A leap forward

Growing

bpost ACTIVITY REPORT 2017

Growing

PARCELS

The worldwide growth of e-commerce has generated a considerable increase in parcel flows and bpost is eagerly taking advantage both in Belgium and internationally.

Domestic parcels

Parcels broke all records in 2017: on the domestic parcel market we achieved

in 2017 a growth of no less than 28% compared with 2016.

In 2016 we particularly saw a strong rise in parcel volumes sent by major (online) senders, not only within Belgium but also from neighbouring countries. This is partly due to the partnership we entered into with DHL Parcel in 2016 for the delivery of B2C parcels at pan-European level.

The continuing expansion of e-commerce offers us a lot of opportunities for growth. The number of parcels is rising at an exponential rate and there is strong demand for solutions for the whole e-commerce logistics chain. We also want to enlarge our proximity and convenience offering, by making optimal use of our strengths to offer innovative solutions and by continuing our diversification efforts.

A leap forward

Growing

ACTIVITY REPORT 2017 bpost

Convenience

In the early days of e-commerce consumers mainly ordered products online because they could not find them in the shops, but now people prefer shopping online because of the convenience. With that in mind, our parcel strategy is centred on delivering parcels to our customers when and where they want.

In that respect we made a number of significant advances in 2017:

• Now customers can choose where they want their parcels delivered if they are not home: to a neighbor, a pick-up point or a safe place in the vicinity of the home. They simply register their preference on the website at www.bpost.be/mypreferences. To rule out any misunderstandings, customers can register the specific house number of a neighbor or upload a photo depicting a safe place in the vicinity of their home. The service was launched in October and 180,000 preferences had been registered by the end of 2017.

• As well as the location, customers also want to know when their parcel will be delivered. To meet that demand, bpost has started a pilot to track parcels in real time as much as possible. Based on this successful trial, we are able to give our customers a

time window for the delivery of their parcel. The aim is to give the most precise possible time window for each delivery.

The majority of customers still prefer to have their parcels delivered to their home, but it is important to offer an extensive, widely accessible network of parcel pick-up points. With more than 1,300 post offices and post points we already easily fulfil that requirement and in 2018 we also incorporated the Kariboo! network. In addition, in 2017 we launched Cubee, Belgium’s largest parcel locker network, which is open to all retailers, consumers and couriers. That makes it an open and independent network, which is the biggest point of difference with the earlier bpost parcel lockers. Cubee resulted from the acquisition of Dutch company de Buren and at the end of 2017 had 152 parcel lockers in Belgium and 61 in the Netherlands.

The ability to return items is a decisive factor in deciding whether to shop online or not. In 2017 bpost launched various initiatives to facilitate this return process. For instance, at a large number of post offices customers can print a free return label to affix to their parcel. And for a major customer in the fashion industry in Ghent, Belgium, we ran a trial in which bpost picked up returns from consumers.

Hybrid network

In spite of these initiatives, customers sometimes require a personalized solution for their parcels. To this end, bpost continues to work on a hybrid network that provides flexible solutions to meet specific personalised delivery needs alongside our long-established distribution network.

Our subsidiary DynaGroup, which provides a wide range of logistics services, often under a specific brand name, plays an important role in this. For instance, Dynafix repairs electronic equipment, from smartphones by way of coffeemakers to computers. Dynafix picks up the device or appliance, makes the requisite repairs and returns it to the customer. Any installation is also included. Dynalogic makes very specific parcel deliveries, with the customer able to select the desired time (a 2-3 hour window) and location. Dynalogic delivers products of any size, from the very small, like a passport or medication, to the very large, like a washing machine or a sofa.

In 2017 the services of Parcify and bringr were consolidated into a single service. With Parcify, customers can have their parcels delivered in just a couple of clicks. Parcify connects consumers and businesses with self-employed couriers that are going in the same direction, on a crowdsourced

At the end of 2017 there were 152 Cubee parcel lockers in Belgium.

bpost ACTIVITY REPORT 2017

A close partnership

During the 2017 peak season, this client experienced sales that were 114% over their forecasted expectations. Because of their intimate understanding of our operation, they knew the challenge ahead of us to react to this unplanned demand. They partnered with us to support additional hours and shifts, which increased our capacity and ultimately

Our client understands how important the people picking, packing and shipping their products are to the brand’s success.

allowed us to exceed their expectations and deliver on their customer’s expectations. Quickly after the peak season concluded, our client was on site throwing a party for associates to help celebrate a successful peak season. I truly believe the investment in a close partnership with the client was key to our mutual success.

Melissa K. AnnelerDirector of Operations & Client Experience at Radial

In our Atlanta-based distribution center, we have a strong relationship with one of Radial’s key apparel clients. Our facility views the client as a part of our team and, in turn, they view our operations as an extension of their brand. To foster brand engagement, this client gives our associates samples of their products to wear. Through first-hand experience with the product, associates gain a close affiliation with the brand. The client is very engaged in our operation and the people supporting it. They spend a lot of time on the floor talking with associates to get their feedback, not only on the products, but on suggestions to improve process and the ultimate consumer experience. The client understands how important the people picking, packing and shipping their products are to the brand’s success.

A leap forward

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ACTIVITY REPORT 2017 bpost

delivery platform. That ensures goods are delivered in a sustainable, money-saving and convenient way. Parcels can now be sent by Parcify from Antwerp, Ghent and Brussels to anywhere in Belgium.

International parcels

bpost aims to be a player on the international parcel market, offering its customers the best solutions through its Landmark Global subsidiary. This cross-border parcel strategy, driven by e-commerce, was strengthened in 2017 with the continued consolidation of our international activities and an integrated organizational structure.

Landmark Global has various strategic facilities that are located close to customers in the United States, Canada, the United Kingdom, the Netherlands, Belgium, China, Hong Kong, Singapore, Australia and New Zealand. The acquisition of Radial (see the “E-commerce logistics” section) also gives us an even firmer foothold on the US market.

This approach has immediately paid dividends. Thanks to our outstanding relations with major customers we have presented excellent results in Asia, while new customers also helped us drive up our revenue in the United States.

E-COMMERCE LOGISTICS

The flourishing of e-commerce does not simply generate a lot of growth potential for the last-mile delivery of parcels. Online stores are also looking for a partner to take on full responsibility for logistics. By covering the whole logistics chain in the fast-growing e-commerce sector, bpost aims to provide customers with a robust cross-border service.

The acquisition of US company Radial is key to our push to become a leading player in e-commerce logistics services. Radial’s expertise, size and competencies are essential in this regard. They enable us to enlarge our service offering and speed up the development of our e-commerce logistics solutions.

That’s because Radial offers intelligent solutions for the whole process triggered by the customer’s online order: services in the sphere of payment, tax and fraud protection, order processing (fulfillment) and customer service. So the whole integrated logistics service related to e-commerce.

Radial is headquartered in King of Prussia, Penn. (USA) and has 24 fulfillment centers across the United States and Canada.

The acquisition of Radial is key to our push to become a leading player in e-commerce logistics services.

bpost ACTIVITY REPORT 2017

PROXIMITY AND CONVENIENCE

Our dense point-of-sale network and our postwomen and men, who enjoy the confidence of our customers, ensure that we are close to our customers and able to offer them innovative solutions.

Our network

Our close-knit sales network ensures that we are never far from our customers. The sales network comprised 662 post offices and 674 post points at the end of 2017.

In 2017 we continued to work on modernizing those post offices. Ten offices were fully transformed into modern retail spaces with open counters and an ATM. Seventy-six offices were given a makeover, including clearer signage for customers and the installation of a parcel dropbox. Twenty-nine offices with closed counters were equipped with a full hatch to allow (large) parcels to be conveniently dropped off or picked up.

The number of customer contacts at the post points increased by 11% in 2017, mainly due to their role as parcel pick-up point.

During the Christmas and New Year period we opened a temporary “parcel

house” in Ghent, where our customers were able to fulfill all their parcel drop-off and pick-up needs. Customers were very enthusiastic about this initiative, specifically the speed and efficiency with which they were served. As well as a number of operational advantages (the creation of extra parcel storage space), the “parcel house” also radiated the innovative image of bpost.

The number of stamp shops remains stable; there are currently 4,250.

Bank and financial products

bpost bank was strongly focused on mortgages in 2017. Well-trained experts now sell mortgage products at 163 offices across the country, based on their location and potential. 2017 also saw the sale of the first open investment funds, which means we are now in an even better position to offer our customers the right product, tailored to their knowledge, experience, wishes and risk appetite. And with a new app bpost bank customers are able to complete bank account transactions in a fast and efficient way on their smartphone, tablet or computer.

Worldwide money transfer through Western Union remains a successful

financial business for bpost. The number of transactions grew slightly in 2017. As a result, Western Union is now available at all post offices and at 200 post points. Sales of bpaid cards remain important too, with 110,000 sold in 2017. This card is not only a safe means of payment when shopping online. It also hands users the possibility of keeping their spending under control as they cannot spend more than the amount they have put on the prepaid card.

Solutions

Alongside established services like letters and parcels, bpost continues to offer customers innovative solutions that fulfill their specific needs. In doing so, we mainly draw on our strengths, such as our tightly knit network and our postwomen and men, who are not only out and about every day, but also enjoy the trust of the general public.

In 2017 we strengthened our focus on innovation, improving existing products (by capitalizing on digitization, for instance), building on our financial knowhow and developing new things. In doing so, we will deploy our resources (our people, buildings and fleet) in an original way to develop new solutions and services.

A leap forward

Growing

ACTIVITY REPORT 2017 bpost

Some of those solutions are linked to a specific service at our customers’ front door. We often take advantage of the strengths of our subsidiaries, such as DynaGroup (see “Hybrid network” section on page 14).

There are also solutions that simplify administrative or operational processes and make them more user friendly. These are often solutions for state enterprises and the public sector. Examples include the processing and delivery of RIZIV/INAMI health care provision certificates and the delivery of license plates. A few years ago the Belgian state contracted us to take on the administrative and financial management of traffic fines. To that end, in 2017 we launched www.trafficfines.be, a portal to facilitate the collection of traffic fines incurred on Belgian roads by inhabitants of Belgium as well as foreign vehicle owners.

Lastly, we also introduced solutions relating to our proximity to daily life

and the general public. A good example is bclose, in which postwomen and men gather information about senior citizens during their round for the local social security department to assess whether they are socially isolated.

In 2017 we also continued our checks ensuring that building permits were displayed where they should be.

Eighteen bpost delivery vans were equipped with sensors to measure air quality on behalf of the University of Antwerp and Imec.

Fresh food

bpost is also targeting fresh food logistics. We tried to launch our own product for food deliveries to consumers, originally under the “Shop & Deliver” name and later as “combo”, but we cancelled the project in 2017. In the future, bpost aims to concentrate on

markets where food and the cold chain are more tightly regulated. We are convinced that we have everything we need to organize food delivery logistics in full compliance with the prevailing regulations. With the acquisition of Bubble Post (in 2017) and Leen Menken Foodservices Logistics (in early 2018), we have two major foundation stones (in terms of knowledge, materials, customers and network) that we can build our ambitions on.

Ubiway

To further diversify our activities, in 2016 bpost acquired the Belgian activities of Lagardère Travel Retail, which now operate under the Ubiway name.

Ubiway Retail is the company behind four strong chains in press, retail and convenience: Press Shop, Relay, Hubiz and Hello! The 220 points of sale are run by independent retailers at strategic

bpost ACTIVITY REPORT 2017

locations, such as airports, metro and train stations (30%), major shopping streets (50%) and centres, international institutions, office buildings and hospitals (20%). In 2017 Ubiway won the Belgian railways contract for newsagent concessions in railway stations.

These shops and their product range meet the needs of today’s customers. As well as newspapers, magazines, tobacco and lottery products, Press Shop and Relay also stock books, gifts, phone accessories and a wide range of food and beverages. Hubiz specialises to an even greater degree in the convenience range, with compact supermarkets in stations. Hello! offers a range of fresh budget-friendly bakery products. They serve more than 124,000 customers every day.

In 2017 the new Press Shop concept was launched at a number of locations; characterized by a modern look, with fresh, light colours, and a coffee corner where customers can enjoy a

hot drink. In the center of Brussels we opened “Ubiway, eat, read, meet”, a contemporary press, food and coffee house, where, as well as buying newspapers and magazines, customers can also enjoy breakfast and lunch or do some work.

In 2017 the Kariboo! network grew to more than a thousand points, where customers can send or receive parcels.

The 220 Ubiway points of sales are run at strategic locations, such as train stations, shopping streets and centres.

GRONINGEN, UTRECHT

BRUSSELS

WARSZAW

BEIJING

SHENZHEN

SHANGHAI

GUANGZHOU

HONG KONG

SINGAPORE

SYDNEY

AUCKLAND

LONDON

MANCHESTER

LEIPZIG

CHENNAI

CANADA

USA

CALGARYSEATTLE

SALT LAKE CITY

TORONTO

PUEBLO

EAU CLAIRE

BRUNSWICK

LAWRENCEVILLERIALTO

RENO

CHICAGO COLUMBUS

RICHWOOD WALTON LOUISVILLE MARTINSVILLE

BURLINGTON

MELBOURNE

BOYNTON BEACH

BUFFALO

STERLING

LOS ANGELES

landmark

landmark global

L

D

A leap forward

Growing

ACTIVITY REPORT 2017 bpost

bpost, a global company.

RRadialKING OF PRUSSIA, UNITED STATES

Wide range of e-commerce logistics services and omnichannel technology solutions with extensive geographical coverage.

www.radial.com

Landmark GlobalSANTA BARBARA, UNITED STATES

International delivery of letters and parcels, plus e-commerce solutions. Strategic locations in 11 countries.

www.landmarkglobal.com

DynagroupSITTARD, NETHERLANDS

E-commerce-related logistics services, home deliveries and deliveries that demand special transport with value-adding activities, such as repairs and installations.

www.dynagroup.nl/en

de BurenHENGELO, NETHERLANDS

Unstaffed pick-up points in Belgium and the Netherlands.

www.deburen.nl

Euro-SprintersMECHELEN, BELGIUM

Domestic and international express deliveries.

www.eurosprinters.com

Welcome MediaBRUSSELS, BELGIUM

Advertising mail advice and services to agencies and advertisers. Plus document management solutions under the eXbo name.

https://welcome.media

Handled by bpost

GRONINGEN, UTRECHT

BRUSSELS

WARSZAW

BEIJING

SHENZHEN

SHANGHAI

GUANGZHOU

HONG KONG

SINGAPORE

SYDNEY

AUCKLAND

LONDON

MANCHESTER

LEIPZIG

CHENNAI

ANTWERPEN

HASSELT

GENT

BRUSSELS

SITTARD

NETHERLANDS

BELGIUM

NUTH

BREDA

AMSTERDAM

UTRECHT

VIANEN

SINT-KATELIJNE-WAVER

WOERDEN

MECHELENST-NIKLAAS

KORTRIJK

OOSTENDE

WAVRE

ROTTERDAM

LEUVEN

BRUGGE

LIÈGE

NAMURCHARLEROI

B P C

bpost ACTIVITY REPORT 2017

bpost, a global company.

ParcifyANTWERP, BELGIUM

Parcel deliveries by self-employes couriers that are going in the same direction, via a crowdsourced delivery platform.

www.parcify.com/en

SpeosBRUSSELS, BELGIUM

Management of outgoing document flows for businesses, from document creation to delivery, through all available channels (paper and electronic).

www.speos.be

Bubble PostGHENT, BELGIUM

Efficient, sustainable urban delivery, including refrigerated transport.

www.bubblepost.eu

CityDepotHASSELT, BELGIUM

Total sustainable goods delivery solution to and from city centers.

www.citydepot.be

UbiwayBRUSSELS, BELGIUM

Press, retail and convenience.

www.ubiway.be

bpost bankBRUSSELS, BELGIUM

Banking and insurance.

www.bpostbanque.be