Theodore Dellis - Bpost
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This document discusses the transformation of bpost, the leading postal operator in Belgium, from a private to a public company. It describes bpost's operations and key financial figures. It then outlines bpost's transformation over time, including projects to optimize mail delivery and sorting. This led to improved financial and operating performance. The finance function prepared for an IPO starting in 2006 by upgrading reporting, planning, and management. After going public, communication to analysts and investors became important new activities for the finance team. The document concludes that people and change management are essential to a company's successful transformation.
![14
The population of the finance
function evolved significantly
200
150
100
50
0
2008 2009 2010 2011 2012 2013
121 106 130
152
156
178
22
40-45
27
30-40
25
18-30
13
45-50 50-55
61
2008
55+
30
45-50 50-55
18 15
55+
10
27 29
18-30 30-40 40-45
15
2013
CAGR [2008-13] F&A : 6.6%
Age Pyramid
Headcount
Median = 42
Median of population
“unchanged” = 53
Median = 48
From a proportion of <25% University
graduates in 2006 to > 70% in 2013](https://image.slidesharecdn.com/theodoredellis-bpost-141027033904-conversion-gate01/85/Theodore-Dellis-Bpost-14-320.jpg)
Theodore Dellis - Bpost
- 1. From private to public The transformation of bpost and its finance function Amsterdam, 22nd October 2014
- 2. 2 Overview bpost at a glance bpost transformation The finance function transformation Conclusions
- 3. 3 bpost at a glance
- 4. 4 bpost at a glance bpost is a focused mail operator bpost is the leading postal operator in Belgium with an extensive range of postal and related services Specialization in the (inter)national collection, sorting, transport and delivery of mail and parcel products Services in banking & insurances, document management, electronic certified communication, etc. Geographical coverage around the world (Europe, Asia, USA, Australia)
- 5. 5 Some figures Mass Retail & Channels •669 post offices •674 post points •Others: stamp shops, e-shop, contact center, … Mail Service Operations •~13,200 red boxes •5 sorting centres, 280 operational platforms •Collect and distribution 5x/week •10,000 daily rounds •5.3 million addresses •~10 million mail items/day •~100,000 parcel items/day Normalized EBIT Employees Average FTEs Key financial indicators EUR million Total Operating income 2010 2011 2012 Total operating income (revenues) 2013 85% Note: Only reported results have been audited; the presentation of normalized results is not in conformity with IFRS and is not audited 3 29.311 27.973 26.625 25.683 2010 2011 2012 2013 2318 2365 2416 2429 2013 319 359 404 436 Other sources of revenues 26% Parcels 10% Domestic Mail 64% bpost at a glance key figures
- 6. 6 bpost at a glance Challenges •100% coverage of the Belgian territory •Frequency of distribution: 5 times per week Liberalisation of the Belgian market + universal services obligation 1 •E substitution due to the use of e-mail •New media such as the the social networks and Skype Decrease in the letter volumes & increase of electronic communication 2 1000 clients represent 65% of the revenues 3 •Ca. 10% of the revenues are generated by 85% of the customers
- 7. 7 bpost at a glance Our Strategy is simple and focused CASH GENERATION & DIVIDENDS Support the core mail business ▪Developing programs to support mail as an effective communication medium, both on transactional (RelatioMail) and advertising (DMBoost) mail Innovate / grow within core competencies ▪eCommerce (B2C parcels) ▪B2B parcels ▪End-to-end solutions ▪Financial services ▪Last mile Generate continued productivity gains ▪Powerful natural attrition lever ▪Culture of continuous improvements ▪Vision 2020 and ongoing projects Keep stakeholders on board ▪Loyal customers ▪Passionate employees ▪Rewarded shareholders
- 9. 9 bpost transformation bpost embarked in the transformation of all aspects of its operations xx Project start date 2003 2004 2004 2007 2009 2011 Continuous optimization of delivery rounds ▪Optimize delivery rounds via dedicated software GeoRoute ▪Goal: Dynamically adapt delivery rounds based on mail volumes evolution Implementation of a new distribution structure ▪Merge 450 distribution offices into 128 operational platforms ▪Goal: Reduce distribution costs Transformation of the retail network ▪Re-think the retail network offering and improve customer’s experience ▪Goal: Adapt retail network to evolving customers’ needs and reduce costs Building of new sorting centres ▪Built 4 new mail- and parcel- sorting centres ▪Upgrade Brussels X ▪Goal: Centralize national sorting and increase mail sorting automation Introduction of round sorting and mail sequencing ▪Automation of mail sorting per delivery round (2007) and sequencing it in the proper order (2010) ▪Goal: Decrease mail preparation time Vision 2020 ▪Conversion of sorting centers into industrial mail centers ▪Further reduce operational platforms to 60 mail centers ▪Goal: Further efficiency improvement in Mail Services Operations
- 10. -69 37 82 160 183 222 240 319 359 0-39 40-49 50+ Non Baremic Contractuals Baremic Contractuals Statutories 10 bpost transformation The strategy resulted in an established performance track record 13.8 10.7 9.8 8.0 7.2 3.9 15.2 16.7 1.7 -3.3 18.0 05 07 06 04 2003 2013 11 10 09 08 12 -4,7% p.a. 25 2012 to 13: -1,090 Customer satisfaction Percent 2013 2004 +10 Quality of delivery Percent +11 85 95 2013 2003 75 86 2012 to 13: +1 2012 to 13: +3 Age Pyramid Headcount per age, 31/12/2013 8,469 8,911 10,407 Historic FTE evolution End of year FTEs, ‘000 Normalized EBIT margin Percent Normalized EBIT EUR million 40 404 436
- 11. 11 bpost transformation IPO 2000 2002 2003 2005 2006 2010 2013 bpost becomes a separate entity. Market opening is announced. New management is appointed. Start of the transformation programme. Search of a strategic partner. CVC Capital Partners + Danish Post acquire 50% - 1 share. Danish Post leaves in 2008. IPO process is launched. Global coordinators are selected. Process is stopped due to delays in EU investigation. IPO process is restarted. 30% sold to the market in June. 20% in December.
- 12. 12 The finance function transformation
- 13. 13 The finance function slowly prepared itself to the IPO since 2006 Description ▪Move to IFRS as from 2006. ▪Acceleration of reporting timetable. ▪Integrated financial and operational reporting. ▪Focus on reliability of figures and underlying accounting records ▪Segmental reporting shelf-ready Financial planning was significantly upgraded Financial reporting was significantly upgraded External reporting and Internal performance management were upgraded to quasi quoted company standards ▪Detailed review of budgets, forecasts, etc… by shareholders and board. ▪Review of key projects every 6 weeks (first couple of years) ▪All IFRS disclosures ▪Benchmarked with comparable players ▪Focus on simplicity ▪Profitability by Customer ▪Supported by integrated financial tools Ante 2006 2008 2010 2012 2013 2014 2015 Monthly Closing WD+10 WD+8 WD+6 Annual Closing M+4 M+1.5 Internal Reporting WD+20 WD+15 WD+12 External Reporting 1/year 4/year Embedding IFRS IPO
- 14. 14 The population of the finance function evolved significantly 200 150 100 50 0 2008 2009 2010 2011 2012 2013 121 106 130 152 156 178 22 40-45 27 30-40 25 18-30 13 45-50 50-55 61 2008 55+ 30 45-50 50-55 18 15 55+ 10 27 29 18-30 30-40 40-45 15 2013 CAGR [2008-13] F&A : 6.6% Age Pyramid Headcount Median = 42 Median of population “unchanged” = 53 Median = 48 From a proportion of <25% University graduates in 2006 to > 70% in 2013
- 15. 15 What has changed after the IPO Zoom on… Communication to analysts and investors is a new activity Description ▪Compliance with timetable is no longer ‘optional’. ▪Accounting and reporting changes/hick-ups become issues that reduce credibility. ▪Good understanding of own figures is key. No excuses in financial planning No excuses in financial reporting Internal and external communication is constrained ▪Planning or forecast accuracy become critical… ▪… and not only at bottom line level. ▪Must be balanced with the needs for the business to take initiatives, to react to the market, etc… ▪Financial communication to own employees must be aligned => in fact, reduced. ▪Critical information become available on a ‘need to know. ▪All external presentations must be controlled ▪‘Outlook’ as a new activity. ▪Quarterly presentations and conference calls. ▪About 30 days of road shows and investors’ conferences split over IR Director (100%), CFO (60%) and CEO (40%). ▪It is about keeping investors on board and recruiting new ones. ▪It is about ensuring a quality coverage by analysts
- 16. 16 Conclusions
- 17. People and change management are essential in a company’s transformation Some obvious truths Some learnings from our process ▪A company can be successful whether it is state-owned, private or stock-quoted. It is about good management and a proper governance. ▪Have a clear strategy. Execute it with discipline and therefore build a track record. ▪It pays to be prepared. Behave as is you were quoted, it is good hygiene and you are building ‘muscle’ for whatever you decide to do. ▪Management is in the lead and must impose discipline. “Walk the talk” day-in / day-out. ▪Post IPO, your life does not change that much. What changes is your margin of errors. ▪KSF boil down to people, processes and systems. But people are critical as is evolutive change of mentality.