- Parcel Volume: 264 million parcels handled, a 23% year-over-year increase.
- Revenue Growth: Comparable to parcel volume growth, 23% year-over-year.
- Adjusted EBITDA: Grew by 29% year-over-year.
- Group Adjusted EBITDA Margin: Reached almost 34%.
- Poland Revenue Growth: 22% year-over-year.
- Poland Adjusted EBITDA Margin: 46%, a slight quarter-on-quarter improvement.
- International Parcel Volume: Increased by 29% year-over-year.
- International Revenue Growth: 27% in local currency.
- International Adjusted EBITDA Margin: Reached 15%, first time in double digits.
- UK Parcel Volume: Over 23 million parcels delivered in one quarter.
- APM Network: Over 70,000 points, including over 40,000 APMs.
- New Lockers Deployed: 3,000 new machines in Q2, over 5,000 in 2024 so far.
- Poland APMs: Added more than 800 machines, totaling over 23,000 APMs.
- Poland Parcel Volume Growth: 20% year-over-year.
- Poland Door Deliveries Growth: 50% year-over-year.
- Poland APM Volumes Growth: 15% year-over-year.
- Group Free Cash Flow: PLN154 million in Q2 2024.
- Leverage Ratio: Reduced to just below 2x.
- Poland Free Cash Flow: PLN623 million in H1 2024.
- Group Free Cash Flow Conversion: Improved from 17% in H1 2023 to 22% in H1 2024.
- Net Debt: Increased by PLN40.3 million.
- Leverage Ratio: Decreased from 2.2x at the end of Q4 2023 to 1.95x at the end of H1 2024.
Release Date: September 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Inpost SA (INPOY, Financial) handled 264 million parcels in Q2, marking a 23% year-over-year increase.
- Adjusted EBITDA grew by 29% year-over-year, with the group adjusted EBITDA margin reaching almost 34%.
- Revenue in Poland grew by 22%, with an adjusted EBITDA margin of 46%.
- International markets saw a 29% increase in parcel volume and a 27% revenue growth in local currency.
- The UK achieved record parcel volumes with over 23 million parcels delivered in one quarter, alongside continued margin expansion.
Negative Points
- Despite strong performance, the geopolitical situation remains uncertain, which could impact future results.
- The company faces challenges in maintaining high margins due to increased volumes of lower-priced door parcels, particularly from Asian e-commerce platforms.
- International market trends are slightly lower than expected at the beginning of the year.
- The company has not yet decided on its pricing strategy for 2025, which could impact future profitability.
- The minimum wage increase in Poland for 2025 will put additional pressure on costs.
Q & A Highlights
Q: Can you provide more color on what is driving the significant margin expansion in Mondial Relay?
A: The margin improvement is driven by higher volumes, a positive mix effect with a higher share of B2C and APM, cost optimization in line haul and last-mile operations, and strict control over SG&A expenses. These factors combined have led to a sustainable increase in margins.
Q: What is your strategy for converting international volumes into APM deliveries in Poland?
A: While door-to-door deliveries are growing, especially from international platforms, our strategy remains to convert these volumes into APM deliveries. We aim to provide a best-in-class one-stop shop for merchants, including both door-to-door and out-of-home delivery solutions.
Q: How is your UK strategy evolving with Menzies and the changing competitive landscape?
A: We are very pleased with the partnership with Menzies, which allows us to provide a seven-day-a-week solution. Despite the changing competitive landscape, we continue to focus on accelerating our network deployment and expanding our B2C offering, which has shown encouraging results.
Q: Can you comment on the impact of minimum wage increases in Poland on your operations?
A: We have absorbed the cost of the minimum wage increase without passing it on to merchants. This has been managed through operational efficiencies and leveraging our growing volume. However, future increases in minimum wage will continue to put pressure on costs.
Q: What are your cross-border ambitions for Poland and how are they progressing?
A: We are in the testing phase of our cross-border solution and plan to launch it fully this year. This will enable us to offer competitive pricing and high-quality cross-border delivery services, which we believe will transform the market and drive additional growth.
Q: How should we think about pricing in the UK and France as volumes and usage pick up in B2C?
A: Our strategy is to maintain a differential between door-to-door and out-of-home deliveries, similar to what we have done in Poland. As volumes grow, we expect to leverage our operating efficiencies to maintain competitive pricing while improving margins.
Q: Are you having discussions with rating agencies about a possible upgrade to investment grade?
A: Yes, we have regular transparent communications with rating agencies to ensure they understand our business performance and strategy. However, the decision to upgrade our rating is ultimately up to their objective assessment.
Q: What is your strategy for smaller markets like Portugal where you have a limited presence?
A: Our strategy is to focus on pure development in these markets, similar to what we did in Italy and Spain. We are deploying small concentrations of lockers to test and validate local nuances, with plans to accelerate deployment as we see proof of concept and profitability.
Q: Can you provide more details on the sustainability of the cost reductions in Mondial Relay's OpEx?
A: The cost reductions are sustainable as they result from a significant transformation of the business, including network development and reconfiguration of local operations. We have also centralized some functions at the group level to maintain efficiency.
Q: What is your outlook for Q3 volume growth compared to Q2?
A: We expect international volume growth to be in line with Q2, while Poland's volume growth is expected to be in the mid to high teens, slightly slower than the 20% realized in Q2 but still significantly outpacing the market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
