologyusedbybpostBelgiumisveryspecifictotheorganization(includesbothresidentialandbusinesscustomersandisbasedona7 pointsscale).Thismakesitdifficulttoconsolidatetheoutcomeswithoursubsidiaries.Wewillinvestigatehowwecandevelopacommon metrics in the future.
(2) Thisindicatorisspecifictothepostalactivities(bpostBelgium)and,thereforenotmonitoredatoursubsidiaries.
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CSR CONSOLIDATED STATEMENTS
toa“smartlock”andtoa“smartdoorbell”,Zalandocustomerscanopentheirdoorsremotely,sothatatrustedbpostdeliverypersoncanslidetheirpackageinsideorpickitup.Anappcontrolstheentireprocessandenablesthecustomerandthedeliverertointeracttogether.ThispilotsolutionhasbeentestedinadozenofparticipatinghomesinAntwerp,Belgium,wherethefindingsoftheexperimentareencouragingandshowthatpeoplearereadytousethenewtechnology.
Cubee
Wetrytoprovideourcustomerswithflexibleandsustainablesolutions.OneofthesesolutionsisCubee,anindependent,opennetworkofparcellockersforretailers,onlinecustomersandcouriers.ConsumerscanchoosetoshiptheirparcelstoaCubeelocker,whichtheycanpickupwheneverconvenientusingtheirsmartphone.TheCubeelockersareconvenientlylocatedathighlyvisitedplaces,forexampleattrainstations.
bclose service
ForsociallyisolatedpeopleinBelgium,ourlocalpostmenandpostwomenarefamiliarfacesandtrustedpeople.Bywalkingpasteverydooreveryday,localpostmenandpostwomencanplayasignificantroleinassessingwhetherolderadultsaresociallyisolated.Therefore,ineightBelgianmunicipalities,bpoststartedthebcloseserviceincollaborationwiththelocalsocialservices.Afterapprovalbytheolderadults,theirtrustedpostmanorwomanpaysthemahomevisittoasksomebriefquestions,inordertogetinsightintowhattheymightneed.Thisinformationprovidedbyourbclose’sservicescanbeusedconfidentiallytotakeactiontohelptheisolatedpeopleandintegratethemintocommunitylife.In2018,westartedanewwaveofhomevisitsinthemunicipalityofOlen,intheprovinceofAntwerp.
Dynasure passport delivery
ThankstooursubsidiaryDynasure,Antwerpcitizenscannowreceivetheirrenewedpassportwhenitssuitsthembest.Alltheyhavetodoisgotothelocalgovernmentofficetoapplyfortheirpassport,providetheirdigitalfingerprintsandsign.Then,Dynasuredeliverstheirpassportwhenitismostconvenientforthem.Thismakestheirlifealittleeasier,ascitizensnolongerhavetofittheirschedulesaroundtheopeninghoursoflocalgovernmentoffices.
bpost ANNUALREPORT2018 133
CSR CONSOLIDATED STATEMENTS
an(internalorexternal)educatororeducationalinstitution.
Frequency rateThetotalnumberofwork-relatedoccupationalaccidentsthathappenedinthereportingyear,outofthetotalnumberofhoursworkedinthereportingyear,multipliedby1,000,000hoursworked.
Informal trainingInformaltraininghoursareeducationalactivitieswithahighdegreeofself-organization(thereisnoeducatororeducationalinstitution),aboutcontentbasedontheindividualneedsoftheemployeesandwithadirectrelationtotheworkactivity.
Lost daysThenumberofworkingdayseployeesdidnotcometoworkduetooccupationalaccidentsinvolvingemployees,notcountinganydaysonwhichtheemployeewouldnothaveworked(soexcludinge.g.weekends,holidays,part-timedays,etc.).Thisnumberdoesnotincludethedayonwhichtheoccupationalaccidentoccurred.
Occupational work accidentsTotalnumberofoccupationalaccidentsleadingtoalost-timeinjuryorawork-relatedfatalityduringthereportingperiod.
Severity rateThetotallostdaysinthereportingyearoutofthenumberofhoursworkedinthereportingyear,multipliedby1,000hoursworked.
Significant tier 1 suppliersSignificanttier 1suppliersarethesuppliersthatmakeupminimum80%oftheprocurementspentduringthereportingperiod.
Reference to external documentsForourSustainabilityGovernance,werefertothefollowingsectiononourwebsite.
Toreadabouthowweengagewithourstakeholders,werefertothefollowingsectiononourwebsite.
bpost’sAnnualReport2018 hasbeenpreparedinaccordancewiththeGRIStandards:Coreoption.Ourmaterialityanalysis,materialitymatrix,GRIcontentindexforthisreportcanbefoundonourwebsite.
Anoverviewofbpost’sawardsandpartnerships,werefertothefollowingsectiononourwebsite.
GlossaryAbsenteeismTotalnumberofdayswhereemployeeswereabsentinthereportingyear(duetowork-relatedoccupationalaccidentsorillness)outofthenumberofdaysworkedinthereportingyeartimes100.
Blameworthy road traffic incidentsThenumberofaroadtrafficincidents(leadingtonear-miss,injuryorfatality)duringworkinghourscausedbyabpostdriver(employeeortemporarystaffoftheentityperformingworkonbehalfoftheentity).
CO2 eq. emissionsbpostGroupusestheGreenhouseGasProtocol-ACorporateAccountingandReportingStandard(RevisedEdition)aswellasthejointmethodologyofUPU(universalpostalunion),PostEuropeandIPC(internationalpostalcorporation)–“GHGInventorystandardforthepostalsectorlastversion 2010standard”tocollectactivitydataandcalculateemissions.bpostGroupreportsCO2emissionsonly.HFCsemissionsfromon-siterefrigerationorair-conditioningarenegligiblysmall.EmissionsfromNH4,N2O,PFCsorSF6 arenegligibleandnotrelevantforbpost’sactivities.Therefore,theIPCGHGprogramhasnotincludedtheseemissionsinthescopeofemissionstobemonitored.ThemajorityoftheconversionfactorsusedarederivedfromIPCorprovideddirectlybytherelevantsupplier.
Customer satisfactionThebpostBelgiumcustomersatisfactionsurveyisbasedona7 pointscaleinwhichlevel7 and6designateenthusiasticcustomersandlevel5satisfiedcustomers.Itincludesbothresidentialandbusinesscustomers.
Employee engagementEmployeeengagementisdeterminedbyanindependentthirdpartyviaanemployeeengagementsurvey,inwhichtheaverageofthequestionscoresprovidesthelevelofengagement.
Employee turnoverThetotalnumberofemployeesthatlefttheentityduringthereportingperiod(yearx)devidedbytheaveragenumberofemployeesinyearxandyearx-1,multipliedby100.
Energy consumptionThetotalenergyconsumedinKWhbythebuildingsandbytheactivitieswithinthebuildings,excludingenergyconsumptionfortransportationandlogisticspurposes,duringthereportingperiod.Thisconsistsofelectricity,naturalgas,heatingoil,districtheating,fueloilconsumedforgeneratorsanddieselforlifttrucks.
Formal trainingPlannedtraining,instructionand/oreducationforemployeesortemporarystaff,paidbybpost,duringandoutsideworkinghoursforthereportingperiod.Formaltrainingsareorganizedincollaborationwith
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CSR CONSOLIDATED STATEMENTS
CORPORATE GOVERNANCE STATEMENT
bpost ANNUALREPORT2018 135
Corporate governance statement
amendedbytheBoardofDirectors’decisionofMarch 19,2019.
TheBoardofDirectorsregularlyreviewsbpost’sCorporateGovernanceCharterandadoptsanychangesdeemednecessaryandappropriate.
TheCorporateGovernanceChartercontainsruleswithrespectto:
• thedutiesoftheBoardofDirectors,BoardCommittees,GroupExecutiveCommittee,andCEO;
• theresponsibilitiesoftheBoardofDirectors’ChairpersonandCorporateSecretary;
• therequirementsthatapplytotheBoardofDirectors’memberstoensurethattheyhaveadequateexperience,expertise,andcompetencestofulfilltheirdutiesandresponsibilities;
• adisclosuresystemonmandatesheldandrulesaimedatavoidingconflictsofinterestsandprovidingguidanceonhowtoinformtheBoardofDirectorsinatransparentwayincaseconflictsoccur,andaprohibitionondirectorparticipationinthedeliberationsandvotingonanymatterinwhichheorshehasaconflictinginterest.
Reference CodebposthasdesignatedtheBelgianCodeonCorporateGovernanceofMarch 12,2009(the“Corporate Governance Code”)asitsreferencecode2. The CorporateGovernanceCodeisbasedona“complyorexplain”approach.BelgianlistedcompaniesarerequiredtofollowtheCorporateGovernanceCode,butmaydeviatefromitsprovisionsprovidedtheydisclosethejustificationforanysuchdeviation.
Deviations from the Corporate Governance CodebpostcomplieswiththeCorporateGovernanceCode,withtheexceptionofthefollowingthreedeviations,whichwereimposedunderthe1991Law(beforeitsamendmentbytheLawofDecember 16,2015(the“December 2015 Law”)thatenteredintoforceonJanuary 12,2016):
• TheCorporateGovernanceCode(provision4.2)statesthattheBoardofDirectorsproposesdirectorsforappointmentbytheShareholdersataShareholders’Meeting.However,somedirectorsappointedbeforeJanuary 12,2016weredirectlyappointedbytheBelgianStateinaccordancewiththeformerArticle 18,§2junctoArticle 148bis/3ofthe1991Law.AsfromJanuary 12,2016,all(new)directorsare(re)appointedbydecisionoftheShareholdersataShareholders’Meeting;
Reference Code and introductionInthisCorporateGovernanceStatement,bpostoutlinesthekeyaspectsofitscorporategovernanceframework.ThisframeworkisconsistentwiththerulesandprinciplessetoutintheLawofMarch 21,1991onthereformofcertaineconomicpubliccompanies,asamendedfromtimetotime(the“1991 Law”),theArticlesofAssociation,andtheCorporateGovernanceCharter.
Asalimitedliabilitycompanyunderpubliclaw,bpostisgovernedbytheBelgianCompaniesCodeandCorporateGovernanceCode,unlessotherwisestipulatedinthe1991LaworotherBelgianlawsorregulations.Inparticular,anychangestobpost’sArticlesofAssociation,whichhavetobeapprovedbytheShareholders’Meeting(generallyrequiringa75%majorityanda50%quoruminaccordancewithArticle 558oftheBelgianCompaniesCode),mustalsobeapprovedbyaRoyalDecreefollowingadebateintheCouncilofMinisters.
Thelatestversionofbpost’sArticlesofAssociationwasadoptedattheShareholders’MeetingofMay 11,2016andwasapprovedbytheRoyalDecreeofSeptember 1,20161.
Themaincharacteristicsofbpost’sgovernancemodelarethefollowing:
• the Board of Directorssetsbpost’sgeneralpolicyandstrategyandoverseesoperationalmanagement;
• theBoardofDirectorssetupaStrategic Committee,anAudit CommitteeandaRemuneration and Nomination Committee to assistandmakerecommendationstotheBoardofDirectors;
• the Ad Hoc CommitteecomprisesallindependentdirectorsoftheBoardofDirectorsandinterveneswhentheprocedureprescribedbyArticle 524oftheBelgianCompaniesCode,asincorporatedinbpost’sCorporateGovernanceCharter,istriggered;
• theChiefExecutiveOfficer(“CEO”) is responsible for operationalmanagement;theBoardofDirectorshasdelegatedthepowersofday-to-daymanagementtotheCEO;
• the Group Executive CommitteeassiststheCEOwithoperationalmanagement;
• thereisacleardivisionofresponsibilitiesbetweentheBoardofDirectorsandtheCEO.
Corporate Governance CharterTheBoardofDirectorsadoptedtheCorporateGovernanceCharteronMay 27,2013.TheCharterhasbeenineffectsinceJune 25,2013andwaslast
(1) ThisRoyalDecreewaspublishedintheBelgianStateGazetteonSeptember 19,2016andhasbeenineffectsinceSeptember 29,2016.
(2) TheCorporateGovernanceCodeisavailableonthewebsiteoftheCorporateGovernanceCommittee(www.corporategovernancecommittee.be).
CORPORATE GOVERNANCE STATEMENT
bpost ANNUALREPORT2018 136
• TheCorporateGovernanceCode(provision6.3)statesthattheBoardofDirectorsappointstheCEO.ThecurrentCEOwasappointedbytheBelgianStatebyRoyalDecreefollowingadebateintheCouncilofMinisters,inaccordancewiththeformerArticle 20,§2ofthe1991Law.FutureCEOswillbeappointedbytheBoardofDirectors;and
• TheCorporateGovernanceCode(provision4.6)statesthatthetermofaBoardmandateshouldnotexceedfouryears.However,thedirectorsappointedbeforeMay 15,2014wereappointedforsixyearsinaccordancewiththeformerArticle 18,§3andArticle 20,§2(firstsentence)ofthe1991Law.(New)directors(re)appointedafterMay 15,2014 havebeen(re)appointedtoservea(new)termoffouryears.
Board of DirectorsComposition
General rules governing the composition of the Board of Directors
SincetheDecember 2015LawenteredintoforceonJanuary 12,2016,thecompositionoftheBoardofDirectorshasbeengovernedasdescribedbelow.
• TheBoardofDirectorsconsistsofamaximumof12directors,includingtheCEO,andcomprisesonlynon-executivedirectors,exceptfortheCEO.
• Alldirectorsareappointed(andcanberemoved)bytheShareholdersataShareholders’Meeting,onproposalbytheBoardofDirectorsandfromcandidatesnominatedbytheRemunerationandNominationCommittee.
• Directorsareappointedforarenewabletermoffouryears,totheextentthatthetotaltermoftheirmandate(asrenewed)doesnotexceed12 years.Toensurecontinuityintheorganization,thelimitationof12 yearsdoesnotapplytotheCEO.
• Anyshareholderholdingatleast15%ofbpost’sshareshastherighttonominatedirectorsforappointment pro rataitsshareholding(“nominationright”).Directorsnominatedbyashareholdermaybeindependent,providedtheyfulfillthecriterialaiddowninArticle 526teroftheCompaniesCode,butdonothavetobeindependent.
• Alldirectors,otherthantheCEOandthoseappointedthroughtheaforementionednominationright,mustbeindependentdirectors.Inanycase,theBoardofDirectorsmustcompriseatalltimesatleastthreedirectorsfulfillingtheindependencecriterialaiddowninArticle 526teroftheBelgianCompaniesCode.ThebpostCorporateGovernanceCharterfurtherprovidesthatatleasthalfofthedirectorsmustatalltimesmeettheindependencecriteriaassetoutinArticle 3.2.4ofthebpostCorporateGovernanceCharter(basedonthecriterialaiddowninArticle 526teroftheBelgianCompaniesCode).
• Alldirectors(includingthedirectorspreviouslyappointedbytheBelgianState)canberemovedbydecisionoftheShareholdersataShareholders’Meeting.TheDecember 2015Lawexplicitlyprovidesthatitsentryintoforcedidnotterminatethecurrentdirectors’mandates.Thesemandateswerethereforecontinuedandwillexpireasinitiallyprovided,notwithstandingthepossibilityfortheShareholderstoendthesemandatesattheShareholders’MeetinginaccordancewiththeBelgianCompaniesCode.
• Shouldanydirectormandatebecomevacant,theremainingdirectorshavetheright,inaccordancewithArticle 519oftheBelgianCompaniesCode,totemporarilyfillsuchvacancyuntilafinalappointmenttakesplaceinaccordancewiththeabovementionedrules.
ThecompositionoftheBoardofDirectorsshouldreflect:
• thegenderrepresentationrequirementssetforthin(i) Article 18,§2bis ofthe1991Lawand(ii) Article 518bisoftheBelgianCompaniesCode.bpostcomplieswiththesegenderrepresentationrequirements;
• thelanguagerequirementssetforthinArticle 16and148bis/1ofthe1991Law.
Finally,inaccordancewiththeLawofSeptember 3,2017ondisclosureofnon-financialanddiversityinformationbycertainlargeundertakingsandgroups,bpostappliesadiversitypolicyinrelationtoitsadministrative,management,andsupervisorybodieswithregardtoaspectssuchas,e.g.,age,gender,educationaland/orprofessionalbackgrounds.Adescriptionofthispolicy,itsobjectives,howithasbeenimplemented,andtheresultsinthereportingperiodisprovidedfurtherinthisAnnualReport.
TheBoardofDirectorswas,perDecember 31,2018,composedofthefollowing9 members:
CORPORATE GOVERNANCE STATEMENT
bpost ANNUALREPORT2018 137
Name Position Director since
Mandateexpires
FrançoisCornelis1 ChairpersonoftheBoardofDirectors 2013 2019
KoenVanGerven2, 3 CEOandDirector 2014 2020
JosDonvil2 Non-ExecutiveDirector 2017 2021
BernadetteLambrechts2 Non-ExecutiveDirector 2014 2020
Michael Stone 4 IndependentDirector 2014 2022
RayStewart 4 IndependentDirector 2014 2022
ThomasHübner 5 IndependentDirector 2017 2021
FilomenaTeixeira 5 IndependentDirector 2017 2021
SaskiaVanUffelen 5 IndependentDirector 2017 2021
(1) AppointedbytheGeneralMeetingofMay 27,2013(confirmedbydecisionofJune 25,2013)andappointedasChairpersonoftheBoardofDirectorsbyaBoardofDirectorsdecisionofMay 10,2017.
(2) AppointedbytheBelgianState.
(3) AppointedasCEObyRoyalDecreeofFebruary 26,2014followingadebateintheCouncilofMinisters.
(4) AppointedbytheGeneralMeetingofallShareholdersofbpostotherthanPublicInstitutionsheldonSeptember 22,2014.TheirmandatewasrenewedbytheGeneralMeetingofShareholdersheldonMay9,2018.
(5) AppointedbytheannualGeneralMeetingofShareholdersofbpostheldonMay 10,2017.
Changes in the composition of the Board of Directors
AttheShareholders’MeetingofMay 9,2018:
• themandateofLucLallemand,LaurentLevaux,andCarolineVenwasnotrenewedsincetheBelgianStaterequestedtopostponetheappointmentofthreereplacementdirectorstobenominatedinaccordancewithitsnominationright;
• theShareholdersdecided,onrecommendationoftheRemunerationandNominationCommittee,torenewthemandatesofRayStewartandMichaelStoneasindependentdirectorsforatermoffouryearsuntilthecloseoftheannualShareholders’Meetingof2022.
AttheShareholders’MeetingofMay 8,2019,themandateofFrançoisCornelisasindependentdirectorwillexpire.Inaddition,theBelgianStatemaydecidetonominatethreedirectorsinaccordancewithitsnominationright.
TheBoardofDirectorsintendstorecommendcandidates,nominatedbytheRemunerationandNominationCommittee,forappointmentbytheShareholdersattheannualShareholders’MeetingofMay 8,2019toreplacethedirectorswhosemandatehasexpiredorwillexpire.
Newlyelecteddirectorscanchoosetoparticipateinaninductionprogramaimedatacquaintingthemwithbpost’sactivitiesandorganizationaswellaswiththeruleslaiddownintheCorporateGovernanceCharter.Thisprogramincludesvisitingoperationalandsortingcenters.
Powers and functioning
Powers and responsibilities of the Board of Directors
TheBoardofDirectorsisvestedwiththepowertoperformallactsthatarenecessaryorusefulfortherealizationofbpost’spurpose,exceptforthoseactionsthatarespecificallyreservedbylawortheArticles
ofAssociationtotheShareholders’Meetingorothermanagementbodies.
Inparticular,theBoardofDirectorsisresponsiblefor:
• definingthegeneralpolicyofbpostanditssubsidiaries;
• decidingallmajorstrategic,financialandoperationalmattersofbpost;
• overseeingthemanagementofthecompanybytheCEOandtheGroupExecutiveCommittee;
• allothermattersreservedtotheBoardofDirectorsbytheBelgianCompaniesCodeorthe1991Law.
TheBoardofDirectorsisentitledtodelegatespecialandlimitedpowerstotheCEOandothermembersofseniormanagementandcanallowsub-delegationofsaidpowers.OnJune 30,2017,theBoardofDirectorsdecidedtoapproveadelegationofauthorityformalizingthedelegationofspecificpowersbytheBoardofDirectorstotheCEOandothermembersoftheGroupExecutiveCommittee.Thispolicy,whichdoesnotaffectthepowersgrantedtotheBoardofDirectorsbyorpursuanttobpost’sArticlesofAssociation,hasbeenpublishedintheannexestotheBelgianOfficialGazetteonNovember 16,2017.
Acquisition and divestiture of own shares, profit-sharing certificates or associated certificates
FollowingthedecisionstakenattheShareholders’MeetingofMay 27,2013,theBoardofDirectorswasauthorized,withoutanypriordecisionoftheShareholders,inaccordancewithArticles620etseq. of theBelgianCompaniesCodeandwithinthelimitssetoutintheseprovisions,toacquire,onoroutsidethestockmarket,itsownshares,profit-sharingcertificatesorassociatedcertificatesforapricerespectingthelegalrequirements.Inparticular,thepriceshouldnotbelessthan10%belowthelowestclosingpriceinthelast30tradingdaysprecedingthetransactionandnotmorethan5%abovethehighestclosingpriceinthelast30tradingdaysprecedingthetransaction.Thisauthorizationcoveredtheacquisitiononoroutsidethestockmarketbyadirectsubsidiarywithinthe
CORPORATE GOVERNANCE STATEMENT
bpost ANNUALREPORT2018 138
meaningandthelimitssetoutbyArticle 627,indent1oftheBelgianCompaniesCode.ThisauthorizationwasvalidforfiveyearsfromMay 27,2013andwasnotrenewedattheShareholders’MeetingofMay 9,2018.
TheBoardofDirectorsisfurtherauthorizedtodivestitselfofpartoforallthebpostshares,profit-sharingcertificatesorassociatedcertificatesatapriceitdetermines,onoroutsidethestockmarketorintheframeworkofitsremunerationpolicytoemployees,directorsorconsultantsofbpostortopreventanyseriousandimminentharmtobpost.Thisauthorizationisvalidwithoutanytimerestriction.Theauthorizationcoversthedivestmentofthecompany’sshares,profit-sharingcertificatesorassociatedcertificatesbyadirectsubsidiarywithinthemeaningofArticle 627,indent1oftheBelgianCompaniesCode.
Functioning of the Board of Directors
TheBoardofDirectorsmeetswhenevertheinterestsofthecompanysorequiresorattherequestofatleasttwodirectors.Inprinciple,theBoardofDirectorsmeetsseventimesayearandinanyeventnotfewerthanfivetimesayear.In2018,theBoardofDirectorsmet11times.
Ingeneral,theBoardofDirectors‘andBoardCommittees’decisionsaretakenbysimplemajorityofthedirectorspresentorrepresented,althoughforcertainBoardmattersatwo-thirds’majorityisrequired(suchas,e.g.,decisionsontheapprovalofallrenewalsoramendmentstotheManagementContractandcertaindecisionsontheadministrativelawstatusofstatutoryemployees).Inthecaseofatie,theChairpersonhasacastingvote.
ThebpostCorporateGovernanceCharterreflectstheprinciplesbywhichtheBoardofDirectorsandtheBoardCommitteesoperate.
TheCorporateGovernanceCharterprovides,inter alia,thattheBoardofDirectors’decisionsofstrategicimportance,includingtheadoptionofthebusinessplanandtheannualbudgetanddecisionsregardingstrategicacquisitions,alliancesanddivestituresmustbepreparedbyastandingoranadhocBoardCommittee.Foranysuchdecisions,theBoardofDirectorsshallstrivetoachievebroadsupportacrossitsvariousconstituencies,itbeingunderstoodthat,followingappropriatedialogueandconsultations,theBoardofDirectors’Chairpersonmaycallforadecisionandtheproposalshallcarryifadoptedbyamajorityofthevotescast.
Evaluation process of the Board of DirectorsUndertheChairperson’slead,theBoardofDirectorsconductsregularevaluationsofitsscope,composition,andperformance,alongwiththoseoftheBoardCommittees,aswellastheinteractionwiththeGroupExecutiveCommittee.Ifneeded,theChairpersonshallproposethenecessarymeasurestoremedyanyweaknessesoftheBoardofDirectorsorofanyBoardCommittee.
Followinganexternalassessmentin2015,theBoardofDirectorsdecidedtomonitorandevaluateonaregularbasisthemainfocusareasidentifiedintheexternalassessment.In2018,theBoardofDirectors,BoardCommittees,andtheGroupExecutiveCommitteeperformedformalandcomprehensiveself-evaluation.Theassessmentfocusedonthecompositionand
structureoftheBoardofDirectorsanditscommittees,itsroleandobjectives,itsfunctioning,theinformationflowswithintheBoardofDirectorsandwiththeGroupExecutiveCommittee,aswellasitscompliancewithgovernancestandards.
TheBoardofDirectorscontinuouslyevaluatesandimprovesitsfunctioninginordertosteerbposteverbetterandmoreefficiently.
Transactions between bpost, its Board members and executive managersAgeneralpolicyonconflictsofinterestapplieswithinbpostandprohibitsanyconflictofinterestssituationofafinancialnaturethatmayaffectadirector’spersonaljudgmentorprofessionaltaskstothedetrimentofbpost’sgroup.
InaccordancewithArticle 523oftheBelgianCompaniesCode,KoenVanGervendeclaredtohaveapersonalconflictofinterestofpatrimonialnatureinconnectionwithhisannualevaluationasCEO.HisannualevaluationwasanitemontheagendaoftheRemunerationandNominationCommittee’smeetingofMarch 12,2018,andtheBoardofDirectors’meetingofMarch 13,2018.Heinformedbpost’sAuditorsofthisconflictofinterestanddecidednottoparticipateinthedeliberationorvotingonthisitem.BelowfollowstheextractoftheBoardofDirectors’minutesrelatingtotheannualevaluationoftheCEO:
“PriortodiscussingtheannualevaluationoftheCEO,theCEOdeclaredtohaveapersonalconflictofinterestofapatrimonialnatureaimedatbyArticle 523oftheBelgianCompaniesCodeinrespectoftheagendaitemwhichrelatestotheevaluationofhis annual performance.
TheCEOleftthemeetingroomanddidnotparticipateinthedeliberationorthedecisionregardinghisannualevaluation.TheCEOwillinstructtheauditorsofhisconflictofinterest,inaccordancewithArticle 523oftheBelgianCompaniesCode.
UponrecommendationoftheRemunerationandNominationCommittee,theBoardofDirectorsunanimouslyapprovedtheevaluationoftheperformanceoftheCEOandtheproposedscore.”
Transactions between bpost and its majority shareholdersbpost’sCorporateGovernanceCharterrequiresthattheproceduresetforthinArticle 524oftheBelgianCompaniesCodebeobservedforanydecisionsregardingtheManagementContractorotheragreementswiththeBelgianStateorotherPublicInstitutions(otherthanthosewithinthescopeofArticle 524,§1,lastsub-paragraphoftheBelgianCompaniesCode).Insummary,thesedecisionsaresubjecttoapriornon-bindingreasonedopinionofan AdHocCommittee,consistingofatleastthreeindependentdirectors.TheAdHocCommitteeisassistedbyanindependentexpert,selectedbytheAdHocCommittee,andbpost’sauditorsvalidatethefinancialdataused.TheprocedurethenrequirestheBoardofDirectorstosubstantiateitsdecisionandtheauditors–tovalidatethefinancialdatausedbytheBoardofDirectors.
TheBoardofDirectorshasestablishedanAdHoc Committee,forthepurposeoftheUSOManagementContract,composedofallindependentdirectors.The
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AdHocCommitteemettwotimesin2018.
Committees of the Board of DirectorsApart from the AdHocCommittee,theBoardofDirectorshasestablishedthreeBoardCommitteeswhichassisttheBoardofDirectorsandmakerecommendationsinspecificfields:theStrategicCommittee,theAuditCommittee(inaccordancewithArticle 526bisoftheBelgianCompaniesCode),andtheRemunerationandNominationCommittee(inaccordancewithArticle 526quateroftheBelgianCompaniesCode).ThetermsofreferenceoftheseBoardCommitteesaresetoutintheCorporateGovernanceCharter.
Strategic Committee
TheStrategicCommitteeadvisestheBoardofDirectorsonstrategicmattersandshall,inparticular:
• regularlyreviewindustrydevelopments,objectivesandstrategiesofbpostanditssubsidiariesandrecommendcorrectiveactions;
• reviewrisksandopportunitiesofthestrategyasidentifiedbytheCompany’sstrategicriskassessmentandotherprocesses,andtheimpactoftherelevantindustrytrendsandchanges,emergingorevolvingcompetitiveactivity,governmentalorlegislativedevelopmentsandtheCompany’sperformanceagainstthefinancialtargetsagreedbytheBoardofDirectorsandcommunicatedtotheCompany’sshareholders;
• reviewthedraftbusinessplansubmittedeachyearbytheGroupExecutiveCommitteeandprovideguidanceforthestrategicplanningprocesstoensurethatthestrategicimplementationplanisdeveloped,adheredto,andembeddedintheCompany;
• reviewstrategictransactionsproposedbytheCEOorGroupExecutiveCommittee,includingstrategicacquisitionsanddivestitures,formationandterminationofstrategicalliancesorlonger-termcooperationagreements,launchingofnewproductsegmentsandentryintonewproductsorgeographicareas;
• monitortheimplementationofsuchstrategicprojectsandofthebusinessplanincludingtheCompany’sprogressagainststrategicgoalsusingpredefinedandagreedkeyperformanceindicators(KPIs)andprovidefeedbackandadviceonbusinesstactics,mergerandacquisitionstrategy,marketcapabilities,andresourcerequirementsandallocation;
• reviewtheexecutionoftransactions,post–acquisitionimplementationandtherealisationoftheforeseenvalueoftheacquisitiontotheCompany’sstrategicobjectives,includingevaluatingpost-transactionauditstotrackperformanceagainstacquisitionplantargetsandthecreationofvalueandrealisationofsynergies;
• makereportstotheBoardofDirectorsonitsactivitiesincludinganannualreviewoftheperformanceofthecommitteeandanyrecommendationsforchangesinthescopeofitsduties,composition,andworkingpractices.
TheStrategicCommitteeconsistsofmaximumsixdirectors,includingatleastthreeindependentdirectors.TheStrategicCommittee’sChairpersonisdesignatedbytheStrategicCommittee’smembers.
TheStrategicCommitteewas,perDecember 31,2018,composedofthefollowingfivemembers:
Name Position
Michael Stone (Chairperson) IndependentDirector
JosDonvil Non-ExecutiveDirector
ThomasHübner IndependentDirector
KoenVanGerven CEOandDirector
RayStewart IndependentDirector
TheStrategicCommitteemettwotimesin2018.
Audit Committee
TheAuditCommitteeadvisestheBoardofDirectorsonaccounting,audit,andinternalcontrolmatters,andshall,inparticularbeinchargeof:
• monitoringtheintegrityofbpost’sfinancialstatementsandbpost’saccountingandfinancialreportingprocessesandfinancialstatementsauditsaswellasbpost’sbudget;
• monitoringtheeffectivenessofbpost’sinternalcontrolandriskmanagement;
• monitoringtheinternalauditfunctionanditseffectiveness;
• monitoringtheperformanceoftheJointAuditorsandthestatutoryauditoftheannualandconsolidatedaccounts,includinganyfollow-uponanyquestionsandrecommendationsmadebytheJointAuditors;
• reviewingandmonitoringtheAuditors’independence,especiallyinviewoftheprovisionsoftheBelgianCompaniesCode;
• proposingcandidatestotheBoardofDirectorsforthetwoAuditorstobeappointedbytheShareholders’Meeting;
• informingtheBoardofDirectorsontheresultsofthestatutoryauditandtheperformanceofitstasks;
• appointing,dismissing,replacing,andannuallyevaluatingtheperformanceoftheChiefAuditOfficer.
TheAuditCommitteeconsistsofmaximumfivenon-executivedirectors,includingatleastthreeindependentdirectors.TheAuditCommittee’sChairpersonisdesignatedbytheAuditCommittee’smembers.
Collectively,theAuditCommittee’smembershavesufficientrelevantexpertiseinthefieldofaccountingandaudittofulfilltheirroleseffectively,notablyinfinancialmatters.RayStewartiscompetentinaccountingandauditing,asevidencedbyhisformerexecutivepositionsatNyrstarandProximus(previouslyBelgacom).TheothermembersoftheAuditCommitteeholdorhaveheldseveralboardorexecutivemandatesintop-tiercompaniesororganizations.
TheAuditCommitteewas,asofDecember 31,2018,
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Name Position
FrançoisCornelis(Chairperson)
ChairpersonoftheBoardofDirectors
ThomasHübner IndependentDirector
SaskiaVanUffelen IndependentDirector
FilomenaTeixeira IndependentDirector
TheRemunerationandNominationCommitteemetfivetimesin2018.
In2018,theRemunerationandNominationCommitteereflected,inter alia,onchangestotheremunerationpolicy(e.g.,long-termincentiveschemes,variablepayindicators)basedonanewbenchmarkexercisewithcompetitivecompanies.
Executive ManagementCEOThecurrentCEOwasappointedforatermofsixyearsbyRoyalDecreeofFebruary 26,2014followingadebateintheCouncilofMinisters,inaccordancewiththeprovisionsofthe1991LawbeforeitwasamendedbytheDecember 2015Law.ThenextCEOwillbeappointedbytheBoardofDirectors,followingnominationbytheRemunerationandNominationCommittee.
TheCEOisvestedwiththeday-to-daymanagementofbpostandreportstotheBoardofDirectors.HeisalsoentrustedwiththeexecutionoftheBoardofDirectors’decisionsandherepresentsbpostwithintheframeworkofitsday-to-daymanagement,includingexercisingthevotingrightsattachedtosharesandstakesheldbybpost.
TheCEOcanberemovedbytheBoardofDirectors.
Group Executive Committeebpost’soperationalmanagementisensuredbytheGroupExecutiveCommitteeandisledbytheCEO.TheGroupExecutiveCommitteeconsistsofmaximumninemembers,appointed(forthedurationdeterminedbytheBoardofDirectors)andremovedbytheBoardofDirectors,followingarecommendationbytheCEOandadviceoftheRemunerationandNominationCommittee.
TheGroupExecutiveCommitteeconvenesregularlyattheinvitationoftheCEO.TheGroupExecutiveCommitteeisassistedbytheGroupExecutiveCommitteeSecretary.
TheindividualmembersoftheGroupExecutiveCommitteeexercisethespecialpowersdelegatedtothembytheBoardofDirectorsortheCEO,asthecasemaybe.Withinthelimitsofthesepowers,themembersoftheGroupExecutiveCommitteemaydelegatetooneormoremembersofbpost’sstaffspecialandlimitedpowers.TheGroupExecutiveCommitteemembersmayallowsub-delegationofthesepowers.
TheGroupExecutiveCommitteeprepares,underdirectionoftheCEO,abusinessplanassessingbpost’smedium-termpurposesandstrategy.ThisbusinessplanissubmittedtotheBoardofDirectorsforapproval.
TheGroupExecutiveCommitteewas,asofDecember 31,2018,composedofthefollowingmembers:
composedofthefollowingfourmembers:
Name Position
RayStewart(Chairperson) IndependentDirector
Michael Stone IndependentDirector
SaskiaVanUffelen IndependentDirector
BernadetteLambrechts Non-ExecutiveDirector
TheAuditCommitteemetsixtimesin2018.
Remuneration and Nomination Committee
TheRemunerationandNominationCommitteeadvisestheBoardofDirectorsprincipallyonmattersregardingtheappointmentandremunerationofdirectors,CEO,andGroupExecutiveCommitteeandshallinparticular:
• identifyandnominateBoardcandidatestofillvacanciesastheyarise,therebyconsideringproposalsmadebyrelevantparties,includingshareholders;
• nominateforappointmentcandidatesfortheBoardofDirectorstobeappointedbyshareholders(whetherornotinapplicationoftheirnominationrightsetforthinArticle 21,§2oftheArticlesofAssociation);
• advisetheBoardofDirectorsontheappointmentoftheBoardofDirectors’Chairperson;
• advisetheBoardofDirectorsontheappointmentoftheCEOandontheCEO’sproposalsfortheappointmentofothermembersoftheGroupExecutiveCommittee;
• advisetheBoardofDirectorsontheremunerationoftheCEOandothermembersoftheGroupExecutiveCommitteeandarrangementsonearlytermination;
• reviewanyshare-basedorotherincentiveschemeforthedirectors,membersoftheGroupExecutiveCommittee,andemployees;
• establishperformancetargetsandconductperformancereviewsfortheCEOandothermembersoftheGroupExecutiveCommittee;
• advisetheBoardofDirectorsontheremunerationofthedirectors;
• advisetheBoardofDirectorsontalentmanagementanddiversity&inclusivenesspolicy;
• submitaremunerationreporttotheBoardofDirectors;
• leadtheprocessforsuccessionplanningforBoardofDirectorsandGroupExecutiveCommitteemembers,takingintoaccountthechallengesandopportunitiesfacingbpostandtheskillsandexpertiseneededineachposition.
TheRemunerationandNominationCommitteeconsistsofminimumthreeandmaximumfivenon-executivedirectors,withatalltimesamajorityofindependentdirectors.
TheRemunerationandNominationCommitteewas,perDecember 31,2018,composedofthefollowingfourmembers:
CORPORATE GOVERNANCE STATEMENT
bpost ANNUALREPORT2018 141
(1) KoenBeeckmanslefttheCompanyasChiefFinancialOfficer,ServiceOperations&ICTonJanuary 15,2018.HenrideRomréewasappointedbytheCEO(empoweredbytheBoardofDirectors(decisionofDecember 4,2017)uponrecommendationoftheNominationandRemunerationCommittee),asnewChiefFinancialOfficerandasGroupExecutiveCommitteememberasofJanuary 15,2018.
(2) LucCloetandPierreWinandwereappointed,withimmediateeffect,bytheBoardofDirectors,uponrecommendationoftheNominationandRemunerationCommittee,onApril 17,2018.
(3) KurtPierlootresignedasDirectorMail&RetailwitheffectasfromJanuary 24,2019.HenrideRomréewasappointedasnewDirectorMail&RetailasfromJanuary 24,2019.BaudouindeHepcéewasappointedasChiefFinancialOfficeradinterimasfromJanuary 24,2019untilanewChiefFinancialOfficerisappointed.
(4) ByadecisiondatedOctober 3,2018,theCourtofAudit(Rekenhof/CourdesComptes)decidedtoreplace–witheffectasfromOctober 1st,2018–Mr. JozefBeckers(MemberoftheCourtofAudit)byMrs. HildeFrançois(ChairpersonoftheCourtofAudit)asbpost’sJointAuditor,forarenewabletermofthreeyears.
Name Function
KoenVanGerven ChiefExecutiveOfficer
HenrideRomrée1 ChiefFinancialOfficer
MarkMichiels ChiefHumanResources&Organization
DirkTirez ChiefLegal&RegulatoryOfficerandCompanySecretary
NicoCools ChiefITOfficerandChiefDigitalOfficer
KurtPierloot3 Director Mail & Retail
LucCloet2 DirectorParcels&LogisticsEuropeandAsia
PierreWinand2 DirectorParcels&LogisticsNorthAmerica
1991 Law CommitteeThe1991Lawcontainsseveralprovisionsdetailingthecomposition,appointment,andfunctioningofa“1991LawCommittee.”SincetheentryintoforceoftheDecember 2015Law,thepowerstobeassignedtothe1991LawCommitteearelimitedtothenegotiationoftheManagementContractwiththeBelgianState(itbeingunderstoodthattheManagementContractrequiresthesubsequentapprovaloftheBoardofDirectors).Therefore,the1991LawCommitteeremainsinexistenceonlyforthelimitedpurposesandtasksassignedtoitbytheamended1991Law.
The1991LawCommitteewas,asofDecember 31,2018,composedoftheCEO,whochairstheCommittee,andtwoothermembersoftheGroupExecutiveCommittee(oneDutch-speakingmemberandoneFrench-speakingmember):MarkMichielsandHenrideRomrée.
Company SecretaryTheBoardofDirectorsandtheAdvisoryCommitteesareassistedbytheGroupCompanySecretary,DirkTirez,whoisalsobpost’sChiefLegal&RegulatoryOfficer.HewasappointedinOctober 2007.FrançoisSoenenistheGroupExecutiveCommitteeSecretary.
Joint AuditorsTheJointAuditorsauditbpost’sfinancialconditionaswellasconsolidatedandunconsolidatedfinancialstatements.TherearefourbpostJointAuditors:(i) twoAuditorsappointedbytheShareholders’Meetingand(ii) twoAuditorsappointedbytheCourtofAudit,theBelgianinstitutionresponsiblefortheverificationof public accounts (CourdesComptes/Rekenhof). The JointAuditorsareappointedforrenewableterms
ofthreeyears.TheShareholders’MeetingdeterminestheremunerationoftheJointAuditors.
bpost’sJointAuditorswere,asofDecember 31,2018:
• Ernst&YoungRéviseursd’Entreprises–BedrijfsrevisorenSCRL/CVBA(“EY”),representedbyMr. RomualdBilem(memberoftheInstitutdesRéviseursd’Entreprises/InstituutvandeBedrijfsrevisoren),DeKleetlaan2,1831Diegem,Belgium(untiltheannualShareholders’Meetingof2021);
• PVMDRéviseursd’Entreprises-BedrijfsrevisorenSCRL/CVBA(“PVMD”),representedbyMrs. CarolineBaert(memberoftheInstitutdesRéviseursd’Entreprises/InstituutvandeBedrijfsrevisoren),Tweekerkenstraat44,1000Brussel,Belgium(untiltheannualShareholders’Meetingof2021);
• Mr. PhilippeRoland,FirstPresidentoftheCourtofAudit(Rekenhof/CourdesComptes),RuedelaRégence2,1000Brussels,Belgium(untilSeptember 30,2019);and
• Mrs. HildeFrançois4,ChairpersonoftheCourtofAudit(Rekenhof/CourdesComptes),RuedelaRégence2,1000Brussels,Belgium(untilSeptember 30,2021).
EYandPVMDareresponsiblefortheauditofbpost’sconsolidatedfinancialstatements.FortheyearendedDecember 31,2018,EYandPVMDreceivedEUR1,265,275(excludingvalueaddedtax)infeesfortheauditoffinancialstatementsofbpostanditssubsidiariesandEUR626,481(excludingvalue-addedtax)infeesfornon-auditservices.ThetwoAuditorsappointedbytheCourtofAuditreceivedEUR 39,134.81inremunerationfortheirservicesinconnectionwiththeauditofbpost’snon-consolidatedfinancialstatementsfortheyearendedDecember 31,2018.
CORPORATE GOVERNANCE STATEMENT
bpost ANNUALREPORT2018 142
Shareholding structure and shareholders rightsbpost’ssharesareregisteredordematerialized.AtDecember 31,2018,bpost’ssharecapitalwasrepresentedby200,000,944 shares,listedontheregulatedmarketofEuronextBrussels.
With,respectively,48,263,200and53,812,449bpostsharesintheirpossessiononDecember 31,2018,theBelgianStateandtheSFPI/FPIMtogetherhadaparticipationof51.04%(respectively,of24.13%and26.91%)ofbpostissuedvotingshares.TheremainingsharesareheldbyindividualshareholdersandEuropeanandinternationalinstitutionalshareholders.
Inthecourseof2018andinaccordancewiththeLawofMay 2,2007onthedisclosureofsignificantshareholdingsinlistedcompaniesandtheArticlesofAssociation,bpostpublishedanumberoftransparencydeclarationsdisclosingthatanotificationthresholdwasreached(crossedupwardordownward).Thetransparencynotificationsareavailableonbpost’swebsiteathttp://corporate.bpost.be/investors/share-information/transparency-declarations.
TheCompany’ssharesarefreelytransferable,providedthat,accordingtoArticle 147bisofthe1991LawandArticle 16oftheArticlesofAssociation,thedirectparticipationofPublicInstitutionsintheregisteredcapitalhastoexceed50%.However,followingtheentryintoforceonJanuary 12,2016oftheDecember 2015Law,theBelgianGovernmenthadtheoption,untilDecember 31,2018,toapprovebyRoyalDecreefollowingadebateintheCouncilofMinisters,transaction(s)thatcausethedirectparticipationofPublicInstitutionstodropbelow50%plusoneshare(Article 54/7§1ofthe1991Law).TheBelgianGovernmentdidnotmakeuseofthisoption.
AtDecember 31,2018,bpostdidnotholdanyofitsownshares.
Eachshareentitlesitsholdertoonevote.Apartfromtherestrictionsonvotingrightsimposedbylaw,theArticlesofAssociationprovidethat,ifsharesareheldbymorethanoneowner,arepledged,oriftherightsattachedtothesharesaresubjecttojointownership,usufructoranyotherkindofsplitofsuchrights,theBoardofDirectorsmaysuspendtheexerciseoftherightsattachedtosuchsharesuntilonepersonhasbeenappointedasthesolerepresentativeoftherelevantsharesvis-à-visbpost.
CORPORATE GOVERNANCE STATEMENT
bpost ANNUALREPORT2018 143
Remuneration Reportbpost’sremunerationpolicyrelatingtotheremunerationoftheBoardofDirectors’membersandbpost’smanagementisbasedoncurrentlegislation,theCorporateGovernanceCode,marketpracticesandtrends.
bpostconsidersessentialtransparencyandclearcommunicationontheprinciplesandimplementationofthepolicy.Itthereforesharesrelevantinformationin this report.
General remuneration policy and remuneration principlesbposthasdevelopedadynamic,rewarding,andresponsibleremunerationpolicy.Thispolicyisregularlyassessedandupdatedtoensurebpost’ssustainability.
Theremunerationpolicyhasmultipleobjectives,inter alia:
• offeringthecompany’semployeesafairremuneration,inconsultationwiththetradeunions,whileremainingcompetitivecomparedtothereferencemarketsofmail,parcels,logisticsande-commercecompaniesinEurope;
• stimulatingperformanceatboththecollectiveandindividuallevelstocreatesustainableandprofitablelong-termgrowth,whilesafeguardingthewellbeingofourstaff.Withthisinmind,theremunerationplanintegratesaspectsrelatedto(i) bpost’sresults(e.g.,EBITresultsalongwithcriteriarelatingtothewellbeingofthestaffandcustomersatisfaction);and(ii) theindividualperformanceandskills;
• identifyingandpromotingbpost’scorporatevaluesandculture;
• attracting,retaining,andmotivatingqualifiedandspecializedindividualsneededtoachievethecompany’sstrategicandoperationalgoalsinthetransformation of its business into one of the leadinge-commerce&logisticscompaniesinEuropeandbeyond.
Theremunerationpolicydescribedaboveshouldnotsubstantiallychangeinthetwocomingfinancialyears.
TheRemunerationandNominationCommitteeregularlyexaminesthepolicy’sprinciplesandtheirconcreteapplication,andwillcontinuetodosointhecomingtwofinancialyears.In2019,alimitedandresponsibleflexibleremunerationplanwillbeintroduced,enablingmanagement-levelemployeestochoosebetweenvariousbenefitswithinafixedbudgetatnoadditionalcostsforthecompany.TheRemunerationandNominationCommitteewillalsoreviewthepensionplanforitsemployees,tobeinlinewiththeabovereferencemarket.
TheBoardofDirectorsandtheRemunerationandNominationCommitteewillalsoexaminethepossibilityandfeasibilityofintroducingalong-termincentiveplan.Thepurposeofthisplanwouldbetobetteraligntheactionsandinitiativesofmanagementwiththelong-termperformanceofthecompany.
Thisreportdoesnotincludebpost’sBelgiansubsidiaries,whoseremunerationpolicyisinlinewiththenationalreferencemarket,orbpost’sforeignsubsidiaries,whoseremunerationpoliciesareinlinewithlocalreferencemarketsofrelevantcompaniesandaimtoattractandretainqualifiedandexperienceddirectorsandmanagers.Inthatregard,theRadial
Grouphasitsownincentiveplan,inaccordancewithUSmarketpractices.
Procedure for establishing the remuneration policy and setting the individual remuneration of the Board of Directors’ members and bpost’s managementAsalimitedliabilitycompanyunderpubliclawandincompliancewiththeapplicablecorporategovernancerequirements,bposthasdevelopedaspecificremunerationpolicyforthemembersofitsBoardofDirectorsandmanagement.ThispolicywasintroducedbytheBoardofDirectorsonrecommendationbytheRemunerationandNominationCommitteeandisregularlyassessedandupdated.EverychangeinthispolicyshallbeapprovedbytheBoardofDirectorsonrecommendationoftheRemunerationandNominationCommittee.
Itisabalancedremunerationpolicybasedontheoverallremunerationpolicyassetoutabove,withtheaimof(i) attractingandretainingqualifiedmanagersanddirectors,(ii) encouragingthemtogeneratesustainableandprofitablelong-termgrowth,inlinewiththegeneralstrategyofbpost,(iii) reflectingtheirindividualdutiesandskills,and(iv) aligningtheinterestsofmanagementandshareholders.Theremunerationpackageofthemanagementtherefore:
• providesforavariableremuneration(asdescribedbelow)basedonstrictlydefinedquantitativeandqualitativeperformancecriteriaanddrivenbybpost’sgrowth;
• offersremunerationincashalongwithothernon-financialbenefits;and
• isregularlyassessedinlightofmarketpractices.
bpostdistinguishesthreedifferentgroupsforwhichtheremunerationprinciplesaresetoutbelowindetail:
• theBoardofDirectors’members; • theCEO; • theGroupExecutiveCommitteemembers.
Theindividualremunerationofthemanagersanddirectorsdependsonthecategorytheybelongto.
Allamountsmentionedinthisreportaregrossamountsbeforetheemployer’ssocialcontribution.
Principles of remuneration of the Board of Directors’ members and bpost’s management
Remuneration of the Board of Directors’ members
TheremunerationoftheBoardofDirectors’members(withtheexceptionoftheCEO)wasapprovedattheGeneralShareholders’MeetingofApril 25,2000andcontinuedtoapplyin2018.Itconsistsoftwoelements:(i) amonthlyfixedremunerationand(ii) anattendancefeeforeachAdvisoryCommitteemeetingattended.
NootherbenefitsarepaidtotheBoardofDirectors’membersfortheirdirector’smandate,exceptforacompanycarallocatedtotheBoardofDirectors’Chairman.
CORPORATE GOVERNANCE STATEMENT
bpost ANNUALREPORT2018 144
Monthly fixed remuneration
TheBoardofDirectors’members(withtheexceptionoftheCEO)areentitledtothefollowingmonthlyfixedremuneration:
• EUR 3,463.04fortheBoardofDirectors’Chairman,whoalsochairsbpost’sJointIndustrialCommittee(ParitairComité/CommissionParitaire),asindexedonMarch 1,20181,andacompanycar;
• EUR 1,731.52fortheotherdirectors(withtheexceptionoftheCEO)asindexedonMarch 1,20181.
Attendance fees
TheBoardofDirectors’members(withtheexceptionoftheCEO)arealsoentitledtoanattendancefeeofEUR 1,731.52perattendedAdvisoryCommitteemeeting.
Theseamountsareindexed1annually.
TheCEOisnotentitledtoremunerationforhisattendanceattheAdvisoryCommitteemeetings.
Overall remuneration
Forthefinancialyear2018,theremunerationgrantedtoalltheBoardofDirectors’members(withtheexceptionoftheCEO)totaledEUR 331,510.77.
ThetablebelowshowsthetotalannualremunerationpaidonanindividualbasistoeachoftheBoardofDirectors’members(withtheexceptionoftheCEO)basedonhis/herparticipationintheAdvisoryCommitteemeetings2:
(1) Thebenchmarkindexusedfortheindexationisthehealthindex.
(2) Theseamountscoverallamountspaidinthefinancialyear2018.PleasenotethatattendancefeesarepaidinthemonthfollowingtheattendedAdvisoryCommitteemeeting.Thismeansthattheamountspaidoutinfinancialyear2018relatetoattendancetomeetingsoftheBoardofDirectorsortheAdvisoryCommitteemeetingsheldfromDecember 2017untilNovember 2018.
(3) UntilMay 9,2018
Member
BoardofDirectors
StrategicCommittee
Remuneration andNominationCommittee
Audit Committee
AdHoc Committee Total an-
nualremu-neration
(EUR)Amount (EUR)
Amount (EUR)
Meetings Amount (EUR)
Meetings Amount (EUR)
Meetings Amount (EUR)
Meetings
LucLallemand3 8,609.34 1,707.39 1/2 NA NA NA 10,316.73
Laurent Levaux3 8,609.34 NA 3,438.91 1/52 NA NA 12,048.25
CarolineVen3 8,609.34 NA NA 5,170.43 3/6 NA 13,779 .77
FrançoisCornelis(ChairmanoftheBoard)
41,459.96 NA 10,340.86 5/52 NA 3,463.04 2/2 55,263.86
RayStewart 20,729.98 1,731.52 1/2 NA 10,364.99 6/6 3,463.04 2/2 36,289.53
Michael Stone 20,729.98 3,438.91 2/2 NA 10,364.99 6/6 3,463.04 2/2 37,996.92
BernadetteLambrechts 20,729.98 NA NA 10,364.99 6/6 NA 31,094 .97
JosDonvil 20,729.98 1,731.52 1/2 NA NA NA 22,461.50
Thomas Hübner 20,729.98 0 0/2 8,633.47 5/5 NA 3,463.04 2/2 32,826.49
FilomenaTeixeira 20,729.98 NA 10,340.86 5/52 NA 3,463.04 2/2 34,533.88
SaskiaVanUffelen 20,729.98 NA 10,340.86 5/52 10,364.99 6/6 3,463.04 2/2 44,898.87
212,397.84 8,609.34 43,094.96 46,630.39 20,778.24 331,510 .77
CORPORATE GOVERNANCE STATEMENT
bpost ANNUALREPORT2018 145
Remuneration of the CEO
TheCEO’sremunerationisapprovedbytheBoardofDirectorsonrecommendationoftheRemunerationandNominationCommittee.Itconsistsof:(i) baseremuneration,(ii) short-termincentivevariableremuneration,(iii) apensioncontribution,and(iv) variousotherbenefits.
Pension contribution
TheCEO’spensioncontributionforthefinancialyear2018amountedtoEUR 47,724.96.
Other benefits
TheCEOhasotherbenefits,e.g.,aninsurancecoveringdeath-in-serviceanddisability,medicalinsurance,representationfees,andacompanycar.
Global remuneration
TheglobalremunerationpaidtotheCEO,Mr. KoenVanGerven,in2018forhisperformanceduringtheyearthatendedonDecember 31,2018,amountstoEUR 593,179.95excludingvariableremuneration(comparedtoEUR 585,977.10in2017excludingvariableremuneration)andcanbebrokendownasfollows:
• baseremuneration:EUR 488,841.75(gross); • pension:EUR 47,724.96; • otherbenefits:
• insurancecoveringdeath-in-service,disabilityandmedicalcoverage:EUR 33,462.72;
• representationfees:EUR 3,300.00;and • leasingcostsforcompanycar:EUR 19,850.52.
Inaddition,theCEOreceivedvariableremunerationofEUR 308,944.00in2018becausethecorporateobjectivesandtheindividualtargetsfortheyearthatendedonDecember 31,2017weremet(giventhatthe2017assessmentwasonlycompletedin2018).Thisamountisbasedon(i) theperformanceofbpostin2017,and(ii) thesurpassingoftheCEO’sindividualtargets,andthelong-termvaluethattheseachievementscreated.Variableremunerationfor2018willbedeterminedandpaidin2019,aftertheperformance assessment.
Noshares,stockoptions,orotherrightstoacquiresharesweregrantedtoorexercisedbytheCEO,orhaveexpiredin2018.Nooptionsunderpreviousstockoptionplanswerestilloutstandingforthefinancialyear2018.
NosubstantialchangesweremadetotheremunerationoftheCEOcomparedtothepreviousfinancialyear.
Remuneration of the Group Executive Committee members
TheremunerationoftheGroupExecutiveCommitteemembersisapprovedbytheBoardofDirectorsonrecommendationoftheRemunerationandNominationCommittee.ItisregularlyreviewedonthebasisofabenchmarkingexercisecoveringlargeBelgiancompaniessoastoofferatotalremunerationinaccordancewiththemedianonthereferencemarket.
TheremunerationpackageoftheGroupExecutiveCommitteemembersconsistsof:(i) baseremuneration,(ii) variableremuneration,(iii) apensioncontribution,and(iv) variousotherbenefits.
Relative importance of the various elements of the CEO’s remuneration (2018)
BASE REMUNERATION
VARIABLE REMUNERATION
(OBJECTIVES 2017)
PENSION CONTRIBUTION
OTHER BENEFITS
Base remuneration
TheCEO’sbaseremunerationforthefinancialyear2018amountedtoEUR 488,841.75(asindexedonOctober 1,2018).
Variable remuneration
ThebaseamountoftheCEO’sshort-termvariableremunerationvariesdependingon(i) thecorporateobjectivesand(ii) individualtargets.Performanceisassessedannuallyinlightofthetargets.
• FortheCEO,thecorporate objectives relate to financialresults:70%ofthevariableremunerationallocatedbasedonthecorporateobjectivesdependsonEBITand30%-onoperationalCashFlow.ThepaygridwasestablishedandvalidatedbytheBoardofDirectorsonrecommendationoftheRemunerationandNominationCommittee(thisgridissetoutbelowintheSectionontheRemunerationoftheGroupExecutiveCommitteemembers).Dependingontheresultsofthese-auditedandregularlypublished-criteria,thepay-outpercriterioncanreach135%ofthebaseamountoftheshort-termvariableremunerationforthiscriterion.
• The individual targets areagreedonbetweentheCEOandtheBoardofDirectorsatthebeginningofeachyear.Clearandmeasurabletargetsareset,whicharetobeachievedwithinanagreedtimeframe.TheCEO’sindividualperformanceismeasuredagainstthesetargetsandmayvaryfrom0%ofthebaseamountoftheshort-termvariableremunerationintheeventofunderperformanceto160%intheeventofoverperformance.
TheCEO’sperformanceisassessedannuallyduringthefirstquarterfollowingtheendofthefinancialyear,aspartofaPerformanceManagementProcess(“PMP”),directedbytheBoardofDirectors.
CORPORATE GOVERNANCE STATEMENT
bpost ANNUALREPORT2018 146
Base remuneration
Baseremunerationreflectstheresponsibilitiesandcharacteristicsoftheposition,thelevelofexperienceandtheperformanceoftheGroupExecutiveCommitteemembersduringthepastyear.Itisgrantedindependentlyofbpost’sresults.Itispaideverymonth
andisrevisedannuallybasedonabenchmarkstudythatcoverslargeBelgiancompanies.
Variable remuneration
Short-termvariableremunerationisapercentageofthebaseremunerationandaimstoreinforcetheperformance-basedmanagerialculture.Thebaseamountofthevariableremunerationactuallyallocatedvariesdependingon(i) thecorporateobjectives,and(ii) individualtargets.Performanceisassessedannuallyinlightofthetargets.
• The corporate objectivesarerelatedtothefinancialresults(70%dependsontheEBIT)aswellastheloyaltyofbpost’scustomersmeasuredthroughtheCustomerLoyaltyIndex(30%):
• EBIT(70%):apaygridisdeterminedandvalidatedeachyearbytheBoardofDirectorsonrecommendationoftheRemunerationandNominationCommittee(seethegridbelow).DependingonEBIT,thepayoutcanreach135%ofthebaseamount;
• CustomerLoyaltyIndex(30%):thepay-outforthiscriterionisequaltotheresultsforthegivenyear.TheCustomerLoyaltyIndexfor2017reachedascoreof69,5%leadingtoapayoutof69,5%forthiscriterionin2018.
From2018(fortheshort-termvariableremunerationtobepaidin2019),thecorporateobjectiveswillstillincludeEBIT(70%)andCustomerLoyaltyIndex(15%)andintroduceastaffwellbeingdimension(15%),tobemeasuredbythelevelofshort-termabsenteeism.
Relative importance of the various elements of the global remuneration of the members of the Group Executive Committee (2018)
BASE REMUNERATION
VARIABLE REMUNERATION
(OBJECTIVES 2017)
PENSION CONTRIBUTION
OTHER BENEFITS
Table: Grid of 2018 remuneration (percentage of base remuneration based on EBIT)
Results (EBIT2017)
Variable remuneration (%)
≤92.5% 30%
95% 60%
97.5% 80%
100% 100%
102.5% 110%
106% 120%
108% 125%
110% 130%
≥112.5% 135%
CUST SAT (obj. 75)
DOT (obj. 98)
NPS (obj. 0)
BELEX (obj. 95)
72.2%
-2.45
91.6%
93.7%
CUSTOMER INDEX
69.5 (obj. 100)
CORPORATE GOVERNANCE STATEMENT
bpost ANNUALREPORT2018 147
• The individual targets aremutuallyagreedonandapprovedbytheCEOatthebeginningofeachyear.Clearandmeasurabletargetsareset,whicharetobeachievedwithinanagreedterm.Theindividualperformanceismeasuredagainstthesetargetsandmayvaryfrom0%ofthebaseamountoftheshort-termvariableremunerationintheeventofunderperformanceto160%intheeventofoverperformance.
TheperformanceofeachGroupExecutiveCommitteememberisassessedannuallyduringthefirstquarterfollowingtheendofthefinancialyear,aspartofaPMP,directedbytheCEO.
Pension contribution
TheGroupExecutiveCommittee’sglobalpensioncontributionforthefinancialyear2018amountedtoEUR 280,134.60.
Other benefits
bpostoffersotherbenefitstotheGroupExecutiveCommitteemembers,e.g.,insurancecoveringdeath-in-serviceanddisability,medicalinsurance,representationfees,mealvouchers,andacompanycar.
Thesebenefitsarebenchmarkedregularlyandadaptedaccordingtostandardpractices.
Global remuneration
Theglobalremunerationpaidin2018totheGroupExecutiveCommitteemembers(otherthantheCEO)duringtheyearthatendedonDecember 31,2018amountedtoEUR 3,462,033.851excludingvariableremuneration(comparedtoEUR 2,299,008.17in2017excludingvariableremuneration)andcanbebrokendownasfollows:
• baseremuneration(includingtheend-of-yearbonusandholidaypay):EUR 3,000,306.49;
• pension:EUR 280,134.60; • otherbenefits:
• insurancecoveringdeath-in-service,disabilityandmedicalcoverage:EUR 57,086.85;
• representationfeesandmealvouchers:EUR 26,019.58;and
• leasingcostsforcompanycars:EUR 98,486.33.
Inaddition,theGroupExecutiveCommitteemembers(otherthantheCEO)receivedaglobalvariableremunerationofEUR 901,423.99in2018becausethecorporateobjectivesandtheindividualtargetsfortheyearthatendedonDecember 31,2017weremet(giventhatthe2017assessmentwasonlycompletedin2018).Theglobalvariableremunerationfor2018willbedeterminedandpaidin2019aftertheperformanceassessmentofeachmemberoftheGroupExecutiveCommittee.
Noshares,stockoptionsorotherrightstoacquiresharesweregrantedtoorexercisedbytheGroupExecutiveCommitteemembers,orhaveexpiredin2018.Nooptionsunderpreviousstockoptionplanswerestilloutstandingforthefinancialyear2018.
NosubstantialchangesweremadetotheremunerationoftheGroupExecutiveCommitteememberscomparedtothepreviousfinancialyear.
Clawback provisions
Thecurrentremunerationpolicydoesnotprovideforaspecificcontractualclawbackprovisioninfavorofbpostforvariableremuneration.
Changes to the composition of bpost’s Group Executive Committee
ThefollowingchangesinthecompositionoftheGroupExecutiveCommitteeoccurredin2018:
• Mr. DirkTirez,ChiefLegal&RegulatoryOfficerandCompanySecretaryandMr. NicoCools,CIO&ChiefDigitalOfficer,wereappointedasGroupExecutiveCommitteememberswitheffectasfromDecember 4,2017andhavebeenremuneratedasmembersofthebpostGroupExecutiveCommitteesinceFebruary 1,2018;
• Mr. HenrideRomréewasappointedasnewChiefFinancialOfficerandasGroupExecutiveCommitteememberandwasremuneratedinthatcapacityasfromJanuary 15,2018;
• Mr. MarcHuybrechts,DirectorMail&RetailSolutions,positionasGroupExecutiveCommitteememberendedonApril 17,2018.HecontinuedtoworkforthegroupuntilAugust 31,2018andreceivedseverancepayofatotalamountofEUR 400,000;
• Mr. PhilippeDubois,DirectorMailServicesOperations,lefttheGroupExecutiveCommitteeonApril 17,2018tobecomeDirectorStrategy,Transformation&Performanceofbpost;
• Mr. LucCloet,DirectorParcels&LogisticsEurope&AsiaandMr. PierreWinand,DirectorParcels&LogisticsNorthAmerica,wereappointedasnewGroupExecutiveCommitteemembersandremuneratedinthatcapacityasfromApril 17,2018.
Inadditiontotheforegoingchanges:
• Mr. KurtPierlootresignedasDirectorMailandRetailwitheffectfromJanuary 24,2019.Mr. HenrideRomréewasappointedasnewDirectorMailandRetailasfromJanuary 24,2019;
• Mr. BaudouindeHepcéewasappointedasChiefFinancialOfficeradinterimasfromJanuary 24,2019,untilanewChiefFinancialOfficerisappointed.
Termination provisions and non-compete clauses
NomemberoftheGroupExecutiveCommitteeisentitledtospecificcontractualterminationarrangements,exceptfortheCEO,whoisentitledtoaseverancepayofEUR 500,000intheeventofearlyterminationbybpostforanyotherreasonthanmaterialbreach.Additionally,theCEOisentitledtotheuseofacompanycarforsixmonthsafterhisdeparture,includingallexpensesrelatingtotheusethereof,exceptforthefuelcard.
(1) Thisamountcomprisesthepro rataremunerationpaidtotheGroupExecutiveCommitteememberswhoresigned/startedin2018.
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Intheeventofautomaticterminationonexpiryofthesix-yeartermandtheappointmentbybpostofanotherCEO,theCEOissubjecttoanon-competeclauseforaperiodofoneyearasfromthedateofterminationofhismandate.Hewillreceiveanon-competitionindemnityofEUR 500,000,unlessbpostwaivestheapplicationofsuchclause.
AllmembersoftheGroupExecutiveCommittee,exceptforMr. MarkMichiels,aresubjecttonon-competeclauses,prohibitingthemfromworkingforbpost’scompetitorsforaperiodof12 monthsfromthedateoftheirresignationorterminationoftheircontract.Allsuchmembersareentitledtoreceiveanamountequaltosixmonthsofremunerationifbpostdecidestoapplythesenon-competeclauses.
FormembersoftheGroupExecutiveCommitteewhocarryouttheirfunctionunderanemploymentagreementundertheLawof3 July 1978,becauseoftheirsenioritywiththecompany,theapplicationofthemandatoryrulesontheterminationoftheiremploymentagreement,mayresultinanentitlementtoaterminationpaymentabove12or18 months’remuneration.
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Internal control and risk managementbpost’sEnterpriseRiskManagement(“ERM”)frameworkassistsbpostinmanagingriskseffectivelyandinimplementingthenecessarycontrolstopursueitsobjectives.TheERMframeworkcovers:(i) riskmanagement,allowingbposttotakeinformeddecisionsonrisksitiswillingtotaketoachieveitsstrategicobjectives,therebytakingintoaccountexternalfactors;and(ii) internalcontrolactivities,whichincludeallinternalpolicies,proceduresandbusinesspracticestomitigaterisks.Bestpracticesinriskmanagementandinternalcontrolactivities(e.g.,internationalstandardISO31000)andtheCommissiononCorporateGovernance’sdirectionshavebeenusedasreferencestodefinetheERMframework.
Ingeneral,theobjectiveistoprovideareasonableassuranceregarding(i) compliancewithapplicablelawsandregulations,(ii) reliabilityoffinancialandnon-financialinformation,and(iii) effectivenessofinternalprocesses.A“reasonableassurancelevel”isahigh,butnotanabsolutelevel,giventhatallinternalcontrolsystemshavelimitationslinkedto,e.g.,humanerror,wrongdecisionsorchoicesoncost/benefitofcontrol.
Thefollowingdescriptionofbpost’sinternalcontrolandriskmanagementactivitiesisfactualandaimstocovertheactivities’maincharacteristics.
Control environmentThecontrolenvironmentpromotesemployeeawarenessandcompliance,definesclearrolesandresponsibilities,publishesqualityguidelines,anddemonstratesthecommitmentofbpost’sGroupExecutiveCommitteeandBoardofDirectors.
Commitment to integrity and ethical values
“Earningtrust”isoneofbpost’skeyvalues.TheBoardofDirectorsandGroupExecutiveCommitteehaveapprovedbpost’sCodeofConduct,whichwasfirstissuedin2007andlastreviewedin2019.
TheCodehasgeneralprinciplesthatdescribethevaluesandethicalstandardsforeverybodyworkinginthegroupandenablesappropriateresponsesintheeventthatitisnotfollowed.Theseprinciplesarereinforcedbytherelevantregulations,policiesandproceduresthatareinplaceacrossbpost’sbusinesses,affiliatesandventures.TheCodeofConductisprovidedtoallnewemployeesaspartoftheonboardingprocessandsystematicallyintroducedinthebpostsubsidiaries.Itisalsomadeavailableonbpost’sintranetandreferredtoduringtrainings.AnyviolationsoftheCodeofConductmustbereportedtotheimmediatesuperiororthereferencepersonoftheemployee,ortothelegaldepartmentofbpost,asthecasemaybe.
Furthermore,tocomplywithinsidertradingandmarketmanipulationregulations,bposthasadoptedaDealingandDisclosureCode.ThisCodeisamendedfromtimetotimetobeinlinewiththemostrecentmarketabuselawsandregulations.TheDealingandDisclosureCodeaimstocreateawarenessaroundpossibleimproperconductbyemployees,senioremployees,andpersonsdischargingmanagerialresponsibilities(beingmembersoftheBoardofDirectorsandoftheGroupExecutiveCommittee)andtheirassociatedpersons.TheDealingandDisclosure
Codecontainsstrictrulesonconfidentiality,non-useof“pricesensitive”information,anddealingrestrictions.TherulesofthisCodehavebeenwidelycommunicatedwithintheGroupandtheCodeisavailabletoallemployees,senioremployeesandpersonsdischargingmanagerialresponsibilities.InconformitywiththeMarketAbuseRegulationofApril 16,2014,personsdischargingmanagerialresponsibilitiesatbposthavebeeninformedoftheirobligationsinrelationtoinsidertradingundertheMarketAbuseRegulation.
Commitment to corporate governance fostering accountability
TheBoardofDirectorssupervisestheCompany’soperationalmanagement.TheAuditCommitteeadvisestheBoardofDirectorsonaccounting,audit,andinternalcontrolmatters.WithoutprejudicetothemonitoringroleoftheBoardofDirectors,theGroupExecutiveCommitteeestablishesriskmanagementandinternalcontrolguidelinesandproceduresandmonitorstheireffectiveroll-out.A“threelinesofdefense”modelhasbeenimplemented:
• Theoperationalmanagementisresponsibleforthedesignandmaintenanceofriskmanagementandinternalcontrols(firstline);
• Thesecondlinefunctions,suchasLegal,Compliance,Health&Safety,SecurityorIntegrity,provideexpertsupporttothefirstlineoperationalmanagement.Theoverallroll-outandcoordinationoftheriskmanagementandinternalcontrolactivitiesiscentralizedwithintheRisk&Controldepartment.AllsecondlinefunctionsreportatleastannuallytotheGroupExecutiveCommitteeontheriskevolutionintheirrespectivedomains;
• Finally,CorporateAudit,responsiblefortheinternalauditsofbpostGroup,constitutesthethirdlineofdefense.TheCorporateAuditDirectorreportstotheAuditCommittee’sChairpersonandCEO.
Commitment to employee development and competence
Goodleadershipisinvaluableandgeneratesbetterresultsforbpost.InSeptember 2015,bpostrolled-outthe“Leading@bpost”programthatidentifiesaccountabilityandcontinuouslearningastwokeyvalues.Todevelopskills,bposthasestablisheditsowntrainingcenter.Technicalcoursesareheldinthe business units (e.g.,trainingontheInternationalFinancialReportingStandards(“IFRS”)usedtopreparebpost’sconsolidatedfinancialstatement)andadhoccoursesaredevelopedonaneed-to-havebasis.Personaldevelopmentisdrivenbyclearjobdescriptionsandastructuredbi-annualevaluation.Adhoccoachingsessionsarepromoted.
Risk assessmentThepurposeofriskmanagement,embeddedintheERMframework,istodeliveraconsistentcorporateapproachandestablishasoundriskmanagementculture.Threetypesofriskmanagementactivitiesareperformed.First,astrategicriskassessmenttakesplaceaspartoftheprocesstodefine/revisebpost’sstrategy.EachBusinessUnitfurtherassessesitsoperationalrisksonasemi-annualbasis.Finally,thereisriskandinternalcontrolmanagementataprocess,productorprojectlevel.Thisincludesanevaluationoftheadequacyofthemostimportantinternalcontrolstomitigaterisksataprocess,productorprojectlevel.Thesamestructuredriskmanagementprocessis
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appliedtothefollowingthreetypesofriskactivities:
• Identificationoftherisksthatmayhaveanimpactonrealizingtheobjectives;
• Assessmentofrisksinordertoprioritizethem; • Decisiononriskresponsesandactionplanstoaddresskeyrisks;
• Monitoringactionplanimplementationandoverallriskevolutionsandidentificationofemergingrisks.
Thecoherenceofthethreedifferenttypesofriskactivitiesisensuredbyusingasingleframeworkofriskevaluationcriteriatoassesstherisks.Thisensurestherightrisksarecirculated,bothtop-downandbottom-up.
Moreinformationcanbefoundinthe“RiskManagement”sectionoftheannualreport(note 6.5).
Control activities
In general
AprocessmanagementframeworkisdefinedbasedontheBusinessProcessMethodology(“BPM”).Policiesandproceduresareestablishedforthekeyprocesses(accounting,procurement,investments,treasury,etc.). Theyaresubjecttoregularcontrols.Internalcontroldashboardsaremonitoredwhererelevant.
AllGroupcompaniesuseanEnterpriseResourcePlanning(“ERP”)systemoraccountingsoftwaretosupportefficientprocessingofbusinesstransactions,toperformaccountingandtodeliverdataforconsolidation.Thesesystemsprovidemanagementwithtransparentandreliableinformationitneedstomonitor,control,anddirectbusinessoperations.AclosemonitoringofpotentialconflictsofseparationofdutiesintheERPsystemiscarriedoutonaregularbasis.bposthasestablishedmanagementprocessestoensure the implementation of appropriate measures onadailybasistosustaintheperformance,availabilityandintegrityofitsITsystems.TheadequacyandeffectivenessismonitoredthroughinternalservicelevelagreementsaswellasperiodicperformanceandincidentreportingtothedifferentBusinessUnitsinvolved.
Specifically related to the financial statements
Systematicandstructuredfinanceprocessesensureatimelyandqualitativereporting.Theseprocessesincludethefollowingmainactivitiesorcontrols:
• Carefulanddetailedplanningofallactivities,includingownersandtiming;
• CommunicationbytheGroupFinanceDepartmentpriortotheclosingofguidelines,includingonallIFRSaccountingprinciples,tobeappliedbyalllegalentitiesandoperatingunits;
• Separationofdutiesbetweentheaccountingteamsinthedifferentlegalentitiesactuallyperformingtheaccountingactivitiesandthedepartmentsresponsibletoreviewthefinancialinformation.Thereviewisperformedmorespecificallyby(i) businesscontrollersresponsible,interalia,forthereviewoffinancialinformationintheirareaofresponsibility,and(ii) theGroupFinanceDepartment,whichisresponsibleforthefinalreviewofthefinancialinformationofthedifferentlegalentitiesandoperatingunitsandforthepreparationoftheconsolidatedfinancialstatements;
• Systematicaccountjustificationandreviewafter
theclosingtriggeringfollow-upandfeedbackofthetimelines,qualityandlessonslearnedinordertostriveforcontinuousimprovement.
Information and communicationTheInternalCommunicationdepartmentusesawidevarietyoftools,suchastheCompany’sintranetandemployeenewsletters,tocirculatemessagesinastructuredandsystematicwaybothfromtopmanagementandoperationallevel.
FinancialandperformanceinformationissharedbetweenoperationalandfinancialmanagementandtheGroupExecutiveCommittee.BesidesthemonthlyreportinganalysispreparedbytheBusinessControllers,theGroupExecutiveCommitteeconductsathoroughquarterlyreviewofthedifferentBusinessUnits’performance.
Properassignmentofresponsibilitiesandcoordinationbetweentherelevantdepartmentsensuresanefficientandtimelycommunicationprocessforperiodicfinancialinformation.TheGroupFinanceDepartmentcommunicatesonaregularbasisallIFRSaccountingprinciples,guidelinesandinterpretations,tobeappliedbyalllegalentitiesandoperatingunits,totheaccountingteamsofthedifferentlegalentitiesandoperatingunits.
Externally,thePressRelationsandPublicAffairsdepartmentmanagesstakeholders,e.g.,pressandpublicauthorities.ThisdepartmentcentralizesandvalidatesexternalcommunicationswithapotentialimpactatGrouplevel.Thisincludes,butisnotlimitedto,financialinformation.
Financialinformationismadeavailabletothemarketonaquarterly,semi-annualandannualbasis.Priortoexternalpublication,financialinformationissubjectto(i) anextensiveinternalvalidationprocess,(ii) reviewbytheAuditCommittee,and(iii) approvalbybpost’sBoardofDirectors.
Monitoring
Corporate Audit (internal) and Joint Auditors (external)
bposthasaprofessionalinternalauditdepartmentthatworksinlinewiththeInstituteofInternalAuditors’standards.Thedepartmentissubjecttoanexternalqualityrevieweveryfiveyears.CorporateAuditconductsanannualriskassessmentwithasemi-annualrevisiontodeterminetheauditprogram.Viaitsauditassignments,CorporateAuditprovidesreasonableassuranceoninternalcontroleffectivenessinthedifferentprocessesorprojectsreviewed.
TheJointAuditorsprovideanindependentopiniononthefullyearstatutoryandconsolidatedfinancialstatements.Theyperformalimitedreviewonthehalf-yearinterimcondensedfinancialstatementsandthestatutoryBGAAPfiguresofbpostNV/SAperendofOctober,whichservesforthedistributionofaninterimdividend.Inaddition,theyreviewmaterialchangestotheIFRSaccountingprinciplesandevaluatethedifferentidentifiedkeycontrolsontheprocessesthatsupporttheset-upofthefinancialstatements.
Audit Committee and Board of Directors
TheAuditCommitteeadvisestheBoardofDirectorsonaccounting,audit,andinternalcontrolmatters.
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Todoso,theAuditCommitteereceivesandreviews:
• AllrelevantfinancialinformationtoenabletheAuditCommitteetoanalyzethefinancialstatements;
• Thequarterlytreasuryupdate; • AnysignificantchangeoftheIFRSaccountingprinciples;
• RelevantfindingsresultingfromtheactivitiesoftheCorporateAuditDepartmentand/ortheJointAuditors;
• TheCorporateAudit’ssemi-annualstatusreportonthefollow-upofauditrecommendationsandannualactivityreport;
• TheGroupExecutiveCommittee’sannualconclusionontheeffectiveexecutionofbpost’sriskmanagementandinternalcontrolactivitiesaswellasperiodicinformationonthemainbusinessandrelatedriskevolutions.
TheBoardofDirectorsultimatelyensurestheestablishmentofinternalcontrolsystemsandprocedures.TheBoardofDirectorsmonitorsthefunctioningandadequacyoftheinternalcontrolsystemsandprocedures,consideringtheAuditCommittee’sreview,andtakesthenecessarymeasurestoensuretheintegrityofthefinancialstatements.Aprocedureisinplacetoconvenebpost’sappropriategoverningbodyonshortnoticeifandwhencircumstancessodictate.
MoredetailedinformationonthecompositionandfunctioningoftheAuditCommitteeandtheBoardofDirectorsisincludedinthesectionofthisCorporateGovernanceStatementontheBoardofDirectorsandtheAuditCommittee.
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anddepthofworkexperience,and(ii) high-potentialyoungertalentswhoareeagertolearn.
• Professional background:tostaycompetitiveinachangingenvironment,bpostmustattractandretaintalentwithdiverseprofessionalbackgrounds.Diversityofprofessionalbackgroundsprovidesbpostwitharangeofexpertiseandexperiencenecessarytorespondtothecomplexchallengesitfaces.Toachieveprofessionalbackgrounddiversitywithinitsmanagement,bpostaimstoidentifypeoplewho(i) havedistinctprofessionalbackgrounds,and(ii) comefromvarioussectorsatdifferentpointsintheir career.
• Geographic diversity:geographicdiversityissignificantandpositivelycorrelatedwithfirmperformance,especiallyinincreasingbusinessandstrategyinternationalization.Tostimulategeographicdiversity,bposttakesintoaccountforeignelementsintheprofileandthepathofitscandidates.
TheBoardofDirectorsassessesannuallywhetherdiversitywithinthebpostmanagementhasimproved.
DiversityCreating a culture of Diversity and Inclusionbpostisahighlydiversecompanyintermsofitsworkforceandiscommittedtocreatingandsupportingacollaborativeworkplaceculture.Suchadiverseenvironmentallowsthegrouptooptimizeinteractionwithitscustomersandstakeholders,andrespondtochallengesindifferentandefficientways.
Inthatcontext,bposthasdesignedaDiversityPolicy(availableonbpost’swebsite)aimedatcreatingdiversityandinclusionawarenesswithinthegroup.ThepurposeofthisDiversityPolicyistosupportbpostemployeesandmanagementinbuildingaculturewherediversityandinclusionareadailypractice.
Theprogramfocusesonengagement,awareness,andinvolvement.TheBoardofDirectorssetsthetoneatthetopandisthetruesponsorofthediversityandintegrationworkshopsorganizedforteamsinvestingindiversityandinclusionawarenessand/ordealingwithspecifictopicswithinthediversityandinclusionframework.
Diversity within the Board of Directors and the Group Executive CommitteebpostadherestotheviewthatdiversityofcompetencesandviewsoftheBoardofDirectorsandGroupExecutiveCommitteefacilitatesagoodunderstandingofthebusinessorganizationandaffairs.Itenablesthememberstoconstructivelychallengestrategicdecisions,ensureriskmanagementawareness,andbemoreopentoinnovativeideas.
bpostcomplieswiththeprovisionsofArticle 518bis oftheBelgianCompaniesCodeintermsofgenderdiversity,buttheDiversityPolicyforthemembersofitsmanagementgoesbeyondthisstrictlegalminimum.
InthecompositionoftheBoardofDirectorsandGroupExecutiveCommittee,specialattentionispaidtodiversityintermsofcriteriasuchasage,professionalbackground,gender,andgeographicdiversity.Whenconsideringcandidatesforvacancies,theRemunerationandNominationCommitteetakesintoaccountbalancedscorecardsofsuchdiversitycriteria.
DiversityaspectsthataretakenintoaccountinrelationtothebpostBoardofDirectorsandGroupExecutiveCommitteemembersarethefollowing:
• Gender:genderdiversitypromotesabetterunderstandingofthemarketplace,increasescreativity,producesmoreeffectiveleadershipandpromoteseffectiveglobalrelationships.Toachievegreatergenderdiversitywithinitsmanagement,bpostaimsto(i) identifypotentialfemaletalentsatanearlystage,(ii) provideopportunitiesthatallowwomentoreachtheirfullpotential,(iii) enrollwomenindevelopmentprogramsthatpreparethemformanagementroles.
• Age:agediversityintheworkplaceispartofthehumancapitalandprovidesalargerspectrumofknowledge,values,andpreferences.Suchage-diversemanagementwillprovideamoredynamicenvironmentwithcontinuousmovement.Toachieveagediversity,bpostaimstoensurethatismanagementcounts(i) oldertalents,withbreadth
17%
8%
18%
10%
19%
13%
7%
8%
16%
9%
15%
9%
18%
17%
7%
9%
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Diversity aspects – Implementation & outcome
Gender diversity
Age diversity
Geographical diversity
Professional Background
Board members
GEC members
Finance&Accounting,RiskManagement,Audit
Transport&Logistics,Fullfilment,Warehousing,E-commerce
Banking
Postalservices
Parcelservices
Retail
Digital,Technology,Telecommunication,Innovation
HumanResourcesManagement
100%men
1/3women
2/3men
50-59years: 5members
50-59years: 4members
60yearsand+:4members
40-49years: 2 members
60yearsand+: 2 members
OnDecember31,2018,theoutcomeofdiversityaspectsinrelationto thebpostBoardofDirectorsandGroupExecutiveCommitteemembersisthefollowing:
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Report of the Joint Auditors to the General Meeting of bpost SA de droit public / bpost NV van publiek recht for the year ended 31 December 2018
Basis for the unqualified opinionWeconductedourauditinaccordancewithInternationalStandardsonAuditing(“ISAs”).Ourresponsibilitiesunderthosestandardsarefurtherdescribedinthe“OurresponsibilitiesfortheauditoftheConsolidatedFinancialStatements”sectionofourreport.
WehavecompliedwithallethicalrequirementsthatarerelevanttoourauditoftheConsolidatedFinancialStatementsinBelgium,includingthosewithrespecttoindependence.
WehaveobtainedfromtheBoardofDirectorsandtheofficialsoftheCompanytheexplanationsandinformationnecessaryfortheperformanceofourauditandwebelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasis for our opinion.
Key audit mattersKeyauditmattersarethosemattersthat,inourprofessionaljudgment,wereofmostsignificanceinourauditoftheConsolidatedFinancialStatementsofthecurrentreportingperiod.
Report on the audit of the Consolidated Financial StatementsUnqualified opinionWehaveauditedtheConsolidatedFinancialStatementsofbpostSAdedroitpublic/bpostNVvanpubliekrecht,whichconsistoftheconsolidatedstatementoffinancialpositionasat31 December 2018,theconsolidatedincomestatement,theconsolidatedstatementofcomprehensiveincome,theconsolidatedstatementofchangesinequityandtheconsolidatedstatementofcashflowsoftheyearandthedisclosures,whichshowaconsolidatedbalancesheettotalofEUR 3,345.1 millionandofwhichtheconsolidatedincomestatementshowsaprofitfortheyearofEUR 263.6 million.
Inouropinion,theConsolidatedFinancialStatementsgiveatrueandfairviewoftheconsolidatednetequityandfinancialpositionasat31 December 2018,andofitsconsolidatedresultsanditsconsolidatedcashflowsfortheyearthenended,preparedinaccordancewiththeInternationalFinancialReportingStandardsasadoptedbytheEuropeanUnion(“IFRS”)andwithapplicablelegalandregulatoryrequirementsinBelgium.
AsrequiredbylawandtheCompany’sarticlesofassociation,wereporttoyouasstatutoryjointauditorsofbpostSAdedroitpublic/bpostNVvanpubliekrecht(the“Company”)anditssubsidiaries(togetherthe“Group”).Thisreportincludesouropinionontheconsolidatedstatementoffinancialpositionasat31 December 2018,theconsolidatedincomestatement,theconsolidatedstatementofcomprehensiveincome,theconsolidatedstatementofchangesinequityandtheconsolidatedstatementofcashflowsfortheyearended31 December 2018andthedisclosures(allelementstogetherthe“ConsolidatedFinancialStatements”)aswellasourreportonotherlegalandregulatoryrequirements.Thesetworeportsareconsideredonereportandareinseparable.WehavebeenappointedasstatutoryjointauditorsbytheShareholdersMeetingof9 May 2018,inaccordancewiththepropositionbytheBoardofDirectorsfollowingrecommendationoftheAuditCommitteeandonrecommendationoftheWorkersCouncil.OurmandateexpiresattheShareholdersMeetingthatwilldeliberateontheConsolidatedFinancialStatementsfortheyearending31 December 2020.We performedtheauditoftheConsolidatedFinancialStatementsoftheGroupduring10 consecutive years.
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ThesematterswereaddressedinthecontextofourauditoftheConsolidatedFinancialStatementsasawholeandinformingouropinionthereon,andconsequentlywedonotprovideaseparateopiniononthese matters.
Long term employee benefits
Description of the key audit matter
ProvisionsforlongtermemployeebenefitsamounttoEUR 308.4 millionasof31 December 2018andaredisclosedinnote 6.27totheConsolidatedFinancialStatements.Thisareaisimportanttoourauditbecauseofthemagnitudeoftheamounts,thejudgmentsinvolvedconcerningthekeyactuarialassumptions(suchasdiscountrates,inflation,mortality,increaseinsalariesandmedicalcosts, …)andthetechnicalexpertiserequiredtoevaluatetheseprovisionsandtoproperlyreflecttheimpactsintheConsolidatedFinancialStatementsinaccordancewithIAS 19.Inaddition,appropriateinternalcontrolproceduresareimportanttoensurethattheunderlyingparticipantdata(suchaspopulation,age,yearsofservice,wage, …)arecorrectlymanagedandtheamendmentstotheplansareproperlyandtimelyreflectedintheConsolidatedFinancialStatements.
Summary of the procedures performed • WehaveperformedadetailedreviewoftheactuarialreportpreparedbytheexternalactuaryengagedbytheCompanytoensurethatallcharacteristicsoftheplanshavebeenproperlyconsideredintheactuarialcalculations.
• Wehaveassessedtheexpertise,independenceandintegrityoftheexternalactuaryengagedbytheCompany.
• Wehavecomparedtheinputdatausedforthecalculationoftheprovisionsbytheexternalactuary(suchaspopulation,age,yearsofservice,wage, …)withsourceinformationofthehumanresourcesdepartmentoftheCompany.
• Wehaveassessedtheappropriatenessofthekeyactuarialassumptions(suchasdiscountrates,inflation,mortality,increaseinwagesandmedicalcosts, …)withtheassistanceofourinternalactuarial specialists.
• WehaveverifiedthattheactuarialcalculationsareproperlyreflectedintheprovisionsrecordedintheConsolidatedFinancialStatementsandensuredthatimpactsarecorrectlyrecordedinaccordancewithIAS19.
• Wehaveperformeddetailedanalyticalreviewsontheimportantlongtermemployeebenefitsplansbyreviewingtheroll-forwardoftheprovisionstounderstandthechangesinthevaluationoftheprovisionscomparedtolastyear.
• Wehaveassessedtheadequacyandcompletenessofthedisclosurespresentedinthenote 6.27oftheConsolidatedFinancialStatementbasedontherequirementsofIAS19.
Business Combination
Description of the key audit matter
Intherecentpast,theCompanyenteredinseveralsignificantbusinesscombinationsleadingtoatotalcarryingvalueofgoodwillrecognizedforEUR 683.6 millionasof31 December 2018and
forwhichearn-outliabilitiesareestimatedbasedonthecontingentconsiderationarrangements(EUR 10.7 millionasof31 December 2018).Asdescribedinnotes6.6and6.19totheConsolidatedFinancialStatements,severalsignificantpurchasepriceallocationexerciseshavebeencompletedduringtheyearinaccordancewithIFRS 3.GoodwillamountingtoEUR 4.9 millionisstillprovisionalconsideringthattheCompanyhasoneyeartoperformthepurchasepriceallocationinaccordancewithIFRS 3.
ThepurchasepriceallocationexerciserequiresthealignmentoftheaccountingrecordsoftheacquiredentitieswiththeaccountingpoliesoftheCompanyandinvolvessignificantjudgmentsandestimatesbythemanagementtoassessthefairvalueoftheassetsacquiredandliabilitiesassumedinaccordancewithIFRS 3.Inaddition,thevaluationoftheearn-outliabilitiesrequiresalsosignificantjudgementsontheunderlyingassumptionsusedinthecalculationmodelswhicharemainlybasedonbudgetedKeyPerformanceIndicators’s(KPI’s)asdeterminedinthesharepurchaseagreements.
Summary of the procedures performed • Wehaveperformedauditproceduresonthefinancialinformationoftheacquiredentitiesatthedateofacquisition.WehaveassessedanddiscussedthekeyfindingsidentifiedduringtheduediligenceproceduresperformedbytheexternalexpertsengagedbytheCompany.Finally,wehavevalidatedthealignmentofthelocalfinancialinformationwiththeaccountingpoliciesoftheCompany.
• Wehavevalidated,withtheassistanceofourinternalvaluationexperts,thatthemethodologiesusedbytheCompanyfortheestimationofthefairvalueofassetsacquiredandliabilitiesassumedareinaccordancewithIFRS 3andindustrypractices.
• Withtheassistanceofourinternalvaluationexperts,wehaveassessedandbenchmarkedthekeyinputsandassumptions(underlyingopeningbalances,businessplans,discountrates,EBITDAmargins,growthrates, …)usedinthepurchasepriceallocationcalculationspreparedbytheCompanywithassistanceofthethirdpartyvaluationexperts.
• Wehaveassessedthecompetence,independenceandintegrityofthethirdpartyvaluationexpertsusedbytheCompany.
• Wehavevalidatedallsignificantaccountingentriesrelatingtothefairvalueimpactsonassetsacquiredandliabilitiesassumedresultingfromthepurchaseprice allocation.
• Withrespecttothevaluationoftheearn-outliabilities,wehaveanalyzedthecontractualagreementsandverifiedwhethertheconditionsarecorrectlyreflectedinthevaluationoftheestimatedearn-outliabilities.Wehaveassessedanddiscussedthebusinessplansoftheacquiredentitiesthatareusedasbasistodeterminetheearn-outliabilities.Finally,wehaveassessedthemathematicalaccuracyofthedetailedcalculationssupportingthevaluationoftheseearn-outliabilities.
• Furthermore,wehaveassessedtheadequacyandcompletenessofthedisclosuresinnotes6.6and6.19totheConsolidatedFinancialStatementsbasedontheIFRSrequirements.
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Impairment of long term assets
Description of the key audit matter
Asdescribedinnote 6.19,relatingtoimpairmenttestingonlongtermassets(includinggoodwill),theCompanyreviewsthecarryingamountsofitscashgeneratingunits(“CGU”)annuallyofmorefrequentlyifimpairmentindicatorsarepresent.TheimpairmentassessmentinvolvesacomparisonoftheestimatedvalueinuseoftheCGUtoitscarryingamount.TheassessmentisajudgmentalprocesswhichrequiresestimatesconcerningtheprojectedfuturecashflowsassociatedwiththeCGU,theweightedaveragecostofcapital(“WACC”)andthegrowthrateofrevenueandcoststobeappliedindeterminingthevalueinuse.
Thisareaisimportanttoourauditbecauseofthemagnitudeoftheamounts,thejudgmentsandthetechnicalexpertiserequiredtoperformtheimpairmenttestingonlongtermassets.
Summary of the procedures performed • Wehaveassessedthedesignandimplementationoftheinternalcontrolsrelatingtomanagement’simpairmenttestingofgoodwillandlongtermassets.
• Wehavetestedtheaccuracyoftheunderlyingmodeltoassesswhethertheprocessesareappliedtothecorrectinputdata.
• Wehavechallengedeachofthekeyassumptionsemployedintheannualimpairmenttest.ThesekeyassumptionsincludetheWACC,thegrowthratesandprojectedcashflows.Wehaveinvolvedourinternalvaluationspecialiststoassessandbenchmarkthoseassumptionstocomparableindependentdata.WehavetestedthereasonablenessofprojectedcashflowsinthelightoftheGroup’shistoricforecastingaccuracyandcomparedtheseprojectionswiththelongtermplanasapprovedbytheBoardofDirectors.
• Wehaveconcludedonthereasonabilityofconclusionreachedbymanagementnottoimpairthegoodwillorwhenanimpairmentwasnecessaryonthevaluationoftheimpairmentloss.
• Wehaveassessedmanagement’ssensitivityanalysesandtheappropriatenessandcompletenessofthesensitivitydisclosures.
• WehaveassessedtheappropriatenessandcompletenessofthedisclosuresinaccordancewithIAS36asincludedinnote 6.19totheConsolidatedFinancialStatements.
Revenue recognition
Description of the key audit matter
Revenuerecognitionisakeyauditmatterinourauditresultingconsideringtheamountsinvolved(EUR 3,850.2 millionofoperatingincomefor2018)andthecomplexityandassumptionsusedtoestimateseveralrevenuestreamsatyear-endinaccordancewithIFRS 15.Themainriskareasrelateto:
• RevenuerelatingtothefinancialcompensationforServicesofGeneralEconomicInterest(“SGEI”)andforthedistributionofpressandperiodicalsthatareestimatedatyear-endbasedoncomplexcalculationsandprinciplescontractuallyagreedandwhichamountstoEUR 271.4 millionfor2018asdisclosedinnote 6.8totheConsolidatedFinancialStatements.Thesecontractsincludevariouscalculationmodelsforthedetermination
oftheannualfinancialcompensationforwhichthelowestcompensationisgrantedandthustakenintoconsiderationfortherevenuerecognition.Thesecalculationmodelsarebasedonvariousinputdata(suchasactualvolumes,qualitytargets,incurredcostsrelatingtotheconcernedservices, …)andinvolvesmanagementestimates.
• RevenueofDecember 2018forRadialthatisestimatedatyear-endandwillbebilledtocustomersinJanuaryofthenextyear.RadialisprovidingE-commerceoutsourcingservices(Technologyservices,paymentprocessingservices,shippingandhandlingservices,24/7 customerservicesrelatedtothewebstores,ordermanagementandfulfillment)andotherprofessionalservicestoitscustomers.TheestimationoftheDecember 2018revenueinaccordancewithIFRS 15iscomplexconsideringthevariousinputdatausedinthecalculations,thevolumeoftransactionsandthespecificcontractualconditionsagreedwithcustomers.
• Revenuewithotherpostaloperators(“terminaldues”)thatisestimatedbasedoncomplexcalculationsinvolvingvariousinputdata.Theestimationoftheserevenuesisbasedonvolumesexchanged(inkilogram’sandperitem),thepricesagreedwiththeforeignpostaloperatorsandalsoothercontractualconditions(e.g.qualityofserviceofthemaildistribution).
Summary of the procedures performed • Wehavegainedanunderstandingofinternalcontrolenvironmentrelatingtotherevenueprocesses,performedwalkthroughsofthesignificantrevenueclassesoftransactionsandevaluatedthedesignandoperatingeffectivenessofkeyinternalcontrols.WehavealsoevaluatedtheITgeneralcontrolsandkeyITapplicationcontrolssupportingtherevenueprocesseswithassistanceofourinternalITexperts.
• Wehaveassessedthemanagement’sestimationprocessandchallengedtheircalculationsbyperforming(i) anassessmentandcomparisonofthekeyinputsandassumptionsinthecalculationmodels,withthecontractualagreements,(ii) avalidationonwhetherthetransferofrisksandrewardsareproperlyreflectedbasedonthecontractualagreementsand(iii) areconciliationofthekeyunderlyingdatausedintherevenuecalculationmodels(e.g.volumes,prices, …)withunderlyingITsystems,contractsandotherdocumentsprovidedbyexternalparties.
• Wehaveperformedanalyticalproceduresontheimportantrevenuestreamstodetectunusualtrendsortransactionsbycomparingrevenuewithlastyearandperforminganmonthlyanalysisofrevenue.
• Wehaveperformedsubsequenteventsproceduresbyreviewingsignificanttransactionsrecordedduring2019andcomparingthesetransactionswithestimatesrecordedatyear-end.
• WehaveassessedtheadequacyandcompletenessofthedisclosuresonrevenueintheConsolidatedFinancialStatementsbasedontheIFRSrequirements.
Responsibilities of the Board of Directors for the preparation of the Consolidated Financial StatementsTheBoardofDirectorsisresponsibleforthepreparationoftheConsolidatedFinancialStatements
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thatgiveatrueandfairviewinaccordancewithIFRSandwithapplicablelegalandregulatoryrequirementsinBelgiumandforsuchinternalcontrolsrelevanttothepreparationoftheConsolidatedFinancialStatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.
AspartofthepreparationofConsolidatedFinancialStatements,theBoardofDirectorsisresponsibleforassessingtheCompany’sabilitytocontinueasagoingconcern,andprovide,ifapplicable,informationonmattersimpactinggoingconcern,TheBoardofDirectorsshouldpreparethefinancialstatementsusingthegoingconcernbasisofaccounting,unlesstheBoardofDirectorseitherintendstoliquidatetheCompanyortoceasebusinessoperations,orhasnorealisticalternativebuttodoso.
Our responsibilities for the audit of the Consolidated Financial StatementsOurobjectivesaretoobtainreasonableassurancewhethertheConsolidatedFinancialStatementsarefreefrommaterialmisstatement,whetherduetofraudorerror,andtoexpressanopinionontheseConsolidatedFinancialStatementsbasedonouraudit.Reasonableassuranceisahighlevelofassurance,butnotaguaranteethatanauditconductedinaccordancewiththeISAswillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisoftheseConsolidatedFinancialStatements.
AspartofanauditinaccordancewithISAs,weexerciseprofessionaljudgmentandwemaintainprofessionalskepticismthroughouttheaudit.Wealsoperformthefollowingtasks:
• identificationandassessmentoftherisksofmaterialmisstatementoftheConsolidatedFinancialStatements,whetherduetofraudorerror,theplanningandexecutionofauditprocedurestorespondtotheserisksandobtainauditevidencewhichissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingmaterialmisstatementsresultingfromfraudishigherthanwhensuchmisstatementsresultfromerrors,sincefraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol;
• obtaininginsightinthesystemofinternalcontrolsthatarerelevantfortheauditandwiththeobjectivetodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheCompany’sinternalcontrol;
• evaluatingtheselectedandappliedaccountingpolicies,andevaluatingthereasonabilityoftheaccountingestimatesandrelateddisclosuresmadebytheBoardofDirectorsaswellastheunderlyinginformationgivenbytheBoardofDirectors;
• concludeontheappropriatenessoftheBoardofDirectors’useofthegoing-concernbasisofaccounting,andbasedontheauditevidenceobtained,whetherornotamaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheCompany’sorGroup’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,weare
requiredtodrawattentioninourauditor’sreporttotherelateddisclosuresintheConsolidatedFinancialStatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedonauditevidenceobtaineduptothedateoftheauditor’sreport.However,futureeventsorconditionsmaycausetheCompanytoceasetocontinueasagoing-concern;
• evaluatingtheoverallpresentation,structureandcontentoftheConsolidatedFinancialStatements,andevaluatingwhethertheConsolidatedFinancialStatementsreflectatrueandfairviewoftheunderlyingtransactionsandevents.
WecommunicatewiththeAuditCommitteewithintheBoardofDirectorsregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.
Becauseweareultimatelyresponsiblefortheopinion,wearealsoresponsiblefordirecting,supervisingandperformingtheauditsofthesubsidiaries.Inthisrespectwehavedeterminedthenatureandextentoftheauditprocedurestobecarriedoutforgroupentities.
WeprovidetheAuditCommitteewithintheBoardofDirectorswithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.
FromthematterscommunicatedwiththeAuditCommitteewithintheBoardofDirectors,wedeterminethosemattersthatwereofmostsignificanceintheauditoftheConsolidatedFinancialStatementsofthecurrentperiodandarethereforethekeyauditmatters.Wedescribethesemattersinourreport,unlessthelaworregulationsprohibitthis.
Report on other legal and regulatory requirementsResponsibilities of the Board of DirectorsTheBoardofDirectorsisresponsibleforthepreparationandthecontentoftheBoardofDirectors’reportontheConsolidatedFinancialStatements,thenon-financialinformationattachedtotheBoardofDirectors’report,andotherinformationincludedinthe annual report.
Responsibilities of the Joint Aud itorsInthecontextofourmandateandinaccordancewiththeadditionalstandardtotheISAsapplicableinBelgium,itisourresponsibilitytoverify,inallmaterialrespects,theBoardofDirectors’reportontheConsolidatedFinancialStatements,thenon-financialinformationattachedtotheBoardofDirectors’report,andotherinformationincludedintheannualreport,aswellastoreportonthesematters.
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Aspects relating to Board of Directors’ report and other information included in the annual reportInouropinion,aftercarryingoutspecificproceduresontheBoardofDirectors’report,theBoardofDirectors’reportisconsistentwiththeConsolidatedFinancialStatementsandhasbeeninpreparedaccordancewitharticle 119oftheBelgianCompanyCode.
InthecontextofourauditoftheConsolidatedFinancialStatements,wearealsoresponsibletoconsiderwhether,basedontheinformationthatwebecameawareofduringtheperformanceofouraudit,theBoardofDirectors’reportandotherinformationincludedintheannualreport,being:
• Overviewofthekeyfigures; • Messagetothestakeholders; • Keyeventsoftheyear;
containanymaterialinconsistenciesorcontainsinformationthatisinaccurateorotherwisemisleading.Inlightoftheworkperformed,therearenomaterialinconsistenciestobereported.Inaddition,wedonotprovidereasonableassuranceregardingtheBoardofDirectors’reportandotherinformationincludedintheannual report.
Thenon–financialinformationrequiredbyarticle 119,§ 2,oftheBelgianCompanyCodehasbeenincluded
Ernst&YoungRéviseursd’EntreprisesSCCRL Representedby
RomualdBilem Partner* *ActingonbehalfofaBVBA/SPRL
PVMDBedrijfsrevisorenBCVBA Representedby
CarolineBaert Partner* *ActingonbehalfofaBVBA/SPRL
intheannualreportontheConsolidatedFinancialStatements.TheCompanyhaspreparedthisnon-financialinformationbasedonGlobalReportingInitiativesStandards.However,wedonotcommentonwhetherthisnon-financialinformationhasbeenprepared,inallmaterialrespects,inaccordancewithGlobalReportingInitiativesStandards.Wedonotexpressanyformofreasonableassuranceregardingtheindividualelementsincludedinthisnon-financialinformation.
Independence mattersOurauditfirmsandournetworkshavenotperformedanyservicesthatarenotcompatiblewiththeauditoftheConsolidatedFinancialStatementsandhaveremainedindependentoftheCompanyandtheGroupduringthecourseofourmandate.
ThefeesforadditionalservicesthatarecompatiblewiththeauditoftheConsolidatedFinancialStatementsasreferredtoinArticle 134oftheBelgianCompanyCodehavebeencorrectlydisclosedanddetailedintheConsolidatedFinancialStatements.
Other communications • ThisreportisconsistentwithoursupplementarydeclarationtotheAuditCommitteeasspecifiedinarticle 11oftheregulation(EU)nr.537/2014.
Brussels,19 March 2019