Good day, and welcome to today's bpost's Second Quarter 2023 Analyst Conference Call. This conference is being recorded. At this time, I'd like to hand the call over to Philippe Dartienne, bpost CEO. Please go ahead, sir. Thank you very much, Sergei. Good morning, ladies and gentlemen, welcome. I am pleased to bring you our Second Quarter 2023 Result as CEO ad interim of bpostgroup. Welcome to all of you, thank you for joining us. With me, I have, as usual, Koen Aelterman, our CFO ad interim, as well as Antoine Lebecq from Investor Relations. We posted the materials on the website last night. We'll walk you through the presentation, we'll then take your questions. Two questions each would ensure everyone gets a chance to be addressed in the upcoming hour. I will get to the highlights of our second quarter results. Koen will provide you with more details on the financial, I will then take some time to update you on the compliance review, on the progress made, on our management priorities, and on our operational output. I am pleased to report a good set of results demonstrating our resilience and strength amidst challenging conditions. Our performance is again exceeding our plan, and this despite the current turmoil and the impacts of the compliance review. In this regard, and for the sake of clarity, as in the first quarter, our second quarter results include a negative revenue and EBIT impact of EUR 6.25 million at Belgian level. As a reminder, this quarterly impact corresponds to one-fourth of the low end of the EUR 25 million-EUR 50 million EBIT range we have identified in the context of the ongoing compliance review as a preliminary estimate for the performance of some services to the Belgian state for the year 2023. Our group operating income for the second quarter stood at EUR 1,028 million and remained roughly stable year-over-year. Our strong parcel volume in Belgium and cross-border, some resilient mail revenue offsetting the revenue pressure in North America. Our group adjusted EBIT stood at EUR 69 million, with a margin of 6.7% or EUR 75 million, and a margin of 7.2% before the revenue recognition. This compares to an EBIT of EUR 83 million and a margin of 8% last year. Unsurprisingly, due to the inflationary pressures on costs and macroeconomic trends, group EBIT is down year-over-year. Our continued focus on productivity and cost control continue to bear fruit, and the decline in operational EBIT remains limited. Before handing over to Koen, I would also like to share with you that on May 17th, S&P reaffirmed the single A issuer, issuer credit rating of bpost SR with a stable outlook. Their report is available on our investors' website. In a nutshell, S&P acknowledges the resilient earnings of last year and our strict cash protection measures, resulting in an increase in ample financial leeway under our credit metrics. Koen, the floor is yours for more details on the financial of this second quarter. Thank you, Philippe. Good morning, everyone. On page 4, you can find an overview of the key financials for the quarter, both reported and adjusted. Philippe already mentioned our Group top line and EBIT. Our adjusted net profit amounts to EUR 45.6 million, or EUR 50.2 million before the revenue correction. This includes higher non-cash financial charges related to IAS nineteen employee benefits, compared to last year, when we had a very favorable impact due to the steep increase in discount rates. Let's move to Belgium on page 5. At Belgium, we see that revenues increased by EUR 27 million to EUR 547 million. Domestic mail recorded an underlying mail volume decline of -8.3% for the quarter, against -7.5% in Q2 2022. This impacted revenues by -EUR 25 million, yet was mitigated by a positive price and mix impact of +EUR 28 million, as well as EUR 4.5 million of additional revenues from AlbiPress, which was acquired on September 30, 2022. Altogether, domestic mail revenues increased by EUR 7 million year-over-year. Noted in advertising mail, market pressures continue as we observed in Q1, including the impact of a customer bankruptcy. Parcels Belgium recorded in Q2 an increase of EUR 40 million in revenue or +13.2%. Volumes increased by 7.8% year-over-year, reflecting our successful commercial hunting plan of 2022, and the absence of further Amazon insourcing impacts. It should be noted that this volume growth continued to occur under persisting unfavorable market conditions. In Belgium, online retail sales, adjusted for inflation, declined by 11%, 9%, and 7% year-over-year in April, May, and June, respectively. Consumer confidence remains negative and only slightly increased versus Q2 last year, when it took a big hit following the start of the war in Ukraine. Price mix stood at +5.3% in Q2, mainly driven by price increases. Proximity and convenience retail network revenues increased by EUR 3 million, following the indexation of the management contract, and value-added services increased by EUR 4 million, mostly resulting from higher revenue from find solutions. Let's move to the P&L of Belgium on Page 6. As just explained by Philippe, our inter-segment and other revenue comprised a negative number of -EUR 6.25 million, reflecting the preliminary estimates relating to the ongoing compliance review. We also see on the same line, the higher inter-segment revenues from inbound cross-border volumes handled in the domestic network for e-logistics Eurasia. On the cost side, operating expenses increased by EUR 32 million year-over-year, mainly due to persisting inflationary pressures, also to a certain extent, from lower recoverable VAT this year. Our payroll costs per FTE increased by 7.5% year-over-year, following the impact of the five salary indexations of +2% each, that occurred since April 2022. Our continuous focus on productivity helped us keep our FTE stable, despite significantly higher parcel volumes. Bottom line, excluding the impact of the compliance review, our EBIT remains stable as inflationary pressures are successfully mitigated by our top-line development and continued efforts on productivity. Moving to e-logistics Eurasia on Page 7. Revenues were up EUR 20 million, reflecting strong growth across sub-segments. In e-commerce logistics, revenues increased by EUR 5 million. Radial Europe and Active Ant sales were up 18% year-over-year. This continued high growth is driven by our existing customers' expansion and by new customers onboarding. At Dyna, lower volumes in Dynal ogic's delivery network were mitigated by price indexations across all Dyna lines. Most notably, cross-border revenues increased by EUR 15 million or +21%. This top-line development is driven by both the consolidation of IMX since July last year and the +35% growth of our Asian sales, where we continue to see the benefit of some recent customer wins. Let's move to the P&L. Operating expenses increased by EUR 21 million or 15%, mainly explained by higher transport costs in line with growth in e-fulfillment and cross-border activities, including the integration of IMX and the inter-segment OpEx, charged by our Belgium segment, as just discussed, and higher payroll costs from inflation and e-commerce logistics growth. From a profitability standpoint, higher revenues continue to support our EBIT margin recovery with 5.5% in Q2, a sequential improvement compared to our margins of around 3% in the third and fouth quarters of 2022, and just below 5% in the previous quarter. Moving on to e-logistics North America. As discussed in Q1 already, our top line in North America continues to be impacted by the economic softness, the market overcapacity, leading to a high degree of competition and pricing pressures, as well as the insourcing of Amazon, which impacts Landmark. The operating income of e-commerce logistics decreased by 13% or EUR 49 million. At constant exchange rate, this corresponds to a decrease of -11%. At Radial, top line decreased by 10% year-over-year, reflecting, on the one hand, the contribution of some new customer launches, but on the other hand, slightly lower sales from existing customers and the impact of some terminated contracts, as discussed in the fourth quarter of last year already. You may want to put our 10% drop in U.S. dollar revenues in context of a U.S. parcel market, which has been in decline over the last few quarters, as illustrated here with the volumes of UPS, FedEx, and USPS. Keep in mind, the correlation is not perfect for Radial because we may benefit from outsourcing contract wins, which can be lumpy. We would nonetheless expect the U.S. consumers to be the first to resume their online ordering, in the meantime, as you will see in a minute, we continue to focus on productivity gains and margin enhancement, ensuring we are well-prepared to seize the rebound when it comes. At Landmark, this is a different story, as besides general price pressures in the market, we continued in this quarter to record lower volumes due to Amazon's insourcing. Moving to the P&L on slide 10. Alongside our total operating income, OPEX and D&A decreased by 9% at constant exchange rate. This also includes, by the way, higher depreciations from new site openings in the second half of last year. The variable OpEx evolved in line with revenue development. We benefit from the continuous strong variable labor management and other productivity gains at Radial, where the variable contribution margin or VCM continues to improve. Our margin has consistently improved and is currently at its highest level. Compared to last year, our VCM has increased by approximately 3%, delivering an impact of $8 million. These productivity gains are part of our management priority set for the year, and we are making significant progress positioning as well when U.S. consumers resume their online ordering. In challenging market conditions, EBIT decline and margin dilution at segment level mainly reflect the revenue pressure at Landmark and the lower fixed cost coverage, partly mitigated by productivity gains at Radial. Moving to the corporate segment on page 11. External operating income decreased by EUR 1 million year-over-year from lower building sales. More importantly, OpEx and DNA increased by EUR 15 million or 15%, reflecting inflationary pressure, notably on payroll costs, with more than 7.5% of salary indexation, as just discussed also for Belgium, partially offset by a reduction of 6.5% in overhead FTEs as part of our mitigating actions, but also additional costs related to the ongoing compliance reviews. In terms of payroll, this is now six quarters in a row that we are able to report a reduction in overhead FTEs. We move to the cash flow on Slide 12, where the main items to flag are the following: Cash flow from operating activities before changes in working capital stood at EUR 121.5 million and increased year-over-year, with lower prepayment of corporate income taxes offsetting the lower operating results. Change in working capital and provisions stood at minus EUR 149 million, in line with typical seasonality of our second quarter. The positive variation of EUR 53 million year-over-year is explained by higher supplier balances this year, due to cut-off effects impacting the payables, as well as different payment schedule of terminal due advances. The cash outflow from investing activities amounted to EUR 23 million, EUR 19 million less than last year. Besides the absence of M&A this year, this mainly reflects our lower CapEx. We spent this quarter EUR 24 million, mainly to support our e-commerce logistics expansion in the U.S. and in the Netherlands, but also our domestic network, with some additional parcel capacity and the development of our E fleet. I now hand back over to Philippe. Thank you, Koen. Before sharing with you the progress we have made on our management priorities and the execution of our strategy, before providing an update on the operational parameters underlying our initial guidance, I would like to update you on the press concessions, and I will contain reviews and the latest developments since we last talked early May. I'm on page 13. As you will remember, the Belgium government launched earlier this year a new tender for the distribution of newspapers and periodicals for the period 2024, 2028, reduced its annual budget from EUR 175 million to EUR 125 million, while adapting the tender specifications. The deadline to submit an offer was June eighth, bpost submitted a bid for the two lots, namely for the distribution of newspapers and periodicals. For your information, it was made public that at least two other operators participated in this tender: the Belgium distributor, PPP, for the newspaper, and the French distributor, Proximy, for the newspaper and the periodicals. While the current concession runs until the end of this year, the timing of the award of the new concession, starting on January first, 2024, is at this stage unclear. Let me also update you on our internal compliance reviews. First, on the press concession, we have closed the internal compliance review. The investigation of the Belgium Competition Authority remains ongoing. The progress made did not change our assessment of the risk of a fine, which is still assessed as possible, but not probable. On the compliance review related to the three other services provided to the Belgium state, namely the management of the 679 bank accounts, the manufacturing and the delivery of the European license plate, and the traffic fines. These reviews, which are still ongoing, are now close to be finalized, reaffirm the preliminary findings we shared with you on April 28, and confirm the need for an in-depth economical assessment of the remuneration charge to the Belgium state. bpost asked the external support of an independent firm of economic consultants and other state aid experts. The assessment is ongoing, and we are making good progress. While the analysis and initial conclusions diverge per service, we deem it probable that the preliminary result will be confirmed upon completion of this economic assessment and will probably result in a material adverse impact on our financial results. As to this financial impact, one is to make the distinction between, on one hand, the impact tied to the provision of the services for the year 2023 and going forward. This is the range of EUR 25 million-EUR 50 million per year we disclose in April already. Pending the ongoing assessment, we are not yet in a position to revise these amounts nor to narrow the range. On the other end, there is an impact tied to the period preceding 2023. There, depending on several factors, such as, for instance, the relevant methodology to be used for the calculation of the remuneration, or the existence or not of some predetermined margins in the market for these kind of services, the assessment may result in different outcomes and can vary by year. Due to the multitude of factors impacting historical compensation, the approach applied to arrive at a preliminary estimate for 2023 cannot be used to determine the historic impact, as it does not reflect in a meaningful range of outcomes. To put it simply, multiplying the annual impact of EUR 25 million-EUR 50 million by 10 years, which is the maximum look-back period for the state aid matters, is not necessarily a good predictor of the outcome of this economic assessment. It is a complex matter and our top priority. We are diligently working on it, and we are doing our utmost to provide you with more clarity by the third quarter result announcement. We do need to recognize that we are dependent on external stakeholders, so the timing is not fully in our hands. To summarize, our estimates and our perception did not change since last time. Rest assured that on all these matters, we will communicate as soon as we can to bring the clarity to all of you understandably request. Let's now focus on the progress on our management priorities and the execution of our strategy to be a global e-commerce and logistics service provider with a sustained anchor in Belgium, widely recognized as a reference in sustainability. Well, as you can see on slide 14, we are making progress on all fronts, and here you are an overview of what we have achieved so far and what will be our focus for the remainder of the year 2023. Before going over the achievement of our business unit, I'd like to highlight that despite the period of turmoil we have been facing for the past 9 months, since October last year, bpost and all its employees continue to stay on course and remain focused on our operation, enabling us to consistently deliver strong results in a challenging market environment and amidst cost inflation pressures. In Belgium, the management and our social partners concluded on May 30th, a CLA for the year 2023 to 2024, with a focus of the well-being of our people and the attractiveness of the job in the field, while ensuring the ability for bpost to respond in a flexible way to the expectation of our customers and citizens. Besides social achievement, we also made progress on our environmental track, notably with our eco-friendly fleet and the addition of a 13th city to our Ecozone network of zero-emission delivery cities. Besides the 1,000th event that was delivered in June, bpost runs more than 6,700 electric vehicles and bike, with or without trailer. Which means that more than 40% of our domestic fleet is now 100% eco-responsible, and the transition continues as more than 600 events are scheduled to arrive by the end of this year. In Eurasia, we continue to make progress in deploying our e-commerce logistics footprint, notably with the launch of a new cutting-edge site in Groningen for Radial Netherlands, as well as the official launch of Active Ant in Northampton, U.K. An additional capacity investment for Active Ant in Willebroek, in Belgium. In North America, as discussed by Koen, although online sales are yet to recover, we are using this time to continue to improve our cost base, mainly by matching labor to volatility in demand patterns from our customers. Working on productivity and services quality today, position ourselves for any rebounds. At cross-border, we developed during the first half of the year, the Asia-Canada lane, with volume expected to start to pick up in Q3, and we improved the lead times in our U.K., North America lanes as well. As you can see, we continue to move forward. We are well equipped to tackle the second half of the year with the same momentum. Preparation and execution of year-end peaks are, of course, at the top of our agenda, our focus also turns to the outcome of the press tender and the result of the economic assessment of the financial impact of the ongoing compliance regimes, which will help alleviate some of current uncertainty surrounding bpost. We are conscious of this uncertainty caused by the situation, be assured that we will update you on these matters as soon as possible. A few words on our outlook for 2023. I'm on Page 15. As you know, we had to withdraw our, in April, our EBIT guidance of EUR 240 million-EUR 260 million for 2023. Following the preliminary result of the conference review, indicating a negative adjusted EBIT impact of EUR 25 million-EUR 15 million. As I just explained, the review is still ongoing, and while it's nearing completion, we are not able yet to reassess this preliminary estimate, and therefore reintroduce a Group EBIT guidance. However, we want to provide you with an update on the operational parameters underlying our initial guidance, reflecting for each of our business units, the performance of the first half of the year and our views for the coming months. For clarity, I emphasize that the financial impact of the conference reviews, notably the negative EBIT impact of EUR 25 million-EUR 15 million, are excluded from this update. How does this compare to the initial guidance we presented in late February at our Q4 results? Belgium outlook is revised upwards, reflecting a favorable evolution of both revenues and costs. While North America, we reflect the current revenue pressure, while preserving our margin ambitions. Eurasia remains unchanged. For Belgium, while we were expecting a 3%-5% top line growth, including the deconsolidation impact of bpost Retail, notably driven by a parcel volume growth of a mid-single digit% and a mid to high single digit% price mix. We now anticipate a top line growth of 4%-6% supported by a parcel growth volume of a mid to high single digit% and a mid-single% price mix. In terms of EBIT margins, continued progress on productivity and cost savings, together with a delayed salary indexation, initially expected to occur in October 2023, but now in January 2024, are expected to result in a higher EBIT margin of 7%-9% compared to a 6.5%-8.5% initially. For North America, current market trends lead us to revise our top line ambition from slightly lower to a double-digit percentage. We are able to maintain our EBIT margin ambition, thanks to the productivity gains. Based on our current views on the market, we expect that the net impact of these two to be positive. We are now ready to take your question. Again, two question each, please, so that everyone gets a chance to be addressed during this session. Operator, please open the lines. Thank you, sir. Ladies and gentlemen, if you wish to ask a question, please signal by pressing star one. If you wish to cancel your request, please press star two. Now the first question comes from Ivar Billfalk- Kelly from UBS. Please go ahead. Good morning, everyone. I'm sorry for laboring this point and starting on straight away, but given it is so important, I just wanted to touch on the ongoing press review to press concession. Can you give us any context around this supposed EUR 75 million cost base highlighted in a recent book that was published in Belgium? What are the major discrepancies in that number compared to your understanding of the actual cost base there? Linked to that, given that you do continue to be confident that a fine is possible, but not probable, what is it that you've seen from the ongoing BCR review that's in process that gives you that confidence? What would need to change for a fine to be applicable? then secondly, given your strong progress on the variable cost base in North America, where do you expect your margins to land in the longer term once we see a recovery arising? I'm sorry, Ivor, I must say the line was not great, I didn't quite catch all of your questions. I'm looking it around at my colleagues. Same. Would you mind repeating? One by one? Yes. I'll, try again. I'm sorry, everyone, about that. If I start with, with the first session. Sorry, it's again, the same. At the beginning of your, your sentence was great, and then it, breaking back. What are the major discrepancies? I'm sorry, we don't hear you. linked to that, what is it from the ongoing BCR review- Sorry, we don't hear you. Ivor, I will ask you please to reconnect your line. We're gonna move to our next question from Marc- Yes. Zwartsenberg from ING. Please go ahead. Yeah, good morning. Thank you for taking my questions. First of all, maybe on the, on the parcel, volume side, can you give a bit more color on, on the trends? 'Cause we had this high single digit and 9.1 in Q1, 7.8 in Q2. Obviously, the underlying 9.1 in Q1 was even a bit higher, given the impact of, of Amazon. Can you, can you, yeah, give us a bit more color on, on whether the trend was rather stable through the quarter, and how things are going into, the third quarter? That's my first question. Yeah, sure. Good morning, Mark. So, on parcel volume, when you look at the trend, you see that Q2 versus Q1 is a slightly smaller growth. Now, to put that in perspective, when we look at what we saw in Q1, we actually had growth in line with Q2 in January and February, and we had a very high growth in the month of March, which was the month that the war in Ukraine started. The trend you see between Q1 and Q2 is very much linked to the comparable of last year, with a disproportionately high impact in March. For the rest of the year, we're actually expecting the trend to continue in the same way as we've seen in Q2 so far. We don't expect any major changes on that front. Okay, that's very clear. Then maybe, I think my colleague wanted to ask a question about press concession, but I had actually sort of the same question, so maybe you can help him with that. Looking to the press concession, a couple of questions on that one. First of all, these, I think my colleague also mentioned that in that book that's published, that indeed, a former CEO talking about a cost base of EUR 75 million is enough to provide the concession. So could you perhaps comment on, on, on those statements? Why is the, the, the, the, the outcome from the government or the EU, why is there still not, not an update? What is causing the delay in that? Can you give maybe a bit more color there? Mark, I will take the first leg of your question on the press concession, and I will let Koen answer the second one. Regarding what has been written in the book, and declaration of the former CEO, I'm sorry, but we are not able to comment on this one because we don't know. It's statement made by by by by Jean. If you have a question, you ask him directly, but we'll not comment on that one. Mm. Moreover, we do not really understand how will this come to this number. Yes. ill that the price that we need to continue delivering the service with a good level of quality is nowhere near this kind of price. Mm. I'm not making any extreme declaration in the bid that we have submitted. I can tell you we are not at a price which is so low. Yeah, exactly. Your other questions on, on why does it take so long to get the outcome from the government, the EU, and so on, I would say there is. This process is not slower than would be typical for these type of investigations. The Belgian Competition Authority is running its investigation. Typical run-through times for these type of processes are in the 18-24 months time frame. We obviously hope we will have some visibility beforehand, but this is a very standard timeline which is happening. I want to reemphasize what Philippe said, that based on the information currently at our disposal, there is no reason for us to think there is any case of overcompensation with regards to the press concession. If there would be, by the way, it would, of course, figure in our contingent liabilities or be even part of the numbers. The fact that it's not there illustrates that we do not see the issue raised in the book. Mm-hmm. Absolutely. Maybe, maybe a small follow-up, because you're using the lower end of the range of EUR 25 million-EUR 50 million that you, you applied to the internal audit. Why do you apply the, the lower end of that range? Is that, is that based on any preliminary findings, or, or you just chose, well, let's set it at 25? Normally would say we use a mid-range if you don't know the outcome yet. We, we, we just apply here the IFRS rules, which stated in the case that you're not then. If we would make an estimate, and we would say we think we'll be around the midpoint, then obviously we would provision for the midpoint. That is not the case here. The way we've gotten to that number is really do a number of scenarios, sort of best and worst case, type analysis, which gives us this range. In such a case where you're not able to make a reliable estimate, you provision for the lower end of the range, and you disclose the full range, which is exactly what we're doing. This is an accounting treatment, exactly the same as we did in Q1. It is not any statement on where in the range we expect to end up. Do I get this right, that you say, if you can make a number of scenarios, that makes sense, but if you can't make any scenario, then you get to lower end of the range? You need to have scenarios to get to a range, so I'm still a bit puzzled how that works. No, no, there's these are very complex files with many potential outcomes, for, for each of them. In order to get to the EUR 25 million-EUR 50 million, we really, we just looked at all the possible outcomes, which gives a very, very broad range, which is the EUR 25 million-EUR 50 million. Again, we have no idea on which scenario at this stage is more probable than any other, we apply the rule to say when you have such a case, you book the minimum of it, and you disclose the entirety as part of the contingent liability. Mark, if you allow me, Yeah. I've made a comment during the presentation that we are making progress on these files, and that we should be able to come back to you before the announcement- Yeah ... of the third quarter results. Of course, there is a small caveat to it, is that there are also some external stakeholders involved in that one. We are trying to go as fast as we can, but we are not, if they, if they do not react rapidly, we might face some delay. I think we've made great progress, but not enough to be able to revisit this range. Oh, that's very clear. I just wanted to understand the dynamics why you, why you picked the low end, and, but accounting is then the answer. Yeah. That's very clear. Thank you very much. Thank you. Thank you. We have back, with us Ivar Billfalk- Kelly, from UBS. Please proceed with your questions. Good morning again, everyone. Sorry about the technical troubles. Can I confirm if you can hear me correctly this time? We can hear you well now. Fantastic. Thank you. Sorry if, if this question was already asked by Mark, but I'm gonna do a follow-up, and, and forgive me if I'm repeating this. In, in the context of, of the review into the press concession, given your confidence that a fine is not probable, can you please just confirm that, is it just a question of overearning or potential overearning that is being under review, or are there other factors in terms of how the contracts were won, for example, which could then alter the dynamic and then potentially lead to a fine? Then secondly, given the strong progress on the variable cost base in North America, and, and you maintaining your, your sort of margin range, where could we actually expect this margin to land in the medium term once we do see a recovery in the US? Okay. Let me take the first one on the press concession. When it comes to press concession, which is what we call the, the Cleopatra file, which is totally different than the other three, then, the question is not overcompensation, it's about potential cartel. Agreement of people to come to. Anti-competitive range. anti-competitive range. In that case, the authority, which is competent, and by the way, it was, if I the issue we heard from your first question was relating to BCA. Indeed, it is the competence of the Belgium competitive competition authority, who are reviewing these matters. Mm. They are absolutely of different nature compared to the other three files, that we have mentioned. As to your question, why, why we assess it as not probable, we obviously cannot share any of the details of the ongoing investigation, but rest assured that the, the assessment of this is backed up by all our external advisors working on this. It reflects really our best estimate of the outcome of this investigation. including our external auditors as well. Yeah ... because they agreed to the, the accounting decision that we have made back then, in the, in the fourth quarter when we published the 2020 key results. Exactly. Now for your question on the U.S. First of all, if we look just at the rest of the year, in terms of our margin range, we do expect that the, the top line pressure will lead to some margin dilution, notably by lower fixed cost coverage. While we maintain our range, we do expect we will be towards the lower end of it for this year. For the longer term perspective, what we envisage for this business or for that unit as a whole, is to very much be in somewhere in the 5%-7% range of margin on a recurring basis. That's very clear. Thank you very much. Our next question comes from Henk Slotboom, from the Idea. Please go ahead. Good morning, Philippe, Koen, and Antoine. Good morning. I've got two questions, if I may. First of all, regarding the press distribution contract. It's now the beginning of August, a lot of people are on holiday. It's not clear when the award of the tender will take place. Certainly in the case of PPP and proximity, time is running out to get a whole infrastructure built up. If the contract starts in 2024, then they face quite a challenge to get, yeah, to be ready to handle the newspaper and magazine distribution. Are there any backup scenarios and that sort of things? Is it fair to assume that the longer it takes before the award takes place, that it is in the favor of bpost one way or another, whether you win the contract or you don't win it, I guess that there's this half year extension possibility that at least you can keep the contract for another half year if you don't win this, this contest. The second question I have is, I think it's fair to assume that there are three company-specific uncertainties at this moment playing a role at bpost. One is the review, in the broad sense, in the broad meaning of the word. The second one is the uncertainty surrounding the who gets the the the press distribution contract. The third uncertainty is finding a new CEO. Now, if I approach it quite pragmatic, and I look back at the most recent quarters, then compliments to the management team, which is in place right now. You've been surprising the market at least for the for the last few quarters. Obviously, things are working well under this management team. Why is there so much emphasis on finding an external candidate? Certainly in in the against the background of the uncertainties I just referred to, it it it will be difficult to sign up a suitable candidate from from outside the company. Perhaps I should ask this, this question to Audrey, as the chair of the management board. If, if that's your answer, then I would like to rephrase it, Philippe. How's your Dutch? Hank, thanks for, for your question and, let's take it. I, I will start with the second one, because it's always good to hear some compliments, especially in turmoil situation. We always said it, we are I, I think bpost is in a very particular situation. There were bad elements and good elements. The good element that I've always seen, and is that there is a very clear strategy for bpost that has been established since 2016, 2017, I would say, which is to become an e-commerce logistic player across the world, strongly anchored in Belgium with an ESG responsibility, or, or, sorry, an ESG focus. I think even when we are in a turmoil situation, when the strategy is clear and not challenged, and it's not been challenged, because since 2017 and 2016, 2017, there has been the acquisition of Ritual. Yes, the acquisition of Ritual was not easy at the beginning, but thanks to the work of the team, it has been able to, the team has been able to turn that around. Now we really see the benefits and the value of having a, a portfolio of activities and also being active on different continents. When the, the strategy of a group is solid, I think it's easier for a group to be able to survive in difficult situation, which is exactly this one. I, I, I think bpost was, is still very equipped to, to face this kind of stuff. When it comes to the decision of of going for for for another CEO and potentially a a new ExCom team, you, you said it nicely, you should you should better direct that question to to Audrey with the chair of the board. You also need to bear in mind that there are some rules applicable to the fact that bpost is a public company, that there is a rule saying that say it's it's obvious for people who are living in Belgium, that there are three official languages of which two major one, Dutch and French. There is a rule which is applicable to bpost since many, many years, whereby when the chair of the board is from French native, the CEO has to be Dutch native speaker. That's a fact that's in the law, that it's also in the agreement, the way that the government has always managed this company. Obviously, I'm a French-speaking person, so I think the question is not even to be put on the table because from a legal standpoint, I could... A French-speaking person, it's not me, any French-speaking person bearing a Belgian passport, could not be the CEO of bpost right now under the present condition. This being said, for furthermore, please ask your question to Audrey. Nevertheless, I can tell you that the current management team takes your, your, your compliments with, with great pleasure, because we need it. It's a, it's a difficult situation. When it comes to the press, concession contract, sorry that I'm not answering directly your question, but it's not in our hands, to, to, to, to, to decide if and when, the winner will be awarded a contract. It's up to the government. You have read in the press that, the government has said that they would not award the contract, would they decide, they would not award the contract before having the, the conclusion of the audit on the press concession. So it has been made public by politicians, so it's one level of, of information. Second, an element which is important to know, because you make the link between the longer it lasts, the more chance we have for, for bpost, because the contract starts on January 1, 2024. You need to understand that there is, in the case, bpost would not win the concession, meaning someone else would be awarded the concession. In fact, there would be, there is a 6-months period to transfer from, from bpost to the new potential operator. The deadline of January 1 is less critical, I would say. Okay, that's clear. Thank you very much. Our next question comes from Nikolas Mauder, from Kepler Cheuvreux. Please go ahead. Hi, good morning. Thanks for taking the questions. I'd like to go one by one for the questions. The first one is on the good parcel volume growth. Can you perhaps try to allocate it into a few buckets, like, let's say, overall consumer spending, e-commerce penetration, market share gains, et cetera, so we can better understand how you're able to produce these growth levels in a, what seems to be a still challenging environment? Thank you. On this one, when we look and, and we decompose our, our growth into different components, we, we can see that in fact, the, the bulk of our growth, the large majority, is coming from the commercial hunting plan and the new customers we signed last year. This is where the majority comes from. When we look at sort of the overall evolution of the market as a whole, that is rather in around flattish territory. Really, due to the efforts we've taken in terms of commercial hunting, and so it's market share gains. Okay, so just to, just to clarify, when you say the overall market is flattish, you mean the overall B2C e-commerce parcel market, rather than. Yes. consumer spending at all? Okay. Thank you. Yeah, indeed. Sorry. Yeah. Secondly, can we please talk again about the EBIT associated with the press concession business now that sort of it has been printed, that there is competitors in the race, and that there is some chance, whatever the probability, that you, that you lose the business. Understand that the government, that there is this government subsidy of EUR 170 million, but that there is an even larger top-up coming from the publishers, and that the margin on the total now, which should represent almost the entire press revenue line in the Belgium segment, now, has a profitability cap of around 7%. That would put EBIT at risk somewhere below EUR 24 million, if I'm, if I'm correct there. Is that calculation correct? Can you, can you maybe comment whether that would probably go down, even in case you win the tender, and by how much? Thank you. So first, so indeed, in terms of the, the compensation for the concession, there are two components. There is the compensation coming from the state, which is a number which is indeed out there and is EUR 170 million, or approximately in that range. There is a compensation coming from the editors. Now, this compensation coming from the editors is smaller than the part coming from the state. It's rather in the range of around EUR 100 million, bringing the total for the concession to EUR 270 million, which, as you rightfully say, is subject to a cap in terms of profitability, which is at 7.5%. Where we've already shared in the past that we are not reaching this cap on that, on that contract. Obviously, I cannot go in more detail, as that would also share competitive information, which I cannot do in the context of the ongoing tender. If we look at the new contract, though, here, I want to emphasize two things. First, the changing conditions for the tender, it goes much beyond just that reduction of the EUR 50 million in subsidy, which is being mentioned. There's the cost of the concession, it depends obviously on the requirements which are put forward, and there are some changes in terms of the requirements, in terms of the service levels, and so on, which will allow people to realize a certain level of cost savings. Secondly, more importantly, the compensation mechanism of the concession has changed. There's still the two parts, but compared to the previous concession, the operator that wins has much more leeway in determining how much the compensation from the editors should be. The concession allows for different ways to reach an economic equilibrium as compared to the previous one. I cannot share more detail, again, given that we're in an ongoing process, but know that the whole setup of the concession is different, and just looking at the reduction in subsidy would, would be looking at only half of the story. Okay, I, I dare to ask one, one more follow-up. If, can you perhaps comment how much of sort of sticky fixed cost is associated with the business? Yes, we can calculate some sort of EBIT risk, but is there some cost that would stay with you, even in case you don't perform the service anymore? As always, when a service suddenly disappears, we will go through a period in which we're not able to take away the cost straight directly at that moment. I think there's a reality there that there will be some, some restructuring efforts needed to to absorb this, and so we will be facing a, a financial impact in the short term. In the longer term, as we reorganize, that stickiness, it should not be very big. Keep in mind that, that whenever we look at how we bid for this type of concession, obviously, we also compare it to the alternative of not having it. We will, of course, look at that from a business case perspective and decide whether or not to bid and at what price, also a function of whatever costs would potentially remain. I cannot share more now, as again, it would be competitively sensitive information. Thanks for your time. Thank you. Thank you. My next question comes from David Kerstens from Jefferies. Please go ahead. Thank you. Good morning, gentlemen. I've got two questions, please. First, on the upgraded margin guidance for Belgium on the back of the better-than-expected parcel growth. The 7%-9% implies still an materially weaker margin in the second half of the year than in the first half, and I think the first half does include the impact of the $25 million-$50 million related to the government contracts. Is that normal seasonality, that you expect margins to be so much weaker in the second half of the year, or is there something else that you are already accounting for in that outlook for the second half of the year? The second question around the top line momentum of Radial, now expected to be down low double digits. Can you break that out into volume and price? I saw you are now benchmarking with UPS, FedEx, and USPS. Is that, yeah, market, maybe more in line with the market due to overcapacity post-COVID normalization? When do you expect that overcapacity to have been absorbed and pricing to recover? Thank you very much. Let me start on the first one in terms of the guidance for Belgium. Our guidance just reflects indeed normal seasonality. You will see that typically, especially the third quarter, is substantially weaker in terms of margins due to the holiday period and the lower volumes in that, in that moment of the year. There is nothing specific there to mention, regular seasonality. As for the US, sort of splitting it in, in volume and price effect, I, I cannot comment on that specifically. What we can say, though, is that especially for the volumes, we, we know we are exposed to, certain verticals and certain customers, which can introduce some type of lumpiness in our results. We operate a number of very big sites, some of which, which are single customer. When one customer switches or insources volumes, we see big impacts straight away, which mean that our trend, although broadly in line with what you would see in the market, can fluctuate both positive and negative. When you look at 2022, we were doing much better than the market. And we have seen examples, and I think I mentioned that also in the previous time, of customers who have both insourced and outsourced fulfillment. In the current situation with the reduction of volumes, they will obviously concentrate volumes to optimize their own capacity utilization, which means that we are disproportionately impacted beyond what the normal market trend is. As to your question, when it will recover? If you allow me. Go ahead. To add, to add one more element, but it's already mentioned, but I really want to reemphasize, is that if you look at the macroeconomicals of the different segments in the US, they are totally different from one to the other. You've got health and personal care product going up, while others are really deeply going down. Also when you're comparing with our competitors, who have a broader exposure, again, I could mention it, then there is a dilution in fact of this... We don't have. We are big, of course, but we are not representative of the entire US economy. There is that effect, which is unfortunate, but it's reality. Then as to the question of when, obviously, that's the million-dollar question. I wish I had the crystal ball. Unfortunately, we don't know. What we can say, though, is that in our, the update we've given you today, our expectation is for the market circumstances to continue along the same way as, as they were. Yeah. Understood. Can I ask one follow-up re-related to Belgium, please? The EUR 25 million-EUR 50 million is excluded from your outlook now, right? Whereas in your reported numbers, it's still still included based on the EUR 25 million, the lower end of the range. Yeah. Once you have clarity on the historical number of overcompensation, how will that- Mm-hmm ... be booked technically in the, in the accounts? Will it still be an adjusted EBIT, or will it be below the line? Will we see it mainly in, in the balance sheet come up? For the, the three contracts, where we're looking into a potential overcompensation, the impact would be similar as the one you see today, which is mainly a reduction in revenue. It would be in the, in the, EBIT numbers. That said, depending on the size of the impact, and if it's a one-off impact, we have a threshold of EUR 20 million of one-offs, when we correct for it in the adjusted EBIT. It depends on the final size of that impact, whether or not it will be corrected. Again, this is for the one-off, given that the EUR 25 million-EUR 50 million is the impact for 2023, and there will be an impact going forward, this would not be neutralized, of course, in the adjusted numbers. No, only. Current one might be, depending on the size. Understood. Thank you very much, gentlemen. You're welcome. Thank you. Our last question in the queue comes from Frank Claassen, from the Degroof Petercam. Please go ahead. Yes, good morning, all. Two questions left, indeed. Also, on Radial, but more focused on the commercial wins. Did you have some new contracts signed up in Q2, and did you notice price pressure with these new contracts? Then, also on CapEx, is the guidance still around EUR 200 million, and what are the main projects you're gonna spend the CapEx on in 2023? Thank you. Thank you, Frank, for the question. Yes. We'll, we'll answer both. I mean, could we start with Radial, and on CapEx- Yeah ... we'll, we'll do it, forehand. Exactly. So for Radial, obviously, we are working very hard on our commercial efforts to make sure we sign new customers also in these difficult market circumstances. We have succeeded in signing, significant amount of contracts. Now, we only share these numbers normally on an annual basis, and again, this can be very lumpy. You will see, we will share this together with the full year numbers, but so far, there has been some commercial traction, obviously in a difficult market context, which we need to take into account. I also want to highlight that we don't want to sign contracts just for the sake of bringing in the revenue, if we would have to do it at margins which are not attractive to us, and certainly which would not meet our return on invested capital requirements. We do remain selective, and we are not chasing top line just for the sake of top line. It's important we have the right return metrics as well for any new contract we sign. we have turned out a contract that representing exactly the characteristic that Koen is describing, and since it doesn't fit our strategy, we have decided not to go for this type of contract. obviously, there's a difference between contracts which would allow us to fill up existing capacity- Of course. ... which obviously changes the metrics, versus contracts where we would have to invest in new capacity, automation, and so on, where what I said on the return, obviously applies. For, for the CapEx, I will make the introduction, and Koen will give you the details for the main contributors for the CapEx for the year. As a general statement, what I would like to say is, first, that bpost Group has a growth strategy that's been always clear, and it's still the case right now. We have a very sound balance sheet. The comment I made on the S&P rating just reinforce that one. We have leeway to leverage our balance sheet, and we have the cash. I mean, all the conditions are there to be able to execute our growth strategy. There is absolutely no reason to stop that one. This being said, we are very selective when it comes to investment. It needs to respect our returns, the expected returns, and if and when they are good project, we will go for it. That's the message I continuously passing on to the commercial team, so does Koen. Do not be shy of coming with projects. If the projects are good, we will invest. Luckily enough, in our business, we invest when we have contract. We don't want to go to an equivalent of a merchant type of investment. No, we link it, and it's part of our strategy with the contract. Philosophically, I would say there is absolutely no reason, in fact, philosophically or strategically, there is absolutely no reason to change that statement. This is the mindset in which we are when, when we contemplate, CapEx in 2023 and going forward. For the details, of what's included, I give the floor to, to Koen. Yes. I, I would say there's three big buckets in there. One is, of course, maintenance CapEx, which we have and, and, where I'm sure you can make an estimate based on some of the other numbers we report as to what that could be. We have two big parts, I would say, within more the growth-oriented CapEx. One is we plan to invest in an extension of our parcel sorting capacity in the Belgian market, specifically in, in Charleroi, which will, which will start, coming in the second half of the year. That's a big bucket. There is also further expansion in e-commerce logistics activities, both in Europe and in, in, the U.S., where it can be expansion, but it can also be further automation, where that makes sense. Those are the big components. I will not give you a split per block, though, so, but these are the major ones. To be clear, the guidance remains EUR 200 million, roughly for 2023, right? Cross CapEx. At this stage, we see no need to change that. No. Again, we, we invest with the idea of doing that through the cycle. We will not react in the short term to some of the market pressures. If we see good opportunities, we will continue to invest. Our balance sheet allows us to do it. Yes. Also, as Philippe said, for much of our investment, it is only when the concrete contracts are there. Okay. Thank you very much. We see no reason to change our growth trajectory. Oh, okay. Very good. Thank you. Sumit Mehrotra from Société Générale, please go ahead. Thank you. First, thanks to Henk for extending the compliments and bringing up the question on the CEO candidature. My first question is, it's going to be a bit detailed. I'm sorry to bring this up the last end of call. Please walk us through your logic of assessing the stable state of Belgium segment, EBIT. What could be the building blocks for us to assess that two years from now, what could be the contribution from this segment, considering the lower value of the future press concession contract? That's my only question. Thank you. On this one, Sumit, I'm afraid we will not answer today. I think we're in longer term forecasts here. At this moment, there is a lot of uncertainty around these contracts. We cannot answer this question today until we have some more clarity on the different outstanding parts, of which the press concession is one, but of which also the other contracts are an important component with that EUR 25 million-EUR 50 million range. You see, that would introduce a very big variance, so it is too early now to give any longer term forecast at this stage. We may come back to that once we have more clarity on those contracts. Okay, I can slip a second one. For U.S., either Radial or Landmark Global, can you give us your observations on the incremental customer wins or the deals out there? Are we now looking at an extended phase of tougher pricing, where you could just about meet the inflation pressure in U.S.? Thank you. As I mentioned before, for Radial, we don't share any numbers on new customers signed, except for on an annual basis, so you'll have to wait for the Q4 results for that, but we are signing new customers. What we see when we look more at our cross-border activities in the U.S., the biggest impact really in our numbers is from that Amazon insourcing. For the rest, we do keep a good traction generally, even though there is a high degree of competition in the market. We are also developing new cross-border lanes to bring volumes from Asia into North America, which will also further support the growth there. We do see we have some traction again, commercially. The biggest impact really is the Amazon contract. For which, by the way, a tender is ongoing and where we are awaiting the outcome of that tender, which would not exclude that volume, may continue to head our way even more than we've had in the second quarter, but that depends on the outcome of that tender process. Thanks, but I just wanted to know the incremental wins that you have for Radial ahead. What's the pricing pressure looking like? Do you think, it's going to continue, being tough in terms of pricing in U.S.? Sumit, could make it very clear there is an overcapacity in the U.S. right now, so the answer is yes. Thank you. Thank you. Our next question comes from Marco Limite from Barclays. Hi, good morning. Thanks for taking my question. The first question is on your portfolio of businesses. Clearly, you are facing the risk of a financial cash out from all the contracts under review. I was wondering if it's part of your strategy, thinking to eventually disposal of some of the minor businesses that, that are maybe not profitable, just to strengthen your balance sheet, and to be in a better position eventually to face any payment of fines? That's my first question, and the second question, a bit more medium term. Across, let's say, your divisions, e-logistic, Europe and North America, are, let's say, set for growth alongside e-commerce growth. When we think about Belgium, clearly, there you've got the mail and the parcel mix. Just wondering how, how confident you are on the medium term to be able to achieve profitability growth also in Belgium, or if we should think about Belgium as a, you know, steady state type of profitability, so not, not really growing over time. Thank you. Okay, so I take the portfolio one, and Koen will take the second one. When it comes to the portfolio, so first, I think it's our way of working to permanently assess the quality and the relevance of the different assets that we have in our portfolio. Mm-hmm. Historically, bpost have demonstrated that they are buying and disposing of assets if and when the conditions are there. Thus, that position has not changed. We will always contemplating potential acquisition and potential disposals, but nevertheless, thanks to the strong balance sheet, there is no need to potentially have to dispose assets. By the way, we still don't know how much this potential reimbursement will amount to. Too early, but fundamentally, asset rotation is still on the agenda. We're constantly looking it, and there is no urgent need. We are not in a cash situation that forces to sell assets. By the way, when you have to sell assets, it's not the low performing that bring the more cash. In any cases, it would not be the reason to dispose them off. Yeah. As to for your second question, clearly in Belgium, indeed, as you mentioned, we have the two activities. One, which will be in a structural decline, which is the mail activity. Another one, which there is a structural growth. Our expectation is that at some point, given that the size of one continues to decrease and the size of the other continues to grow, that the growing business will overtake the declining one. We are not there yet at this stage, I think that is clear. It will come. On the exact timing, again, that's a bit of a crystal ball. We've seen parcel volume growth in the past few years fluctuate very wildly. It's difficult to predict when that will come. However, the belief is that at some point, indeed, the parcel business will overtake the mail business, and we will, even for Belgium, return to an area where we see growth from a EBIT contribution. That said, I do want to add it will probably be at a lower margin level than it is today, as obviously, the margin levels for a mail business and a parcel business are different. We do expect some further margin dilution in the coming years on that business. Okay, I can sorry. No, no. Thank you. That's it, that's it. Thank you. Thank you. Thank you. Thank you, we will now take our very, very last question today from Pavel Kirjanovs, from Bank of America. Hi, good morning, Pavel Kirjanovs from Bank of America. Just one question, I promise, last one. Just on costs, you had six quarters of workforce optimization now. Mm-hmm. Are you now finding the right levels of FTs, or can we expect that to continue going forward? If you're close to that level, would that mean we can expect sort of a step up and focus on productivity, or is that not the case? Thank you, Pavel, for your question. Yes, we are continuously reducing the workforce. Are we still at the bone? I don't think so. There's still meat around the bone. We can always benefit from from more digitalization and different ways of working. Also, depending on the services that we're offering to our customers, we might end up with a different structure of workforce. This being said, this one element, the second element, as the company evolves, there are areas where we can continue decreasing the workforce, but there are maybe others where we need to reinforce them. Nevertheless, we are quite confident that for the coming, for the coming quarters, the net effect of both will still be positive. Great, thank you. Thank you. Thank you. With this, I'd like to hand the call back over to Philippe Dartienne for any additional or closing remarks. Over to you, sir. Thank you very much. I would like to thank everyone for being in the call with us. Sorry, we went a little bit longer than typically, but there was a lot of very interesting questions. I hope... thank you for the one who stayed a bit longer. We hope we answered this question in a way which is acceptable for you. We will hear you from- we will hear from you, the conference will be going to attend in London in September. Looking forward to staying in touch on our third quarter results, will be re- released in November. In the meantime, you can always stay in contact as you are with with Antoine, he's at your disposal. More than likely, as we are expecting, we should come back to you prior to the release of the third quarter results, with an update of the conference review file. For the one who has not been on holiday yet, I wish you a very happy holidays. Thank you very much, and see you soon. Bye-bye. Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.