deep roots, strong wingsbpost.production.investis.com/~/media/files/b/bpost... · deep roots,...

ANNUAL REPORT 2018

Deep roots, strong wings

Contents

(*) Thesechaptersformtheannualreportcf.Article 119oftheBelgianCompaniesCode.

Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Overview of the key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Message from the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

How we create value for all the stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Key events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Financial review* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Financial consolidated statements 2018* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Summary of the financial statements of bpost NV/SA* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

Management responsibility statement* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

CSR review* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

CSR consolidated statements* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

Corporate governance statement* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

Report of the Joint Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

bpost ANNUALREPORT2018 3

PROFILE

Profile

bpostisBelgium’sleadingpostaloperatorandaparcelande-commercelogisticsproviderintheBenelux,North-AmericaandAsia.Wedelivermailandparcelstomillionsofdoorstepsandprovidelogisticservicestobusinessesandconsumers.With34,000 employeesinBelgiumandacrosstheglobe,wegenerateaturnoverofEUR 3,850.2 million,whilereducingourimpactontheenvironmentandthecommunitiesaroundus.

Mail & Retail Parcels & Logistics Europe and Asia Parcels & Logistics North America

Description

• Transactional mail • Advertisingmail • Press • Proximityandconvenienceretailnetwork

• Valueaddedservices

• ParcelsBelgiumandTheNetherlands(lastmile)

• E-commercelogistics(RadialEU) • Cross-border(incl.mailandparcels)

• E-commercelogistics • International mail

7.65 millionlettershandleddaily 417,000parcelsperpeakdayinBelgium

Servicing5.6 millionletterboxes

5industrialsortingcenters

2,300locationsinBelgium

6parcelcenters,1sortinglocation&9fulfillmentcentersin5 countries(UnitedKingdom,Belgium,TheNetherlands,PolandandGermany)

Brands


KEY FIGURES

Normalized for the year ended 31 December

Inmillion EUR 2018 2017 Evolution2018-2017

TotalOperatingIncome1 3,850.2 3,023.8 27.3%

Profitfromoperatingactivities(EBIT)2 424.3 501.6 -15.4%

Profitfortheyear(consolidated-IFRS)3 290.4 329.3 -11.8%

Operatingfreecashflow4 231.5 (500.8) -146.2%

Reported for the year ended 31 December


TotalOperatingIncome 3,850.2 3,023.8 27.3%

Profitfromoperatingactivities(EBIT) 393 .4 492.9 -20.2%

Profitfortheyear(consolidated-IFRS) 263.6 322.9 -18.4%

bpostS.A./N.V.netprofit(unconsolidated-BelgianGAAP) 262.3 291.0 -9.8%

Operatingfreecashflow5 241.2 (485.8) -149.6%

NetDebt/(NetCash)6 344.8 292.4 17.9%

Basicearningspershare,inEUR 1.32 1.62 -18.5%

Dividendpershare,inEUR 1 .31 1.31 0.0%

Numberofemployees(atyearend) 34,074 33,992 0.2%

NumberofFTE(average) 31,201 25,323 23.2%

NumberofFTEandinterim(average) 36,109 26,906 34.2%

Overview of the key figures

(1) Normalizedtotaloperatingincomerepresentstotaloperatingincomeexcludingtheimpactofadjustingitemsandisnotaudited.

(2) NormalizedEBITrepresentsprofitfromoperatingactivitiesexcludingtheimpactofnon-adjustingitemsandisnotaudited.

(3) Normalizedprofitfortheyearrepresentsprofitfortheyearexcludingtheimpactofnon-adjustingitemsandisnotaudited.

(4) Normalizedoperatingfreecashflowfortheyearrepresentsoperatingfreecashflowfortheyearexcludingtheimpactofnon-adjustingitemsandisnotaudited.

(5) Operatingfreecashflowrepresentsnetcashfromoperatingactivitieslessnetcashusedininvestingactivities

(6) NetDebt/(NetCash)representsinterestandnon-interestbearingloanslesscashandcashequivalents

Forfurtherdetailsonreconciliationofnormalizedandreportedkeyfigures,pleaserefertosection”Reconciliationofreportedtonormalizedfinancialmetrics”ofthisdocument.


Message from the Board of Directors

Message from the Board of Directors

2018: a challenging year given the disruption in the industry2018wasatoughyearforbpost.Theoperationalresults(EBIT)fellby20.2%andthenetresultsby18.4%.Thesewerecausedbythelettervolumedeclineandageneralriseincosts,particularlypayrollcostsinBelgium.Thiswasnotsufficientlyoffsetbytheincreaseintariffsandthestronggrowthinparcelvolumes.Nevertheless,turnoverwasup27%(toEUR 3,850.2 millionin2018).

Deep roots, strong wings

Asourecologicalfootprintisimportant,bposthasatrailblazingroleinsustainability.In2018,theInternationalPostCorporationnamedbposttheworld’sgreenestpostaloperatorforthesixthyearinarow.Between2007and2017,wereducedourCO2 emissions bynearly40%,followingthereplacementofourmopedswith3,500electricalbikesandinstallationof33,000 solarpanels.In2018,wesetournewtarget:reducingtheCO2 emissions generatedbyouroperationsby20% by 2030, in spite of the expected growth in parcels.Indoingso,bpostwillcontributetotherealisationoftheParisCOP21 climatetargets.

The focus and organisation are based upon bpost’s strategic ambitions

In2018,weenlargedourfocusandorganisationaroundthree strategic ambitions:

• remainingthepreferredproviderofmail,retailandpublicservicesinBelgium;

• becomingamajorplayerinlast-mileparceldeliveryinBelgiumandtheNetherlandsandine-commercelogisticsinEuropeandAsia;and

• furtherdevelopingRadialasasuccessfulplayerintheimportantUSe-commercelogisticsspace.

TheBoardofDirectorsmeteleventimesin2018,todoeverythingwithinitspowertorespondtothedisruptivechangesinthepostalindustry,bysteeringbpost’sstrategy,improvingitsoperatingmodel,andbroadeningitsbusinessportfoliointoe-commercelogistics.

TheBoardofDirectorswillproposetotheGeneralMeetingofShareholdersthepaymentofagrossdividendfor2018ofEUR 1.31pershare,whichisthesameasin2017.

Post is a people business

Thepostalbusinessisapeoplebusiness.Ouremployeesareourbiggestasset.bpostaimstocontinuetobeanattractive employer inahighlycompetitivemarket.Thenew collective labour agreement,enteredintofor2019-2020,willcontributetothis.

In 2018 bpost handled 235,000 parcels per day on average, an increase of 23%.

François CornelisChairmanoftheBoardofDirectors

Koen Van GervenCEO


MESSAGE

Towards a new last mile distribution model in Belgium

Givene-substitution,thevolumeoftraditional letters,givene-substitution,fell by 5.8% in 2018.Marketresearchshowsthatcustomersuseothermediatoconveyurgentmessagesandfinditacceptablethattheirregularmailtakesalittlelongertoarrive.Thatobservationisaconvincingsignthatwecanmovetowardsanew distribution model underwhichwewillalternatelydeliverregularmail.Parcelsandnewspaperswillbedeliveredonadailybasis.Thisnewwayofworkingisnotonlymoreefficient,butalsoenvironmentallyfriendlier.Itwillalsoenableustosafeguardthelong-termeconomicviabilityoftheuniversalservice.TheintroductionofPrior and Non Prior stampsfrom2019isthefirststepinthisdirection.

bpostwelcomesthenewPostallawofferingregulatorystability,andhopestoconcludeshortlythemanagementcontractwiththeBelgianStatefortheprovisionofuniversalservicesinBelgiumforthenextfiveyears.

Parcels continue to grow strongly

In 2018, we noted new record volumes for domestic parcels. Onaverage,bposthandled235,000 parcelsperday,anincreaseof23%comparedto2017.Duringtheyear-endholidays,volumespeakedatarecord417,000 parcelsperday.

In2018welaunched“The Benelux Couriers”,apartnershipbetweenbpostandDHL.ItmeansthatBelgianconsumerscancountonnext-daydeliverybybpostoftheirordersmadeatDutchonlinestorestheeveningbefore.

Wewanttomakeitmoreconvenientforourcustomerstoreceivetheirparcels.Thatissomethingweworkedhardonin2018.Wealreadyknowhowa million customers wanttoreceivetheirparcelsiftheyarenotathome.WiththeintegrationoftheKariboo!points,wenowhavea network of 2,300 pick-up points,thelargestinBelgium.Wealsointroducedaninnovation,withapilotinwhichwedeliverparcelsinsidepeople’shomes,basedonanappthatallowsrecipientstoopentheirfrontdoorremotely.

In2018,wealsobroughtourorganisationinlinewiththeoperationaldemandsconnectedwiththedeliveryoflargeparcelswiththeopeningofdedicatedparcel centres.

Enlargement of e-commerce logistics services

bpostaimstobeanimportantprovideronthegrowinge-commercelogisticsmarketinEuropeandNorthAmerica.TheacquisitionoftheUScompanyRadial madethefoundationofthee-commercelogisticsstrategyofbpost.Radialisatopfivesupplierinahighlyfragmentedindustry.In2018,thefocuswasonimprovingthecommercialorganisationandincreasingthecustomercentricity.

In2018,wecontinuedtodevelopoure-commercelogisticsexpertiseinEuropewithamajoritystakeinActive Ants.Thiscompanyusesrobotsinthefulfilmentprocessandishighlyautomated.Withtheacquisitionof Leen Menken, wealsogainedacustomerbaseandknow-howinfooddeliveries,inchilledaswellasinfrozenform.Wearefirmlycommittedtodevelopandfurtherexpandthee-commercelogisticsactivitiesinEurope.

People, talent, culture, innovation and technology will be key drivers of our success

TheBoardofDirectorsandtheBoardcommitteeshavebeenworkinghardin2018,andwillcontinuetodosoin2019byprovidingstrongsupporttobpost’smanagement.Inthisrespect,theBoardandtheBoardcommitteeswillbeincreasinglyinvolvedinkeyprojectswhichhaveanimpactonthelongtermfutureofbpost.Keyprioritieswillincludedevelopingtoptalentandengagementofemployeestocreateacultureofinnovationandaddressingthedisruptivetrendsintheindustrybyofferinginnovativesolutionsusingtechnology.

Wewillensuresthatbpostrealizesitsthreestrategicambitions:toremaintheuniversalserviceproviderformailinBelgium,tobecomeamajorplayerinlast-mileparceldeliveryinBelgiumandtheNetherlandsandaglobale-commercelogisticsplayer,anchoredinBelgium.Thelongtermstrategicfocusisthebestguaranteetocreatelastingvaluefortheshareholdersandthestakeholdersatlarge.

bpostwouldalsoliketothankallitsemployeesfortheirengagementandcommitment,anditsshareholdersandstakeholdersfortheirconfidence.Weareconvincedthatwehavetherightstrategytorewardthemwhilealsoservingsocietyatlarge.

François Cornelis ChairmanoftheBoardofDirectors

Koen Van Gerven CEO

The new collective labour agreement increases the purchasing power of our employees and makes our jobs in the field more attractive.

The fact that customers find it acceptable that their regular mail takes a little longer to arrive is a convincing sign that we are able to move towards a new distribution model.

How we create value for all the stakeholders

Fast-changingconsumerrequirementsandbehavioraredrivingdisruptivetrendsinthepostallandscape.

Changes in the postal landscape

3,850.2millionEUR revenue

4.8Employee engagement score

308,857Teq CO2

Total eq emissions (score 1+2+3)

84Customer satisfaction score

Howwecreatevalue forallthestakeholders

Talent scarcity

Theworkforceisthemost important asset of a postalcompany.However,accordingtotheIPC,theaverageageofpostalemployeesisincreasing:37%oftheworkforceisagedabove50,whileonly11%isunder30(1). Therequiredskillsarechangingduetothenewtechnologiesandnewpostalactivities.Youngpeopleareswitchingjobsquickly(2).Therefore,itisgettinghardertoattractandretaintalentwiththerightskill-set.

Climate change

Becauseofhuman-causedgreenhousegasemissions,theclimateisslowlychanging,bringingsomeriskssuchasnaturaldisastersandhealthissues.Becauseofthisandtheriskofincreasingfuelandcarbonprices,there is pressure on postal companies to increaseefficiencyandto operate in a more environmentallyfriendlyway.

New technologies

Autonomouslydrivingvehicles,mobileapplications,automatedsorting,roboticsandartificialintelligenceareallmakinganentranceinto the postal sector. The purpose of these technologiesistoincreaseefficiencyandtoimproveconvenienceandflexibilityoflast-miledelivery.

E-commerce

Today10%ofglobalretailsalesaremadeonline,withagrowthof20%everyyearinthepastdecade.Thishasresultedinadoublingofthevolumeofparceldeliveriesbypostalcompaniesandhassignificantlyintensifiedcompetitionbetweenparceldeliverycompanies.Consumersaredemandingforfaster,moreflexibleandlowerpricedservices,suchasfreedeliveryandreturns,parceltrackingande-notifications.

Digitization and e-substitution

Moreandmorecommunicationandservicesofbothbusinessesandconsumershappendigitallyoronline,andthetraditionalcore business of postal companies is in fast decline:forbpostthishasresultedinamailvolumedeclineof19%overthepastfiveyearsandanexpectedcontinuingdeclineof9%by2022.

1 IPC(2018)–GlobalPostalIndustryReport2018

2 Forbes(https://www.forbes.com/sites/sarahlandrum/2017/11/10/millennials-arent-afraid-to-change-jobs-and-heres-why/#596876a519a5)

Therapidlychangingworldarounduspresentsbothchallengesandopportunities,whichbposttakesonwithenthusiasm.

Shared value KPIs

1. 2. 3.

How we answer

Wecareaboutouremployeesandengagethem.

Westrivetoreduceour impact on the environment.

Ae are close to thesocietyanditsemergingneeds.

MailservicestocitizensandStateremaincoreandwillcontinuetogenerateprofitwithamoreadapteddistributionmodel.

DriveprofitablegrowthinparcelsinBeNeande-commercelogisticsinEurope.

OptimizeRadialtodeliverontheinvestmentthesisinthepromisingNorthAmericane-commercemarket.

People

Mail & Retail

Planet

Parcels & Logistics Europe and Asia

Proximity

Parcels & Logistics North America

Our impact on society and the Sustainable Development Goals

whilerespectingitsstakeholders

bpostwilldeliveronthreestrategicaspirations

wecontributeinbuildingresilientinfrastructure,promoteinclusiveandsustainableindustrializationandfosterinnovation.

ByprovidingaffordableandreliablepostalservicetoallBelgiancitizensacrossbothruralandurbanareas,

wecontributeinpromotingsustained,inclusiveandsustainableeconomicgrowth,fullandproductiveemploymentanddecentworkforall.

AsoneofthelargestemployersinBelgiumandwithemployeesallovertheglobe,

wecontributeinensuringsustainable consumption andproductionpatterns.

Bysustainablydiversifying,innovatingandgrowingine-commercelogisticsservices,

wecontributeintakingurgentactiontocombatclimatechangeanditsimpacts.

WithourcommitmenttotheParisClimateAgreementviaourScienceBasedCO2 reductionTarget,

wecontributeinmakingcitiesandhumansettlementsinclusive,safe,resilientandsustainable.

Byworkingcloselytogetherwithsuppliers,customersandcommunities,

Stakeholders

Shareholders and investors

Customers Employees and trade

unions

Suppliers NGOs and partners

Authorities


KEY EVENTS

Key events

During the first quarter of 2018, bpost acquired the companies Leen Menken Foodservice Logistics BV, IMEX Global Solutions, LLC, M.A.I.L., Inc. and Anthill BVLeenMenkenFoodserviceLogisticsBVisaDutchlogisticsoperatorforthetransportofrefrigeratedandfrozenproductsfore-commerce.IMEXGlobalSolutions,LLC.isa3rdpartylogisticscompanyintheUS,activeincross-borderpublicationandmaildelivery.M.A.I.L.,Inc.isactiveinthefieldofbusinessmail/cataloguedistributionforre/e-tailersandmail-roomservicesaswellasparceldistribution.AnthillBV(ActiveAntsBV)isaDutchcompanywhichprovidese-commercefulfilmentservicesforwebshops.

On May 2, 2018 bpost accelerated its transformation by adapting its structureInordertopreparethecompanyforthefuture,theBoardofDirectorsdecidedtoadaptitsstructureasofMay 2,2018.bpostgroupwillbeorganizedaroundthreebusinessunits:Mail&RetailinchargeofthecommercialandoperationalactivitiesrelatedtomailandretailinBelgium,Parcels&LogisticsEurope&AsiainchargeofthecommercialandoperationalactivitiesofparcelsandlogisticsinEuropeandAsiaandParcels&LogisticsNorthAmericainchargeofthecommercialandoperationalactivitiesinNorthAmerica,includingRadial.

On May 30, 2018 bpost and DHL decided to partner for e-commerce deliveries in the BeneluxThepartnershipisexpectedtoboostcross-bordere-commerce,whileofferinge-tailersacomprehensivelogisticssolution.DHLParcelandbpostjoinedforcesinanon-exclusivepartnershipunderthename“TheBeneluxCouriers”tofacilitateandacceleratethecross-borderonlineshoppingexperienceforconsumersandonlinestores.

On July 4, 2018 bpost successfully issued a EUR 650 million long-term bond to secure the financing of its growthbpostissuedaEUR 650 million8-yearbond,twotimesoversubscribed,withacouponof1.25%.ThetransactionservedtorefinancetheNovember 2017acquisitionofRadialHoldings,LPatverygoodfinancialconditionsfollowingthegrantingofanAcreditratingbyStandard&Poor’sinJune 2018.

On November 28, 2018 bpost decided to offer two separate services enabled by the “Prior” and “Non Prior” stampsAsperJanuary 1,2019bpost’sclientshavetwodifferentoptionsforsendingtheirletters:theycanchoosebetweenthedistributionwithinthethreeworkingdays(NonPrior)orthenextworkingday(Prior).

On December 20, 2018 the management of bpost and the trade unions approved a new collective labor agreement for 2019-2020Thecollectivelaboragreementcontainsaseriesofmeasurestostrengthenthepurchasingpowerofbpostpostmen,toreducetheworkloadandtoimprovetheattractivenessofthefieldjobs.Aseriesofmeasurestoimprovetheremunerationhavealsobeenagreedupon.

FINANCIAL REVIEW


Financial review

1.1Consolidatedincomestatement

Thefollowingtablepresentsbpost’sfinancialresultsfortheyears2017and2018:

For the year ended 31 December


Revenue 3,774 .4 2,972.2 27.0%

Otheroperatingincome 75.8 51.6 46.9%

Total operating income 3,850.2 3,023.8 27.3%

Material costs (257.5) (240.7) 7.0%

Servicesandothergoods (1,556.2) (972.8) 60.0%

Payrollcosts (1,455.6) (1,206.7) 20.6%

Otheroperatingexpenses (9.8) (5.6) 74.2%

Total operating expenses excluding depreciations/amortizations (3,279.1) (2,425.9) 35.2%

EBITDA 571.1 598.0 -4.5%

Depreciation,amortization (177.7) (105.1) 69.2%

Profit from operating activities (EBIT) 393.4 492.9 -20.2%

Financialincome 6.1 5.8 5.3%

Financialcosts (29.9) (19.5) 53.4%

Shareofprofitofassociates 11 .5 9.6 19.9%

Profit before tax 381.0 488.7 -22.0%

Incometaxexpense (117.4) (165.8) -29.2%

Profit for the year (EAT) 263.6 322.9 -18.4%

FINANCIAL REVIEW


Total operating incomeTotal operating incomeincreasedbyEUR 826.4 millionor27.3%fromEUR 3,023.8 milliontoEUR 3,850.2 million.ThisincreasewasdrivenbyParcels(EUR 765.3 million,explainedbytheorganicvolumegrowthofDomesticParcelsandtheintegrationofRadialforacompleteyearinLogisticSolutions),alongwiththeintegrationofIMEXandM.A.I.L.inInternationalmail,whichwas



Domestic mail 1,339.5 1,353.4 -1.0%

Transactional mail 809.3 807.9 0.2%

Advertisingmail 244.2 252.9 -3.4%

Press 286.0 292.6 -2.2%

Parcels 1,561.4 796.1 96.1%

Domestic parcels 262.3 224.2 17.0%

International parcels 242.9 222.6 9.1%

LogisticSolutions1 1,056.2 349.2 -

Additional sources of revenues 911.0 831.5 9.6%

International mail 240.9 160.4 50.1%

Valueaddedservices 110.7 101.5 9.0%

Bankingandfinancialproducts 167.1 182.6 -8.5%

Distribution 101.0 98.1 3.0%

Retail & Other 291.4 288.9 0.9%

Corporate (Reconciling post) 38.3 42.9 -10.7%

Total 3,850.2 3,023.8 27.3%

RevenuesfromDomestic MaildecreasedbyEUR 13.8 milliontoEUR 1,339.5 millionin2018withareportedandunderlyingvolumetrendof-5.2%and-5.8%respectivelycomparedtoanunderlyingvolumedeclineof-5.8%lastyear.TransactionalMailvolumescontinuedtobeimpactedbye-substitutionandrationalization,neverthelessrevenuesincreasedbyEUR 1.4 millionfollowingthepriceincreasefornon-regulatedproductsasfromJanuary 1,2018andthepriceincreaseforthesmalluserbasketasfromMarch 1,2018.ExcludingelectionsthattookplaceonOctober 14th,AdvertisingMailwasimpactedbythecompetitivemarketinUnaddressedaswellastheunfavorablemediamixevolutioninDirectmail.OverallAdvertisingvolumesduringtheyearwereimpactedbyashifttowardsthecategoriesofTransactionalmailandPress.Pressvolumesdecreasedby3.8%withthenewspaperstrendbetterthan2017whenexcludingdifferencesindistributiondayswhileperiodicalswereimpactedbydigitizationandrationalization.

TheoverallvolumedeclineamountedtoEUR 70.7 million

andwaspartiallycompensatedbytheimprovementofthepriceandmix(EUR 49.6 million),theimpactofmoreworkingdays(EUR 2.0 million)andtheoccurrenceoflocalelections(EUR 5.2 million).

ParcelsgrewbyEUR 765.3 milliontoreachEUR 1,561.4 milliondrivenby:

• ExcellentDomesticParcelsvolumegrowthof23.3%in2018versus28.2%in2017.Thisincreasewasdrivenbytheconsistente-commercegrowthandtheonlineC2Cproductoffering.Priceincreasesweremorethanoffsetbytheevolutionoftheclientandproductmix(fastergrowthoflargee-tailerswithhighvolumesandlowerpricescomparedtosmallercustomers),resultinginanegativepricemixeffectof-5.1%.OverallDomesticParcelscontributedEUR 38.1 milliontotheincome increase.

• GrowthinInternationalParcels(EUR 20.3 million),drivenbytheUSandEurope,especiallyUK.

• LogisticSolutionsincreasedbyEUR 707.0 million,mainlyduetothefullyearintegrationofRadialaswell

themaincontributortotheincreaseofAdditionalsourcesofrevenues(EUR 79.5 million).AlltheseeffectswerepartiallyoffsetbythedecreaseofDomesticMail(EUR 13.8 million)andCorporate(EUR 4.6 million).

Theevolutionperproductlinecanbesummarizedasfollows:

(1) LogisticSolutionscontainsRadialconsolidatedasofNovember16,2017

FINANCIAL REVIEW


astheintegrationofLeenMenkenandActiveAnts.

TotaloperatingincomefromtheAdditional sources of revenuesincreasedbyEUR 79.5 milliontoEUR 911.0 millionin2018.TheintegrationofIMEXandM.A.I.L.aswellashighervolumesfromAsiaandInboundMailresultedinanincreaseofInternationalMail(EUR 80.4 million).FurthermoretheincreaseofValueaddedServices(EUR 9.1 million),drivenbythemanagementofcross-borderfinesonbehalfoftheBelgianState,theincreaseofDistribution(EUR 2.9 million)andtheincreaseofRetail&Other(EUR 2.6 million)mainlyduetothefavorableevolutionofthecontingentconsiderations(EUR 10.3 million)werepartlyoffsetbythelowerrevenuesofBankingandfinancialproducts(EUR 15.5 million).ThisdecreasewasmainlyduetothelowerrevenuesfromfinancialtransactionsmanagedonbehalfoftheBelgianStateandthelowercommissionofbpostbankonsavingaccountsduetothelowinterestrateenvironment.

TheevolutionoftotaloperatingincomeofCorporate (reconcilingcategory)decreasedbyEUR 4.6 milliontoEUR 38.3 million.

Operating expenses (including depreciation)Operatingexpenses,includingdepreciation,amortization,andimpairmentcharges,amountedtoEUR 3,456.8 million(2017:EUR 2,530.9 million)andincreasedbyEUR 925.9 millioncomparedtolastyearofwhichEUR 827.9 millionwasduetotheintegrationofnewsubsidiaries.Excludingthesesubsidiaries,operatingexpensesincreasedbyEUR 98.0 millionasthedecreaseofmaterialcosts(EUR 4.3 million)andotheroperating

expenses(EUR 7.3 million)wereoffsetbytheincreaseofservicesandothergoods(EUR 74.8 million),depreciationandamortization(EUR 22.6 million)andpayrollcosts(EUR 12.3 million).

Material costsMaterialscosts,whichincludethecostofrawmaterials,consumablesandgoodsforresale,increasedbyEUR 16.8 milliontoEUR 257.5 million(2017:EUR 240.7 million)duetotheintegrationofthenewsubsidiaries.

Services and other goodsThecostofgoodsandservicesincreasedbyEUR 583.3 millionorEUR 74.8 millionexcludingtheintegrationofthenewsubsidiaries.Thisincreasewasmainlyduetoincreasedtransportcosts(EUR 38.9 million),rentandrentalcosts(EUR 11.0 million),insurancecosts(EUR 5.8 million),energycosts(EUR 4.4 million),otherservices(EUR 3.7 million)andmaintenanceandrepairs(EUR 3.0 million).

Notethatinterimcostsareanalyzedtogetherwithpayrollcosts,astheyareabetterperformanceindicatorofhumancapitalutilization.Incertaincasesofnaturalattrition,personnelisreplacedbyinterimstoanticipatereorganizationsandproductivityimprovementprograms.



Rentandrentalcosts 148.6 104.3 42.5%

Maintenanceandrepairs 108.3 86.9 24.6%

Energydelivery 45.9 40.7 12.7%

Othergoods 38.6 26.2 47.6%

Postalandtelecomcosts 21.2 8.9 137.3%

Insurance costs 19.7 11.8 67.7%

Transport costs 686.8 374.2 83.5%

Publicityandadvertising 24.4 18.7 30.6%

Consultancy 21.7 19.4 12.1%

Interimemployees 192.5 107.1 79.8%

Thirdpartyremuneration,fees 145.9 132.3 10.3%

Otherservices 102.6 42.4 142.0%

Total 1,556.2 972.8 60.0%

FINANCIAL REVIEW


• RentalcostshaveincreasedbyEUR 44.3 millionorexcludingtheintegrationofthenewsubsidiariesbyEUR 11.0 million,mainlyduetothenewBrusselssortingcenter(NBX)andthegrowingfleet.

• TheincreaseofmaintenanceandrepairsbyEUR 21.3 millionwasmainlycausedbytheintegrationofthenewsubsidiaries(EUR 18.3 million).

• EnergydeliverycostsincreasedbyEUR 5.2 millionorEUR 4.4 millionexcludingtheintegrationofthenewsubsidiaries,mainlyduetohigherfuelpricesandthegrowingfleet.

• TransportcostsamountedtoEUR 686.8 million,EUR 312.6 millionhighercomparedtopreviousyear,mainlyduetoscopechange(EUR 273.7 million),theevolutionofinternationalactivitiesandhigherdomesticparcelvolumes.

• Thegrowthininterimcostswasdrivenbytheintegrationofthenewsubsidiaries,seealsosectionpayrollcosts.

• OtherservicesincreasedbyEUR 60.2 millionmainlyduetotheintegrationofthenewsubsidiaries(EUR 56.5 million).

Payroll costsPayrollcosts(EUR 1,455.6 million)andinterimcosts(EUR 192.5 million)in2018amountedtoEUR 1,648.1 million.PayrollandinterimcostsincreasedbyEUR 334.4 million(EUR 249.0 millionforpayrollandEUR 85.4 millionforinterimcosts)comparedtolastyearandthiswasmainlydrivenbytheintegrationofthenewsubsidiaries(EUR 314.6 million).

Thereportedaverageyear-on-yearstaffshowedanincreaseof9,203FTEandinterims,generatingextracostsofEUR 334.6 million,explainedbytheintegrationofFTEandinterimsofthenewsubsidiaries,higherparcelsvolumesandabsenteeismpartlycompensatedbybetterproductivity.

ApositivemixeffectreducedcostsbyEUR 12.3 millionandwasmainlydrivenbytherecruitmentofauxiliarypostmen.

Furthermorethesalaryindexation,meritincreases,lastyear’snon-cashgainofEUR 15.3 millionrelatedtotheterminationofthetransportbenefitandlastyear’sreversalofsomeprovisions(EUR 6.8 million)werepartiallycompensatedbyanIAS 19non-cashgainrelatedtogroupinsurance(positiveimpactofEUR 10.9 millionin2018),taxshiftandunpaidhoursduetostrikes.

Other operating expensesOtheroperatingexpensesincreasedbyEUR 4.2 millionversuslastyear.Excludingtheintegrationofthenewsubsidiaries,operatingexpensesdecreasedbyEUR 7.3 million,mainlyduetothereversalofprovisions.

Depreciation and amortizationDepreciation,amortizationandimpairmentchargeshaveincreasedbyEUR 72.7 millionor69.2%toEUR 177.7 millionin2018(2017:EUR 105.1 million),mainlydrivenbytheintegrationofthenewsubsidiariesbyEUR 50.0 million.ThelatterwasmainlyduetodepreciationatRadialwhichisimpactedbytheCAPEXinvestmentsfromthepast.

EBITNottakingintoaccounttheimpactofthenewsubsidiaries,therevenueincreasewasoutpacedbytheincreaseincostsfromservicesandothergoods,payrollanddepreciationandamortization.AsaresultEBITexcludingtheintegrationofnewsubsidiariesdecreasedbyEUR 57.2 millionwithoverallEBITdecreasingbyEUR 99.5 million.

Net financial resultNetfinancialresultdecreasedbyEUR 10.1 millionmainlyduetotheincreaseininterestsonloansandthebond.

Share of results of associatesTheshareofresultsofassociatesrelatedtobpostbankandincreasedbyEUR 1.9 milliontoEUR 11.5 million.

Income tax expenseIncometaxexpensedecreasedfromEUR 165.8 millionin2017toEUR 117.4 millionin2018.bpost’seffectivetaxratedecreasedfrom33.9%in2017to30.8%in2018.ThisdecreasewasdrivenbytheloweredBelgiancorporatetaxratefrom33.99%in2017to29.58%in2018.In2017,astheBelgianandUScorporatetaxreformshadbeensubstantiallyenacted,bpostreassesseditsdeferredtaxpositionunderIFRStakingintoconsiderationthesenewmeasures,thisledtoataxexpenseofEUR 7.0 millionin2017.

FINANCIAL REVIEW


(1) RestatedinordertoshowcomparativeinformationfollowingthepurchasepriceallocationofRadial.

1.2Statementoffinancial position

As at 31 December

Inmillion EUR 2018 2017restated1 2017

AssetsNon-current assetsProperty,plantandequipment 708.0 752.8 710.3Intangibleassets 874.9 890.4 910.6Investmentsinassociates 251.2 329.2 329.2Investmentproperties 18.7 5.7 5.7Deferredtaxassets 31.5 31.4 31.5Tradeandotherreceivables 11.2 9.4 9.4

1,895.7 2,018.8 1,996.6Current assetsInventories 36.9 39.1 39.1Incometaxreceivable 5.7 1.6 1.6Tradeandotherreceivables 712.0 714.9 719.4Cashandcashequivalent 680.1 466.0 466.0

1,434.7 1,221.6 1,221.6Assetsheldforsale 14.7 0.6 0.6

Total assets 3,345.1 3,241.0 3,223.3

Equity and liabilitiesIssuedcapital 364.0 364.0 364.0Reserves 271.4 310.1 310.1Foreigncurrencytranslation 12.7 (11.5) (11.5)Retainedearnings 51.6 110.9 110.9Equity attributable to equity holders of the Parent 699.7 773.5 773.5Equityattributabletonon-controllinginterests 2.5 4.3 4.3

Total equity 702.3 777.8 777.8

Non-current liabilitiesInterest-bearingloansandborrowings 849.1 55.4 58.4Employeebenefits 308.4 326.9 326.9Tradeandotherpayables 17.5 45.2 45.2Provisions 22.6 38.1 24.2Deferredtaxliabilities 7.3 12.3 12.3

1,204.8 478.0 467.0Current liabilitiesInterest-bearingloansandborrowings 175.7 699.9 699.9Provisions 16.8 28.4 21.2Incometaxpayable 21.4 38.6 39.3Derivativeinstruments 0.8 0.0 0.0Tradeandotherpayables 1,212.5 1,218.4 1,218.2

1,427.3 1,985.3 1,978.5Liabilitiesdirectlyassociatedwithassetsheldforsale 10.8 0.0 0.0

Total liabilities 2,642.9 2,463.3 2,445.5

Total equity and liabilities 3,345.1 3,241.0 3,223.3

FINANCIAL REVIEW


Preliminarynote:in2018thepurchasepriceallocationofRadialhasbeenfinalized.Asaconsequencethe2017figuresofthestatementoffinancialpositionhavebeenrestatedinordertoshowcomparativeinformation.Allvarianceshereaftercompare2018with2017restatedexceptindicatedotherwise.

AssetsProperty, plant and equipment

Property,plantandequipmenthavedecreasedbyEUR 44.8 millionfromEUR 752.8 milliontoEUR 708.0 million.Thisdecreasewasmainlyexplainedby:

• depreciationandimpairmentamountingtoEUR 110.0 millionandhigherthanlastyear(2017:EUR 80.2 million);

• disposals-mainlyrelatedtosalesofbuildings-forEUR24.8million;

• transfertoassetsheldforsale(EUR 1.2 million)andtoinvestmentproperty(EUR 13.0 million),partiallyoffsetby

• theintegrationofnewsubsidiariesforEUR 9.2 million; • acquisitions(EUR 88.9 million)relatedtoproductionfacilitiesforsortingandprintingactivities(EUR 23.3 million),mailandretailnetworkinfrastructure(EUR 13.5 million),ATMandsecurityinfrastructure(EUR 1.7 million),transportationrelatedinfrastructure(EUR 36.9 million)andITandotherinfrastructure(EUR 13.5 million).

Intangible assetsIntangibleassetsdecreasedbyEUR 15.4 million,mainlydueto:

• amortizationandimpairmentsamountingtoEUR 67.8 millionincludingtheimpairmentofEUR 16.3 millionongoodwillofdeBuren,CertipostandBubblePost;

• partiallycompensatedbytheacquisitionofLeenMenkenFoodserviceLogistics,IMEX,M.A.I.L.andActiveAntsforEUR 5.3 millionand;

• theevolutionoftheexchangerate(EUR21.6million); • investmentsinsoftwareandlicenses(EUR 13.5 million),developmentcostscapitalized(EUR 12.7 million)andotherintangibleassets(EUR 0.4 million).

Investments in associatesInvestmentsinassociatesdecreasedbyEUR 77.9 milliontoEUR 251.2 million.ThisdecreasewasmainlyduetoIFRS 9FinancialInstrumentswhichreplacedIAS 39FinancialInstrumentsRecognitionandMeasurementasofJanuary 1,2018atbpostbank.AsaresultamajorpartofitsbondportfoliohasbeenreclassifiedfromtheIAS 39available-for-salecategorytotheIFRS 9amortisedcostcategory,leadingtoadecreaseofbpostbank’sequitybyEUR 119.8 millionasof1 January 2018andconsequentlybpost’sinvestmentinassociatesbyEUR 59.9 million.ThisdecreasewasalsodrivenbylowerunrealizedgainsonthebondportfoliointheamountofEUR 25.5 millionrecognizedinothercomprehensiveincome,reflectinganaverageincreaseoftheunderlyingyieldcurveby2basispoints(bps)comparedtoDecember 31,2017andlowerdividendsreceivedfrombpostbankforEUR 4.0 million.Thiswaspartiallyoffsetbybpost’sshareofresultofassociatesforanamountofEUR 11.5 million.End 2018,investmentsinassociatescomprisedunrealizedgainsnetofdeferred

taxesinrespectofthebondportfoliointheamountofEUR 38.8 million,whichrepresented15.4%oftotalinvestmentsinassociates.Theunrealizedgainsweregeneratedbythelowerlevelofinterestratescomparedtotheacquisitionyieldsofthebonds.Unrealizedgainsarenotrecognizedintheincomestatement,butdirectlyinequityintheothercomprehensiveincome.

Investment propertiesInvestmentpropertiesincreasedfromEUR 5.7 millionin2017toEUR 18.7 millionin2018,asthenumberofsquaremetersrentedoutincreased.

Deferred Tax assetsDeferredtaxassetsamountedtoEUR 31.5 million(2017:EUR 31.4 million)andmainlyrelatetothetimingdifferencebetweentheaccountingandthetaxvalueoftheemployeebenefits.

InventoriesInventoriesslightlydecreasedbyEUR 2.1 millionandamountedtoEUR 36.9 million(2017:EUR 39.1 million).

Current trade and other receivablesCurrenttradeandotherreceivablesareinlinewithlastyearandslightlydecreasedbyEUR 2.9 milliontoEUR 712.0 million(2017:EUR 714.9 million),drivenbyariseintradereceivablesofEUR 21.6 millionoffsetbythedecreaseofotherreceivablesofEUR 22.6 milliongivenlastyear’soutstandingreceivablerelatedtothepurchaseofRadial.

Cash and cash equivalentsCashandcashequivalentsincreasedbyEUR 214.1 milliontoEUR 680.1 million,thisincreasewasmainlyduetofreecashflowgenerationofEUR 241.2 millionandtheissuanceofthebondandcommercialpaper,partiallyoffsetbythepaymentofEUR 262.0 millionindividendsandthereimbursementofthebridgeloanrelatedtotheacquisitionofRadial.

Equity and liabilitiesEquityEquitydecreasedbyEUR 75.5 million,or9.7%,toEUR 702.3 millionasofDecember 31,2018fromEUR 777.8 millionasofDecember 31,2017.Therealizedprofit(EUR 263.6 million)andtheexchangedifferencesontranslationofforeignoperations(EUR 24.2 million)wereoffsetamongstothersbytheimpactatbpostbankofthetransitiontoIFRS 9FinancialInstruments,whichreplacedIAS 39,thefairvalueadjustmentinrespectofbpostbank’sbondportfolio,thepaymentofadividendandtheeffectivepartofacash-flowhedgeenteredintoforcashflowriskonthebond,respectivelyfortheamountsofEUR 59.9 million,EUR 25.5 million,EUR 262.0 million(grossdividendofEUR 0.25pershare,paidinMayandgrossdividendofEUR 1.06pershare,paidinDecember)andEUR 14.0 million.Thiscash-flowhedgereservewillbereclassifiedtoprofitorlossoverthe8-yeardurationofthebondfromtheissuancedate.

Non-current interest-bearing loans and borrowingsNon-currentinterest-bearingloansandborrowingsincreasedbyEUR 793.6 milliontoEUR 849.1 millionmainlyduetotheissuanceofaEUR 650.0 million8-yearbond,twotimesoversubscribed,withacouponof1.25%andaUSDtermloanofUSD 185.0 millionwithenddate

FINANCIAL REVIEW


September 2021andafloatingratestructure.ThesetransactionsservedtorefinancetheNovember 2017acquisitionofRadialHoldings,LP.bpostborrowedapartinUSDtomitigatetheriskonforeignexchangeratedifferenceshencebpostperformedanetinvestment

hedge.ThisincreasewaspartiallyoffsetbyadecreaseofEUR 9.1 millioncorrespondingtotheportionoftheloanoftheEuropeanInvestmentBanktransferredtocurrentliabilities.

Employee benefits

As at 31 December

Inmillion EUR 2018 2017

Post-employmentbenefits (32.8) (50.7)

Long-termemployeebenefits (113.5) (108.2)

Terminationbenefits (8.5) (6.6)

Otherlong-termbenefits (153.5) (161.5)

Total (308.4) (326.9)

EmployeebenefitsdecreasedbyEUR 18.6 million,or5.7%,toEUR 308.4 millionin2018fromEUR 326.9 millionin2017.Thedecreasemainlyreflects:

• ThepaymentofbenefitsforanamountofEUR 30.7 million.

• Operationalactuarialgain(EUR 5.2 million)partiallycausedbyupdatingtheinflationassumption.

• Additionalservicecosts(EUR 25.5 million),anincomingtransferrelatedtopensionsavingdays(EUR 5.6 million),interestcosts(EUR 4.0 million)andapositivepastservicecosts(EUR 10.9 million).ThelatterwasduetoanIAS 19non-cashgainongroupinsurance.

• FinancialactuarialgainofEUR 1.0 millioncausedbychangesinthediscountrates.

• Aremeasurementgainrelatedtopost-employmentbenefitsofEUR 5.8 million(beforetax),recognizedthroughothercomprehensiveincome.

AfterdeductionofthedeferredtaxassetrelatingtoemployeebenefitswhichamountedtoEUR 23.6 million,thenetliabilityamountedtoEUR 284.8 million(2017:EUR 294.5 million).

Non-current trade and other liabilitiesNon-currenttradeandotherliabilitiesdecreasedbyEUR 27.7 million(2017:EUR 45.2 million),mainlyduetothedecreaseofthecontingentconsiderationsforDynaGroupanddeBuren.

Non-current provisionsNon-currentprovisionsamountedtoEUR 22.6 millioncomparedtoEUR 24.2 millionin2017orEUR 38.1 millionrestatedforthepurchasepriceallocationofRadial.

Deferred tax liabilitiesDeferredtaxliabilitiesdecreasedbyEUR 5.0 millionfromEUR 12.3 millionin2017toEUR 7.3 millionin2018.

Current interest-bearing loans and borrowingsCurrentinterest-bearingloansandborrowingsdecreasedbyEUR 524.2 milliontoEUR 175.7 millionduetothereimbursementofthebridgeloanenteredintoin2017tobuyRadial.Thebridgeloanhasbeenrefinancedviatheissuanceofabondandatermloan.ThisdecreasewaspartiallyoffsetbytheissuanceofcommercialpaperforEUR 165.1 million.

Current provisionsCurrentprovisionsamountedtoEUR 16.8 millioncomparedtoEUR 21.2 millionin2017orEUR 28.4 millionrestatedforthepurchasepriceallocationofRadial.

Income tax payableIncometaxpayabledecreasedbyEUR 17.2 millionandwasmainlyexplainedbythelowertaxesandthehigheradvancesonincometaxespaid.

Current trade and other liabilitiesCurrenttradeandotherliabilitiesdecreasedbyEUR 5.8 milliontoEUR 1,212.5 millionin2018.ThisvariancewasmainlyduetotheincreaseoftradepayablesbyEUR 38.0 million,partiallyoffsetbythedecreaseofpayrollandsocialsecuritypayablesbyEUR 14.7 million,taxpayablesbyEUR 2.2 millionandotherpayablesbyEUR 27.0 million.ThedecreaseofotherpayableswasmainlyduetothepaymentofcontingentconsiderationstoDynaGroupandFDM(EUR 45.4 million)partiallyoffsetbythetransferofthecontingentconsiderationforDynaGroupfromnon-currenttradeandotherpayables.

FINANCIAL REVIEW


1.3Statement ofcash flows

In2018,bpostgeneratedEUR 211.7 millionofnetcash.ThiswasanincreaseofEUR 280.6 millioncomparedtothenetcashoutflowofEUR 68.9 millionin2017.

FreecashflowamountedtoEUR 241.2 millionandwasEUR 727.0 millionhigherthanlastyear.

CashflowfromoperatingactivitiesresultedinacashinflowofEUR 362.0 million,EUR 95.8 millionhigherthanin2017.Cashgenerationfromoperatingactivitieswasimpactedbybpostbankdividend(EUR -7.8 million)andcollectedproceedsduetoRadial’sclients(EUR -5.4 million).Excludingtheseelementsthepositivevarianceinworkingcapitalevolution(EUR +143.8 million,mainlythankstoimprovedclientsbalancesandpaymentoftransactionexpensesrelatedtoRadialacquisitionin2017)waspartiallyoffsetbythedecreasedoperatingresults(EUR -34.8 million).

CashusedininvestingactivitiesresultedinacashoutflowofEUR 120.8 millionin2018comparedtoEUR 751.9 millionlastyear.CashoutflowsrelatedtoacquisitionswereEUR 605.2 millionlowerthanlastyearwhichcombinedwithhigherproceedsfromsaleofbuildings(EUR +31.5 million)andlowercapitalexpenditures(EUR +6.4 million)contributedtothedecreasedcashoutflow.Thiswastoalimitedextentoffsetbyinvestmentsecuritiesin2017(EUR -12.0 million).

ThecashflowrelatingtofinancingactivitiesamountedtoEUR -29.5 million(EUR +416.8 millionin2017).In2018theissuanceofthebondandcommercialpaper,alongwiththeloansenteredintoduringthethirdquarterof2018wasmorethanoffsetbythereimbursementofthebridgeloanfortheRadialacquisition,theunwindingofthepre-hedgeinterestrateswaprelatedtothebondandthedividends.Financingactivitiesgeneratedcashinflowin2017asthebridgeloanenteredintoforthepurchaseofRadialwashigherthandividendspaid.

FINANCIAL REVIEW


1.4Reconciliationofreportedtonormalizedfinancialmetrics

bpostalsoanalyzestheperformanceofitsactivitiesonanormalizedbasisorbeforeadjustingitems.Adjustingitemsrepresentsignificantincomeorexpenseitemsthatduetotheirnon-recurringcharacterareexcludedfrominternalreportingandperformanceanalyses.bpostusesaconsistentapproachwhendeterminingifanincomeorexpenseitemisadjustingandifitissignificantenoughtobeexcludedfromthereportedfigurestoobtainthenormalizedones.

AnadjustingitemisdeemedtobesignificantifitamountstoEUR 20.0 millionormore.Allprofitsorlossesondisposalofactivitiesarenormalizedwhatevertheamounttheyrepresent,aswellasallnon-cashPurchasePriceAllocation(PPA)accountingimpactsrelatedtoacquisitions.Reversalsofprovisionswhoseadditionhadbeennormalizedfromincomearealsonormalizedwhatevertheamounttheyrepresent.

ThepresentationofnormalizedresultsisnotinconformitywithIFRSandisnotaudited.Thenormalizedresultsmaynotbecomparabletonormalizedfiguresreportedbyothercompaniesasthosecompaniesmaycomputetheirnormalizedfiguresdifferentlyfrombpost.Normalizedfinancialmeasuresarepresentedbelow.

Income Statement relatedOperating income for the year ended 31 December


Totaloperatingincome 3,850.2 3,023.8 27.3%

Normalized total operating income 3,850.2 3,023.8 27.3%

Operating expenses for the year ended 31 December


Totaloperatingexcludingdepreciation,amortization (3,279.1) (2,425.9) 35.2%

Normalized total operating expenses excluding depreciation, amortization (3,279.1) (2,425.9) 35.2%

EBITDA for the year ended 31 December

Inmillion EUR 2018 2017Evolution2018-2017

EBITDA 571.1 598.0 -4.5%

Normalized EBITDA 571.1 598.0 -4.5%

EBIT for the year ended 31 December


EBIT 393 .4 492.9 -20.2%

Non-cashimpactofpurchasepriceallocation(PPA)1 30.9 8.7 252.9%

Normalized profit from operating activities (EBIT) 424.3 501.6 -15.4%

(1) InaccordancewithIFRS 3andthroughoutthepurchasepriceallocation(PPA)fordeBuren,DynaGroup,Ubiway,RadialandIMEX,bpostrecognizedseveralintangibleassets(brandnames,know-how,customerrelationships, …).Thenon-cashimpactconsistingofamortizationchargesontheseintangibleassetsisbeingnormalized.

FINANCIAL REVIEW


Profit (EAT - Earnings After Taxes) for the year ended 31 December


Profitfortheyear 263.6 322.9 -18.4%

Non-cashimpactofpurchasepriceallocation(PPA)1 26.8 6.3 324.8%

Normalized profit of the year 290.4 329.3 -11.8%

Cash Flow Statement relatedFor the year ended 31 December


NetCashfromoperatingactivities 362.0 266.1 36.0%

NetCashusedininvestingactivities (120.8) (751.9) -83.9%

Operating free cash flow 241.2 (485.8) -149.6%

Collectedproceedsduetoclients (9.7) (15.0) -35.8%

Normalized operating free cash flow 231.5 (500.8) -146.2%

Operatingfreecashflowrepresentsnetcashfromoperatingactivitieslessacquisitionofproperty,plantandequipment(netofproceedsfromsaleofproperty,plantandequipment),acquisitionofintangibleassets,acquisitionofotherinvestmentsandacquisitionofsubsidiaries(netofcashacquired).

InsomecasesRadialperformsthebillingandreceivingpaymentsonbehalfoftheircustomers.Underthisarrangement,Radialroutinelyremitsbilledamountsbacktotheclient,andperformsamonthlysettlementwiththeclientonamountsowedtoorfromRadialbasedonbillings,fees,andamountspreviouslyremitted.NormalizedoperatingfreecashflowsexcludesthecashRadialreceivedonbehalfoftheircustomersasRadialhasnoorlittleimpactontheamountorthetimingofthesepayments.

FINANCIAL REVIEW


1.5FromIFRSConsolidatedNetProfittoBelgianGAAPUnconsolidatedNetProfit



IFRS Consolidated Net Profit 263.6 322.9

Resultsofsubsidiariesanddeconsolidationimpacts (1.7) (23.3)

Differencesindepreciationandimpairments (2.2) (2.0)

Differencesinrecognitionofprovisions (1.4) (0.1)

EffectsofIAS19 (21.3) (38.8)

DepreciationintangiblesassetsPPA 30 .9 8.7

Deferredtaxes (2.8) 20.3

Other (2.8) 3.2

Belgian GAAP unconsolidated net profit 262.3 291.0

bpost’sunconsolidatedprofitaftertaxespreparedinaccordancewithBelgianGAAPcanbederivedfromtheconsolidatedIFRSprofitaftertaxesintwostages.

Thefirststageconsistsofun-consolidatingtheprofitaftertaxesunderIFRS,i.e.:

• Subtractingtheresultsofthesubsidiaries,i.e.removingtheprofitaftertaxofthesubsidiaries;and

• EliminatinganyotherIncomeStatementimpactthe



ProfitoftheBelgianfullyconsolidatedsubsidiaries(localGAAP) (6.1) (11.8)

Profitoftheinternationalsubsidiaries(localGAAP) 59 .5 (25.1)

Shareofresultsofassociates(localGAAP) (12.1) (13.0)

Otherdeconsolidationimpacts (43.1) 26.6

Total (1.7) (23.3)

subsidiarieshadonbpost(suchasimpairments)andaddingthedividendsreceivedfromthesesubsidiaries.

Thetablebelowsetsforththebreakdownoftheabovementionedimpacts:

• Theevolutionoftheotherdeconsolidationimpactsin2018comparedto2017wasmainlyexplainedbythereversalofstatutoryimpairments,whichmainlyoffsetthelowerresultsoftheinternationalsubsidiariesandthehighergainsoncontingentconsiderations.

ThesecondstageconsistsofderivingtheBelgianGAAPfiguresfromtheIFRSfiguresandisachievedbyreversingallIFRSadjustmentsmadetolocalGAAPfigures.Theseadjustmentsinclude,butarenotlimitedtothefollowing:

• Differencesinthetreatmentofdepreciationandimpairments:BelgianGAAPallowsdifferentusefullives(andhencedepreciationrates)forfixedassetsfromIFRS.GoodwillisamortizedunderBelgianGAAPwhileIFRSrequiresimpairmenttestingforgoodwill.IFRSalsoallowsintangibleassetstoberecordedonthebalance

sheetunderdifferentconditionsfromBelgianGAAP; • RecognitionofprovisionsissubjecttodifferentcriteriaunderBelgianGAAPandIFRS;

• IFRSrequiresthatallfutureobligationstopersonnelarerecordedasaliabilityunderIAS 19,whereasBelgianGAAPhasnosuchobligation.ThemovementsintheIFRSliabilityarereflectedonbpost’sincomestatementunderpayrollcosts(EUR 21.2 millionin2018versusEUR 41.7 millionin2017)orprovisions(EUR 3.1 millionin2018versusEUR 3.2 millionin2017),exceptfortheimpactofchangesinthediscountratesforthefutureobligations,whichwasrecordedasafinancialresult(negativeEUR 3.0 millionin2018versusnegativeEUR 6.0 millionin2017);

• TheevolutionofIAS 19in2018comparedto2017wasmainlyexplainedbylastyear’sincreaseofnon-cash

FINANCIAL REVIEW


financialchargesrelatedtoemployeebenefitsduetothecurtailmentofthetransportbenefitsforbpost’sretirees;

• InaccordancewithIFRS 3bpostfinalizedin2018thepurchasepriceallocation(PPA)forRadialandIMEXandrecognizedseveralintangibleassets(mainlytradenamesandcustomerrelationships, …),hencetheincreaseofdepreciationcomparedtolastyear;

• DeferredtaxesrequirenoaccountingentriesunderBelgianGAAP,butarerecordedunderIFRS.AstheBelgianandUScorporatetaxreformshadbeenenactedbeforeDecember 31,2017bpostreassesseditsdeferredtaxpositionunderIFRStakingintoconsiderationthesenewmeasuresin2017.


OUTLOOK FOR 2019

Outlook for 2019

The2019ambitionistoachieveastable Group total operating incomeincludingbuildingsales,aGroup normalized EBIT above EUR 300.0 million,andtodistributeatleast85%of2019BGAAPnetprofitofbpost NV/SA as dividend.

Morespecificallyforour4businessunits:

Mail & Retail:

• Weexpectalowsingle-digitpercentagedeclineintotaloperatingincome.

• TheunderlyingDomesticMailvolumedeclineisanticipatedatupto-7%,partlyoffsetbyanaveragepriceincreaseof+4.4%.

• EBITmarginofMail&Retailisexpectedtorangebetween11%and13%.

Parcels & Logistics Europe & Asia:

• Weexpecttorecordhighsingle-digitpercentagegrowthintotaloperatingincome,ofwhichmid-teensforParcelsBelgium-Netherlands.

• EBITmarginofParcels&LogisticsEurope&Asiaisexpectedtorangebetween6%and8%.

Parcels & Logistics North America:

• Totaloperatingincomeisexpectedtodeclinebyalowsingle-digitpercentage,mainlyexplainedbythefull-yearimpactofthe2018 clientchurnandrepricingatRadial.Radialishoweverontrackforthe2022guidanceaspresentedattheCapitalMarketsDay.

• Parcels&LogisticsNorthAmericaisexpectedtobreak-evenatEBITlevel.

Corporate:

• ExpectedtobeneutralatEBITlevel.

GrosscapexisexpectedtobearoundEUR 150.0 million.

FINANCIAL CONSOLIDATED STATEMENTS


Financial consolidated statements 2018

1. Consolidated income statement

2. Consolidated statement of comprehensive income

3. Consolidated statement financial position

4. Consolidated statement of changes in equity

5. Consolidated statement of cash flows

6. Notes to the consolidated financial statements

6.1Generalinformation

6.2Basisofpreparation

6.3Significantaccountingjudgmentsandestimates

6.4Summaryofsignificantaccountingpolicies

6.5Riskmanagement

6.6Businesscombinations

6.7Segmentinformation

6.8Revenue

6.9Otheroperatingincome

6.10Otheroperatingexpense

6.11Servicesandothergoods

6.12Payrollcosts

6.13Financialincomeandfinancialcost

6.14Incometax/deferredtax

6.15Earningspershare

6.16Property,plantandequipment

6.17Investmentproperty

6.18Assetsheldforsale

6.19Intangibleassets

6.20 Lease

6.21Investmentinsecurities

6.22Investmentinassociates

6.23Tradeandotherreceivables

6.24Inventories

6.25Cashandcashequivalents

6.26Financialliabilities

6.27Employeebenefits

6.28Tradeandotherpayables

6.29Provisions

6.30Financialassetsandfinancialliabilities

6.31Derivativefinancialinstrumentsandhedging

6.32Contingentliabilitiesandcontingentassets

6.33Rightsandcommitments

6.34Relatedpartytransactions

6.35Groupcompanies

6.36Eventsafterthestatementoffinancialpositiondate




Inmillion EUR Notes 2018 2017 Evolution2018-2017

Revenue 6.8 3,774 .4 2,972.2 27.0%

Otheroperatingincome 6.9 75.8 51.6 46.9%

Total Operating Income 3,850.2 3,023.8 27.3%

Material costs (257.5) (240.7) 7.0%

Servicesandothergoods 6.11 (1,556.2) (972.8) 60.0%

Payrollcosts 6.12 (1,455.6) (1,206.7) 20.6%

Otheroperatingexpenses 6.10 (9.8) (5.6) 74.2%

Depreciation,amortization (177.7) (105.1) 69.2%

Total operating expenses (3,456.8) (2,530.9) 36.6%

Profit From Operating Activities (EBIT) 393.4 492.9 -20.2%

Financialincome 6.13 6.1 5.8 5.3%

Financialcosts 6.13 (29.9) (19.5) 53.4%

Shareofprofitofassociates 6.22 11 .5 9.6 19.9%

Profit Before Tax 381.0 488.7 -22.0%

Incometaxexpense 6.14 (117.4) (165.8) -29.2%

Profit From Continuing Operations 263.6 322.9 -18.4%

Profit For The Year (EAT) 263.6 322.9 -18.4%

Attributableto:

OwnersoftheParent 264.8 324.9 -18.5%

Non-controllinginterests (1.2) (2.0) -38.5%

EARNINGS PER SHARE

In EUR 2018 2017

Basic,profitfortheyearattributabletoordinaryequityholdersoftheparent 1 .34 1.62

Diluted,profitfortheyearattributabletoordinaryequityholdersofthe parent 1 .34 1.62

1 .Consolidated income statement




Inmillion EUR Notes 2018 2017

Profit for the year 263.6 322.9

Other comprehensive income

Othercomprehensiveincometobereclassifiedtoprofitorlossinsubsequentperiods(netoftax):

Changeofothercomprehensiveincomeofassociates 6.22 (25.5) (42.1)

Netgain/(loss)onhedgeofanetinvestment 6.31 (5.7) 2.5

Netgain/(loss)oncashflowhedges 6.31 (14.0) 0.0

Exchangedifferencesontranslationofforeignoperations 29.8 (16.5)

Net other comprehensive income/(loss) to be reclassified to profit or loss in subsequent periods (15.3) (56.0)

Othercomprehensiveincomenottobereclassifiedtoprofitorlossinsubsequentperiods(netoftax):

Remeasurementgain(losses)ondefinedbenefitplans 6.27 4.6 3.1

Net other comprehensive income/(loss) not to be reclassified to profit or loss in subsequent periods 4.6 3.1

Other comprehensive income/(loss) for the year, net of tax (10.7) (53.0)

Total comprehensive income for the year, net of tax 252.9 270.0

Attributableto:

OwnersoftheParent 254.1 271.9

Non-controllinginterest (1.2) (2.0)

2.Consolidated statement of comprehensive income



3 .Consolidated statement financial position

As at 31 December

Inmillion EUR Notes 2018 2017restated1 2017

AssetsNon-current assetsProperty,plantandequipment 6.16 708.0 752.8 710.3Intangibleassets 6.19 874.9 890.4 910.6Investmentsinassociates 6.22 251.2 329.2 329.2Investmentproperties 6.17 18.7 5.7 5.7Deferredtaxassets 6.14 31.5 31.4 31.5Tradeandotherreceivables 6.23 11.2 9.4 9.4

1,895.7 2,018.8 1,996.6Current assetsInventories 6.24 36.9 39.1 39.1Incometaxreceivable 6.14 5.7 1.6 1.6Tradeandotherreceivables 6.23 712.0 714.9 719.4Cashandcashequivalent 6.25 680.1 466.0 466.0

1,434.7 1,221.6 1,226.1Assetsheldforsale 6.18 14.7 0.6 0.6

Total assets 3,345.1 3,241.0 3,223.3

Equity and liabilitiesIssuedcapital 364.0 364.0 364.0Reserves 271.4 310.1 310.1Foreigncurrencytranslation 12.7 (11.5) (11.5)Retainedearnings 51.6 110.9 110.9

Equity attributable to equity holders of the Parent 699.7 773.5 773.5Equityattributabletonon-controllinginterests 2.5 4.3 4.3

Total equity 4 702.3 777.8 777.8Non-current liabilities Interest-bearingloansandborrowings 6.26 849.1 55.4 58.4Employeebenefits 6.27 308.4 326.9 326.9Tradeandotherpayables 6.28 17.5 45.2 45.2Provisions 6.29 22.6 38.1 24.2Deferredtaxliabilities 6.14 7.3 12.3 12.3

1,204.8 478.0 467.0Current liabilities Interest-bearingloansandborrowings 6.26 175.7 699.9 699.9Provisions 6.29 16.8 28.4 21.2Incometaxpayable 6.14 21.4 38.6 39.3Derivativeinstruments 6.30 0.8 0.0 0.0Tradeandotherpayables 6.28 1,212.5 1,218.4 1,218.2

1,427.3 1,985.3 1,978.5Liabilitiesdirectlyassociatedwithassetsheldforsale 6.18 10.8 0.0 0.0

Total liabilities 2,642.9 2,463.3 2,445.5

Total equity and liabilities 3,345.1 3,241.0 3,223.3

(1) RestatedinordertoshowcomparativeinformationfollowingthepurchasepriceallocationofRadial.



4 .Consolidated statement of changes in equity

AttributabletoequityholdersoftheparentNon-

control-ling

interests

Total equity

Inmillion EURAuthorized&issued

capital

Treasuryshares

Other reserves

Foreigncurrency

translation

Retainedearnings Total

As per 1 January 2017 364.0 0.0 274.2 2.5 135.5 776.3 3.1 779.3

Profitfortheyear2017 324.9 324.9 (2.0) 322.9

Othercomprehensiveincome 96.5 (14.0) (135.5) (53.0) (53.0)

Total comprehensive income 0.0 0.0 96.5 (14.0) 189.4 271.9 (2.0) 270.0

Dividends(Pay-out) (50.0) (212.0) (262.0) 0.0 (262.0)

Other (10.7) (2.0) (12.7) 3.2 (9.5)

as per 31 December 2017 364.0 0.0 310.1 (11.5) 110.9 773.5 4.3 777.8

As per 1 January 2018 364.0 0.0 310.1 (11.5) 110.9 773.5 4.3 777.8

ImpactofIFRS 9onbpostbank (59.9) (59.9) (59.9)

As per 1 January 2018 (Restated) 364.0 0.0 250.2 (11.5) 110.9 713.6 4.3 717.9

Profitfortheyear2018 264.8 264.8 (1.2) 263.6

Othercomprehensiveincome 76.1 24.2 (110.9) (10.7) (10.7)

Total comprehensive income 0.0 0.0 76.1 24.2 153.9 254.1 (1.2) 252.9

Dividends(Pay-out) (50.0) (212.0) (262.0) 0.0 (262.0)

Other (4.8) (1.2) (6.0) (0.5) (6.6)

As per 31 December 2018 364.0 0.0 271.4 12.7 51.6 699.7 2.5 702.3

OtherreservesperDecember 31,2018(EUR 272.2 million)arecomposedofgroupreservesamountingtoEUR 221.4 million,ofwhichEUR 172.8 milliondistributableretainedearningswithin

bpostNV/SA,andlegalreservesofEUR 50.8 million.

AtDecember 31,2018,theshareholdingofbpostisasfollows:

Number of shares Total TheBelgianState1 Freefloat

As per 1 January 2018 200,000,944 102,075,649 97,925,295

Changesduringtheyear - - -

As per 31 December 2018 200,000,944 102,075,649 97,925,295

Theshareshavenonominalvalueandarefullypaidup.

(1) DirectlyandviatheFederalHoldingandInvestmentCompany.



Distributions made and proposed:


Cash dividends on ordinary shares declared and paid:

Finaldividendfor2017:0.25 EURpershare(2016:0.25 EURpershare) 50.0 50.0

Interimdividendfor2018:1.06 EURpershare(2017:1.06 EURpershare) 212.0 212.0

262.0 262.0

Proposed dividends on ordinary shares

Finalcashdividendfor2018:1.31 EURpershare(2017:1.31 EURpershare) 262.0 262.0

Proposeddividendsonordinarysharesaresubjecttoapprovalattheannualgeneralmeetingandarenotrecognizedasaliabilityasat31 December.



As at 31 December


Operating activities

Profitbeforetax 1 381.0 488.7

Depreciationandamortization 177 .7 105.1

Impairmentonbaddebts 6.10 10 .5 3.3

Gainonsaleofproperty,plantandequipment 6.9 (30.0) (15.9)

Othernon-cashitems (4.2) (8.1)

Changeinemployeebenefitobligations 6.27 (12.8) (29.1)

Shareofprofitofassociates 6.22 (11.5) (9.6)

Dividendsreceived 6.22 4 .0 11.8

Incometaxpaid (126.1) (125.2)

Incometaxpaidonpreviousyears (11.8) (15.0)

Cash flow from operating activities before changes in working capital and provisions 376.8 405.9

Decrease/(increase)intradeandotherreceivables 14 .7 (91.1)

Decrease/(increase)ininventories 6.24 0 .3 (0.3)

Increase/(decrease)intradeandotherpayables (10.9) (48.3)

Increase/(decrease)incollectedproceedsduetoclients 9 .7 15.0

Increase/(decrease)inprovisions (28.6) (15.2)

Net cash from operating activities 362.0 266.1

Investing activities

Proceedsfromsaleofproperty,plantandequipment 55.6 24.0

Acquisitionofproperty,plantandequipment 6.16 (88.9) (96.7)

Acquisitionofintangibleassets 6.19 (26.5) (24.7)

Acquisitionofotherinvestments 0 .5 12.0

Acquisitionofsubsidiaries,netofcashacquired 6.6 (61.4) (666.6)

Net cash used in investing activities (120.8) (751.9)

5 .Consolidated statement of cash flows



As at 31 December


Financing activities

Proceedsfromborrowingsandfinancingleaseliabilities 994 .0 692.5

Paymentsrelatedtoborrowingsandfinancingleaseliabilities (739.7) (13.7)

Paymentsforderivativeinstruments (21.5) 0.0

Transactionswithminorities (0.3) 0.0

Interimdividendpaidtoshareholders 4 (212.0) (212.0)

Dividendspaid 4 (50.0) (50.0)

Net cash from financing activities (29.5) 416.8

Net increase in cash and cash equivalents 211.7 (68.9)

Net foreign exchange difference 2.5 (3.9)

Cashandcashequivalentlessbankoverdraftasof1st January 6.25 466.0 538.9

Cashandcashequivalentlessbankoverdraftasof31st December 6.25 680.1 466.0

Movements between 1st January and 31st December 214.1 (72.9)



6.Notes to the consolidated financial statements

6.1GeneralinformationBusiness activitiesbpostNV/SAanditssubsidiaries(hereinafterreferredtoas‘bpost’)providenationalandinternationalmailandparcelsservicescomprisingthecollection,transport,sortinganddistributionofaddressedandnon-addressedmail,printeddocuments,newspapersandparcels.

bpostNV/SA,throughitssubsidiariesandbusinessunits,alsosellsarangeofotherproductsandservices,includingpostal,parcels,bankingandfinancialproducts,e-commercelogistics,expressdeliveryservices,proximityandconvenienceservices,documentmanagementandrelatedactivities.bpostalsocarriesoutServicesofGeneralEconomicInterest(SGEI)onbehalfoftheBelgianState.

Legal statusbpostNV/SAisalimitedliabilitycompanyunderpubliclaw.bposthasitsregisteredofficeatMuntcentrum-CentreMonnaie,1000Brussels.bpostsharesarelistedontheNYSE-EuronextBrusselssinceJune 21,2013(sharetickerBPOST).

6.2BasisofpreparationTheconsolidatedfinancialstatementsofbposthavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS),asadoptedforusebytheEU.AllstandardsandinterpretationsissuedbytheInternationalAccountingStandardsBoard(IASB)andtheInternationalFinancialReportingInterpretationsCommittee(IFRIC)effectiveyear-end2018andadoptedbytheEuropeanUnionareappliedbybpost.

TheconsolidatedfinancialstatementsarepresentedinEuro(EUR),allvaluesareroundedtothenearestmillionexceptwhenotherwiseindicated.Theconsolidatedfinancialstatementsarepreparedunderthehistoricalcostconvention,exceptforthemeasurementatfairvalueofthebondportfolioofbpostbankwhichisclassifiedonthebalancesheetofbpostbankasHoldtoCollectfinancialassets.ThefinancialstatementswereauthorizedforissuebytheBoardofDirectorsonMarch 19,2019.

TheaccountingpoliciesadoptedareconsistentwiththoseofthepreviousfinancialyearexceptfortheadoptionofnewstandardsandinterpretationseffectiveasfromJanuary 1,2018.

bpostappliedIFRS 15RevenuefromContractswithCustomersandIFRS 9FinancialInstrumentsforthe

firsttime.Thenatureandeffectofthechangesasaresultofadoptionofthesenewaccountingstandardsaredescribedhereunder.

Apart from IFRS 9andIFRS 15,thefollowingnewstandardsandamendments,enteredintoforceasfromJanuary 1,2018,don’thaveanyeffectonthepresentation,thefinancialperformanceorpositionofbpost:

• IFRS 2 – Amendments–ClassificationandMeasurementofShare-basedPaymentTransactions

• IAS 40 – Amendments–TransfersofInvestmentProperty

• IFRS 4 – Amendments–ApplyingIFRS 9FinancialinstrumentswithIFRS 4

• IFRIC 22 -ForeignCurrencyTransactionsandAdvanceConsideration

• Annual Improvements Cycle 2014-2016

In2017IAS 18Revenuewasappliedbybpost.AsofJanuary 1,2018,theaccountingofrevenuesdescribedbyIAS 18wasreplacedbyIFRS 15-RevenuefromContractswithCustomers.UnderIFRS 15,revenueisrecognizedatanamountthatreflectstheconsiderationtowhichanentityexpectstobeentitledinexchangefortransferringgoodsorservicestoacustomer.IFRS 15establishesafive-stepmodeltoaccountforrevenuearisingfromcontractswithcustomers:theperformanceobligation(s)ofeachcontractneedstobeassignedwithatransactionpriceandrevenueisonlyrecognizedwhentheentitysatisfiestheperformanceobligation(s)ofthecontract.

bpostperformedanassessmentofIFRS 15byanalyzingtheproductsandservicesrenderedtoitscustomers.bpostisinthebusinessofdistributingmailandparcelsdomesticallyandabroadaswellastherenderingofadditionalsourcesofrevenue,includingvalueaddedservices,retailandbankingservicesandfinancialproducts.Productsandservicescaneitherbesoldontheirowninseparateidentifiedcontractsortogetherasabundledpackagewhichcan’tbedistinct.Inconclusionandaftercarefulinvestigationofallproductsandservicesprovidedtoitscustomers,bpostmeasurednoimpactontheresultsof2017or2018regardingtheapplicationoftheIFRS 15requirements:

• Iflowerpricesaregrantedonabundleofservices,thevariousservicesinthecontractaredecreasedatanequalproportionaterate,whichisinlinewithIFRS 15.

• Regardingtheperformanceobligation,whereadistinctionneedstobemadeonwhetherbpostactsasanagentorprincipal,bpostcancontinuetorecognizeandaccountrevenuesinthesamewayasbefore2018asitisinlinewithIFRS 15.

• Eachperformanceobligationinthecontracthasatransactionprice,whichinsomecasescanbevariable(discounts,penalties,etc.).Inlinewith



IAS39measurementcategory IFRS 9 measurementcategory

FairvaluethroughOCI

In million EUR Carryingamount

Fairvaluethrough

profitorloss

Amortizedcost

Financial assets (cash and receivables)

CashandCashequivalents 466.0 466.0

Tradeandotherreceivables 724.3 724.3

Total financial assets (cash and receivables) 1,190.3 1,190.3

Therearenochangesinclassificationandmeasurementofbpost’sfinancialliabilities.

IFRS 15bpostalreadyperformsanestimationofthevariableconsiderationatcontractinception.

• Furthermoretherevenuerecognitiondidn’tchangeeitherasmostoftherevenuesarerecognizedatapointintime(i.e.whentheservicehasbeenrendered).

bpostadoptedIFRS 15usingthemodifiedretrospectivemethodofadoptionwiththedateofinitialapplicationJanuary 1,2018.Asaresultofthemodifiedretrospectivemethod,2017figuresarepresentedinaccordancewithIAS 18.Iftherewouldhavebeenanyimpacton2017results,theimpactofIFRS 15atthedateofinitialapplicationofJanuary 1,2018wouldhavebeenrecognizedasanadjustmenttotheopeningbalanceofretainedearnings.

AsofJanuary 1,2018,IAS 39FinancialInstruments:RecognitionandMeasurementwasreplacedbyIFRS 9FinancialInstruments.bpostappliedIFRS 9usingthemodifiedretrospectivemethodasofJanuary 1,2018withoutrestatingthecomparatives,2017figuresarepresentedinaccordancewithIAS 39.IFRS 9bringstogetherallthreeaspectsoftheaccountingforfinancialinstrumentsproject:(a)classification

andmeasurement,(b)impairmentand(c)hedgeaccounting.ThemainimpactofIFRS 9relatestobpost’sinvestmentof50%inbpostbankwhosestatementoffinancialpositionismainlycomposedoffinancialinstruments.

TheimpactofIFRS 9 hasbeenassessedasfollows:

(a) Classification & Measurement:classificationandmeasurementoffinancialassetsunderIFRS 9dependsonthespecificbusinessmodelinplaceandtheasset’scontractualcashflowcharacteristics.Thenewrequirementshavenoimpactforthefinancialassetsofbpost.HoweverbpostbankatthetransitiontoIFRS 9reclassifiedamajorpartofitsbondportfoliofromIAS 39available-for-salecategorytoIFRS 9amortisedcostcategory.Thisresultedinadecreaseofbpostbank’sequitybyEUR 119.8 millionandconsequentlybpost’sinvestmentinassociatesandtherelatingreservesdecreasedby50%ofthisamountsoEUR 59.9 milliononthetransitiondatetoIFRS 9.

InsummaryimpactupontheadaptionofIFRS 9onfinancialassets(cashandreceivables)asperJanuary 1,2018:

(b) Impairment: IFRS 9requiresrecognizingexpectedcreditlossesonallofdebtinstruments,eitherona12-monthorlifetimebasis.Theimpactonbpost’stradereceivableswasnotsignificant.OntheotherhandbpostbankwillapplythegeneralapproachthustheIFRS 9stagingwhichwillreplacetheIAS 39incurredbutnotreported(IBNR)provisions,howevertheimpactwasnotsignificant(EUR 0.2 million).

(c) Hedge accounting: bposthasverylimitedhedgeaccountingtransactionsbuthasdecidedtocontinueapplyingIAS 39hedgeaccountingbecausebpostbankwillcontinuetoapplyIAS39hedgeaccountinguntilthemacro-hedgeprojectisfinalizedbytheIASB.



bposthasnotearlyadoptedanyotherstandard,interpretation,oramendmentthatwasissuedbutisnotyeteffective.

6.3Significantaccountingjudgmentsandestimates

AseriesofsignificantaccountingjudgmentsunderliethepreparationofIFRScompliantconsolidatedfinancialstatements.Theyimpactthevalueofassetsandliabilities.Estimatesandassumptionsaremadeconcerningthefuture.Theyarere-assessedonacontinuousbasisandarebasedonhistoricallyestablishedpatternsandexpectationswithregardstofutureeventsthatappearreasonableundertheexistingcircumstances.

Employee benefits - IAS 19Thekeyassumptions,inherenttothevaluationofemployeebenefitliabilitiesandthedeterminationofthepensioncost,includeemployeeturnover,acceptancerate,mortalityrates,retirementages,discountrates,benefitincreasesandfuturewageincreases,whichareupdatedonanannualbasis.Eachyearthereferencedatabaseisenrichedwithoneadditionalyearofhistoricaldatamakingthedatabaseevermorestableandreliable.Actualcircumstancesmayvaryfromtheseassumptions,givingrisetodifferentemployeebenefitliabilities,whichwouldbereflectedasanadditionalprofitorcostintheIncomeStatementorintheothercomprehensiveincomedependingonthetypeofthebenefit.

IFRS 16willreplaceIAS 17Leases,IFRIC 4DeterminingwhetheranArrangementcontainsaLease,SIC-15OperatingLeases-IncentivesandSIC-27EvaluatingtheSubstanceofTransactionsInvolvingtheLegalFormofaLease.IFRS 16setsouttheprinciplesfortherecognition,measurement,presentationanddisclosureofleasesandrequireslesseestoaccountforallleasesunderasingleon-balancesheetmodelsimilartotheaccountingforfinanceleasesunderIAS 17.IFRS 16willbeeffectiveforannualperiodsbeginningonorafter1 January 2019.bpostwilltransitiontoIFRS 16inaccordancewiththemodifiedretrospectiveapproachwithcalculationfromtransitiondate,henceprioryearfigureswillnotbeadjusted.TheanalysisoninitialapplicationperformedbybpostshowedthatIFRS 16 hasamaterialeffectontheconsolidatedstatementoffinancialpositiongiventhefleetandbuildingcommitmentsfortheBelgiancompaniesandthebuildingcommitmentsfortheforeignentities.Asof2019assetswillberecognisedfortherightofusereceivedandliabilitieswillberecognisedforthepaymentobligationenteredintoforalloftheseleases.bpostwillmakeuseofthereliefoptionsprovidedforlow-valueassetsandshort-termleases.TheimpactoftheanalysisledtotherecognitionofaleaseliabilityandarightofuseassetofEUR 417.8 millionperJanuary 1,2019.Contrarytothecurrentpresentationofoperatingleases,depreciationchargesonrightofuseassetsandinterestexpensefromunwindingofthediscountoftheleaseliabilitieswillberecognised,whichwillimprovetheEBITDAastheoperatingleaseexpenseisnolongerincluded.FurthermoreIFRS 16alsoprovidesnewguidanceonthetreatmentofsalesandleasebacktransactions.Theseller/lesseerecognisesarightofuseassetfortheleaseretainedandaccordinglyonlyaproportionalamountofthegainorlossfromthesalecanberecognised.

Standardorinterpretation Effectiveforinreportingperiodsstartingonorafter

IFRS 16–Leases 1 January 2019

IFRIC Interpretation 23-UncertaintyoverIncomeTaxTreatments 1 January 2019

IFRS 9–Amendments-PrepaymentFeatureswithNegativeCompensation 1 January 2019

IAS 28–Amendments-Long-termInterestsinAssociatesandJointVentures 1 January 2019

IAS 19–Amendments-PlanAmendment,CurtailmentorSettlement 1 January 2019

AnnualImprovementsCycle–2015–20171 1 January 2019

IFRS 17-InsuranceContracts1 1 January 2021

(1) NotyetendorsedbytheEUasperdateofthisreport.

Standards and Interpretations issued but not yet applied by bpostThefollowingnewIFRSStandardsandIFRICInterpretations,issuedbutnotyeteffectiveorwhichareyettobecomemandatory,havenotbeenappliedbybpostforthepreparationofitsconsolidatedfinancialstatements.



(1) TheTowersWatsonRATE:linktoolisatooldesignedtoassistcompaniesintheselectionofdiscountratesthataccuratelyreflectthecharacteristicsof their pension schemes.

ThemortalitytablesusedaretheBelgianMortalitytablesMR(formen)andFR(forwomen)withanageadjustmentoftwoyears.bpostdecidedtoreflectthemortalityimprovementsbyadoptinganagecorrectionoftwoyearstotheofficialtables,forbothactiveandinactiveemployees.

RegardingtheAccumulatedCompensatedAbsencesbenefit,theconsumptionpatternoftheillnessdaysisderivedfromthestatisticsoftheconsumptionaverageoveramobileaverageof3 years(years2016to2018forDecember 2018).Thenumberofdaysofillnessdependsontheage,identifiedpersegmentoftherelevantpopulation.Therateofguaranteedsalaryissetat75%incaseoflong-termillness.Thus,thepercentageoftheguaranteedsalaryusedfordeterminingthecostofdaysaccumulatedinthenotionalaccountis25%.Thebalanceofthecumulatedun-usedsicknessdaysforcivilservantsislimitedtoamaximumof63 days.

Bylaw,definedcontributionpensionplansinBelgiumaresubjecttominimumguaranteedratesofreturn.Hence,thoseplansclassifyasdefinedbenefitplanswhichwouldrequirethattheProjectedUnitCreditmethodisappliedinordertomeasurethebenefitobligations.Althoughthereisstillnofullclarityontheapproach,newlegislationdatedDecember 2015broughtmoreclarificationontheminimumguaranteedreturn.TheuncertaintywithrespecttothefutureevolutionoftheminimumguaranteedratesofreturninBelgiumhasbeenremovedwiththechangeintheWAP/LPClawendofDecember 2015.Asfrom2016,theminimumreturnforfuturecontributionsisequaltotheaverageofthepast24 monthsreturnon10-yearlinearbonds,withaminimumof1.75%p.a.bpostcontinuedtoapplytheso-calledPUCmethodology(ProjectedUnitCredit),howeverasof2018withoutprojectionoffuturecontributionsastheplansarenotbackloadedandwithapplicationofparagraph115ofIAS 19.

Thefinancingmethodologyoffamilyallowancesforcivilservantschangedfollowingalawchange(lawof19 December 2014).Asaconsequence,bpostasapublicinstitutionpaysacontributionthatisdefinedbyaprogrammelaw.Theamountisadaptedeachyearproportionallytothenumberofcivilservants(fulltimeequivalents)andissubjecttoinflation.

Formostbenefits,anaveragecostperinactivememberisusedforthevaluationofthebenefits.Thisaveragecosthasbeenestimatedbydividingtheannualcostforinactivemembersbythenumberofinactivebeneficiariesbasedonthereferencedatareceivedfromthepensions’administration.

Thediscountrateshavebeendeterminedbyreferencetomarketyieldsatthestatementoffinancialpositiondate.bpostusedtheTowersWatsonRATE:link1 tool for thedeterminationofthediscountrates,consideringamixoffinancialandnon-financialAAcorporatebonds.

Fair value adjustments for business combinations

InaccordancewithIFRS 3Businesscombinations,theidentifiableassetsacquiredandthecontingentconsiderationsarevaluedatfairvalueattheacquisitiondateaspartofthebusinesscombination.Fairvalueadjustmentsfortheassetsarebasedonexternalappraisalsorvaluationmodels.Whenthecontingentconsiderationmeetsthedefinitionofaliability,itissubsequentlyre-measuredtofairvalueateachreportingdate.Thedeterminationofthefairvalueisbasedondiscountedcashflows.Thekeyassumptionstakeintoconsiderationtheprobabilityofmeetingeachperformancetargetandthediscountfactor.

Deferred revenue and revenue related accruals

bpostrecognizesadvancecustomerpaymentsonitsbalancesheet,predominantlyrelatedtostampsandcreditsonfrankingmachinesoldbutnotyetusedbycustomersatbalancesheetdate.bpostusesamodelbaseduponhistoricaldataofconsumptionpatternsforthevaluationofthisdeferredrevenue.Furthermorebposthandlesandshipsinternationalmailandparcelstoandfromotherforeignpostaloperators.Atbalancesheetdatethebestestimateoftheoutstandingpositionisreflectedintheconsolidatedstatementoffinancialposition,howeverasthefinalsettlementsarebasedupondifferentassumptions(amongwhich“itemsperkilo”)finalsettlementsmightdeviatefromthe initial assessment.

Income taxes and deferred taxes

bpostissubjecttoincometaxesinanumberofjurisdictions.Deferredtaxesarecalculatedatthelevelofeachfiscalentity.bpostrecognizesdeferredtaxassetstotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized.Inordertodeterminethis,bpostusesestimatesoftaxableincomebyjurisdictioninwhichbpostoperatesandtheperiodoverwhichdeferredtaxassetsarerecoverable.Thesameprinciplesapplytotherecognitionofdeferredtaxassetsforunusedtaxlossescarriedforward.



Allassociatesareaccountedforusingtheequitymethod:theparticipatinginterestsareseparatelyincludedintheconsolidatedstatementoffinancialposition(underthecaption“Investmentsinassociates”)attheclosingdateatanamountcorrespondingtotheproportionoftheassociate’sequity(asrestatedunderIFRS),includingtheresultfortheperiod.Dividendsreceivedfromaninvesteereducethecarryingamountoftheinvestment.

The portion of the result of associates attributable tobpostisincludedseparatelyintheconsolidatedincomestatementunderthecaption“Shareofresultofassociates(equitymethod)”.

Unrealizedprofitsandlossesresultingfromtransactionsbetweenaninvestor(oritsconsolidatedsubsidiaries)andassociatesareeliminatedtotheextentoftheinvestor’sinterestintheassociate.

bpostbankisanassociateandisaccountedforusingtheequitymethodasbposthassignificantinfluencebutdoesnotcontrolthemanagementofthiscompany.

Partofthebondportfolioofbpostbankisclassifiedonthebalancesheetofbpostbankas“HoldtoCollectfinancialassets”andpartas”HoldtoCollect&Sellfinancialassets”.Thebondsinclude:

• Fixedincomesecurities(bonds,negotiabledebtinstruments,sovereignloansintheformofsecurities,etc.);

• Variableincomesecurities; • Fixedand/orvariableincomesecuritiescontainingembeddedderivatives(whichareaccountedforseparatelyifnecessary).

Securitiesclassifiedin“HoldtoCollectfinancialassets”aremeasuredatfairvalueandchangesinfairvaluearerecordedinothercomprehensiveincomeunderaspecificheading“Unrealizedordeferredgainsorlosses.”Securitiesclassifiedin“HoldtoCollect&Sellfinancialassets”aremeasuredatAmortisedCost.

Forfixedincomesecurities,interestisrecognizedintheIncomeStatementusingtheeffectiveinterestratemethod.Forvariableincomesecurities,revenuesarerecordedinprofitorlossassoonastheshareholdersgeneralmeetingconfirmsthedistributionofadividend.

Goodwill and negative acquisition differencesWhenanentityisacquired,thedifferencerecordedonthedateofacquisitionbetweentheacquisitioncostoftheinvestmentandthefairvalueoftheidentifiableassets,liabilitiesandcontingentliabilitiesacquiredisaccountedforasgoodwill(ifthedifferenceispositive)ordirectlyasaprofitintheIncomeStatement(ifthedifferenceisnegative).

Acontingentconsideration,ifany,ismeasuredatfairvalueatthetimeofthebusinesscombinationandincludedintheconsiderationtransferred(i.e.recognizedwithingoodwill).Iftheamountofcontingentconsiderationchangesasaresultofapost-acquisitionevent(suchasmeetinganearningstarget),thechangeinfairvalueisrecognizedinprofitorloss.

Goodwillisnotamortized,butistestedforimpairmentannually.

6.4Summaryofsignificantaccountingpolicies

Allaccountingestimatesandassumptionsthatareusedinpreparingthefinancialstatementsareconsistentwithbpost’slatestapprovedbudget/long-termplanprojections,whereapplicable.Judgmentsarebasedontheinformationavailableoneachstatementoffinancialpositiondate.Althoughtheseestimatesarebasedonthebestinformationavailabletothemanagement,actualresultsmayultimatelydifferfromthose estimates.

Consolidation

Theparentcompanyandallthesubsidiariesitcontrolsareincludedintheconsolidation.Noexceptionispermitted.

Subsidiaries

Assetsandliabilities,rightsandcommitments,incomeandchargesoftheparentandthesubsidiariesfullycontrolledareconsolidatedinfull.Aninvestorcontrolsaninvesteewhentheinvestorisexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvesteeandhastheabilitytoaffectthosereturnsthroughitspowerovertheinvestee.

Controlisassumedtoexistwhenbpostholdsatleast50%,plusoneshareoftheentity’svotingpower;theseassumptionsmayberebuttedifthereisclearevidencetothecontrary.Theexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhetherbpostcontrolsanentity.

Consolidationofasubsidiarytakesplacefromthedateofacquisition,whichisthedateonwhichcontrolofthenetassetsandoperationsoftheacquireeiseffectivelytransferredtotheacquirer.Fromthedateofacquisition,theparent(theacquirer)incorporatesintotheconsolidatedincomestatementthefinancialperformanceoftheacquireeandrecognizesintheconsolidatedstatementoffinancialpositiontheacquiredassetsandliabilities(atfairvalue),includinganygoodwillarisingontheacquisition.Subsidiariesarede-consolidatedfromthedateonwhichcontrolceases.Intragroupbalancesandtransactions,aswellasunrealizedgainsandlossesontransactionsbetweengroupcompaniesareeliminatedinfull.

Consolidatedfinancialstatementsarepreparedusinguniformaccountingpoliciesforliketransactionsandothereventsinsimilarcircumstances.

AssociatesAnassociateisanentityinwhichbposthassignificantinfluence,butwhichisneitherasubsidiarynorajointventure.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutnottocontrolthosepolicies.Itisassumedtoexistwhenbpostholdsatleast20%oftheinvestee’svotingpowerbutnottoexistwhenlessthan20%isheld;theseassumptionsmayberebuttedifthereisclearevidencetothecontrary.

Consistentaccountingpoliciesareappliedwithinthewholegroup,includingassociates.



Borrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofanassetthatnecessarilytakesasubstantialperiodoftimetogetreadyforitsintendeduseorsalearecapitalizedaspart of the cost of the asset.

Thedepreciableamountisallocatedonasystematicbasisovertheusefullifeoftheasset,usingthestraight-linemethod.Thedepreciableamountistheacquisitioncost,exceptforvehicles.Forvehicles,itistheacquisitioncostlesstheresidualvalueoftheassetattheendofitsusefullife.Theapplicableusefullivesare:

Property,plantandequipment Useful life

Land N/A

Centraladministrativebuildings 40 years

Networkbuildings 40 years

Industrialbuildings,sortingcenters 25 years

Fitting-outworkstobuildings 10 years

Tractorsandforklifts 10 years

Bikesandmotorcycles 4 years

Allothervehicles(cars,trucks,etc,) 5 years

Machines 5-10 years

Furniture 10 years

Computerequipment 4-5 years

Lease transactionsAfinancelease,whichtransferssubstantiallyalltherisksandrewardsincidenttoownershiptothelessee,isrecognizedasanassetandaliabilityatamountsequaltothepresentvalueoftheminimumleasepayments(=sumofcapitalandinterestportionsincludedintheleasepayments)or,iflower,thefairvalueoftheleasedassets.Leasepaymentsareapportionedbetweenthefinancechargeandthereductionoftheoutstandingliabilityinordertoobtainaconstantrateofinterestonthedebtovertheleaseterm.Thedepreciationpolicyforleasedassetsisconsistentwiththatforsimilarassetsowned.

Rentalspaid/receivedunderoperatinglease(onesthatdonottransfersubstantiallyalltherisksandrewardsincidentaltoownershipofanasset)arerecognizedasanexpensebythelesseeandasanincomebythelessoronastraight-linebasisovertheleaseterm.

Investment propertiesInvestmentpropertymainlyrelatestoapartmentslocatedinbuildingsusedaspostoffices.

Investmentpropertiesarecarriedatacquisitioncostlessanyaccumulateddepreciationandlessanyimpairmentloss.Thedepreciationamountisallocated

Intangible assetsAnintangibleassetisrecognizedontheconsolidatedstatementoffinancialpositionwhenthefollowingconditionsaremet:

(i) theassetisidentifiable,i.e.eitherseparable(ifitcanbesold,transferred,licensed)oritresultsfromcontractualorlegalrights;

(ii) itisprobablethattheexpectedfutureeconomicbenefitsthatareattributabletotheassetwillflowtobpost;

(iii)bpostcancontroltheresource;and

(iv)thecostoftheassetcanbemeasuredreliably.

Intangiblefixedassetsarecarriedatacquisitioncost(includingthecostsdirectlyattributabletothetransaction,butnotindirectoverheads)lessanyaccumulatedamortizationandlessanyaccumulatedimpairmentloss.TheexpensesinrelationtotheresearchphasearechargedtotheIncomeStatement.Theexpensesinrelationtothedevelopmentphasearecapitalized.Withinbpost,internallygeneratedintangibleassetsrepresentmainlyITprojects.

Intangibleassetswithfinitelivesareamortizedonasystematicbasisovertheirusefullife,usingthestraight-linemethod.Theapplicableusefullivesare:

Intangibleassets Useful life

Patent1 12 years

Know-how1 5 years

Pointsofsalenetwork(replacement costs)1 20 years

ITdevelopmentcosts 5 yearsmaximum

Licensesforminorsoftware 3 yearsmaximum

Tradenames/brandnames1 Between5 yearsandindefinite

Customerrelationships1 Between5and20 years

Intangiblefixedassetswithindefiniteusefullivesarenotamortizedbutaretestedforimpairmentannually.Forbpostthatisthecaseforgoodwillandtradenames.

Property, plant and equipmentProperty,plantandequipmentarecarriedatacquisitioncost,lessanyaccumulateddepreciationandlessanyaccumulatedimpairmentloss.Costincludesanydirectlyattributablecostofbringingtheassettoworkingconditionforitsintendeduse.

ExpenditureonrepairandmaintenancewhichserveonlytomaintainbutnottoincreasethevalueoffixedassetsarechargedtotheIncomeStatement.However,expendituresonmajorrepairandmajormaintenance,whichincreasethefutureeconomicbenefitsthatwillbegeneratedbythefixedasset,areidentifiedasaseparateelementoftheacquisitioncost.

(1) Usefullifecanbedifferentcasepercaseanddependsontheassessmentdoneatthetimeofthepurchasepriceallocation



impairmentwasrecordedceasetoexist,andsolelytotheextentthatthecarryingamountoftheassetdoesnotexceedtheamountthatwouldhavebeenobtained,afterdepreciation,hadnoimpairmentbeenrecorded.

InventoriesInventoriesaremeasuredatthelowerofcostandnetrealizablevalueatthestatementoffinancialpositiondate.

TheacquisitionpriceofinterchangeableinventoriesisdeterminedbyapplicationoftheFIFOmethod.Inventoriesofminorimportancewhosevalueandcompositionremainstableovertimearestatedinthestatementoffinancialpositionatafixedvalue.

Thecostofinventoriesfinishedproductscomprisesallcostsincurredinbringinginventoriestotheirpresentlocationandcondition,includingindirectproductioncosts.Inparticular,thecostpriceofstampsincludesthedirectandindirectcostsofproduction,excludingcostsofborrowingandoverheadsthatdonotcontributetobringingthemtothepresentlocationandcondition.Theallocationoffixedcostsofproductiontothecostpriceisbasedonnormalproductioncapacity.

Awrite-downisnecessarywhenthenetrealizablevalueatthestatementoffinancialpositiondateislowerthanthecost.

Revenue recognitionbpost’snormalbusinessoperationsconsistofthedeliveryofnationalandinternationalmailandparcelsservicescomprisingthecollection,transport,sortinganddistributionofaddressedandnon-addressedmail,printeddocuments,newspapersandparcels.Furthermorebpostalsosellsarangeofotherproductsandservices,includingpostal,parcels,bankingandfinancialproducts,e-commercelogistics,expressdeliveryservices,proximityandconvenienceservices,documentmanagementandrelatedactivities.bpostalsocarriesoutServicesofGeneralEconomicInterest(SGEI)onbehalfoftheBelgianState.Allincomerelatedtonormalbusinessoperationsisrecognizedasrevenueintheincomestatement.Allotherincomeisreportedasotheroperatingincome.

Revenueisrecognizedwhentheperformanceobligation(thepromisetotransferagoodorservicetoacustomer)issatisfiedatapointintime.Thisiswhenthecontrolofthesegoodsorservicesaretransferredtothecustomer,ingeneralonthedeliveryofmail,parcelsoranyotherserviceorgood,atanamountthatreflectstheconsiderationtowhichbpostexpectstobeentitledinexchangeforthosegoodsorservices.

bpostgenerallyconsidersthatitistheprincipalinitsrevenuearrangements,exceptforpressdistribution,fulfilmentservices(consistingoffollowingperformanceobligations:receiving,storing,pickingandpackingandreturningactivitiesforgoods),commissionforbpostbankproductsandallothercommissionsreceivedwherebpostactsasagentandonlynetamountexpected(feeorcommission)isrecognized.

bposthasdifferentpricinggridsfordifferentproducts,providinganinstantadvantagetocustomers.Somecontractsforeseevolumerebatesoncethequantity

onasystematicbasisovertheusefullifeoftheasset,usingthestraight-linemethod.Theapplicableusefullivescanbefoundinthetablethatisincludedinsection“Property,plantandequipment”.

Assets held for saleNon-currentassetsareclassifiedasassetsheldforsaleunderaseparateheadinginthestatementoffinancialpositioniftheircarryingamountisrecoveredprincipallythroughsaleratherthanthroughcontinuinguse.Thisisdemonstratedifcertainstrictcriteriaaremet(activeprogramtolocateabuyerhasbeeninitiated,propertyisavailableforimmediatesaleinitspresentcondition,saleishighlyprobableandisexpectedtooccurwithinoneyearfromthedateofclassification).

Non-currentassetsheldforsalearenolongerdepreciatedbutmaybeimpaired.Theyarestatedatthelowerofcarryingamountandfairvaluelesscoststo sell.

Stamp collectionThestampcollectionthatisownedbybpostanduseddurablybyitisstatedatthere-evaluatedamountlessdiscountforthelackofliquidity.Therevaluedamountsaredeterminedperiodicallyonthebasisofmarketprices.bpostproceedstothereevaluationofitscollectioneveryfiveyears.Thestampcollectionisrecordedinthecaption“OtherProperty,PlantandEquipment”ofthestatementoffinancialposition.

Impairment of assetsAnimpairmentlossisrecognizedwhenthecarryingamountofanassetexceedsitsrecoverableamount,whichisthehigherofitsfairvaluelesscostsofdisposal(correspondingtothecashthatbpostcanrecoverthroughsale)anditsvalueinuse(correspondingtothecashthatbpostcanrecoverifitcontinues to use the asset).

Whenpossible,thetestshavebeenperformedonindividualassets.Whenhoweveritisdeterminedthatassetsdonotgenerateindependentcashflows,thetestisperformedatthelevelofthecash-generatingunit(CGU)towhichtheassetbelongs(CGU=thesmallestidentifiablegroupofassetsthatgenerateinflowsthatarelargelyindependentfromthecashflowsfromotherCGUs).

Animpairmenttestiscarriedoutannuallyforgoodwill.ForaCGUtowhichnogoodwillisallocated,impairmenttestisonlycarriedoutwhenthereisanindicationofimpairment.Forthepurposeofimpairmenttesting,goodwillacquiredinabusinesscombinationis,fromtheacquisitiondate,allocatedtogroupsofcash-generatingunits,thatareexpectedtobenefitfromthesynergiesofthecombination.

Whereanimpairmentisidentified,itisfirstallocatedtoreducethecarryingamountofanygoodwillallocatedtothegroupofCGU.AnyexcessisthenallocatedtoreducethecarryingamountofotherfixedassetsoftheCGUinproportiontotheirbookvalues,butsolelytotheextentthatthesellingpriceoftheassetsinquestionislowerthantheircarryingamount.

Impairmentongoodwillmayneverbereversedatalaterdate.Impairmentonotherfixedassetsisreversediftheinitialconditionsthatprevailedatthetimethe



thetradereceivabledoesnotcontainasignificantfinancingcomponentbpostoptedtoapplythesimplifiedapproachtocalculatetheexpectedcreditlossratewiththeuseofaprovisionmatrix,basedonthehistoricaldefaultratesadaptedforcurrentandforwardlookinginformation.

Prepaymentsandaccruedincomearealsopresentedunderthiscaption.

Investment securitiesFinancialassetsareassignedtothedifferentcategoriesoninitialrecognition,dependingonthecharacteristicsoftheinstrumentanditspurpose.Afinancialinstrument’scategoryisrelevantforthewayitismeasuredandwhetheranyresultingincomeandexpensesarerecognizedinprofitorlossordirectlyinequity.

Therearedifferentcategoriesoffinancialassets:

(1) Financialassetsheldfortradinginclude(a)derivativesand(b)assetsthatbposthasvoluntarilydecidedtoclassifyinthecategory“atfairvaluethroughprofitorloss”atthetimeofinitialrecognition.Thesefinancialassetsaremeasuredattheirfairvalueateachstatementoffinancialpositiondate,changesinfairvaluebeingrecognizedintheIncomeStatement.

(2) Held-to-maturityfinancialassetsarefinancialassets,otherthanderivatives,withfixedordeterminablepaymentsandfixedmaturitydates,whichbposthasthepositiveintentionandabilitytoholdtomaturity.Theseassetsaremeasuredatamortizedcostusingtheeffectiveinterestmethod.

(3) Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Afterinitialrecognitionthesearemeasuredatamortizedcostusingtheeffectiveinterestmethod.

(4) Available-for-salefinancialassetsconstitutearesidualcategorythatincludesallthefinancialassetsnotclassifiedunderoneofthepreviouscategories,forinstanceinvestmentsinequityinstruments(otherthansharesinsubsidiaries,jointlycontrolledentitiesandassociates),investmentsinopen-endedmutualfundsandbondsthatbposthasneithertheintentionnortheabilitytoholdtomaturity.Theseavailable-for-salefinancialassetsaremeasuredatfairvalue,withchangesinfairvaluerecognizeddirectlyinequityuntilthefinancialassetsarederecognized,atwhichtimethecumulativegainsorlossespreviouslyrecognizedinequityarerecycledinprofitorloss.

Regularwaypurchasesorsalesoffinancialassetsarerecognizedandde-recognizedusingsettlementdateaccounting.Thefairvaluesofthefinancialassetsaredeterminedbyreferencetopublishedpricequotationsinanactivemarket.

Cash and cash equivalentsThiscaptionincludescashinhand,atbank,valuesforcollection,short-terminvestments(withmaturitydatenotexceedingthreemonthsasfromacquisitiondate)thatarehighlyliquidandarereadilyconvertibleintoaknownamountofcashandthataresubjecttoaninsignificantriskofchangesinvalue.

ofproductsorservicespurchasedexceedscertainthresholdsforeseeninthecontracts,whichgiverisetoavariableconsideration.bposthasanestimateatcontractinceptionofthetargetoftheperformanceobligationandaccruesthediscountamountmonthly,basedontheexpectedvalueprinciple.

bpostprovidesservicesthatareeithersoldseparatelyorbundledtogether,everyperformanceobligationhasastand-alonesellingpriceperunit.Ifalowerpriceisgrantedonabundleofservices,thevariousservicesinthecontractaredecreasedatanequalproportionaterate.

TheremunerationoftheSGEIisbasedonthecontractualprovisionsofthemanagementcontractandtherevenueisrecognizedwhentheservicesarerendered.bpostalsoreceivescommissionsonsalesofpartnerproductsthroughitsnetwork.Commissionincomeisrecordedatthetimetheservicesareprovided.Foraminorityoftheservices,mainlythoseservicesforwhichtheconsiderationisasubscriptionortherentofbuildings,revenueisrecognizedoverthedurationofthecontract.

Therevenuerelativetothestampsaleandfrankingmachineactivityisrecognizedinincomeatthetimethemailisdelivered.Therefore,bposthassetuparevenuerecognitionmodeltorecognizethepredictedamountofrevenues,basedonhistoricdata.

Forthehandlingandshipmentofinternationalmailandparcelstoandfromotherforeignpostaloperatorscertainpenalties(e.g.qualityfortimelydelivery)giverisetovariableconsideration.Atbalancesheetdatethebestestimateoftheoutstandingpositionisreflectedintheconsolidatedstatementoffinancialpositionbasedontheexpectedvalueprinciple.

Radial,asubsidiaryofthegroup,earnsrevenueforitsomnichanneltechnologyandoperationseitherthrougharevenue-sharingmodel(chargesapercentageofclientmerchandise)orviaanactivity-basedmodel(e.g.customerservicecentercallsthatarebilledatarateperminuteorpercall,fulfillmentoperationsbilledatarateperfulfilledorder/item,etc.).IfRadialalsoperformsPayment,FraudandTax(PT&F)services,forpotentialpaymentsrelatedtothefraudservices,Radialrecognizesarefundliabilitybasedupontheexpectedvaluemethod.

bpostperformstheserviceofprocessingreturnedgoodsonbehalfofthesupplier,butbpostdoesnottakeonanyliabilityhencenoliabilityforreturnisbookedatbpost.

Interestincomeisrecognizedusingtheeffectiveyieldmethodandtherevenuerelatedtodividendsisrecognizedwhenthegroup’srighttoreceivethepaymentisestablished.

Rentalincomearisingfromoperatingleasesorinvestmentpropertiesisaccountedforonastraightlinebasisovertheleaseterm.

ReceivablesReceivablesareinitiallymeasuredattheirfairvalueandlaterattheiramortizedcost,i.e.thepresentvalueofthecashflowstobereceived(unlesstheimpactofdiscountingisnotsignificant).

bpostrecognizesonallofitstradereceivablesanallowanceforexpectedcreditlossesbasedonthelifetimeexpectedcreditlosses(ECL)model.As



takenintoaccountinvaluingthebenefitsgrantedandtheobligationspertainingthereto.Thediscountrateusedistheyieldofhigh-qualitycorporatebondsorisbasedongovernmentbondswithamaturitysimilartothatofthebenefitsbeingvalued.

Servicecostscomprisecurrentservicecosts,past-servicecosts,gainsandlossesoncurtailmentsandnon-routinesettlements.

Pastservicecostsresultingfromaplanamendmentorcurtailmentshouldberecognizedattheearlierofthedatewhen(1) theplanamendmentorcurtailmentoccurs;and(2) theentityrecognizesrelatedrestructuringcostsinaccordancewithIAS 37.PastservicecostsarerecognizedintheIncomeStatement.

Netinterestiscalculatedbyapplyingthediscountratetothenetdefinedbenefitliabilityorassets.NetinterestcostsarealsorecognizedintheIncomeStatement.

Theplanassetsrelatedtothepost-employmentbenefitsaremeasuredattheirfairvalueattheendoftheperiodinthesamedefinitionusedinIFRS 13.

Long-term benefitsLong-termemployeebenefitsarevaluedusinganactuarialvaluationmethodandprovisionsaresetupforthem(underdeductionofanyplanassets)insofarasbposthasanobligationtoincurthecostsinrelationtothesebenefits.Thisobligationcanbealegal,contractualorconstructiveobligation(“vestedrights”onthebasisofpastpractice).

Aprovisioniscreatedforlong-termbenefitstocoverbenefitsthatwillonlybepaidinanumberofyearsbutthatarealreadyearnedbytheemployeeonthebasisofthepastservice.Here,aswell,theprovisioniscalculatedaccordingtoanactuarialmethodimposedbyIAS 19.

Theprovisioniscalculatedasfollows:

Re-measurements,comprisingofactuarialgainsandlossesarerecognizedimmediatelythroughprofitorlossintheperiodinwhichtheyoccur.

Actuarialassumptions(concerningthediscountrate,mortalityfactor,costsoffuturebenefits,inflation,etc.)areusedtoassessemployeebenefitobligationsinconformitywithIAS 19.Actuarialgainsandlossesinevitablyappear,resulting(1) fromchangesintheactuarialassumptionsyearonyear,and(2) deviationsbetweenactualcostsandactuarialassumptionsusedfortheIAS 19valuation.TheseactuarialgainsandlossesarerecognizeddirectlyintheIncomeStatement.

Thecalculationoftheobligationisdoneusingtheprojectedunitcreditmethod.Eachyearofserviceconfersentitlementtoanadditionalcreditunittobetakenintoaccountinvaluingthebenefitsgrantedandtheobligationspertainingthereto.Thediscountrateusedistheyieldofhigh-qualitycorporatebondsoralternativelyisbasedongovernmentbondswithamaturitysimilartothatofthebenefitsbeingvalued.

ActuarialvaluationoftheobligationunderIAS 19

– Fairvalueoftheplanassets

= Provisiontobeconstituted (orassettoberecognisedifthefairvalueoftheplanassetsishigher)

Forthepurposeoftheconsolidatedstatementofcashflows,cashandcashequivalentsconsistofcashandshort-termdeposits,asdefinedabove,netofoutstandingbankoverdrafts.

Share capitalOrdinarysharesareclassifiedunderthecaption“issuedcapital”.

Treasurysharesaredeductedfromequity.MovementsoftreasurysharesdonotaffecttheIncomeStatement.

Otherreservescomprisetheresultsofthepreviousperiods,thelegalreserveandtheconsolidatedreserve.

RetainedearningsincludetheresultofthecurrentperiodasdisclosedintheIncomeStatement.

Employee benefitsShort-term benefitsShort-termbenefitsarerecognizedasanexpensewhenanemployeehasrenderedtheservicestobpost.Benefitsnotpaidforonthestatementoffinancialpositiondateareincludedunderthecaption“Payrollandsocialsecuritypayables”.

Post-employment benefitsPost-employmentbenefitsarevaluedusinganactuarialvaluationmethodandprovisionsaresetupforthem(underdeductionofanyplanassets)insofarasbposthasanobligationtoincurthecostsinrelationtothesebenefits.Thisobligationcanbealegal,contractualorconstructiveobligation(“vestedrights”onthebasisofpast practice).

Inapplicationoftheseprinciples,aprovision(calculatedaccordingtoanactuarialmethodlaiddowninIAS 19)issetupinthecontextofthepost-employmentbenefitstocover:

• thefuturecostsrelativetocurrentretirees(aprovisionrepresenting100%ofthefutureestimatedcostsofthoseretirees);

• thefuturecostsofpotentialretirees,estimatedonthebasisoftheemployeescurrentlyinservice,takingaccountoftheaccumulatedserviceoftheseemployeesoneachstatementoffinancialpositiondateandtheprobabilitythatthepersonnelwillreachthedesiredagetoobtainthebenefits(theprovisionisconstitutedprogressively,asandwhenmembersofthepersonneladvanceintheircareers).

Re-measurements,comprisingofactuarialgainsandlosses,arerecognizedimmediatelyinthestatementoffinancialpositionwithacorrespondingdebitorcredittoretainedearningsthroughOCIintheperiodinwhichtheyoccur.Re-measurementsarenotreclassifiedtoprofitorlossinsubsequentperiods.

Actuarialassumptions(concerningthediscountrate,mortalityfactor,costsoffuturebenefits,inflation,etc.)areusedtoassessemployeebenefitobligationsinconformitywithIAS 19.Actuarialgainsandlossesinevitablyappear,resulting(1)fromchangesintheactuarialassumptionsyearonyear,and(2)deviationsbetweenactualcostsandactuarialassumptionsusedfortheIAS 19valuation.

Thecalculationoftheobligationisdoneusingtheprojectedunitcreditmethod.Eachyearofserviceconfersentitlementtoanadditionalcreditunittobe



Servicecostscomprisecurrentservicecosts,past-servicecosts,gainsandlossesoncurtailmentsandnon-routinesettlements.

Pastservicecostsresultingfromaplanamendmentorcurtailmentshouldberecognizedattheearlierofthedatewhen(1)theplanamendmentorcurtailmentoccurs;and(2)theentityrecognizesrelatedrestructuringcostsinaccordancewithIAS 37.PastservicecostsarerecognizedintheIncomeStatement.

Netinterestiscalculatedbyapplyingthediscountratetothenetdefinedbenefitliabilityorassets.NetinterestcostsarerecognizedintheIncomeStatement.

Termination benefitsWherebpostterminatesthecontractofamemberofitspersonnelpriortohisnormalretirementdateorwhereanofferofbenefitsismadeinreturnfortheterminationofemploymentthatcannolongerbewithdrawn,aprovisionisconstitutedinsofarasthereisanobligationonbpost.

ProvisionsAprovisionisrecognizedonlywhen:

(1) bposthasapresent(legalorconstructive)obligationasaresultofpastevents;

(2) itisprobable(morelikelythannot)thatanoutflowofresourceswillberequiredtosettletheobligation;and

(3) areliableestimateoftheamountoftheobligationcanbemade.

Wheretheimpactislikelytobematerial(mainlyforlong-termprovisions),theprovisionisestimatedonanetpresentvaluebasis.Theincreaseintheprovisionduetothepassageoftimeisrecognizedasafinancialexpense.

Aprovisionforrestoringpollutedsitesisrecognizedifbposthasanobligationinthisrespect.Provisionsforfutureoperatinglossesareprohibited.

Ifbposthasanonerouscontract(theunavoidablecostsofmeetingtheobligationsunderthecontractexceedtheeconomicbenefitsexpectedtobereceivedunderit),thepresentobligationunderthecontractisrecognizedasaprovision.

Aprovisionforrestructuringisonlyrecordedifbpostdemonstratesaconstructiveobligationtorestructureatthestatementoffinancialpositiondate.Theconstructiveobligationshouldbedemonstratedby:(a) adetailedformalplanidentifyingthemainfeaturesoftherestructuring;and(b) raisingavalidexpectationtothoseaffectedthatitwillcarryouttherestructuringbystartingtoimplementtheplanorbyannouncingitsmainfeaturestothoseaffected.

DividendspayableinrespectofyearNareonlyrecognizedasliabilitiesoncetheshareholders’rightstoreceivethesedividends(duringthecourseofyearN+1)areestablished.

Income taxes and deferred taxationIncometaxincludescurrenttaxationanddeferredtaxation.Currenttaxationistheamountoftaxestobepaid(recovered)onthetaxableincomeforthecurrentyeartogetherwithanyadjustmentinthe

taxespaid(toberecovered)inrelationtopreviousyears.Itiscalculatedusingtherateoftaxonthestatementoffinancialpositiondate.

Deferredtaxationiscalculatedaccordingtotheliabilitymethodonthetemporarydifferencesarisingbetweenthecarryingamountofthestatementoffinancialpositionitemsandtheirtaxbase,usingtherateoftaxexpectedtoapplywhentheassetisrecoveredortheliabilityissettled.Inpractice,therateinforceonthestatementoffinancialpositiondateis used.

Deferredtaxesarenotrecognizedinrespectof:

(1) goodwillthatisnotamortizedfortaxpurposes;

(2)theinitialrecognitionofanassetorliabilityinatransactionthatisnotabusinesscombinationandthataffectsneitheraccountingprofitnortaxableprofit;and

(3)investmentsinsubsidiaries,branches,associatesandjointventuresifitislikelythatdividendswillnotbedistributedintheforeseeablefuture.

Adeferredtaxassetisrecognizedforalldeductibletemporarydifferencestotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized.Thesameprinciplesapplytorecognitionofdeferredtaxassetsforunusedtaxlossescarriedforward.Thiscriterionisreassessedoneachstatementoffinancialpositiondate.

Deferredtaxesarecalculatedatthelevelofeachfiscalentity.Thedeferredtaxassetsandliabilitiesofvarioussubsidiariesmaynotbepresentedonanetbasis.

Deferred revenueDeferredrevenueistheportionofincomereceivedduringthecurrentorpriorfinancialperiodsbutwhichrelatestoasubsequentfinancialperiod.

Transactions in foreign currenciesTransactionsinforeigncurrenciesareinitiallyrecordedinthefunctionalcurrencyoftheentitiesconcernedusingtheexchangeratesprevailingonthedatesofthetransactions.Realizedexchangerategainsandlossesandnon-realizedexchangerategainsandlossesonmonetaryassetsandliabilitiesonthestatementoffinancialpositiondatearerecognizedintheIncomeStatement.

Onconsolidation,theassetsandliabilitiesofforeignoperationsaretranslatedintoEuroattheexchangerateprevailingatthereportingdateandtheirincomestatementsaretranslatedatexchangeratesprevailingatthedatesofthetransactions.Theexchangedifferencesarisingontranslationforconsolidationarerecognizedinothercomprehensiveincome.Ondisposalofaforeignoperation,thecomponentofothercomprehensiveincomerelatingtothatparticularforeignoperationisrecognizedinprofitorloss.

Derivative financial instrumentsbpostusesderivativefinancialinstrumentstohedgeitsexposuretoforeignexchangeandinterestraterisksarisingfromitsoperationalandfinancialactivities.Inaccordancewithitstreasurypolicy,bpostdoesnotholdorissuederivativefinancialinstrumentsfortradingpurposes.



Derivativefinancialinstrumentsareinitiallyrecognizedatfairvalueatthedatethederivativecontractsareenteredintoandaresubsequentlymeasuredtotheirfairvalueattheendofeachreportingperiod.Dependingonwhetherhedgeaccounting(seebelow)isappliedornot,anyresultinggainorlossontheremeasurementofthederivativefinancialinstrumentiseitherrecognizeddirectlyinothercomprehensiveincome or in the income statement.

Hedge accountingbpostdesignatescertainhedginginstruments,whichincludesderivativesandnon-derivativesinrespectofforeigncurrencyrisk,ashedgesofnetinvestmentsinforeignoperationsandascashflowhedgesrespectively.

Atthebeginningofthehedgerelationship,bpostdocumentstherelationshipbetweenthehedginginstrumentandthehedgeditem,alongwithitsriskmanagementobjectivesanditsstrategyforundertakingvarioushedgetransactions.Furthermore,atthebeginningofthehedgeandonanongoingbasis,bpostdocumentsandassesstheeffectivenessofthederivativeinstruments.

Cash flow hedgesTheeffectiveportionofchangesinthefairvalueofderivativesthataredesignatedandqualifyascashflowhedgesisrecognizedinothercomprehensiveincomeandaccumulatedundertheheadingofcashflowhedgingreserve.Thegainorlossrelatingtotheineffectiveportionisrecognizedimmediatelyinprofitor loss.

Amountspreviouslyrecognizedinothercomprehensiveincomeandaccumulatedinequityarereclassifiedtoprofitorlossintheperiodswhenthehedgeditemaffectsprofitorloss,inthesamelineastherecognizedhedgeditem.

Hedgeaccountingisdiscontinuedwhenbpostrevokesthehedgingrelationship,whenthehedginginstrumentexpiresorissold,terminated,orexercised,orwhenitnolongerqualifiesforhedgeaccounting.Anygainorlossrecognizedinothercomprehensiveincomeandaccumulatedinequityatthattimeremainsinequityandisrecognizedwhentheforecasttransactionisultimatelyrecognizedinprofitorloss.Whenaforecasttransactionisnolongerexpectedtooccur,thegainorlossaccumulatedinequityisrecognizedimmediatelyinprofitorloss.

Hedges of net investments in foreign operationsHedgesofnetinvestmentsinforeignoperationsareaccountedforsimilarlytocashflowhedges.Anygainorlossonthehedginginstrumentrelatingtotheeffectiveportionofthehedgeisrecognizedinothercomprehensiveincomeandaccumulatedundertheheadingofforeigncurrencytranslationreserve.Thegainorlossrelatingtotheineffectiveportionisrecognizedimmediatelyinprofitorloss.

Gainsandlossesonthehedginginstrumentrelatingtotheeffectiveportionofthehedgeaccumulatedintheforeigncurrencytranslationreservearereclassifiedtoprofitorlossonthedisposaloftheforeignoperation.

6.5Riskmanagement

Approach and methodologybposthasdefinedandimplementedanEnterpriseRiskManagement(“ERM”)frameworktoembedcompany-wideriskmanagementprocessesinkeymanagementactivities,suchastheGroupExecutiveCommittee’srevisionofthestrategyorquarterlyreviewsoftheoperations.

Risksareidentifiedatdifferentlevelsintheorganization(including,inter alia,operationalandfinancialmanagement;corporate2nd linefunctions,suchasLegalandRegulatory,HealthandSafety,SecurityandIntegrity;andtheGroupExecutiveCommittee).Itcoverstheentirebusiness.

bpostdisclosestherisksanduncertaintiesinthreecategories:

• Regulatory/Legal risks:Regulatoryevolutionsandlegalcomplianceissuesthatcouldimpacttherealizationofbpost’sstrategy.

• External Business risks:Externaleventsthatmayaffectthegrowthstrategy.

• Operational risks:Mostlyinternallyorientedrisksorunforeseendisastersthatmayresultinanimpactonbpost’sresults.Thesealsoincludefinancialrisks.

Basedonformalizedriskevaluationcriteria,approvedbytheBoardofDirectors,bpostprioritizesriskstoallowappropriatecommunicationofrisksthroughoutthecompany(top-downandbottom-up).Forthemainrisksineachofthecategories,bpostdefinedadedicatedmitigationandmonitoringapproach.TheGroupExecutiveCommittee,AuditCommitteeandBoardofDirectorsreviewtheapplicationofthisapproachonaregularbasis.



Anyofthefollowingriskscouldhaveamaterialadverseeffectonbpost’sbusiness,financialpositionandoperatingresults.Theremaybeadditionalrisksofwhichbpostiscurrentlyunaware.Theremayalsoberisksthatarecurrentlyconsideredtobeimmaterial,butthatmayultimatelyhaveamaterialadverseeffect.Theriskmitigation,asdescribedbelow,ismeanttoprovideahigh-leveloverviewofpotentialandinitiatedactionpointsinresponsetotherisksandshouldnottobeinterpretedasacomprehensivelistofriskresponses.Inaddition,themitigationeffortsdescribedbelowarenoguaranteethatriskswillnotmaterialize.Noriskmanagementorinternalcontrolsystemcanprovideabsolutesafeguardsagainstfailuretoachievecorporateobjectives,fraudorbreachofrulesandregulations.

Regulatory/legal risksAppropriatepolicies,processesandinternalcontrolproceduresareimplementedinordertolimittheexposuretocomplexregulatoryandlegalrequirements.Inaddition,bpoststrivesforaconstructivestakeholdermanagementtowards,inter alia,government,decisionmakersandregulators.

bpostoperatesinmarketsthatareheavilyregulated,includingbynational,EUandglobalregulatorybodies.ItisuncertainwhetherBelgianorEuropeanregulatorsorthirdpartieswillraisematerialissueswithregardtobpost’scompliancewithapplicablelawsandregulationsorwhetherfuturelegislative,regulatoryorjudicialchangesorotherregulatorydevelopmentswillhaveamaterialadverseeffectonbpost’sbusiness,financialcondition,operatingresultsandprospects.

Related to our mail and parcel businessInNovember 2015,BelgianMinisterDeCroo,responsibleforthepostalsector,announcedhisintenttoadoptanewPostalLawduringthecourseofhislegislature.ThisnewPostalLawwasapprovedbytheParliamentonJanuary 18,2018 andenteredintoforce

inFebruary 2018.bpostwelcomesthislegislativeinitiativeasthenewPostalLawprovidesafuture-proof,stableandpredictablelegalframeworkfortheBelgianpostalsector.

In2012,theEuropeanCommissionrequiredbposttorepayallegedstateaidfortheperiod1992to2012.OnMay 2,2013,theEuropeanCommissionapprovedthecompensationgrantedtobpostunderthetermsofthe5thmanagementcontractcoveringtheperiod2013to2015.AlthoughtheEuropeanCommission’sdecisionsonstateaidprovidebpostwithadegreeofcertaintyregardingthecompatibilityofthecompensationitreceivesfortheprovisionofservicesofpubliceconomicinterest(“SGEIs”)withstateaidrulesfortheperiodfrom1992through2015,itcannotbeexcludedthatbpostcouldbesubjecttofurtherstateaidallegationsandinvestigationsinrespectofthisperiodinrelationtoSGEIs,otherpublicservicesandotherservicesitperformsfortheBelgianStateandvariouspublicentities.

InaccordancewiththeBelgianState’scommitmenttotheEuropeanCommission,theBelgianStateorganizedacompetitive,transparentandnon-discriminatorytenderingprocedurewithrespecttothedistributionofrecognizednewspapersandperiodicalsinBelgium,followingwhichtheserviceconcessionwasawardedtobpostonOctober 16,2015toprovidetheservicefromJanuary 1,2016untilDecember 31,2020.InrespectoftheperiodcommencingasofJanuary 1,2021,itisuncertainwhetheranothercallfortenderwillbeissuedandwhethertheconcession,ifany,willoncemorebegrantedtobpost.

OnDecember 3,2015,bpostandtheBelgianStatesignedanewmanagementcontract(“6thmanagementcontract”)withrespecttotheotherSGEIs(interalia, themaintenanceofaretailnetwork,distributionofpensions,cashatcounterandotherservices).This6thmanagementcontractprovidesforacontinuedprovisionoftheseSGEIsforaperiodoffiveyears,endingonDecember 31,2020,andforaremunerationinlinewiththeprinciplesofthe5thmanagement

• Actionplans/Projectstomitigatetherisks(partoftheBUobjectivesandbudgetprocess)

• Briefstatus&EmergingriskevolutionsarereportedduringtheQuarterlyReview(QR)

• Annualupdateontheriskevolution(CorporateRisk)

• Trackingoftheeventswhichinfluencetheriskassessment

• Networkingandinfluencing(ifdeemeduseful)

• DefinitionofPlanB(ifdeemeduseful)

• AnnualstatusreportingasinputfortheAnnualReport(EOY)

• Immediatereportingofimportantevolutionspotentiallyimpactingthestrategy

• MaintainingaconstructiverelationshipwiththeAuthoritiesandRegulators

• Annualstatusreporting(Legal/regulatory)

• Immediatereportingofimportantevolutionspotentiallyimpactingthestrategy

Mitigation Monitoring

Operational Risks

External Business Risks

Regulatory/Legal Risks



regulationoncross-borderparceldeliveryservices.Afterageneralagreementonthetextwasachievedattheendof2017,theregulationwasadoptedbytheCouncilandEUParliamentin2018 andimposesincreasedpricingtransparencyandregulatoryoversightforcross-borderparceldeliveryoperatorssuch as bpost.

bpostwasdesignatedbytheBelgianStateastheUSOproviderforaneight-yeartermcommencingin2011.InthenewPostalLaw,bpostisdesignatedasUSOprovideruntiltheendof2023.ThespecialtermsandconditionsoftheUSOmustbedefinedinanewdedicatedmanagementcontractwhichshouldenterintoforcein2019.TheobligationtoprovidetheUSOmayrepresentafinancialburdenonbpost.AlthoughthenewPostalLawprovidesthatbpostisentitledtocompensationbytheBelgianStateintheeventtheUSOhascreatedanunfairburden,therecanbenoassurancethattheentirenetcostoftheUSOwillbecovered.Furthermore,goingforward,inabsenceofadedicatedmanagementcontractdefiningthetermsandconditionsofbpostdesignationasUSOprovider,thereisstilluncertaintyregardingthetermsandconditionsandfinancingmechanismthatwouldapplytotheprovisionoftheUSO.

Related to bpost bank, bpost’s associatebpostbankoperatesinaheavilyregulatedmarket.Theregulatorylandscapeforfinancialinstitutionshaschangedconsiderably(e.g.,increasedfocusoncustomerprotection,anti-moneylaundering,etc.)andprudentialsupervisionhasbeenreinforced(e.g.,qualityandlevelofcapital,liquidity,corporategovernance).ItisuncertainwhetherandtowhichextentBelgianorEuropeanregulatorsorthirdpartiesmayraisematerialissueswithregardtobpostbank’scompliancewithapplicablelawsandregulationsorwhetherfuturelegislative,regulatoryorjudicialchangesorotherregulatorydevelopmentsmayhaveamaterialadverseeffectonbpostbank’sbusiness,financialcondition,resultsofoperationsandprospects.bpostbankmayalsoberequiredtoincreaseitscapital,inparticularasaresultofnewcapitalrequirements.

Related to other regulatory & legal requirementsTheinteractionbetweenthelawsapplicabletoallprivatelimitedliabilitycompaniesandthespecificpubliclawprovisionsandprinciplesapplicabletobpostmaypresentdifficultiesininterpretationandcauselegaluncertainty.Forinstance,bpostissubjecttocertainspecificrisksinrelationtoemploymentmattersderivingfromtheapplicationofcertainpubliclawprovisionsandprinciples.Inparticular,bpostwasinvolvedinalitigationinitiatedbyanumberofauxiliarypostmen(whichincludeallpostmenrecruitedfromJanuary 1,2010performingcertaincorefunctionssuchascollection,sorting,transportanddistributionofmail).InMay 2016,theMonsLaborCourtofAppealsfoundinfavorofbpostandrejectedallclaims.Furtherappealsarenolongerpossible.

Amendmentsto,ortheintroductionofnew,legislationandregulations,includinglegislationandregulationsrelatingtostatepensions,couldresultinadditionalburdensforbpost.Therecanalsobenoassurancethatbpostwillnotfacechallengesregardingcertainemploymentmattersonstateaidgrounds.Finally,bpost’scontractualemployeescouldalsochallengetheiremploymentstatusandclaimdamagesto

contract,asapprovedbytheEuropeanCommissiononMay 2,2013.FortheperiodcommencingJanuary 1,2021,theBelgianStatemayceasetoprovide(oramendthescopeandcontentof)certainpublicservices,mayconcludethatsuchservicesdonotconstituteSGEIsandhencedoesnotwarrantcompensationormaynotentrusttheseservicestobpost.

OnJune 3,2016,theEuropeanCommissionapprovedthe 6thManagementContractandtheconcessionagreementsunderthestateaidrules.InOctober 2016,theVlaamseFederatievanPersverkopers(“VFP”)soughttheannulmentoftheEuropeanCommission’sclearancedecisionbeforetheGeneralCourtonproceduralgrounds.InFebruary 2019,theGeneralCourthasremovedthecasefromtheregisterfollowingtherequestbyVFPtodiscontinuetheproceedings.

bpostmayberequiredtoprovideotherpostaloperatorsaccesstospecificelementsofitspostalinfrastructure(suchasinformationonrequestsformailre-directionincaseofaddresschange),accesstoitspostalnetworkand/ortocertainuniversalservices.Itcannotbeexcludedthatcompetentauthoritiesimposeaccessatuneconomicpricelevelsortheaccessconditionsimposeduponitmayotherwisebeunfavorableforbpost.Intheeventbpostweretofailtocomplywiththeserequirements,itmayalsobesubjecttofines(underthecompetitionlawrulesandpostalregulation)and/orotherpostaloperatorsmayinitiateproceedingsseekingdamagesinnationalcourts.

bpostisrequiredtodemonstratethatitspricingfortheservicesfallingwithintheUSOcomplieswiththeprinciplesofaffordability,costorientation,transparency,non-discriminationanduniformityoftariffs.TariffincreasesforcertainsinglepiecemailandUSOparcelsaresubjecttoapricecapformulaandpriorcontrolbytheBIPT.TheBIPTmayrefusetoapprovesuchtariffsortariffincreasesiftheyarenotincompliancewiththeaforementionedprinciplesorpricecapformula.ItshouldbenotedthatthenewPostalLaw,whichenteredintoforceinFebruary 2018,providesforanewpricecapformulaaspartofastableandpredictablepricecontrolmechanism.

Inaddition,inrelationtoactivitiesforwhichbpostisdeemedtohaveadominantmarketposition,itspricingmustnotconstituteanabuseofsuchdominantposition.Failuretoobservethisrequirementmayresultinfines.bpostmayalsobeorderedbynationalcourtstodiscontinuecertaincommercialpracticesortopaydamagestothirdparties.

bpostisalsosubjecttotherequirementofnocross-subsidizationbetweenpublicservicesandcommercialservices.Inaddition,accordingtostateaidrules,ifbpostengagesincommercialservices,thebusinesscaseforprovidingsuchservicesmustcomplywiththe“privateinvestortest,”thatis,bpostmustbeabletodemonstratethataprivateinvestorwouldhavemadethesameinvestmentdecision.Iftheseprinciplesarenotcompliedwith,theEuropeanCommissioncouldfindthatcommercialserviceshavebenefitedfromunlawfulstateaidandordertherecoveryofthisstateaidfrombpost.

AccordingtotheEuropeanCommission,cross-borderparceldeliveryisoneofthekeyelementsimpactinge-commercegrowthinEurope.InMay 2016,theEuropeanCommissionpreparedaproposalfora



adeclineinmailvolumesmaytranslateintoasignificantdeclineinprofit,unlessbpostcanreduceitscosts.Accordingly,bposthasintroducedmultipleleversfortransformationofthelegacybusiness(e.g.alternativedistributionmodel,networkoptimization,etc.).However,therecanbenoassurancethatbpostwillrealizeallofthebenefitsexpectedfromsuchinitiatives.Someofthecriticalelementsforsuccessarechangemanagement,projectprioritizationandstakeholderalignment.

Related to Information and Communication TechnologybpostreliesonInformationandCommunicationTechnology(“ICT”)systemstoprovidemostofitsservices.Thesystemsaresubjecttorisks,suchaspoweroutages,disruptionsofinternettraffic,softwarebugsandproblemsarisingfromhumanerror.Thismayresultinlossofdataorsignificantdisruptionofbpost’soperations.Inaddition,inaworldofconstantconnectivityanddependencyoninformationthatisprocessedandstoredelectronically,thelackofprotectionofconfidentialand/orsensitiveinformationmayresultininappropriateinformationsharing.

Related to the integration of recent acquisitionsTopursueitsgrowthambitions,bposthasboughtseveralcompaniesduringthelastfewyears.ThemostimportantacquisitionwasRadialintheUS.However,eventhoughbposthasstrengtheneditspost-mergerintegrationactivities,itremainsuncertainwhetherbpostwillbringtheintegrationstoasuccessfulendandwhetherbpost’ssubsidiarieswillactuallyrealizetherelatedbusinessplans.

Related to the attractiveness of bpost as employerbpostmayfacedifficultiestoattractandretaintheoperationalworkforceitneedstoensureday-to-daydeliveryofmailandparcels.Inaddition,asanylargeemployer,talentmanagementinviewofeffectivesuccessionplanningforcriticalfunctionsandsuccessfulin-sourcingcertainnewcapabilitiesmayalsobechallenging.

Related to the business continuitybpost’sabilitytoserveitscustomersandthepublicingeneraldependshighlyonthesortingcenterswherebpostcentralizes,sortsandpreparesthemailandparcelsfordistribution.InBelgium,bpostoperatessixsortingcenters.Ifoneormoreofthesefacilitiesweretoshutdownforaperiodoftimedueto,e.g.,poweroutage,accident,strikeaction,naturaldisasterresultinginfireorflooding,terroristattackorotherwise,bpostmaybeunabletodistributeorcomplywithdeliverytimesforaperiodoftime.Thiscouldhaveanegativeimpactonbpost’sreputation,customersatisfactionandfinancialperformance.

Related to “Force Majeure”Theriskofapotentialprolongedinterruptionofoperationsduetoextremenaturaleventsasaresultofclimatechange(e.g.,fire,flood,storm,andincreaseinemployees’healthissuesduetopollution)hasincreased.bpostseekstopreventdamagetobuildingsandinterruptionstooperationsasmuchaspossiblethroughpreventionandcontingencyprograms.The

compensatethemforbeingdeprivedofstatutoryemploymentprotectionandbenefits.

Regulatorychangesmay(directlyorindirectly)impacttheattractivenessofmailasawayofcommunicatingandhencebpost’sturnover.Suchchangescouldinclude,inter alia:

• theentryintoforceoftheGeneralDataProtectionRegulationonMay 25,2018,deterringcompaniesfromcontinuingtoengageincommercialprospectingactivities;

• theenactmentoflegislationpromotingdigitalgrowth,electroniccommunicationande-governmentinitiativescouldalsoadverselyaffectbpost’sbusiness.In2016,legislationgrantingregisterede-mailthesamelegalstatusasregisteredmailundercertainconditionsenteredintoforce.

External business risksTherisksmentionedinthesectionbelowareconsideredinlightofthelongtermstrategy.bpostassignedclearownershipforeachoftherisks.Theownermonitorstherisk,observestrendsandinitiatesmitigatingactionsifandwhenneeded.Moredetailsontheinternalcontrolandriskmanagementsystemcanbefoundinthecorporategovernancestatement.

Related to substitution and competition in the mail and parcel sectorsTheuseofmailhasdeclinedinrecentyears,primarilyasaresultoftheincreaseduseofe-mailandtheinternet.bpostexpectsthatthemailvolumeswillcontinuetodecline.E-governmentinitiativesorothermeasuresintroducedbytheBelgianStateorotherpublicauthoritiesorprivateenterprisesthatencourageelectronicsubstitutioninadministrativemailmayalsoaffecttherateofdeclineinmailvolumes.Managementhastakenactiontoaddressthedigitalizationrisk(e.g.launchof‘prior’stamp).However,boththespeedofchangeaswellashowourcustomerswillreacttothenewproductofferingsandnewwaysofworkingremains uncertain.

Thisnew“digital”areaalsoimpactstheparcelsindustryinthesensethatthee-commerceclientshavealimitedwillingnesstopayforthedeliverywhilerequestingadditionalservices(e.g.samedaydelivery).Thisputspressureonthemarginsandoverallprofitabilityintheparcelsindustry.Assuchexternalfactorstriggeredbytheindustry,competitionandclientscouldchallengethegrowthinparcels(bothinBelgiumandabroad).Inaddition,aslowdowninthegrowthofthee-commercemarketcouldalsoimpactthegrowthintheparcelsdistributionandfulfillmentbusiness.Finally,theuncertaintiesrelatedtotheBrexitmightalsoimpactourEuropeanparcelactivities.

Operational risks – Business risksbpostfacessomeoperationalchallengesthatrequireanappropriatelevelofmanagementattention.bpostinitiatesmitigatingactionplansifandwhenneeded.MoredetailsontheinternalcontrolandriskmanagementsystemcanbefoundintheCorporateGovernanceStatement.

Related to the agility and flexibility of the bpost networkDuetotherelativefixednatureofitscostbase,



Interest rate riskbpost’sassociatebpostbankis,likeanyotherbank,subjecttotheinterestraterisk,whichdirectlyinfluencesitsmargin.Interestrateslikewiseinfluencevaluationofbpostbank’sbondportfolio,whichisclassifiedonthestatementoffinancialpositionofbpostbankasHoldtoCollectfinancialassets.Changesinvaluationarereflectedasfairvaluethroughothercomprehensiveincome.Sincebpostbankisanequity-accountedentity,50%ofthechangeinitsequitydirectlyinfluencestheconsolidatedequityofbpost.Thefollowingtableillustratestheimpactofarelativechangeininterestratesof1%(from1%to1.01%forinstance)onbpostbank’sequityand,throughtheequitypickup,onbpost:

As at 31 December

Inmillion EUR 1% -1%

Equitybpostbank (0.2) 0.2

Equitybpost (0.1) 0.1

bpostisalsodirectlyexposedtointerestratefluctuationsthroughitsexternalfinancing.However,bpostmitigatesthisriskachievingabalancebetweenfixedandvariablerates.Thisbalancecurrentlyconsistsmainlyoffixedratesbutmayevolveaccordingtomarketsituation.

Inordertomanagetheinterestratestructureofitsdebt,bpostmayusehedginginstrumentssuchasinterestrateswaps.AnysubstantialchangeintheratestructurerequirespriorvalidationfromtheGroupExecutiveCommittee.

Thetablebelowillustratestheimpactofachangeininterestratesof100bp(from1%to2%forexample)onthedebtexposedtofloatingrates(i.e.thetermloaninUSDandtheEuropeanInvestmentBankloanin EUR).InterestiscalculatedasEuribor/USDLiborplusmargin.Asthemarginisdeterminedinthecontract,thesensitivityanalysisonlyappliesontheEuribor/USDLibor,knownasthe”baserate”.AstheEuriboriscurrentlyflooredatzerointhecontracts,adecreaseof100bpontheEuriborhasasignificantlylowerimpactthananincreaseof100bp.Consequentlythesensitivityanalysisisasymmetrical.

detrimentalconsequencesoftheserisksarecoveredbyinsurance policies.

Itshouldbenotedthatbpost’sCorporateSocialResponsibilitystrategyincludesambitioustargetstoreducebpost’sGreenhouseGas(“GhG”)emissions.Thisshouldlimitclimatechangeandtheoccurrenceofextremenaturalevents.

Operational risks - Financial risksClimate change riskNexttotheriseofnaturaldisastersandhealthissuesassociatedtoclimatechangeandwhichcouldaffectouroperations,carbontaxes,emissionstradingschemesandfueltaxesarealsoexpectedtofeatureprominentlyinthecomingregulations.AveragecarbonpricescouldincreasemorethansevenfoldtoUSD 120permetrictonby2030.

Theeffectsofrisingcarbonpricesoncompanieswillbebothdynamicandcomplex:

• Companies’costswillriseinproportiontothetotalemissionsgeneratedbythemselvesandpossiblytheir suppliers.

• Sellingpricesarelikelytorisetooffsetcostincreasesatanindustrylevel.

• Demandcouldfallreflectingthepricesensitivityofcustomersineachmarketaffected,shrinkingcompanies’salesandcosts.

bpostmonitorsthecarbonpriceriskandtakesmeasurestoreduceitscarbonfootprintwithintheframeworkofitsCorporateSocialResponsibilitystrategy.

Byadoptingcarbonpricingforecastsandestimatedinternalcarbonprices,bpostisabletooutpacethecostofintensifyingcarbonregulationsandadapttobusinessinalow-carboneconomy.

Nexttotheforecastingofcarbonpricing,bpostisalsoworkingateffectivelyreducingitsemissions.Awareoftheecologicalimpactofthegrowingparceldistribution,bposthasdrawnupanewCO2reductionobjectiveaimedatreducingemissionsfromtheactivitiesoftheentirebpostGroupbyatleast20%by2030,comparedto2017.Theobjectivehasbeenapprovedbythe‘ScienceBasedTarget’initiativethatguaranteesthatthecompanyisinlinewiththeclimatetargetsoftheParisAgreement.Toachievethisgoal,bpostwill,amongothers,replace50%ofitsdieselvehiclesbyanelectricalternativeby2030.

Exchange rate riskInitsoperationalandfinancialactivities,bpostisexposedtoforeignexchangeratefluctuationswhichimpactsthebalancesheetandtheincomestatement.

Theseexchangeraterisksconsist(i) oftransactionriskrelatedtooperationalactivitieswithcashflowsinforeigncurrencyorrelatedtoinvestmentsand(ii) oftranslationriskrelatedtotheconsolidationinEuroofsubsidiarieswhosefunctionalcurrencyisnottheEuro(bpost’sfunctionalcurrency).Themainexposuretoforeignexchangerateriskcorrespondstoassetsin USD.

Hedginginstrumentsareusedtomitigatetheseimpacts.



Theageinganalysisofthetradereceivablesandthecreditriskexposurefollowingtheprovisionmatrixisasfollows:

As at 31 December


At 1 january 17.5 13.4

Impairments:Additionsthroughbusinesscombinations 0.2 3.9

Impairments:Additions 1 .0 2.2

Impairments:Utilization (0.4) (1.3)

Impairments:Reversal (1.1) (0.5)

Impairments:Translationdifferences 0.6 0.0

At 31 december 18.5 17.5

losses(ECL)model.Astradereceivablesdonotcontainasignificantfinancingcomponentbpostoptedtoapplythesimplifiedapproachtocalculatetheexpectedcreditlossratewiththeuseofaprovisionmatrix,basedonthehistoricaldefaultratesadaptedforcurrentandforwardlookinginformation.PriortotheadoptionofIFRS 9anindividualassessmentoftherecoverabilityofthereceivableswasmadeandanimpairmentwasrecognizedwherecashsettlementwaswhollyorpartiallydoubtfuloruncertain.

Thefollowingtablesummarizesthemovementintheprovisionforexpectedcreditlosses:

Operational activities

Thecreditriskbydefinitiononlyconcernsthatportionofbpost’sactivitiesthatarenotpaidupfrontincash.bpostNV/SAactivelymanagesitsexposuretocreditriskbyinvestigatingthesolvencyofitscustomers.Thistranslatesintoacreditratingandacreditlimit.BotharefolloweduponadailybasisforallBelgianandforeigncustomers.

AsfromJanuary 1,2018withtheadoptionofIFRS 9Financialinstruments,bpostNV/SArecognizedonallofitstradereceivablesanallowanceforexpectedcreditlossesbasedonthelifetimeexpectedcredit

As at 31 December


Heldtomaturityfinancialassets 0 .0 0.0

CashandCashequivalents 680.1 466.0


Credit risk classes of financial assets 1,392.1 1,185.4

Credit riskbpostisexposedtocreditrisksthroughitsoperationalactivities,intheinvestmentandmanagementofitsliquidities(banks)andthroughitsinvestmentinbpostbank.

Financialresultsofbpostarealsoinfluencedbytheevolutionofthediscountrates,usedtocalculatetheemployeebenefitsobligation.AtDecember 31,2018,anincreaseby0.5%oftheaveragediscountrates,wouldgenerateadecreaseoffinancialchargeofEUR 18.9 million.Adecreaseby0.5%oftheaveragediscountrates,wouldincreasefinancialchargesbyEUR 20.7 million.Forfurtherdetail,seenote 6.27.

As at 31 December

Inmillion EURSensitivitytoa-100bp

movementinmarketinterestrates

Sensitivitytoa+100bpmovementinmarketinterest

rates

Impact on costs -1.9 2.1



Inmillion EUR CURRENT lessthan1 year

NON-CURRENT

within1 yearbutnotlaterthan5 years laterthan5 years

31 december 2017

Financeleaseobligations 1.7 7.5 11.9

Tradeandotherpayables 1,218.2 45.2 0.0

Bankloan 698.1 36.7 0.0

bonds,othersovereignbondsandbondsfromfinancialandcommercialcorporationsaswellasmortgages.PerDecember 31,2018bpostbankhadinvestedthefundsdepositedbyitscustomersininterbankassets(EUR 515.5 million),loansandadvancestocustomers(mainlymortgageandtermloans,EUR 4,936 million)andsecurities(mainlygovernmentbondsandcorporatebonds,EUR 5,242 million).Inaddition,maximumconcentrationlimitsperissuer,persector,perrating,percountryandpercurrencyhavebeenestablishedandareconstantlymonitored.

Liquidity riskbpost’scurrentliquidityriskislimitedduetothehighlevelofcashathandandduetothefactthatasignificantportionofitsrevenuesispaidbyitscustomerspriortobpostperformingtheservice.

Asdisclosedinnote 6.34bpostreservedanamountofEUR 6.5 millionasanoutstandingreceivableforthereductionoftheSGEIcompensationof2015andconsideredthisreceivabletobeindefault.

Investment of liquidities

Regardingbpost’sinvestmentofitsliquidities,whichincludescashandcashequivalentsandinvestmentsecurities,theexposuretocreditriskarisesfromdefaultofthecounterparty,withamaximumexposureequaltothecarryingamountoftheseinstruments.

bpost bank

bpostbankinveststhefundsthathavebeendepositedbyitscustomers.ThebankhasadoptedastrictinvestmentpolicythatdeterminesanoverallallocationoftheinvestmentsacrossBelgianState

As at 31 December

Inmillion EUR Dayspastdue

TotalCurrent <60days 60-120

days >120days

Outstand-ingbalance

SGEIindefault

Estimatedtotalgrosscarryingamountatdefault 568.2 67.7 7.8 14.3 6.5 664.5

Expectedcreditlossrate 0.2% 5.0% 28.6% 35.3% 100.0%

Allowanceforexpectedcreditlosses (1.3) (3.4) (2.2) (5.1) (6.5) (18.5)

Trade receivables 566.9 64.3 5.6 9.3 0 646.0

Thematurityoftheliabilitiesinthepreviousreportingperiodwereasfollows:



As at 31 December

Inmillion EUR 2018 2017restated 2017

Capital

Issuedcapital 364.0 364.0 364.0

Reserves 271.4 310.1 310.1

Foreigncurrencytranslation 12.7 (11.5) (11.5)

Retainedearnings 51.6 110.9 110.9

Non-controllinginterests 2.5 4.3 4.3

Total 702.3 777.8 777.8

Net Debt / (net cash)

Interestbearingloansandborrowings 1024.8 755.3 758.2

Non-interestbearingloansandborrowings 0 .1 0.1 0.1

-Investmentsecurities 0 .0 0.0 0.0

-Cashandcashequivalents (680.1) (466.0) (466.0)

Total 344.8 289.4 292.4

Inmillion EUR CURRENT lessthan1 year

NON-CURRENT within1 yearbutnot

laterthan5 yearslaterthan5 years

31 december 2018

Financeleaseobligations 1.6 4.1 12.5

Tradeandotherpayables 1,212.9 17.5 0.0

Bankloan 8.6 189.6 0.0

Long-Termbond 0.0 0.0 641.8

Commercialpapers 165.1 0.0 0.0

Other loans 0.3 1.0 0.0

AsatDecember 31,2018,liabilitieshavecontractualmaturitieswhicharesummarizedbelow:

structuremaximizingthevalueforshareholders.Inthiscontext,itmaychoosetoadjusttheamountofdividendspaid,carryouttransactionsimpactingthenumberofsharesorsellassetsscalingbackitsnetdebt.

bpost’spolicyisalsotomaintainanintrinsicsolidinvestmentgradecreditprofile.Oneofthemostthoroughlyfollowedindicatorsistheratiobetween(i) theoperatingcashflowslessfinancialexpensesandpaidtaxes,and(ii) theadjustednetdebt.

Thetablebelowgivesanoverviewofthenetdebt/netcashpositionaswellastheequityposition:

Theabovecontractualmaturitiesarebasedonthecontractualundiscountedpayments,whichmaydifferfromthecarryingvaluesoftheliabilitiesatthestatementoffinancialpositiondate.

Theliquidityriskisfurthermitigatedbycommittedcreditlinesscaledaccordingtothemagnitudeofbpost operations.

Capital management policies and proceduresbpostseeksanoptimalbalancebetweenitsnetdebtanditsoperatingcashflowandmanagesthefinancial



6.6Businesscombinations

Acquisition of non-controlling interest ParcifyInJanuary 2018,bpostNV/SAacquiredtheremainingsharesinParcifyNV,toreachatotalof100%sharesforanamountofEUR 0.3 million.

Contingent consideration for DynaGroupInJanuary 2018,bpostNV/SApaidEUR 42.0 millioninexecutionofthecontingentconsiderationagreement.Thefairvalueofthecontingentconsiderationwasrecognizedasaliability.Thepaymenthadnoimpactontheoriginallycalculatedgoodwillnorontheresultoftheyear.Theremainingcontingentconsideration,payablein2019,wascappedatEUR 9.0 million(amongstothersbaseduponfinancialresults)andforwhichEUR 5.4 millionwasrecordedasacurrentliabilityatyearend2018.

Contingent consideration for Freight Distribution Management (FDM)InFebruary 2018,bpostNV/SApaidAUD5.0 million(EUR 3.3 million)inexecutionofthecontingentconsiderationagreementandbasedupontheDecember 2017performanceofFreightDistributionManagementSystemsPtyLtd.andFDMWarehousingPtyLtd.Thefairvalueofthecontingentconsiderationwasrecognizedasaliability.Thepaymenthadnoimpactontheoriginallycalculatedgoodwillnorontheresultoftheyear.

Purchase price allocation for the entities Bubble PostOnAugust 7,2017bpostNV/SAenteredintoanagreementfortheacquisitionofBubblePostNV/SA.Besidesitsexperienceinsustainableurbandelivery,BubblePostalsohasextensiveknowledgeofrefrigeratedandfrozentransportforamongothershospitalitywholesalersanddeliveryofpreparedmealsandfoodboxes.

bpostacquired100%ofthesharesofBubblePostforanamountofEUR 1andcommittedtomakeEUR 4.0 millionoffundsavailable.InadditiontheagreementincludesacontingentconsiderationarrangementandforeseesanadditionalremunerationbasedontheEBITachievedin2020.Basedonthelastforecast,noliabilityforthecontingentconsiderationwasrecognized.Thereisnomaterialsensitivityforbposttovariationsinthecontingentconsideration.ThecompanywasconsolidatedwithintheP&Loperatingsegmentusingthefull-integrationmethodasfromAugust 2017.Transactioncostswereexpensedandwereincludedintheoperatingexpensesin2017.

Thecalculatedgoodwillispresentedasfollows:

Fair value of the assets acquired and liabilities assumed in the acquired entities

Inmillion EUR

Non-Current Assets 0.7

Property,plantandequipment 0.1

Intangibleassets 0.5

Tradeandotherreceivables 0.0

Current Assets 1.2

Inventories 0.0


Cashandcashequivalents 0.1

Non-Current Liabilities (1.7)

Interest-bearingloansandborrowings (1.7)

Tradeandotherpayables 0.0

Current Liabilities (4.4)

Incometaxpayable 0.0

Tradeandotherpayables (4.4)

Fair value of net assets acquired (4.2)

Goodwillarisingonacquisition 4.2

Purchase consideration transferred 0.0

ofwhich:

-Cashpaidin2017 -

-Contingentconsideration 0.0

Analysis of cash flows on acquisition

Inmillion EUR

Netcashacquiredwiththesubsidiaries 0.1

Cashpaidin2017 -

Net cash outflow 0.1

ThefairvalueofthetradereceivablesamountedtoEUR 1.1 millionanditisexpectedthatthefullcontractualamountscanbecollected.

For2018BubblePostcontributedEUR 2.1 millionofrevenueandEUR -8.0 milliontoprofitbeforetaxfromcontinuingoperationsoftheGroup.

TheresultedgoodwillofEUR 4.2 millionderivesfromexpectedsynergiesfromcombiningoperationsofbpostanditssubsidiaries.Noneofthegoodwillisexpectedtobedeductibleforincometaxpurposes.



Purchase price allocation for the entities of RadialOnNovember 16,2017bpostNV/SA,throughitssubsidiarybpostNorthAmericaHoldings,Inc.,acquired100%oftheissuedandoutstandingequityinterestsoftheRadialHoldings,L.P.andRadialIIIGP,LLC(“Radial”)afterhavingobtainedallnecessaryapprovalsfromtherelevantcompetitionauthorities.TheacquisitionofRadial,aleadingproviderofintegratede-commercelogistics,perfectlyfitswithinbpost’sgrowthstrategy.ItallowsbposttoscaleitsexistingUSpresenceand

expanditsproductofferingintovalue-addedactivitiesthatcovertheentirevaluechainine-commercelogisticsandomnichanneltechnology.RadialwasconsolidatedwithintheP&Loperatingsegmentusingthefull-integrationmethodasfromNovember 16,2017.Thepurchasepricefor100%ofthesharesamountedtoUSD 804.6 million,whichhasbeenpaidin2017.TransactioncostsofUSD 3.3 millionwereexpensedandwereincludedintheoperatingexpensesin2017.



In million USD

Preliminarygoodwill Finalgoodwill

Non-Current Assets 177.9 354.0

Property,plantandequipment 151.5 202.2

Intangibleassets 19.2 144.6


Current Assets 290.8 285.3

Inventories 0.2 0.2


Cashandcashequivalents 126.5 126.5

Non-Current Liabilities (23.0) (36.1)

Interest-bearingloansandborrowings (21.4) (17.9)

Tradeandotherpayables (1.3) (1.3)

Provisions 0.0 (16.7)

Deferredtaxliabilities (0.2) (0.2)

Current Liabilities (312.9) (314.6)

Interestbearingloansandborrowings (0.7) (0.7)

Provisions 0.0 (8.7)

Incometaxpayable (1.5) (0.8)

Tradeandotherpayables (310.7) (304.4)

Fair value of net assets acquired 132.8 288.6

Goodwillarisingonacquisition 671.7 516.0

Purchase consideration transferred 804.6 804.6

ofwhich:

-Cashpaidin2017 804.6 804.6

-Contingentconsideration


In million USD In million USD

Netcashacquiredwiththesubsidiaries 126.5 126.5

Cashpaidin2017 (804.6) (804.6)

Net cash outflow (678.0) (678.0)



Thefairvalueofthecurrentandnon-currenttradereceivablesamountedtoUSD 165.7 millionanditisexpectedthatthefullcontractualamountscanbecollected.

TheinitialgoodwillhadbeenreducedbyUSD 155.7 millionfollowingthefairvalueimpactsandthepurchasepriceallocation.Theadjustmenttofairvalueconsistedamongstothersoftherecognitionofintangibleassets:customerrelationships(usefullife14-year),in-housedevelopedtechnology(usefullife3 year)andtradename(usefullife10-year),respectivelyforanamountofUSD 85.0 million,USD 14.0 millionandUSD 33.4 million.Thenetimpactoffairvalueadjustmentoffixedasset,non-currentprovisionsandtradepayablesamountedtoUSD 23.4 million.Assetswerefairlyvaluedwiththeassistanceofanexternalindependentexpert.Theincreaseddepreciationchargesonthefairvalueimpactonintangibleassetswaspartiallyoffsetbythelowerdepreciationchargesonthefairvalueimpactontangibleassetsastheusefulliveofthetangibleassetshasbeenprolonged,theimpactofthesefromacquisitiondateto31 December 2017werenotmaterial.

For2018RadialcontributedEUR 887.5 millionofrevenueandEUR–26.6 milliontoprofitbeforetaxfromcontinuingoperationsoftheGroup.

TheresultinggoodwillofUSD 516.0 millionderivesfromfuturegrowthandexpectedsynergies.Noneofthegoodwillisexpectedtobedeductibleforincometaxpurposes.

Acquisition of M.A.I.L., Inc.InJanuary 2018,LandmarkGlobal’sMailDivisionMSIacquired100%ofthesharesofM.A.I.L.,Inc.Thiscompanyisactiveinthefieldofbusinessmail/cataloguedistributionforre/e-tailersandmail-roomservicesaswellasparceldistributionandbpostpaidanamountofUSD 4.0 million.M.A.I.L.,Inc.wasconsolidatedwithintheP&Loperatingsegmentusingthefull-integrationmethodasfromJanuary 2018.Transactioncostswereexpensedandareincludedintheoperatingexpenses.


Fair value of the assets acquired and liabilities assumed in the acquired entity

Inmillion USD

Current Assets 1.4

Inventories (0.1)




Deferredtaxliabilities (0.1)



Fair value of net assets acquired 0.9



ofwhich:

-Cashpaid 4.0



In million USD

Netcashacquiredwiththesubsidiary 0.9

Cashpaid (4.0)

Net cash outflow (3.1)


For2018M.A.I.L.,Inc.contributedEUR 12.4 millionofrevenueandEUR 1.3 milliontoprofitbeforetaxfromcontinuingoperationsoftheGroup.




Acquisition of IMEX Global Solutions, LLCInJanuary 2018,LandmarkGlobal’sMailDivisionMSIacquired100%ofthesharesofIMEXGlobalSolutions,LLC.IMEXGlobalSolutions,LLCisa3rdpartylogisticscompanyintheUS,activeincross-borderpublicationandmaildeliveryandbpostpaidanamountofUSD 8.0 million.ThiscompanyisconsolidatedwithintheP&Loperatingsegmentusingthefull-integrationmethodasfromJanuary 2018.



In million USD



Intangibleassets 3.8


Current Assets 6.4

Inventories 0.2








ofwhich:

-Cashpaid 8.1



In million USD

Netcashacquiredwiththesubsidiary 0.2

Cashpaid (8.1)



Theadjustmenttofairvaluefollowingthepurchasepriceallocationconsistedoftherecognitionofintangibleassets:customerrelationships(usefullife7 year)foranamountofUSD 3.8 million.

For2018IMEXGlobalSolutionscontributedEUR 55.7 millionofrevenueandEUR 0.2 milliontoprofitbeforetaxfromcontinuingoperationsoftheGroup.


Acquisition of Leen Menken Foodservice Logistics BVOnJanuary 11,2018bpostacquiredtheDutchcompanyLeenMenkenFoodserviceLogisticsBV.LeenMenkenFoodserviceLogisticsBVisalogisticoperatorforthetransportofrefrigeratedandfrozenproductsfore-commerce.bpostpaidanamountofEUR 0.85 millionfor100%ofthesharesandfurthermoreperformedacapitalincreaseofEUR 2.35 million.InadditiontheagreementincludesacontingentconsiderationarrangementandforeseesanadditionalremunerationwhichcanamountuptoEUR 1.5 million.ThecompanywasconsolidatedwithintheP&Loperatingsegmentusingthefull-integrationmethodasfromJanuary 2018.Transactioncostswereexpensedandareincludedintheoperatingexpenses.



In million EUR



Current Assets 4.2

Inventories 1.3


Cashandcashequivalent (0.2)


Interestbearingloansandborrowings (0.2)





ofwhich:

-Cashpaid 3.2





In million EUR

Netcashacquiredwiththesubsidiary (0.2)

Cashpaid (3.2)


Thefairvalueofthecurrentandnon-currenttradereceivablesamountedtoEUR 3.1 millionanditisexpectedthatthefullcontractualamountscanbecollected.

For2018LeenMenkencontributedEUR 19.7 millionofrevenueandEUR -0.8 milliontoprofitbeforetaxfromcontinuingoperationsoftheGroup.

TheresultinggoodwillofEUR 1.1 millionderivesfromfuturegrowthandexpectedsynergies.Noneofthegoodwillisexpectedtobedeductibleforincometaxpurposes.

Acquisition of Anthill BVInMarch 2018bpostacquired63.6%ofthesharesoftheDutchcompanyAnthillBV,whichholds100%ofthesharesinActiveAntsBV.ActiveAntsprovidese-fulfilmentandtransportservicestocompaniesactiveine-commerce.ActiveAntsprovidesstorageservices,doesthepick&packactivityandshipstheproducts.Anthillsolelyfunctionsasaholdingcompany.bpostpaidanamountofEUR 4.0 millionfor50%ofthesharesandperformedacapitalincreaseofEUR 3.0 milliontoobtainanadditional13.6%oftheshares.Nexttothat,theagreementforeseesacontingentconsiderationbaseduponthe2018EBITDAwhichcanamountuptoEUR 0.8 million.ThecompanywasconsolidatedwithintheP&Loperatingsegmentusingthefull-integrationmethodasfromMarch 2018.Transactioncostswereexpensedandareincludedintheoperatingexpenses.

Thepreliminarycalculatedgoodwillispresentedasfollows:


Inmillion EUR




Current Assets 5.3

Inventories 0.1




Interest-bearingloansandborrowings (0.8)



Interestbearingloansandborrowings (4.1)





ofwhich:

-Cashpaid 7.0



Inmillion EUR

Netcashacquiredwiththesubsidiaries 3.3

Cashpaid (7.0)


Thefairvalueofassetsacquiredandliabilitiesassumedatacquisitiondatecouldnotbeassessedyet.Consequently,thedeterminationofthecarryingamountoftheacquiredentityandthepurchasepriceallocationoftheacquisitionarestillunderreviewandwillbefullydisclosedin2019.

Fromthedateofacquisition,AnthillBVcontributedEUR 12.9 millionofrevenueandEUR 0.6 milliontoprofitbeforetaxfromcontinuingoperationsoftheGroup,giventhevolatilityofthefigures,nofiguresaredisclosedfortheperiodstartingfromthebeginningoftheyear.



6.7Segmentinformationbpost’sbusinessisorganizedbasedonbusinessunits,serviceunitsandcorporateunits.EffectiveJanuary 1,2013,ithasoperatedthroughtwobusinessunits:theMRSbusinessunitandtheP&Lbusinessunit.

TheMail&RetailSolutionsbusinessunit(MRS)offerssolutionstobigcustomers,privateandpublic,self-employedworkersandsmallandmediumbusinessesontheonehandandservesresidentialcustomersaswellasallcustomersusingmassmarketchannelssuchasthepostoffices,thePostPoints,pointofsalesofUbiwayorbpost’se-Shoptopurchasetheirmail,pressandotherproductsontheotherhand.ItalsosellsbankingandinsuranceproductsunderanagencyagreementwithbpostbankandAGInsuranceandofferstoitsclientsanumberofotherpaymentproducts.

TheParcels&Logistics(P&L)businessunitspecializesinworldwidemail,parcelande-commercelogisticssolutions(fulfillment,handling,deliveryandreturnmanagement).

bpostprovidesproductsandservicesbasedonthefollowingproductlines:(i) transactionalmail,(ii) advertisingmail,(iii) press,(iv) domesticparcels,(v) internationalparcels,(vi) logisticsolutions,(vii) value-addedservices,(viii) internationalmail,(ix) bankingandfinancialproducts,(x) distributionand(xi) retail&other.Revenuefromthetransactionalmail,advertisingmail,press,distributionandbankingandfinancialproductsareincludedwithintheMRSbusinessunit.Revenuefromtheinternationalmail,logisticsolutionsandparcelsproductlinesareincludedwithintheP&Lbusinessunit.Retail&otherrevenueandvalue-addedservicesareallocatedacrosstheMRSandP&Lbusinessunits.

bposthasserviceunitsthatsupportthebusinesswhosecostsarerechargedtothebusinessandcorporateunitsusingacostallocationmechanism.TheserviceunitsincludetheMailServiceOperations(MSO)unit,InternationalOperations(IOPS)unit,theICTandServiceOperationsunits,theGlobalServiceOrganization(GSO)andtheHumanResources&Organization(HR&O)unit.TheMSOserviceunitisinchargeofcollecting,sortinganddistributingmailandparcelsinBelgium.TheIOPSserviceunitcomprisestheoperationsoftheEuropeanMailCenter,whichislocatedatBrusselsAirportandservesasahubforinternationalmailandparcels.

bpost’scorporateunitsincludeFinance(excludingGSO),Legal/Regulatory/Corporate/M&A/StrategyandInternalAuditandsomecostsrelatedtotheemployeerelatedliabilitiesandprovisions.Thecostsofthecorporateunitsarenotrechargedtootherunitsandarereportedunderthecategory“Corporate”.

Thetwobusinessunits(MRSandP&L)arealsooperatingsegmentsforfinancialreportingpurposes.Operatingincomeatthelevelofeachofthesetwosegmentscapturesexternalsalestothirdparties.Thesumoftheoperatingincomeofthetwosegments,togetherwiththeoperatingincomeofthereconcilingcategory“Corporate”tiesinwithbpost’soperatingincome.bpostcomputesitsprofitfromoperatingactivities(EBIT)atthesegment.

TheoperatingsegmentsarethelowestlevelonwhichperformanceisassessedbytheChiefOperatingDecisionMaker(CODM)underthedefinitionofIFRS 8.22.TheCODMistheBoardofDirectorsandthekeyprofitorlossmeasureusedbytheCODMisEBIT.

ThetablebelowpresentstheevolutionperbusinessunitfortheyearsendedDecember 31,2018and2017:

TotaloperatingincomeattributabletotheMRSoperatingsegmentdecreasedbyEUR 22.2 millionin2018,mainlydrivenbytheunderlyingvolumedecreaseinDomesticmail(-5.8%)andthedecreaseofBankingandfinancialproductspartlyoffsetbytheimprovementofthepriceandmixofDomesticmailandtheincreaseofValueaddedServicesdrivenbythemanagementofcross-borderfinesonbehalfoftheBelgianState.

P&Loperatingincomeincreasedin2018byEUR 853.2 milliontoEUR 1,825.8 million.ThisincreasewasmainlyduetotheintegrationofRadial,excellentorganicvolumegrowthofDomesticParcels,

As at 31 December


MRS 1,986.1 2,008.3

P&L 1,825.8 972.7

Total operating income of operating segments 3,811.9 2,981.0

Corporate(Reconcilingcategory) 38.3 42.9

Total operating income 3,850.2 3,023.8

whichnotedavolumegrowthof+23.3%drivenbye-commercegrowth,alongwiththeincreaseofInternationalParcelsandInternationalMail.

Inter-segmentsalesareimmaterial.Thereisnointernaloperatingincome.

Excludingtheremunerationreceivedtoprovidetheservicesasdescribedinthemanagementcontractandpressconcessions(seenotes 6.8 and6.34),nosingleexternalcustomerexceeded10%ofbpost’stotaloperatingincome.

Theevolutionperproductlinecanbesummarizedasfollows:





Domestic mail 1,339.5 1,353.4 -1.0%

Transactional mail 809.3 807.9 0.2%

Advertisingmail 244.2 252.9 -3.4%

Press 286.0 292.6 -2.2%

Parcels 1,561.4 796.1 96.1%

Domestic parcels 262.3 224.2 17.0%

International parcels 242.9 222.6 9.1%

LogisticSolutions 1,056.2 349.2 -

Additional sources of revenues 911.0 831.5 9.6%

International mail 240.9 160.4 50.1%

Valueaddedservices 110.7 101.5 9.0%

Bankingandfinancialproducts 167.1 182.6 -8.5%

Distribution 101.0 98.1 3.0%

Retail & Other 291.4 288.9 0.9%

Corporate (Reconciling post) 38.3 42.9 -10.7%


ThefollowingtablepresentstheoperatingincomefromexternalcustomersattributedtoBelgium,restofEurope,UnitedStatesofAmericaandrestoftheworldfromwhichbpostderivesitsoperatingincome.Theallocationoftheoperatingincomeoftheexternalcustomersisbasedonthelocationoftheentitygeneratingtheoperatingincome.

As at 31 December

Inmillion EUR 2018 2017 Evolution 2018-2017

Belgium 2,481.9 2,459.3 0.9%

Rest of Europe 252.5 175.3 44.1%

USA 1,064.4 323.6 228.9%

Restofworld 51 .5 65.7 -21.6%




Thefollowingtablepresentsthenon-currentassets1 attributedtoBelgium,RestofEurope,UnitedStatesofAmericaandRestoftheworld.

As at 31 December

Inmillion EUR 2018 2017 Evolution 2018-2017

Belgium 703 .4 869.7 -19.1%

Rest of Europe 143.2 61.8 131.6%

USA 735 .1 688.0 6.8%

Restofworld 31.2 16.3 91.5%

Total non-current assets 1,612.9 1,635.9 -1.4%

ThefollowingtablepresentsEBITinformationaboutbpost’soperatingsegmentsfortheyearsendedDecember 31,2018 and2017:

As at 31 December


MRS 368.1 435.4

P&L 35 .3 67.4

Total EBIT of operating segments 403.5 502.8

Corporate(Reconcilingcategory) (10.1) (9.9)

Total EBIT 393.4 492.9

TheEBITattributabletotheMRSoperatingsegmentdecreasedbyEUR 67.2 millionin2018asthelowerrevenuesforDomesticMailcouldnotbecompensatedbycostsavings.

TheEBITattributabletotheP&LoperatingsegmentdecreasedbyEUR 32.1 millioncomparedto2017,fromEUR 67.4 milliontoEUR 35.3 million.Therevenueincreasewasoutpacedbythecostincrease,partially

duetodepreciationatRadialwhichisimpactedbytheCAPEXinvestmentsfromthepast.

TheEBITattributabletotheCorporatereconciliationcategoryslightlydecreasedbyEUR 0.2 millionin2018.

ThefollowingtablepresentsEATinformationaboutbpost’soperatingsegmentsfortheyearsendedDecember 31,2018 and2017:

As at 31 December


MRS 368.1 435.4

P&L 35 .3 67.4

Total EAT of operating segments 403.5 502.8

Corporate(Reconcilingcategory) (139.8) (179.8)

Total EAT 263.6 322.9

(1) Totalnon-currentassetsconsistoutofproperty,plantandequipment,intangibleassets,investmentpropertiesandtradeandotherreceivables(>1 year).



FinancialdetailsfortheyearendedDecember 31,2018 and2017onthecorporatesegment(reconciliationpost)areasfollows:

As at 31 December


Operating income 38.3 42.9

Centraldepartments(Finance(excl.GSO),Legal,InternalAudit,CEO,…) (62.2) (64.3)

Other reconciliation items 13.8 11.6

Operating expenses (48.4) (52.7)

EBIT corporate (Reconciling category) (10.1) (9.9)

Shareofprofitofassociates 11 .5 9.6

FinancialResults (23.8) (13.7)

IncomeTaxexpense (117.4) (165.8)

EAT corporate (Reconciling category) (139.8) (179.8)

Financialincome,financialcosts,shareofprofitofassociatesandincometaxexpensesareallincludedinthereconcilingcategory“Corporate”.

AssetsandliabilitiesarenotreportedpersegmenttotheBoard.

6.8Revenue



RevenueexcludingtheSGEIremuneration 3,502.9 2,702.2

SGEIremuneration 271.4 270.0

Total 3,774.4 2,972.2

Disclosuresconcerningthenature,theamount,timinganduncertaintyofrevenueandcashflowsarisingfromcontractswithcustomersrevenuescanbefoundbackinthesections:6.2 basisofpreparation(IFRS 15transition),6.4 summaryofsignificantaccountingpolicies(performanceobligations),6.7 segmentinformation(disaggregationofrevenue)and6.28 tradeandotherpayables(remainingperformanceobligation).Significantjudgementsaredisclosedwithinsection 6.3 significantaccountingjudgementsandestimates.



6.9Otheroperatingincome

Gainsondisposalofproperty,plantandequipment,whichmainlyrelatetothesalesofbuildings,increasedbyEUR 14.6 million.Thisincreasecomparedtolastyearwasmainlyduetothesizeofthebuildingssold(e.g.OldBrusselsX).

ThirdpartycostsrecoverydecreasedbyEUR 1.7 millionandmainlyrelatestothereimbursementsbythirdpartiesofnon-ordinaryservicesprovidedbyUbiwayandothersubsidiariesaswellasthesalesrealizedbybpost’srestaurants.

OnDecember 20,2017 anamendmenttothesharepurchaseagreementofDynaGroupwasmadeforthepaymentofanacceleratedcontingentconsiderationbaseduponwhichbpostreversedoutoftheoutstandingliabilityanamountofEUR 7.9 million.In2018 anamountofEUR 3.6 millionwasreversedoutoftheoutstandingliabilityrelatedtothecontingentconsiderationofDynaGroupascertaincriteriawerenotachieved.Furthermorein2018bpostdecidedtoexittheparticipationindeBurenthroughtheputoptionforeseenintheinitialpurchasecontract,thistriggeredthereversalofthecontingentconsiderationwhichamountedtoEUR 14.6 million.

OtherRetailincomemainlyconsistedofnon-specificproductincomeintheretailchannel.

Othersourcesofoperatingincomemainlyconsistedofreimbursementsbythirdpartiestowardsbpostanditssubsidiariesandincomeofotherservicesprovidedbyitssubsidiaries.



Gainondisposalofproperty,plantandequipment 30 .5 15.9

Benefitsinkind 0 .1 0.4

Rentalincomeofinvestmentproperty 2.0 1.1

Thirdpartycostrecovery 10 .3 12.0

Gainoncontingentconsiderations 18.2 7.9

Other Retail income 4.8 4.7

Other 9 .9 9.6

Total 75.8 51.6



6.10Otheroperatingexpense



Provisions (17.2) (3.9)

Local,realestateandothertaxes 11 .5 5.1

Impairmentontradereceivables 10 .5 3.3

Penalties 0 .3 0.1

Other 4.8 1.0

Total 9.8 5.6

OtheroperatingexpensesincreasedbyEUR 4.2 millionversuslastyear.ExcludingtheintegrationofthenewsubsidiariesoperatingexpensesdecreasedbyEUR 7.3 million,mainlyduetothereversalofprovisions.

6.11Servicesandothergoods

ThecostofgoodsandservicesincreasedbyEUR 583.3 millionorEUR 74.8 millionexcludingtheintegrationofthenewsubsidiaries.Thisincreasewasmainlyduetoincreasedrentandrental



Rentandrentalcosts 148.6 104.3 42.5%

Maintenanceandrepairs 108.3 86.9 24.6%

Energydelivery 45.9 40.7 12.7%

Othergoods 38.6 26.2 47.6%

Postalandtelecomcosts 21.2 8.9 137.3%

Insurance costs 19.7 11.8 67.7%

Transport costs 686.8 374.2 83.5%

Publicityandadvertising 24.4 18.7 30.6%

Consultancy 21.7 19.4 12.1%

Interimemployees 192.5 107.1 79.8%

Thirdpartyremuneration,fees 145.9 132.3 10.3%

Otherservices 102.6 42.4 142.0%

Total 1,556.2 972.8 60.0%

costs(EUR 11.0 million),maintenanceandrepairs(EUR 3.0 million),energycosts(EUR 4.4 million),insurancecosts(EUR 5.8 million),transportcosts(EUR 38.9 million)andotherservices(EUR 3.7 million).



6.12Payrollcosts



Employeeremuneration 1,185.7 987.8

Socialsecuritycontribution 216.3 202.6

Definedbenefitanddefinedcontributionplans 13 .4 4.0

Other personnel costs 40 .3 12.2

Total 1,455.6 1,206.7

AsatDecember 31,2018,theheadcountofbpostamountedto34,074(2017:33,992)andwascomposedasfollows:

• Statutorypersonnel:9,509(2017:10,296) • Contractualpersonnel:24,565(2017:23,696)

TheaverageFTEnumberfor2018was31,201(2017:25,323).

• RentalcostshaveincreasedbyEUR 44.3 millionorexcludingtheintegrationofthenewsubsidiariesbyEUR 11.0 million,mainlyduetothenewBrusselssortingcenter(NBX)andthegrowingfleet.

• TheincreaseofmaintenanceandrepairsbyEUR 21.3 millionwasmainlycausedbytheintegrationofthenewsubsidiaries(EUR 18.3 million).

• EnergydeliverycostsincreasedbyEUR 5.2 millionorEUR 4.4 millionexcludingtheintegrationofthenewsubsidiaries,mainlyduetohigherfuelpricesandthegrowingfleet.

• TransportcostsamountedtoEUR 686.8 million,EUR 312.6 millionhighercomparedtopreviousyear,mainlyduetoscopechange(EUR 273.7 million),theevolutionofinternationalactivitiesandhigherdomesticparcelvolumes.

• Thegrowthininterimcostswasdrivenbytheintegrationofthenewsubsidiaries,seealsosectionpayrollcosts.

• OtherservicesincreasedbyEUR 60.2 millionmainlyduetotheintegrationofthenewsubsidiaries(EUR 56.5 million).

6.13Financialincomeandfinancialcost

ThefollowingamountshavebeenincludedintheIncomeStatementlineforthereportingperiodspresented:



Financialincome 6.1 5.8

Financialcosts (29.9) (19.5)

Total (23.8) (13.7)



Financial income



InterestincomefromfinancialassetsatfairvaluethroughP&L,designatedassuchuponinitialrecognition 0 .0 0.0

Interestincomefromfinancialassetsheldtomaturity 0 .0 0.0

Interestincomefromshorttermbankdeposits 0 .0 0.0

Interest income from current accounts 0 .4 0.1

Gainfromexchangedifferences 5 .1 5.0

Other 0.6 0.6

Financial income 6.1 5.8

Financial costs



Financialcostsonbenefitobligations(IAS 19) 3 .0 6.0

Interest on loans 4 .7 0.7

Interestandcostsrelatedtolong-termbond 4 .4 0.0

Unwindingofpre-hedgeinterestswap 2.7 0.0

Lossfromexchangedifferences 8.4 5.7

Impairmentcurrent/financialassets 0 .1 0.1

Unwindingofdiscountandeffectofchangesindiscountrateoncontingentconsideration 1 .3 2.2

Otherfinancecosts 5 .4 4.8

Financial costs 29.9 19.5




Tax expense using statutory tax rate 112.7 166.1

Profitbeforetax 381.0 488.7

Statutorytaxrate 29.58% 33.99%

Reconciling items between statutory and effective tax

Taxeffectofnontaxdeductibleexpenses 6.1 8.8

Notionalinterestsdeduction 0 .0 0.0

Taxeffectsprioryear (4.4) 0.5

Taxeffectoftaxlossesutilizedbysubsidiariesforwhichnodeferredtaxassetwasrecognizedinprioryear (1.8) (8.2)

Subsidiariesinlosssituationforwhichnodeferredtaxassetwasrecognized 11 .9 10.7

Associates(equitymethod) (3.4) (3.3)

Other:

Taxeffectofsubsidiaryliquidation 0 .0 (3.0)

Taxeffectofthechangesintaxrates 0 .0 7 .0

Otherdifferences (3.7) (12.8)

Total 117.4 165.8

Taxusingeffectiverate(currentperiod) (117.4) (165.8)

Profitbeforeincometax 381.0 488.7

Effectivetaxrate 30.8% 33.9%

Thereconciliationoftheeffectivetaxratewiththeaggregatedweightednominaltaxratecanbesummarizedasfollows:

6.14Incometax/ deferredtax

IncometaxesrecognizedintheIncomeStatementcanbedetailedasfollows:

As at 31 December


Tax expense included:

Currenttaxexpenses (125.6) (145.0)

Adjustmentrecognizedinthecurrentyearinrelationtothecurrenttaxofprioryear 6.0 (0.5)

Deferredtaxexpenses 2.2 (20.3)

Total tax expense (117.4) (165.8)

In2018,theeffectivetaxratehasbeenpositivelyimpactedbytherecordoftaxdeductionsonprioryearbalance(EUR 4.4 million).

In2017,eXboNV/SAhasbeenliquidated,triggeringapositiveimpactofEUR 3.0 million.

AstheBelgianandUScorporatetaxreformshadbeensubstantiallyenactedbeforeDecember 31,2017bpostreassessedtheirdeferredtaxpositionunderIFRStakingintoconsiderationthesenewmeasures,thisledtoataxexpenseofEUR 7.0 millionin2017.



As at 31 December

In million EUR 2018 2017

Deferred tax assets

Employeebenefits 0 .0 0.0

Provisions 0 .0 0.1

Taxlossescarriedforward 2.2 1.0

Other 0 .0 0.0

Total deferred tax assets 2.2 1.1

Deferred tax liabilities

Propertyplantandequipment 1 .3 1.3

Intangibleassets 8.3 11.2

Other (0.1) 0.8

Total deferred tax liabilities 9.5 13.4

Net deferred tax liability (7.3) (12.3)

DeferredtaxassetsrelatedtounusedtaxlossesforRadialhavebeenrecognizedperDecember 31,2018(EUR 39.4 million).

AsofDecember 31,2018,bpostrecognizedanetdeferredincometaxliabilityofEUR 7.3 million.The

As at 31 December


Deferred tax assets

Employeebenefits 23.6 32.4

Provisions 6.2 9.0

Taxlossescarriedforward 41 .1 0.9

Other 29.5 15.8

Total deferred tax assets 100.3 58.0

Deferred tax liabilities

Propertyplantandequipment 31 .1 20.6

Intangibleassets 37 .7 5.9

Other 0 .0 0.1

Total deferred tax liabilities 68.8 26.5

Net deferred tax asset 31.5 31.5

Taxeffectofthepermanentdifferences(excludingnon-deductibleexpenses)isincludedin“Otherdifferences”caption.

Netdeferredtaxpositionsaredisclosedbylegalentity.

Forsomesubsidiariesbpostdidnotrecognizedeferredtaxassetsforunusedtaxlossescarriedforwardasit’suncertainthattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized.Inordertodeterminethis,bpostused

estimatesoftaxableincomebyjurisdictioninwhichbpostoperatesandtheperiodoverwhichdeferredtaxassetsarerecoverable.ThetaxlossesforwhichnodeferredtaxassetwasrecognizedinentitieslocatedinBelgiumcanbecarriedforwardindefinitely,whereasinsomeothercountriestherearelimitationsconcerningthecarryforward.

AsofDecember 31,2018,bpostrecognizedanetdeferredincometaxassetofEUR 31.5 million.Thisnetdeferredincometaxassetiscomposedasfollows:

decreaseinnetdeferredincometaxliabilitymainlyresultedfromthedepreciationsandimpairmentofintangibleassetsrelatedtothepurchasepriceallocation.Thenetdeferredtaxliabilityiscomposedasfollows:



numberofordinarysharesthatwouldbeissuedonconversionofallthedilutivepotentialordinarysharesintoordinaryshares.

Incaseofbpost,noeffectsofdilutionaffectthenetprofitattributabletoordinaryequityholdersandtheweightedaveragenumberofordinaryshares.

Thetablebelowreflectstheincomeandsharedatausedinthebasicanddilutedearningspersharecomputations:

6.15EarningspershareInaccordancewithIAS 33,thebasicearningspershareamountsarecalculatedbydividingnetprofitfortheyearattributabletoordinaryequityholdersoftheparentbytheweightedaveragenumberofordinarysharesoutstandingduringtheyear.

Dilutedearningspershareamountshavetobecalculatedbydividingthenetprofitattributabletoordinaryequityholdersoftheparent(afteradjustingfortheeffectsofalldilutivepotentialordinaryshares)bytheweightedaveragenumberofordinarysharesoutstandingduringtheyearplustheweightedaverage



Net profit attributable to ordinary equity holders of the parent for basic earnings 264.8 324.9

Adjustmentsfortheeffectofdilution

Net profit attributable to ordinary equity holders of the parent adjusted for the effect of dilution 264.8 324.9

In million shares

Weighted average number of ordinary shares for basic earnings per share 200.0 200.0

Effectofdilution

Weighted average number of ordinary shares adjusted for the effect of dilution 200.0 200.0

In EUR

Basic,profitfortheyearattributabletoordinaryequityholdersoftheparent 1.32 1.62

Diluted,profitfortheyearattributabletoordinaryequityholdersoftheparent 1.32 1.62



6.16Property,plantandequipment

Inmillion EUR Landandbuildings

Plantandequipment

Furnitureand

vehicles

Fixturesand

fittings

Otherproperty,plantandequipment

Total

Acquisition cost

Balance at 1 January 2017 836.1 383.9 259.2 129.5 28.9 1,637.7

Acquisitions 0.6 30.8 27.7 22.9 14.7 96.7

Acquisitionsthroughbusinesscombinations 6.7 (0.2) 150.8 41.7 2.4 201.3

Disposals 0.0 (18.9) (15.9) (3.3) 0.3 (37.9)

Disposalsviabusinesscombinations 0.0 0.0 0.0 0.0 0.0 0 .0

Assetsclassifiedasheldforsaleorinvestmentproperty (18.6) 0.0 0.0 (0.5) 0.0 (19.1)

Exchangeratedifference (0.1) (0.4) (2.9) (0.5) 0.0 (3.9)

Othermovements 4.9 28.2 1.0 (5.2) (29.8) (0.9)

Balance at 31 December 2017 restated 829.6 423.4 419.8 184.5 16.4 1,873.9

Balance at 1 January 2018 restated 829.6 423.4 419.8 184.5 16.4 1,873.9

Acquisitions 1.6 25.6 33.0 26.8 1.9 88.9

Acquisitionsthroughbusinesscombinations 5.1 6.6 8.5 0.4 0.0 20.7

Disposals (64.1) (44.9) (16.9) (33.4) 0.0 (159.3)

Disposalsviabusinesscombinations 0.0 0.0 0.0 0.0 0.0 0 .0

Assetsclassifiedasheldforsaleorinvestmentproperty (43.7) (1.3) (1.7) (0.1) 0.0 (46.8)

Exchangeratedifference 0.1 (0.1) 6.6 1.0 0.1 7 .7

Othermovements (10.9) 0.6 0.5 16.6 (5.6) 1 .1

Balance at 31 December 2018 717.9 409.8 449.9 195.8 12.8 1,786.2




Plantandequipment

Furnitureand

vehicles

Fixturesand

fittings


Total

Revaluation

Balance at 1 January 2017 0.0 0.0 0.0 0.0 7.4 7.4

Assetsclassifiedasheldforsaleorinvestmentproperty 0.0 0.0 0.0 0.0 0.0 0 .0

Exchangeratedifference 0.0 0.0 0.0 0.0 0.0 0 .0

Othermovements 0.0 0.0 0.0 0.0 0.0 0 .0

Balance at 31 December 2017 0.0 0.0 0.0 0.0 7.4 7.4

Balance at 1 January 2018 0.0 0.0 0.0 0.0 7.4 7.4

Assetsclassifiedasheldforsaleorinvestmentproperty 0.0 0.0 0.0 0.0 0.0 0 .0

Exchangeratedifference 0.0 0.0 0.0 0.0 0.0 0 .0

Othermovements 0.0 0.0 0.0 0.0 0.0 0 .0

Balance at 31 December 2018 0.0 0.0 0.0 0.0 7.4 7.4

Depreciation and impairment losses

Balance at 1 January 2017 (475.4) (299.4) (222.8) (82.1) (3.7) (1,083.5)

Depreciationthroughbusinesscombinations (0.2) 2.0 (17.1) (1.3) 0.2 (16.3)

Disposals 0.0 18.8 15.8 3.3 0.0 37 .9

Depreciation (15.5) (21.5) (21.8) (20.6) 0.0 (79.3)

Impairment losses 0.0 0.0 (0.7) (0.2) 0.0 (0.9)

Assetsclassifiedasheldforsaleorinvestmentproperty 11.9 0.0 0.0 0.2 0.0 12.1

Exchangeratedifference 0.0 0.2 0.5 0.1 0.0 0.8

Othermovements (8.8) 1.5 (1.3) 9.6 (0.2) 0.8

Balance at 31 December 2017 restated (487.9) (298.4) (247.4) (91.0) (3.7) (1,128.5)




Plantandequipment

Furnitureand

vehicles

Fixturesand

fittings


Total

Balance at 1 January 2018 restated (487.9) (298.4) (247.4) (91.0) (3.7) (1,128.5)

Depreciationthroughbusinesscombinations (2.1) (2.2) (7.1) (0.1) 0.0 (11.5)

Disposals 43.6 44.5 16.9 29.5 0.0 134 .5

Disposalsthroughbusinesscombinations 0.0 0.0 0.0 0.0 0.0 0 .0

Depreciation (18.8) (23.4) (45.8) (23.9) 0.0 (111.9)

Impairment losses 1.7 (0.3) 0.1 0.4 0.0 1 .9

Assetsclassifiedasheldforsaleorinvestmentproperty 30.6 0.5 1.3 0.1 0.0 32.6

Exchangeratedifference 0.0 (0.1) (1.2) (0.1) 0.0 (1.4)

Othermovements 9.9 0.2 0.4 (11.8) 0.0 (1.3)

Balance at 31 December 2018 (423.0) (279.2) (282.9) (96.8) (3.7) (1,085.6)

Carrying amount

At31 December 2017restated 341.7 125.0 172.4 93.5 20.1 752.8

At31 December 2018 295.0 130.7 167.0 99.0 16.4 708.0

Property,plantandequipmenthavedecreasedbyEUR 44.8 millionfromEUR 752.8 milliontoEUR 708.0 million.Thisdecreasewasmainlyexplainedby:

• theintegrationofLeenMenkenFoodserviceLogistics,IMEX.,M.A.I.L.andActiveAntsforEUR 9.2 million;

• acquisitions(EUR 88.9 million)relatedtoproductionfacilitiesforsortingandprintingactivities(EUR 23.3 million),mailandretailnetworkinfrastructure(EUR 13.5 million),ATMandsecurityinfrastructure(EUR 1.7 million),transportationrelatedinfrastructure(EUR 36.9 million)andITandotherinfrastructure(EUR 13.5 million);

• depreciationandimpairmentamountingtoEUR 110.0 millionandhigherthanlastyear(2017:EUR 80.2 million);

• disposals-mainlyrelatedtosalesofbuildings-forEUR24.8million;

• transfertoassetsheldforsale(EUR 1.2 million)andtoinvestmentproperty(EUR 13.0 million).

Allamortizationanddepreciationchargesareincludedinthesection“Depreciation,amortization”oftheincome statement.



6.17Investmentproperty

InvestmentpropertymainlyrelatestoapartmentslocatedinbuildingsusedaspostofficesandtherentofsomefloorsofBrusselscentraloffice.Investmentpropertiesarecarriedatacquisitioncostlessanyaccumulateddepreciationandlessanyimpairmentloss.Thedepreciationamountisallocatedonasystematicbasisoverusefullife(ingeneral40 years).

TherentalincomeoftheinvestmentpropertyamountedtoEUR 2.0 million(2017:EUR 1.1 million).TheestimatedfairvalueoftheinvestmentpropertyincreasedfromEUR 5.7 milliontoEUR 18.7 milliongiventheincreasednumberoffloorsoftheCentreMonnaiebuilding(ieheadoffice)beingrentedout.

Inmillion EUR Land and buildings

Acquisition cost

Balance at 1 January 2017 18.2

Acquisitions 0.0

Transferfrom/tootherassetcategories (0.5)

Balance at 31 December 2017 17.6

Balance at 1 January 2018 17.6

Acquisitions 0.0

Transferfrom/tootherassetcategories 43.7

Balance at 31 December 2018 61.3


Balance at 1 January 2017 (12.0)

Depreciations (0.1)

Transferfrom/tootherassetcategories 0.2

Balance at 31 December 2017 (11.9)

Balance at 1 January 2018 (11.9)

Depreciations (0.1)

Transferfrom/tootherassetcategories (30.5)

Balance at 31 December 2018 (42.6)

Carrying amount

At31December2017 5.7

At31December2018 18.7



6.18Assetsheldforsale

As at 31 December


Assets

Property,plantandequipment 0 .0 0.6

Alvadis 12.1 0.0

deBuren 2.6 0.0

Assets held for sale 14.7 0.6

Liabilities

Alvadis (7.8) 0.0

deBuren (3.0) 0.0

Liabilities directly linked to assets held for sale (10.8) 0.0

Property, plant and equipmentIn2018,assetsheldforsaledecreasedfromEUR 0.6 milliontoEUR 0.0 million.

Thenumberofbuildingsrecognizedinassetsheldforsaleamountedto3attheendof2017versus1attheendof2018.Themajorityoftheseassetsareretailoutletswhicharevacantasaconsequenceoftheoptimizationofthepostofficesandmailcenternetwork.

ProfitsondisposalofEUR 30.5 million(2017:EUR 15.9 million)wereaccountedforintheincomestatementinthesectionotheroperatingincome.In2018,EUR 2.1 millionofimpairmentchargeswererecordedinthesectiondepreciation,amortization.

AlvadisOnDecember 3,2018bpostdecidedtostartupthesalesprocessofAlvadisNV/SA,asubsidiaryofUbiwayNV/SAandAMPNV/SA.

Alvadisprovidesprepaidcards,vouchersandelectronicservicessolutionsforpointsofsale.ThesaleofAlvadisisexpectedtobecompletedwithinayearfromthereportingdate,subjecttoregulatoryapproval.AtDecember 31,2018Alvadis–partoftheMRSoperatingsegment-wasclassifiedasheldforsale.

ThemajorclassesofassetsandliabilitiesofAlvadisclassifiedasheldforsaleareasfollows:

As at 31 December

Inmillion EUR 2018

Assets

Property,plantandequipment 0 .3

Intangibleassets 0 .1

Longtermtradeandotherreceivables 0 .0

Inventories 2.7

Shorttermtradeandotherreceivables 8.5

Cashandcashequivalents 0 .5

Assets held for sale 12.1

Liabilities

Longterminterest-bearingloansandborrowings 0 .0

Deferredtaxliabilities 0 .1

Provisions 0 .0

Shorttermtradeandotherpayables (7.9)

Liabilities directly linked to assets held for sale (7.8)

Net assets directly associated with disposal group 4.3



Followingtheclassificationtoassetsheldforsale,theintangibleassets(brandnameandcustomerrelationship)originatingfromthepurchasepriceallocationwerewritten-down(EUR 1.0 million)toreducethecarryingamountoftheassetstotheirfairvaluelesscoststosellbaseduponabindingsalesagreement(classifiedaslevel1inthefairvaluehierarchy).Nofurtherwrite-downwasnecessary.

de BurenOnDecember 3,2018bpostdecidedtostartuptheexitintheparticipationindeBurenInternationaalBV,whichoperatesanopennetworkofparcellockersin

theNetherlands,throughtheputoptionforeseenintheinitialpurchasecontract.ThisputoptionallowedbposttoselltheirparticipationindeBurentotheminorityshareholders.ThistransactionwascompletedonFebruary 21,2019.HenceatDecember 31,2018deBuren–partoftheP&Loperatingsegment-wasclassifiedtoheldforsale.

ThemajorclassesofassetsandliabilitiesofdeBurenclassifiedasheldforsaleareasfollows:

As at 31 December

Inmillion EUR 2018

Assets

Property,plantandequipment 0 .9

Intangibleassets 0 .9

Deferredtaxassets 0 .0

Longtermtradeandotherreceivables (0.2)

Inventories 0.8

Shorttermtradeandotherreceivables (0.1)

Cashandcashequivalents 0 .3

Assets held for sale 2.6

Liabilities

Longterminterest-bearingloansandborrowings (1.7)

Deferredtaxliabilities (0.1)

Provisions 0 .0

Shorttermtradeandotherpayables (1.2)

Liabilities directly linked to assets held for sale (3.0)

Net assets directly associated with disposal group (0.4)

Thedivestmentofthe51%stakeindeBurentriggeredthereversalofthecontingentconsiderationwhichamountedtoEUR 14.6 millionasbpostwasliberatedfromanycontingentconsiderationorothersimilarobligation.Thishasbeenreleasedwithinotheroperatingincome(seenote 6.9).Followingtheclassificationtoassetsheldforsale,theintangibleassets(know-how)originatingfromthepurchasepriceallocationwerewritten-down(EUR 5.6 million)aswellasthegoodwill(EUR 4.2 million)toreducethecarryingamountoftheassetstotheirfairvaluelesscosts to sell.



6.19Intangibleassets

Inmillion EUR Goodwill Development Software Otherintangibleassets Total

Acquisition cost

Balance at 1 January 2017 199.2 101.2 129.1 38.7 468.1

Acquisitions 606.4 16.4 8.0 0.2 631.0

Acquisitionsandadditionsthroughbusiness combinations (132.3) 0.5 37.6 144.5 50 .3

Disposals 0.0 0.0 (2.5) (0.3) (2.7)

Disposalsviabusinesscombinations 0.0 0.0 0.0 0.0 0 .0

Assetsclassifiedasheldforsaleorinvestmentproperty 0.0 0.0 0.0 0.0 0 .0

Exchangeratedifference (8.1) 0.0 (1.7) 3.0 (6.7)

Othermovements (0.6) (1.6) 3.8 (0.7) 0 .9

Balance at 31 December 2017 restated 664.6 116.5 174.4 185.4 1,140.9

Balance at 1 January 2018 restated 664.6 116.5 174.4 185.4 1,140.9

Acquisitions 0.0 12.7 13.5 0.4 26.5

Acquisitionsandadditionsthroughbusiness combinations 3.0 0.0 0.2 3.2 6.4

Disposals 0.0 (8.7) (5.7) (3.2) (17.7)


Assetsclassifiedasheldforsaleorinvestmentproperty (4.2) (1.2) (10.0) (2.5) (17.8)

Exchangeratedifference 21.6 0.0 1.6 (0.6) 22.6

Othermovements (1.5) 0.3 (1.3) 1.4 (1.1)

Balance at 31 December 2018 683.6 119.6 172.6 184.0 1,159.8


Balance at 1 January 2017 (24.8) (79.4) (110.8) (28.8) (243.8)

Acquisitionsandadditionsthroughbusiness combinations 0.0 (0.6) 0.9 15.6 15 .9

Disposals 0.0 0.0 2.5 0.3 2.7

Disposalsthroughthesaleofsubsidiaries 0.0 0.0 0.0 0.0 0 .0

Depreciation 0.0 (5.5) (13.8) (5.8) (25.1)

Impairment losses 0.0 0.0 0.0 0.0 0 .0

Assetsclassifiedasheldforsaleorinvestmentproperty 0.0 0.0 0.0 0.0 0 .0

Exchangeratedifference 0.0 0.0 0.5 0.0 0 .5

Othermovements 0.0 (1.2) 0.4 0.0 (0.8)

Balance at 31 December 2017 restated (24.8) (86.6) (120.3) (18.8) (250.6)



IntangibleassetsdecreasedbyEUR 15.4 million,mainlydueto:

• amortizationandimpairmentsamountingtoEUR 67.8 millionincludingimpairmentofEUR 16.3 millionongoodwillofdeBuren,CertipostandBubblePost;

• partiallycompensatedbytheacquisitionofLeenMenkenFoodserviceLogistics,IMEX,M.A.I.L.andActiveAntsforEUR 5.3 million;

• theevolutionoftheexchangerate(EUR21.6million)and

• investmentsinsoftwareandlicenses(EUR 13.5 million),developmentcostscapitalized(EUR 12.7 million)andotherintangibleassets(EUR 0.4 million).

Allamortizationanddepreciationchargesareincludedinthesection“Depreciation,amortization”oftheincome statement.

Businesscombinationsareaccountedforusingtheacquisitionmethod.Thecostofanacquisitionismeasuredastheaggregateoftheconsiderationtransferredmeasuredatacquisitiondatefairvalueandtheamountofanynon-controllinginterestsintheacquiredentity.

Goodwillisinitiallymeasuredatcost,beingtheexcessoftheaggregateoftheconsiderationtransferredoverthenetidentifiableassetsacquiredandliabilitiesassumed.

Afterinitialrecognition,goodwillismeasuredatcostlessanyaccumulatedimpairmentlosses.

Forthepurposeofimpairmenttesting,goodwillisallocatedtoeachoftheGroup’scash-generatingunits(orgroupsofcash-generatingunits)inaccordancewithIAS 36Impairment of assets.

Until2017,thegoodwillwithinbposthasbeenallocatedtocash-generatingunitsinlinewiththeacquiredbusinesscombinations.PerDecember 31,2017thecarryingvalueofthegoodwillamountedtoEUR 639.8 millionandmainlyrelatedtoacquisitionssuchasRadial(EUR 430.2 million),DynaGroup(EUR 73.6 million),Ubiway(EUR 50.2 million),deBuren(EUR 4.2 million),BubblePost(EUR 11.6 million),LandmarkGlobalInc.(EUR 18.1 million),FDM(EUR 16.3 million)andotherindividualimmaterialgoodwillforEUR 35.6 million.Theimpairmenttestsofthecash-generatingunitsinlinewiththeacquiredbusinesscombinationsdidnotleadtoanyimpairmentof assets.

In2018,bpostreorganizeditssegmentset-uptoenhancestrategiccoherenceandimprovealignment.Asaresult,thecompositionoftheCGUchangedandgoodwillhasbeenreallocatedtotheunitsaffected.

Inmillion EUR Goodwill Development Software Otherintangibleassets Total


Balance at 1 January 2018 restated (24.8) (86.6) (120.3) (18.8) (250.6)

Acquisitionsandadditionsthroughbusiness combinations (0.2) 0.0 (0.1) (0.8) (1.1)

Disposals 0.0 8.7 5.6 3.2 17 .4


Depreciation 0.0 (8.5) (22.0) (14.6) (45.0)

Impairment losses (16.3) 0.1 (5.6) (1.0) (22.8)

Assetsclassifiedasheldforsaleorinvestmentproperty 4.2 0.7 10.0 2.0 16.8

Exchangeratedifference 0.0 0.0 (1.0) 0.1 (1.0)

Othermovements 0.3 (0.2) 0.0 1.2 1 .3

Balance at 31 December 2018 (36.7) (85.9) (133.4) (28.8) (284.8)

Carrying amount

At31 December 2017restated 639.8 29.9 54.1 166.6 890.4

At31 December 2018 646.8 33.7 39.2 155.2 874.9



inmillion EUR 2017restated

Acquisi-tions&di-vestments

Transfer ImpairmentCurrency

translation differences

2018

Former business combinations:

BubblePost 11.6 (7.3) 0.0 (4.2) 0.0 0 .0

Certipost 7.9 0.0 0.0 (7.9) 0.0 0 .0

Ubiway 50.2 0.0 (50.2) 0.0 0.0 0 .0

DynaGroup 73.6 0.0 (73.6) 0.0 0.0 0 .0

CGU, to which goodwill is allocated as from 2018:

Press 0.0 0.0 21.9 0.0 0.0 21.9

Proximityandconvenienceretailnetwork 0.0 0.0 28.3 0.0 0.0 28.3

Valueaddedservices 0.9 0.0 0.0 0.0 0.0 0 .9

ParcelsBeNe 5.6 0.0 36.9 (4.2) 0.0 38.3

E-commercelogisticsEurope&Asia 8.9 6.0 36.8 0.0 0.0 51 .7

Cross-Border 0.5 0.0 0.0 0.0 0.0 0 .5

E-commercelogisticsNorthAmerica 472.9 0.0 0.0 0.0 20.4 493 .3

International Mail 7.8 4.2 0.0 0.0 0.0 12.0

Total 639.8 2.9 0.0 (16.3) 20.4 646.8

TheCGU“Press”regroupsallactivitiesrelatedtopressdistributionandincludesapartoftheformerbusinesscombinationUbiway.TheCGU“Proximityandconvenienceretailnetwork”includesthebpostandUbiwayretailnetworks.“ParcelsBene”combineslastmileparceldeliveryofbpostNV/SAandtheformerbusinesscombinationsCitydepotandDynaGroup(partially).TheCGU“E-commercelogisticsEurope&Asia”combinestheformerbusinesscombinationsofDynaGroup(partially),LandmarkNetherlands&Poland,thenewlyacquiredcompaniesLeenMenkenandAnthill,togetherwithecommerceactivitiesofbpostNV/SAandRadialEurope.E-commercelogisticsNorth America consists of the former business combinationsRadialUS,LandmarkUS,AppleExpressandFDM.InternationalMailincludestheformerbusinesscombinationsofMSIanditsnewlyacquiredsubsidiariesImexandM.A.I.L..

GoodwillofBubblePost(7.3 million EUR)wasadjustedasaresultofthefinalizationofthepurchasepriceallocation(seenote 6.6businesscombinations).InlinewithIFRS 3businesscombinationadjustmentscanbemadewithinthemeasurementperiod,themeasurementperiodcannotexceedoneyearfromtheacquisitiondate.FurthermorebpostrecognizedanimpairmentforEUR8.4millionbecausebpostdecidedtoselldeBurenandstoptheactivitiesofBubblePostandthefairvaluelesscoststosellwaslowerthanthecarryingvalue.ThegoodwillofCertipost(EUR 7.9 million)hasbeenimpairedastherecoverableamountisnotsupportedanymorebythevalueinuseasthephaseoutofthecurrenteIDcardswillleadtoazerocashflow.

Goodwillisnotamortizedbutistestedforimpairmentonanannualbasis(December 2018).Thetestconsistsofcomparingthecarryingamountoftheassets(orgroupsof)CGU’swiththeirrecoverableamount.

Therecoverableamountsarebasedonthevalueinuse.ThelatterequalsthepresentvalueofthefuturecashflowsexpectedtobederivedfromeachCGUorgroupofCGUandisdeterminedusingthefollowinginputs:

• businessplanandbudgets(includingEBITDA)approvedbyseniormanagement,whichcoversafouryearperiod;

• considerationofaterminalvaluedeterminedfromthecashflowsobtainedbyextrapolatingthecashflowsofthelastyearofthebusinessplanreferredtoabove,affectedbyalong-termgrowthratedeemedappropriatefortheactivityandthelocationoftheassets;

• discountingofexpectedcashflowsataratedeterminedusingtheweightedaveragecostofcapital formula.

Thediscountrateisestimatedbasedonanextensivebenchmarkingwithpeers,soastoreflectthereturninvestorswouldrequireiftheyweretochooseaninvestmentintheunderlyingassets.Asfrom2018,thepeergroupwasdividedintomailrelatedpeersandparcelsrelatedpeers.Besidesthis,thedifferenteconomicenvironmentwasalsofactoredinthedeterminationoftheweightedaveragecostofcapital(WACC).Asaresult,theWACCusedtodiscountfuturecashflowsvariesbetween6.6%and8.4%in2018,whilein2017 anaverageof7.7%wasused.Long-termgrowthratewassetat0%formailactivitiesand2%forparcelsactivities(in2017ingeneral0%).



As at 31 December

Inmillion EURE-commerce

Logistics North America

E-commerce Logistics Europe &

AsiaParcels Bene

Sensitivitytolong-termgrowthrate-1% (130.2) (41.5) (87.0)

Sensitivitytolong-termgrowthrate+1% 179.6 64.6 135.5

Sensitivitytodiscountrate-0.5% 92.4 31.5 66.2

Sensitivitytodiscountrate+0.5% (78.7) (25.3) (53.2)

SensitivitytoEBITDAmargin-1.0% (171.5) (34.6) (76.0)

SensitivitytoEBITDAmargin+1.0% 171.5 34.6 76.0

6.20 Lease

Finance leaseThefinanceleaseliabilitiesasofDecember 31,2018relatetoleasedbuildings,machineryandequipment.

Thenetcarryingamountandusefullivesoftheleasedassetsareasfollows:

Inmillion EUR Usefullives CarryingamountDec31,2018

LandandBuildings 25 years 14.6

Machineryandequipment 5 years 2.2

Vehicles 5 years 0.0

Thefutureminimumfinanceleasepaymentsattheendofeachreportingperiodunderreviewwereasfollows:

Anunfavorablechangeingrowthrate,discountrateorEBITDAmarginasdisclosedaboveisnotexpectedtoresult in an impairment.

TheimpairmenttestsperformedatCGUleveldidnotleadtoanyimpairmentofassets,astherecoverableamountsofthe(groupsof)CGUsweresignificantlyhigherthantheircarryingamounts.Morespecifically,thedifferencebetweentheCGU’scarryingamountandtheirvalueinuse(headroom)representsinallcasesatleastmorethan42%oftheircarryingamount.Assuch,areasonablechangeinakeyassumptiononwhichtherecoverableamountoftheCGU’sisbasedwouldnotresultinanimpairmentlossfortherelatedCGU’s.

Inthisrespect,forE-commerceLogisticsNorthAmerica,E-commerceEurope&AsiaandParcelsBene,whicharethe3CGU’swhichrepresent90%ofthetotalamountofgoodwill,theworstcasesensitivityanalysisbelowleadstoheadroomthatisstillmorethan18%oftheirrespectivecarryingamounts.



As at 31 December


Minimum lease payments

Within1year 3 .0 1.7

1to5years 8.7 11.1

Morethan5years 17 .0 19.0

Total 28.7 31.7

Less

Future finance costs 10.6 10.6

Present value of the minimum lease payments

Within1year 1.6 1.7

1to5years 4 .1 7.5

Morethan5years 12.5 11.9

Total 18.3 21.1



Lessthanoneyear 100.8 115.5

Betweenoneyearandfiveyears 232.4 303.0

Morethanfiveyears 128.1 235.3

Total 461.3 653.8



Lessthanoneyear 1 .3 2.1

Betweenoneyearandfiveyears 3 .7 4.8

Morethanfiveyears 2.9 2.1

Total 7.9 9.0

Theincomethatisrelatedtooperationalleaseagreementsisrecognizedinthesection“Otheroperatingincome”foranamountofEUR 2.0 millionin2018.

Operating Leasebpost’sfutureminimumoperatingleasepaymentsareasfollows:

Theoperationalleaseagreementsincludefixedleasepayments.Therisksandrewardsincidentaltotheownershiparenottransferredtobpost.

ThedecreaseofthefutureoperatingleasescomparedtolastyearwasmainlyduetoachangeaspartoftheadoptionofIFRS 16,whichwillbeapplicableas

ofJanuary 1,2019.Theoutstandingbalance2018isinlinewiththescopetobeusedasofJanuary 1,2019intheframeworkofIFRS 16(excludinganyimpactofdiscounting).

bpost’sfutureminimumoperatingleaseincomeisasfollowsandrelatestobuildings:

Thefinancialleaseagreementsincludefixedleasepaymentsandapurchaseoptionattheendofleaseterm.



6.21Investmentinsecurities

Inmillion EURTotal non

current investments

Financialassetsheldto

maturity

Total current investments Total

Acquisition cost

Balance at 1 January 2017 0.0 12.0 12.0 12.0

Acquisitions 0.0 0.0 0.0 0 .0

Acquisitionsthroughbusinesscombinations 0.0 0.0 0.0 0 .0

Changesinfairvalue 0.0 0.0 0.0 0 .0

Disposals 0.0 (12.0) (12.0) (12.0)

Balance at 31 December 2017 0.0 0.0 0.0 0.0


Acquisitions 0.0 0.0 0.0 0 .0

Acquisitionsthroughbusinesscombinations 0.0 0.0 0.0 0 .0

Changesinfairvalue 0.0 0.0 0.0 0 .0

Disposals 0.0 0.0 0.0 0 .0


Impairment losses


Othermovements 0.0 0.0 0.0 0 .0



Othermovements 0.0 0.0 0.0 0 .0


Carrying amount

At31December2017 0.0 0.0 0.0 0 .0

At31December2018 0.0 0.0 0.0 0 .0

Theinvestmentsecuritiesthatmeetthedefinitionofcash&cashequivalentsasdefinedbyIAS 7 arereportedincash&cashequivalent.Asper

December 31,2018bpostholdsnoinvestmentsecurities.



6.22Investmentinassociates


Balance at 1 January 329.2 373.7

Acquisition/Disposal 0 .0 (0.3)

Shareofprofit 11 .5 9.6

Dividendreceived (4.0) (11.8)

ImpactofIFRS 9ontransition (59.9) 0.0

Othermovementsinequityofassociates (25.5) (42.1)

Balance at 31 december 251.2 329.2

Share of profit/lossIn2018,bpost’sshareintheprofitofbpostbankamountedtoEUR 11.5 million.Lastyear,theshareofprofitinbpostbankandCitieamountedtoEUR 9.6 million.

Dividends receivedIn2018,bpostreceivedadividendofEUR 4.0 millionfrombpostbank.In2017bpostreceivedadividendofEUR 11.8 millionfrombpostbank.

Impact of IFRS 9 on transitionAsofJanuary 1,2018,IAS 39FinancialInstruments:RecognitionandMeasurementwasreplacedby

IFRS 9 FinancialInstruments.AtthetransitiontoIFRS 9bpostbankreclassifiedamajorpartofitsbondportfoliofromIAS 39available-for-salecategorytoIFRS 9amortizedcostcategory.Thisresultedinadecreaseofbpostbank’sequitybyEUR 119.8 millionandconsequentlybpost’sinvestmentinassociatesandtherelatingreservesdecreasedby50%ofthisamountsoEUR 59.9 milliononthetransitiondatetoIFRS 9.

Other movementsTheamountrepresentsthedecreaseinunrealizedgains,netoftaxes,onbpostbank’sbondportfolio(EUR 25.5 million).

Anoverviewoftheselectedfinancialfiguresoftheassociatesispresentedinthefollowingtables.

Inmillion EUR Ownership Total assetsTotal

liabilities (excl.Equity)

Revenues Profit/(loss)

2017

bpost bank 50% 10,658.2 9,999.9 273.2 19.9

Citie 0% 0.0 0.0 0.2 (1.1)

2018

bpost bank 50% 11,045.3 10,542.9 265.7 22.9



6.23Tradeandotherreceivables

As at 31 December


Tradereceivables 0 .0 0.0 0.0

Otherreceivables 11.2 9.4 9.4

Non current trade and other receivables 11.2 9.4 9.4

As at 31 December


Tradereceivables 646.0 624.4 628.9

Taxreceivables,otherthanincometax 6.1 8.0 8.0

Otherreceivables 59 .9 82.5 82.5

Current trade and other receivables 712.0 714.9 719.4

As at 31 December


Accruedincome 8.3 6.8 6.8

Deferredcharges 45 .7 41.5 41.5

Otherreceivables 5 .9 34.3 34.3

Current - other receivables 59.9 82.5 82.5

Thenon-currentreceivablesareconsideredasareasonableapproximationofthefairvalueofthisfinancialasset,asitisexpectedtobepaidwithinashorttimeframe,makingtheimpactofthetimevalueofmoneynotsignificant.

CurrenttradeandotherreceivablesareinlinewithlastyearandslightlydecreasedbyEUR 2.9 milliontoEUR 712.0 million(2017:EUR 714.9 million),drivenbyariseintradereceivablesofEUR 21.6 millioncompensatedbythedecreaseofotherreceivablesofEUR 22.6 milliongivenlastyear’soutstandingreceivablerelatedtothepurchaseofRadial.

TaxreceivablesrelatetotheoutstandingVATamountstobereceived.

Tradeandotherreceivablesaremainlyshort-term.Thecarryingamountsareconsideredtobeareasonableapproximationofthefairvalue.



6.24Inventories

As at 31 December


Rawmaterials 2.3 2.2

Finishedproducts 6.2 6.2

Goodspurchasedforresale 29.2 35.8

Reductionsinvalue (0.8) (5.1)

Inventories 36.9 39.1

6.25Cashandcashequivalents

As at 31 December


Cashinpostalnetwork 151.2 171.7

Transit accounts 107 .0 83.8

Cashpaymenttransactionsunderexecution (39.4) (19.2)

Bankcurrentaccounts 461.4 229.7

Shorttermdeposits 0 .0 0.0

Cash and cash equivalents 680.1 466.0

Rawmaterialsincludeconsumables,i.e.materialsusedforprintingpurposes.Finishedproductsarestampsavailableforsale.Goodspurchasedforresalemainlyincludepostograms,postcards,suppliesforresale,pressdistributioninventoryandretailinventory(tobacco,beverage,multimedia, …).

Bankcurrentaccountsearninterestatfloatingratesbasedondailybankdepositrates.Shorttermdepositsaremadeforvaryingperiodsofonedaytothreemonths,dependingonimmediatecashrequirementsandearninterestattherespectiveshort-termdepositrates.



6.26Financialliabilities

Inmillion EUR 2017 2017restated

Cashflows

Non-cashchanges

2018Foreignexchange

movement

Newleases

Acqui-sitions

business combina-

tions

Fairvalue

changesTransfer Other

Financial liabilities measured at amortized cost

Bankloans 36.7 36.7 158.8 2.7 0 .0 0 .0 0 .0 (9.2) 0 .4 189.6

Long-termbond 0.0 0.0 641.3 0 .0 0 .0 0 .0 0 .0 0 .0 0 .5 641.8

Other loans 2.2 2.2 (0.8) (0.1) 0.8 0 .4 0 .0 0 .1 (1.7) 1 .0

Financeleaseliabilities 19.4 16.5 (1.7) 0.8 0 .0 0.8 0 .0 (0.7) 1 .0 16.7

Non current liabilities 58.4 55.4 797.7 3.4 0.8 1.2 0.0 (9.8) 0.3 849.1

Non-currentinterest-bearingloansandborrowingsincreasedbyEUR 793.6 milliontoEUR 849.1 millionmainlyduetotheissuanceofaEUR 650.0 million8-yearbondwithacouponof1.25%andaUSDtermloanofUSD 185.0 millionwithanenddateinJuly 2021(possibleextensionuntilJuly 2023)andafloatingratestructure.ThesetransactionsservedtorefinancetheNovember 2017acquisitionofRadial

Inmillion EUR 2017 2017restated

Cashflows

Non-cashchanges

2018Foreignexchange

movement

Newleases

Acqui-sitions

business combina-

tions

Fairvalue

changesTransfer Other

Financial liabilities at amortized cost

Bankloans 698.1 698.1 (700.9) 0 .0 0 .0 0 .9 0 .0 9.2 1.2 8.6

Commercialpapers 0.0 0.0 165.1 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 165.1

Other loans 0.1 0.1 (2.2) 0 .5 0 .0 2.7 0 .0 (0.1) (0.7) 0 .4

Financeleaseliabilities 1.7 1.7 (1.6) 0 .0 0 .0 0 .7 0 .0 0 .7 0 .0 1.6

Current liabilities 699.9 699.9 (539.5) 0.5 0.0 4.4 0.0 9.8 0.5 175.7

Currentinterest-bearingloansandborrowingsdecreasedbyEUR 524.2 milliontoEUR 175.7 millionduetothereimbursementofthebridgeloanenteredin2017tobuyRadial.Thebridgeloanhasbeenrefinancedviatheissuanceofabondandatermloan(bothwithinnon-currentliabilities).ThisdecreasedwaspartiallyoffsetbytheissuanceofsomecommercialpapersforEUR 165.1 million.

Notethatthetotalofthecolumns“cashflow”mentionedinthetwotablesaboveamountedtoEUR 258.2 million,while“thenetflowsrelatedto

Holdings,LP.bpostborrowedapartinUSDtomitigatetheriskonforeignexchangeratedifferencesontheforeignoperation,hencebpostperformedanetinvestmenthedge.ThisincreasewaspartiallyoffsetbyadecreaseofEUR 9.1 millioncorrespondingtotheportionoftheloanoftheEuropeanInvestmentBanktransferredtocurrentliabilities.

borrowingsandfinancingleaseliabilities”intheconsolidatedstatementofcashflowamountedtoEUR 254.2 million.ThedifferenceofEUR 3.96 millionwasmainlyduetointerestsbookedonthetradeandotherpayableaccounts,whicharenotbeingdisclosedin this note.

NotefurthermorethatbpostalsohastwoundrawnrevolvingcreditfacilitiesforatotalamountofEUR 375.0 million,seenote 6.33“rightsandcommitments”.



6.27Employeebenefitsbpostgrantsitsactiveandretiredpersonnelpost-employmentbenefits,long-termbenefits,otherlongtermbenefitsandterminationbenefits.ThesebenefitplanshavebeenvaluedinconformitywithIAS 19.SomeofthemoriginatefrommeasuresnegotiatedintheframeworkofCollectiveLaborAgreements(‘CLA’).Thebenefitsgrantedundertheseplansdiffer

dependingonthecategoriesofbpost’semployees:civilservants(alsoknownasstatutoryemployees),payscalecontractualemployees,auxiliaryagentsandnon-payscalecontractualemployees.

Theemployeebenefitsareasfollows:

As at 31 December


Post-employmentbenefits (32.8) (50.7)

Long-termemployeebenefits (113.5) (108.2)

Terminationbenefits (8.5) (6.6)

Otherlong-termbenefits (153.5) (161.5)

Total (308.4) (326.9)

Netofthedeferredtaxassetsrelatedtothem,employeebenefitsamounttoEUR 284.8 million(2017:EUR 294.5 million).

As at 31 December


Employeebenefits (308.4) (326.9)

Deferredtaxassetsimpact 23.6 32.4

Employee benefits net of deferred tax (284.8) (294.5)

bpost’snetliabilityforemployeebenefitscomprisesthefollowing:

As at 31 December


Presentvalueoftotalobligations (373.7) (380.3)

Fairvalueofplanassets 65.3 53.4

Present value of net obligations (308.4) (326.9)

Unrecognizedactuarial(gains)/losses

Net liability (308.4) (326.9)

Employeebenefitsamountsinthestatementoffinancialposition 0 .0 0.0

Liabilities (308.4) (326.9)




Thechangesinthepresentvalueoftheobligationsareasfollows:


Present value at 1 January (380.3) (401.2)

Servicecosts (16.3) (4.5)

-Currentservicecost (22.0) (23.1)

-Terminationexpenses (5.2) 0.0

-Pastservice(cost)/gain 10 .9 18.6

Net interest (4.9) (5.5)

Benefitspaid 27.9 36.2

Re-measurementgainsand(losses) 6.3 (1.8)

-Actuarialgainsand(losses)recognizedinIncomeStatement 6.3 (1.8)

Re-measurementgainsand(losses)inothercomprehensiveincome (0.8) 3.9

-Actuarialgainsand(losses) (0.8) 3.9

SettlementContribution 0 .0 10.0

Additionthroughbusinesscombinations 0 .0 (17.4)

Transfer (5.6) 0.0

Defined benefit obligation at 31 December (373.7) (380.3)

Thefairvalueoftheplanassetscanbereconciledasfollows:


Fair value of plan assets at 1 January 53.4 44.5

Contributionsbyemployer 31 .0 34.6

Contributionsbyemployee 1 .4 1.3

Benefitspaid (27.9) (36.2)

Interest income/(cost) on assets (P&L item) 0.8 0.8

Additionthroughbusinesscombinations 0 .0 8.0

Actuarialgain/(loss)onassets(OCIitem) 6.6 0.4

Fair value of plan assets at 31 December 65.3 53.4

Theplanassetrelatestothegroupinsurance’sbenefitinaccordancewithIAS 19.Thisplanassetisheldbyathirdpartyinsurancecompany,andiscomposedofthereservesaccumulatedfromtheemployerandemployeecontributions(assuredcontractswithaguaranteedreturn).

TheexpenserecognizedintheIncomeStatementispresentedhereafter:



As at 31 December







Re-measurementsgainsand(losses) 6.3 (1.8)

-Actuarialgainsand(losses)reportedasfinancial 1 .0 (1.4)

-Actuarialgainsand(losses)reportedasoperating 5.2 (0.4)

Net expense (12.4) (9.4)

Actuarialgainsandlosses,causedbychangesindiscountrates,arerecordedasfinancialcosts,whereasactuarialgains/lossesforpost-employmentbenefitsarerecordedinothercomprehensiveincome.Inallothercases,actuarialgainsandlossesarerecordedasoperatingexpenses.

Interestcostsandfinancialactuarialgainsorlosseshavebeenrecordedasfinancialcosts.AllotherexpensessummarizedabovewereincludedintheIncomeStatementcaption“Payrollcosts”.

TheimpactonpayrollcostsandfinancialcostsintheIncomeStatementispresentedhereafter:



Payrollcosts (9.4) (3.4)

Financialcost (3.0) (6.0)


Theexpenserecognizedintheothercomprehensiveincomeispresentedhereafter:

As at 31 December


Re-measurement gains/(losses) 5.8 4.3

-Actuarialgainsand(losses) 5.8 4.3

Net expense 5.8 4.3

Themainassumptionsusedincomputingthebenefitobligationsatthestatementoffinancialpositiondatearethefollowing:

2018 2017

Rateofinflation 1.8% 2.0%

Futuresalaryincrease 2.8% 3.0%

Medicalcosttrendrate 5.0% 5.0%

Mortalitytables MR/FR-2 MR/FR-2



Thediscountrateshavebeendeterminedbyreferencetomarketyieldsatthestatementoffinancialpositiondate.Thediscountratesusedin2018rangefrom0.00%to1.80%(2017:0.00%to1.80%):

BENEFIT DurationDiscount rate

2017 2018

Familyallowances 6.9 1.05% 1.15%

Bank 14.7 1.70% 1.70%

Funeralexpense 8.1 1.25% 1.30%

Gratification from11.8to14.1 from1.50%to1.60% from1.55%to1.65%

Groupinsurance from10.9to17.9 from1.50%to1.55% from1.55%to1.80%

Accumulatedcompensatedabsences 2.3 0.00% 0.15%

Workerscompensationincaseofaccidents 12.4 1.55% 1.55%

Medicalexpensesincaseofaccidents 17.3 1.80% 1.80%

Pensionsavingdays 9.3 1.30% 1.40%

JubileePremiums from6.8to8.0 from1.05%to1.10% from1.15%to1.30%

DSPRJOR 8.8 1.30% 1.35%

Part-timeregime from1.8to4.0 0.00% 0.45%

Prepension from0.5to1.8 0.00% from0.00%to0.15%

Theaveragedurationofthedefinedbenefitplanobligationattheendof2018is10.8 years(2017:10.9 years).

AquantitativesensitivityanalysisforsignificantassumptionsatDecember 31,2018isoutlinedherebelow:

Assumptions Discount rate MortalitytableMR/FR

Medicaltrendrate

Sensitivitylevel 0.5%increase 0.5%decrease Decreaseby1 year 1%increase

Inmillion EUR

Impactondefinedbenefitobligation(increase)/decrease 18.9 (20.7) (5.8) (2.0)

Thissensitivityanalysishasbeendeterminedbasedonamethodthatextrapolatestheimpactondefinedbenefitobligationasaresultofreasonablechangesinkeyassumptionsoccurringattheendofthereportingperiod.

Post-employment benefitsPost-employmentbenefitsincludefamilyallowances,bankcosts,funerarycosts,retirementgiftsandgroupinsurance.Inthecourseof2017,bpostdecidedtostoptheadvantagefortransport.InactivecivilservantsaswellastheirfamilymemberswereentitledtopersonalvouchersthatcouldbeexchangedforatransportticketforatripinBelgiumorforapricereductiononothertransporttickets.bpostpaidaone-timesettlementcontributionofEUR 10.0 million

toPensocandanon-cashgainofEUR 15.3 millionhasbeenbookedasapastserviceincomein2017.

Family allowancesThecivilservantsofbpost(bothactiveandpensioners)withdependents(youngstersanddisabled)receiveafamilyallowancefromOfficeNationald’AllocationsFamilialespourTravailleursSalariés(ONAFTS)–RijksdienstvoorKinderbijslagvoorWerknemers(RKW).Thefinancingmethodologyoffamilyallowancesforcivilservantshaschangedduetoalawchange(lawof19 December 2014).Asaconsequence,bpostasapublicinstitutionpaysacontributionthatisdefinedbyaprogrammelaw.Theamountisadaptedeachyearproportionallytothenumberofcivilservants(fulltimeequivalents)andissubjecttoinflation.



BankAllactivemembers,pre-pensionersandpensionerscanbenefitfromareductionofthefeeschargedonthecurrentaccountaswellasfavorableinterestratesand/orreductionsonsavingscertificates,investmentfunds,insurancesandloans.In2017,thefavorableinterestratesonsavingsaccountshavebeenreviewedresultinginanon-cashgainofEUR 3.9 million.

Group insurancebpostofferstoitsactivecontractualemployeesagroupinsurancebenefit.SincetheintroductionoftheWAP/LPClegislationinBelgiumtheseplanshavethecharacteristicsofadefinedbenefitplanunderIAS 19.

Theemployerislegallyrequiredtoguaranteeacertainreturnontheplanassets.BeforethechangeintheWAP/LPClawendof2015,bposthadtoprovidethelegalminimumreturnof3.25%onemployercontributions(aftercostsonpremiums)and3.75%onemployeecontributions.Thelegalminimumreturnonemployercontributionsisa“careeraverage”returnandnotayearbyyearreturnwherethelegalminimumontheemployeecontributionsshouldbegrantedonayearbyyearbasis.

Althoughthereisstillnofullclarityontheapproach,newlegislationdatedDecember 2015broughtmoreclarificationontheminimumguaranteedreturn.TheuncertaintywithrespecttothefutureevolutionoftheminimumguaranteedratesofreturninBelgiumhasbeenremovedwiththechangeintheWAP/

LPClawendofDecember 2015.Asfrom2016,theminimumreturnforfuturecontributionsisequaltotheaveragepast24 monthsreturnon10-yearlinearbondswithaminimumof1.75%p.a.

Themethodologyconsistentlyappliedbybpostresultedinaliabilityatthehigherendcomparedtocompanieswithsimilarpensionplans.Althoughthereisnofullconsensusinthemarketconcerningthemethodology,in2018theunderlyingmethodologyusedforIAS 19accountingofthesedefinedcontributionplanshasbeenfinetunedtakenintoaccounttheevolutioninmethodologiesinthemarketbasedonnewinsights.bpostcontinuestousethePUC(projectedunitcredit)methodologybutwithoutprojectionoffuturecontributionsandsalariesastheplansarenotbackloaded(contributionsdonotincreasewithage).Theonlyreasonwhycontributionsmaymateriallyincreaseinalaterstageofacareerislinkedtosalaryincreasesbeinghigherthanindexationsinsteprateplans.Furthermorein2018bpostappliedparagraph115ofIAS 19.Theassetsandliabilitiesaredeterminednottakingintoaccountcontractualinterestguaranteesonmathematicalreserves,guaranteedbytheinsurancecompany.Applyingparagraph115 mayresultinhigherassetswhenguaranteedinterestratesarehigherthanthediscountrate,resultinginalowernetliability.Theimpactoftheaboveresultedinanon-cashgainofEUR 10.9 million.

bpost’snetliabilityforemployeepost-employmentbenefitscomprisesthefollowing:

As at 31 December



Fairvalueofplanassets 65.3 53.4











Servicecosts 2.6 9.5


-Terminationexpenses 0 .0 0.0




Re-measurementgainsand(losses) 0 .0 0.0

-Actuarialgainsand(losses)recognizedinIncomeStatement 0 .0 0.0

-Actuarialgainsand(losses)unrecognized 0 .0 0.0

Re-measurementgainsand(losses)inothercomprehensiveincome (0.8) 3.9

-Actuarialgainsand(losses) (0.8) 3.9

SettlementContribution 0 .0 10.0



Thefairvalueoftheplanassetsrelatedtothegroupinsurance’sbenefitandheldbytheinsurancecompanyispresentedasfollows:


Fair value of plan assets at 1 January 53.4 44.5

Contributionsbyemployer 6.2 5.8

Contributionsbyemployee 1 .4 1.3

Benefitspaid (3.1) (7.4)

Interest income/(cost) on assets (P&L item) 0.8 0.8


Actuarialgain/(loss)onassets(OCIitem) 6.6 0.4

Fair value of plan assets at 31 December 65.3 53.4





Payrollcosts 4 .3 11.0


Net expense 3.6 9.9



Re-measurement gains/(losses) 5.8 4.3

-Actuarialgainsand(losses) 5.8 4.3

Net expense 5.8 4.3


As at 31 December


Servicecosts 4 .3 11.0





Re-measurementgainsand(losses) 0 .0 0.0

-Actuarialgainsand(losses)reportedasfinancial 0 .0 0.0

-Actuarialgainsand(losses)reportedasoperating 0 .0 0.0

Net expense 3.6 9.9

Theimpactonpayrollcostsandfinancialcostsispresentedhereafter:

Theexpenserecognizedinothercomprehensiveincomeispresentedhereafter:

Long-term employee benefitsLong-termemployeebenefitsincludeaccumulatedcompensatedabsences,pensionsavingdaysandpart-timebenefits.

Accumulated Compensated AbsencesCivilservantsareentitledto21sick-daysperyear.Duringthese21 daysandiftheyhavereceivedtheappropriatenotefromadoctor,theyreceive100%oftheirsalary.Ifanygivenyear,acivilservantisabsentlessthan21 days,thebalanceoftheun-usedsicknessdaysiscarriedovertothefollowingyearsup

toamaximumof63 days(seesectionPensionsavingdayshereinafter).Employeeswhoareillformorethan21 daysduringayearwillfirstuseuptheyear’sallotmentandthenusethedayscarriedoverfrompreviousyearsaspertheirindividualaccount.Duringthisperiod,theywillreceivetheirfullsalary.Oncetheallotmentoftheyearandthedayscarriedoverareusedup,theyreceivereducedpayments.

Boththefullsalarypaidunderthe“sick-days”schemeandthereducedpaymentsbeyondthatarecostsincurredbybpost.



Therewasnomodificationtothecalculationmethodologycomparedto2017.Thevaluationisbasedonthefuture“projectedpayments/cashoutflows”.Thecashoutflowsarecalculatedforthetotalityofthepopulationconsidered,basedonacertainconsumptionpattern,derivedfromthestatisticsoverthe12 monthsof2018.Theindividualnotionalaccountsareprojectedforthefutureanddecreasedbytheactualnumberofdaysofillness.

Theannualpaymentisthenumberofdaysused(andlimitedbythenumberofdaysinthesavingsaccount)multipliedbythedifferencebetweentheprojectedsalary(increasedwithsocialcharges)at100%andthereducedpayments.Therelevantwithdrawalandmortalityrateshavebeenappliedtogetherwiththediscountrateapplicabletothedurationofthebenefit.

Pension saving daysCivilservantshavethepossibilitytoconverttheunusedsickdaysabovethe63 daysintheir‘notional’account(seeabove“AccumulatedCompensatedAbsences“benefit)inpensionsavingdays(7sickdaysper1pensionsavingday)andtoconverteachyearamaximumof3 daysofextra-legalholidays.Contractualemployeeswithapermanentcontractareentitledtoamaximumof2pensionsavingdaysperyearandhavethepossibilitytoconverteachyearamaximumof3 daysofextra-legalholidays.Thepensionsavingdaysareaccumulatedyearoveryearandcanbeusedasfromtheageof50.

Themethodologyofvaluationisbasedonthesameapproachasthebenefit“AccumulatedCompensatedAbsences“.Thevaluationisbasedonthefuture“projectedpayments/cashoutflows”.Thesearecalculatedforthetotalityofthepopulationconsidered,basedonacertain“consumption”pattern,derivedfromthestatisticsoverthe12 monthsof2018,asprovidedbythehumanresourcesdepartment.Theindividual“pensionsavingdays”accountsareprojectedperpersonanddecreasedbytheactualnumberofusedpensionsavingdays.

Theannualpaymentisthenumberofpensionsavingdaysusedmultipliedbytheprojecteddailysalary(increasedwithsocialcharges,holidaypay,endofyearpremium,managementandintegrationpremium).Therelevantwithdrawalandmortalityrateshavebeenappliedtogetherwiththediscountrateapplicabletothedurationofthebenefit.

Part-time regime (50+)Theregulatoryframeworkregardingpart-timeregimeforbpost’semployeesisthefollowing:

• FrameworkAgreementofDecember 20,2012:partial(50%)careerinterruptionisaccessibletothedistributorsaged54 andolderandtotheotheremployeesasfrom55 yearsold.bpostmakescontributionsequalto7.5%ofthegrossannualsalaryforamaximumperiodof72 monthsforthedistributorsand48 monthsfortheotherbeneficiariesoftheplan.

• FrameworkAgreementofMay 22,2014:(i) theplanapprovedin2012 andaccessibletothedistributorsisextendedtotheemployeesworkingduringnightand(ii) fortheotheremployees,theplanisaccessibleasfrom55 yearsold.bpostmakescontributionsequalto7.5%ofthegrossannualsalaryforamaximumperiodof72 monthsforthenightworkersand48 monthsfortheotherbeneficiariesoftheplan.

In2016,twonewplanswereapproved:

• FrameworkAgreementofJune 2,2016(validuntilDecember 2016):(i) theplanapprovedin2012fordistributorsandextendedin2014toemployeesworkingduringnightisalsoapplicableforcollectagentsand(ii) fortheotheremployees,theplanisaccessibleasfrom57 yearsold.bpostmakescontributionsequalto7.5%ofthegrossannualsalaryforamaximumperiodof72 monthsforthecollectagentsand48 monthsfortheotherbeneficiariesoftheplan;

• FrameworkAgreementofSeptember 30,2016:(i) forthedistributors,collectagentsandtheemployeesworkingduringnight,theplanisaccessibleasfrom55 yearsoldand(ii) fortheotheremployees,theminimumagerequiredis57 yearsold.bpostmakescontributionsequalto7.5%ofthegrossannualsalaryforamaximumperiodof72 monthsforthenightworkers,distributorsandcollectagentsand48 monthsfortheotherbeneficiariesoftheplan.ThisplanisextendeduntilDecember 2020followingtheFrameworkAgreementofDecember 20,2018.

bpost’snetliabilityforemployeelong-termbenefitscomprisesthefollowing:

As at 31 December



Fairvalueofplanassets 0 .0 0.0















Re-measurementsgainsand(losses) 2.5 0.6


-Actuarialgainsand(losses)reportedasoperating 1 .5 1.0










Benefitspaid 11 .9 13.3

Re-measurementgainsand(losses) 2.5 0.6

-Actuarialgainsand(losses)recognizedinIncomeStatement 2.5 0.6


Transfer (5.6) 0.0




Payrollcosts (11.6) (12.5)






Termination benefitsEarly Retirement schemeIn2018,thepreviousearly-retirementplansbelowareincludedinthesebenefits:

• theplancoveredbytheFrameworkAgreementofJuly 1,2012 andaccessibletothecivilservantsmeetingcertainage,seniorityandserviceorganizationconditionsasatDecember 31,2013atthelatest.TheJointCommitteeofDecember 19,2013 hasextendedthismeasureuntilthenextCollectiveLaborAgreement.

• anearly-retirementplanapprovedbytheFrameworkAgreementofMay 22,2014 andaccessibletothecivilservantsundercertainconditionsofage,seniorityandserviceorganization.TheJointCommitteeofDecember 17,2015extendedthismeasureuntilthenextCollectiveLaborAgreementorJune 30,2016atthelatest.

Intheseearly-retirementschemes,bpostcontinuestopaytothebeneficiariesaportion(between60%and75%dependingonthedurationoftheearly-retirement)oftheirsalaryatdepartureanduntiltheyreachretirementage.Theearly-retirementperiodistreatedasaserviceperiod.

Anearly-retirementplanwasapprovedbytheJointCommitteeofJuly 23,2015linkedtotheAlphaplan.ThisplanwasaccessibletocivilservantswhereofthefunctionwasimpactedbyAlphaandundercertainconditionsofageandseniority.bpostcontinuestopaytothebeneficiariesaportion(between65%and75%dependingonthedurationoftheearly-retirement)oftheirsalaryatdepartureanduntiltheyreachretirementage.Besidesthis,anexceptionalyearly

As at 31 December









allowancewaspaid,whereoftheamountdependsonthedurationoftheearly-retirement.Theearly-retirementperiodwastreatedasaserviceperiod.

IncaseacivilservantconcernedbytheAlphaplanhadnotbeenselectedforanewfunction12 monthsafterthepublicationoftheopenfunctions,hewasputinearly-retirement.bpostcontinuedtopaytothebeneficiariesaportion(between60%and70%dependingonthedurationoftheearly-retirement)oftheirsalaryatdepartureanduntiltheyreachedretirementage.Theearly-retirementperiodwastreatedasaserviceperiod.

Twonewearly-retirementplanswereapprovedin2016:

• PlansignedonJune 2,2016 andopenuntilendofDecember 2016:wasaccessibletocivilservantsundercertainconditionsofage,seniorityandserviceorganization.bpostcontinuestopaytothebeneficiariesaportion(between60%and75%dependingonthedurationoftheearly-retirement)oftheirsalaryatdepartureanduntiltheyreachretirementage.

• PlansignedonSeptember 30,2016:isaccessibletocivilservantsundercertainconditionsofage,seniorityandserviceorganization.bpostcontinuestopaytothebeneficiaries75%oftheirsalaryatdepartureanduntiltheyreachretirementage.Thisplanhasanindefiniteduration.

Theemployeebenefitrelatedtotheearlyretirementschemesgivesrisetoaliabilityatbpostbecause(i) theemploymentisterminatedbeforethenormalretirementageand(ii) itistheemployee’sdecisiontoaccepttheoffermadebybpostinexchange.

bpost’snetliabilityforterminationbenefitscomprisesthefollowing:






Servicecosts (5.2) 0.0

-Currentservicecost 0 .0 0.0



Net interest 0 .0 0.0


Re-measurementgainsand(losses) (0.3) 0.2

-Actuarialgainsand(losses)recognizedinIncomeStatement (0.3) 0.2


Re-measurementgainsand(losses)inothercomprehensiveincome 0 .0 0.0

-Actuarialgainsand(losses) 0 .0 0.0






Servicecosts (5.2) 0.0

-Currentservicecost 0 .0 0.0



Net interest 0 .0 0.0

Re-measurementgainsand(losses) (0.3) 0.2

-Actuarialgainsand(losses)reportedasfinancial 0 .0 0.0

-Actuarialgainsand(losses)reportedasoperating (0.3) 0.2

Net expense (5.5) 0.2






Payrollcosts (5.5) 0.2

Financialcost 0 .0 0.0

Net expense (5.5) 0.2

Other long-term benefitsWorkers compensation accident planUntilOctober 1,2000,bpostwasself-insuredforinjuriesattheworkplaceandonthewaytoandfromtheworkplace.Asaresult,allcompensationstoworkersforaccidentswhichoccurredbeforeOctober 1,2000 areincurredandfinancedbybpostitself.

SinceOctober 1,2000,bposthascontractedinsurancepoliciestocoversuchrisk.

DSPR/ DVVP for Job Mobility CenterTheFrameworkAgreementofSeptember 30,2016definedaDispensePrécédantlaRetraite/DienstvrijstellingvoorafgaandaandePensionering(DSPR/DVVP)planfortheJobMobilityCenter.Thisplanforeseesforanindefinitedurationthatcivilservantsagedasfrom61 yearsoldwhoareattachedtotheJobMobilityCenterandwhoarestillattachedtoitafteraperiodofoneyearwillbereleasedfromservice.bpostcontinuestopaytothebeneficiaries70%oftheirsalaryatdepartureanduntiltheyreachretirementage,withamaximumof5 years.

bpost’snetliabilityforotherlong-termemployeebenefitscomprisesthefollowing:

As at 31 December




















Re-measurementgainsand(losses) 4 .1 (2.6)

-Actuarialgainsand(losses)recognizedinIncomeStatement 4 .1 (2.6)


Re-measurementgainsand(losses)inothercomprehensiveincome 0 .0 0.0

-Actuarialgainsand(losses) 0 .0 0.0










Re-measurementsgainsand(losses) 4 .1 (2.6)


-Actuarialgainsand(losses)reportedasoperating 4 .0 (1.6)

Net expense 1.2 (5.5)




Payrollcosts 3 .5 (2.0)


Net expense 1.2 (5.5)



6.28Tradeandotherpayables

As at 31 December


Tradepayables 0 .0 0.0 0.0

Otherpayables 17 .5 45.2 45.2

Non-current trade and other payables 17.5 45.2 45.2

Non-currenttradeandotherpayablesamounttoEUR 17.5 millionandconsistmainlyoftheworkingcapitalprovidedbybpostbankandthecontingentconsiderationarrangementsrelatedtotheacquisitionsofCityDepotandLeenMenken.

As at 31 December

Inmillion eur 2018 2017restated 2017

Tradepayables 499 .9 461.9 466.6

Payrollandsocialsecuritypayables 332.5 347.2 342.4

Taxpayableotherthanincometax 12.4 14.6 14.6

Otherpayables 367.7 394.7 394.7

Current trade and other payables 1,212.5 1,218.4 1,218.2

Thecarryingamountsareconsideredtobeareasonableapproximationofthefairvalue.Theotherpayablesincludedincurrenttradeandotherpayableincludethefollowingitems:

As at 31 December


Advancepaymentsonorders 10 .9 10.5 10.5

Advancepostalfinancialservices 18.8 18.8 18.8

Cashguaranteesreceived 9.6 10.2 10.2

Accruals 122.4 105.1 105.1

Deferredincome 55 .9 59.0 59.0

Depositsreceivedfromthirdparties 0 .1 0.1 0.1

Otherpayables 150 .0 190.8 190.8

Current - other payables 367.7 394.7 394.7

TheconsiderationspaidalreadybycustomersthathavebeenallocatedtotheunsatisfiedremainingperformanceobligationamountedtoEUR 55.9 millionandmainlyrelatedtostampsandcreditsonfrankingmachinesoldbutnotyetusedbycustomersat

balancesheetdate.Thelargemajorityoftheremainingperformanceobligationsatreportingdateisexpectedtoberecognizedwithinoneyear,allotherremainingperformanceobligationsareexpectedtoberecognizedwithintwoyears.



6.29Provisions

Inmillion EUR Litigation Environment Onerous contract

Restructuring& other Total

Balance at 1 January 2017 38.0 0.6 1.6 18.5 58.7

Additionalprovisionsrecognized 3.8 0.1 0.8 4.9 9.6

AdditionthroughBusinessCombinations 0.7 0.0 0.0 0.0 0 .7

Provisionsused (0.1) 0.0 0.0 (4.0) (4.1)

Provisionsreversed (10.2) 0.0 (0.2) (3.1) (13.6)

Othermovements (0.1) 0.0 0.0 (5.8) (5.9)

Balance at 31 December 2017 32.1 0.6 2.2 10.5 45.4

Additionthroughbusinesscombinations 0.0 0.0 21.6 0.0 21.6

Exchangeratedifference 0.0 0.0 (0.4) 0.0 (0.4)

Balance at 31 December 2017 (restated) 32.1 0.6 23.4 10.5 66.5

Noncurrentbalanceatendofyear(restated) 20.4 0.6 14.9 2.3 38.1

Currentbalanceatendofyear(restated) 11.8 0.0 8.5 8.2 28.4

32.1 0.6 23.4 10.5 66.5

Balance at 1 January 2018 (restated) 32.1 0.6 23.4 10.5 66.5

Additionalprovisionsrecognized 1.8 0.0 0.1 4.3 6.2

Provisionsused (1.9) 0.0 (6.6) (3.4) (11.9)

Provisionsreversed (15.8) 0.0 (4.3) (3.0) (23.0)

Exchangeratedifference 0.0 0.0 1.4 0.0 1 .4

Othermovements 0.0 0.0 0.0 0.0 0 .0

Balance at 31 December 2018 16.2 0.6 14.1 8.5 39.3

Noncurrentbalanceatendofyear 11.9 0.6 9.1 0.9 22.6

Currentbalanceatendofyear 4.3 0.0 5.0 7.5 16.8

16.2 0.6 14.1 8.5 39.3

In2018thepurchasepriceallocationofRadialhasbeenfinalized,asaconsequencetheopeningbalancehasbeenrestated.Thisimpactisshownunder“additionthroughbusinesscombinations”.

TheprovisionforlitigationamountedtoEUR 16.2 million.Itrepresentstheexpectedfinancialoutflowrelatingtomanydifferent(actualorimminent)litigationsbetweenbpostandthirdparties.

Theperiodanticipatedforthecashoutflowspertainingtheretoisdependentondevelopmentsinthelengthoftheunderlyingproceedingsforwhichthetimingremains uncertain.

Thereversein2018wasmainlyduetothereassessmentofalitigation.

bpostiscurrentlyinvolvedinthefollowinglegalproceedingsinitiatedbyintermediaries:

• Aclaimfordamagesinanalleged(provisional)amountofapproximatelyEUR 21.1 million(exclusiveoflatepaymentinterest)inthecontextoflegalproceedingsinitiatedbyPublimailNV/SA.TheBrusselscommercialcourtrejectedPublimail’sclaimonMay 3,2016.PublimailappealedthisdecisiononDecember 16,2016.TheappealisnowpendingbeforetheBrusselsCourtofAppeal.

• Aclaimfordamagesinanalleged(provisional)amountofapproximatelyEUR 28.0 million(exclusiveoflatepaymentinterest)inthecontextoflegalproceedingsinitiatedbyLink2BizInternationalNV/SAandpendingbeforetheBrusselscommercialcourt.CertainaspectsofthecontractualrelationshipbetweenLink2Bizandbpostarealsothesubjectofaceaseanddesistorder(adoptedonJune 21,2010),whichbposthasappealedinAugust 2010 andwhichiscurrentlypendingbeforetheBrusselsCourtofAppeal.



Allclaimsandallegationsarecontestedbybpost.

Moreover,onJuly 20,2011theBelgianpostalregulator(“BIPT/IBPT”)concludedthatcertainaspectsofbpost’s2010pricingpolicyinfringedtheBelgianPostalActandimposedafineofEUR 2.3 million.Whilebpostpaidthefinein2012,itcontestedtheBIPT/IBPT’sfindingsandappealedthedecision.TheBrusselsCourtofAppealfoundinfavorofbpostandannulledtheBIPT/IBPT’sdecisiononMarch 10,2016.bpostrecoveredtheEUR 2.3 millionfineinOctober 2016.

Finally,onDecember 10,2012,theBelgianCompetitionAuthorityconcludedthatcertainaspectsofbpost’spricingpolicyovertheJanuary 2010-July 2011periodinfringedBelgianandEuropeancompetitionlawandimposedafineofapproximatelyEUR 37.4 million.Whilebpostpaidthefinein2013,itcontestedtheBelgianCompetitionAuthority’sfindingsand

appealedthedecisionbeforetheBrusselsCourtofAppeal.OnNovember 10,2016,theBrusselsCourtofAppealannulledtheAuthority’sdecision.TheBelgianCompetitionAuthorityappealedthisjudgmentbeforetheSupremeCourtonpointsoflaw.TheSupremeCourtissueditsdecisiononNovember 22,2018.Itpartiallyupheldtheappeal.ThiswillleadtoanewtrialbeforetheBrusselsCourtofAppeal.

TheprovisionrelatedtoenvironmentissuesamountedtoEUR 0.6 million.Itcoverssoilsanitation.

Theprovisionononerous contracts concerns the best estimateofthecostsrelatingtotheclosingdownofmailandretailofficesandtheICTmaintenanceofaphaseoutwebstoreplatform.

OtherprovisionsamountedtoEUR 8.5 million.

6.30Financialassetsandfinancialliabilities

Thefollowingtableprovidesthefairvaluemeasurementhierarchyofbpost’sfinancialassetsandfinancialliabilitiesperDecember 31,2017:

Fairvaluecategorized:

Inmillion EUR Carryingamount

Quotedpricesinactivemarkets

(Level1)

Significantotherobservable

inputs(Level2)

Significantunobservableinput(Level3)

Financial assets measured at amortized cost

Non-Current

Financialassets 9.4 0.0 9.4 0.0

Current

Financialassets 1,182.5 0.0 1,182.5 0.0

Total financial assets 1,191.9 0.0 1,191.9 0.0

Financial liabilities measured at amortized cost

Non-Current

Financialliabilities 100.6 0.0 100.6 0.0

Current

Financialliabilities 1,956.8 0.0 1,956.8 0.0

Total financial liabilities 2,057.5 0.0 2,057.5 0.0



Thefollowingtableprovidesthefairvaluemeasurementhierarchyofbpost’sfinancialassetsandfinancialliabilitiesperDecember 31,2018:

Fairvaluecategorized:

Inmillion EUR Carryingamount

Quotedpricesinactivemarkets

(Level1)

Significantotherobservable

inputs(Level2)

Significantunobservableinput(Level3)

Financial assets measured at amortized cost

Non-Current

Financialassets 11.2 0.0 11.2 0.0

Current

Financialassets 1,397.8 0.0 1,397.8 0.0

Total financial assets 1,409.1 0.0 1,409.1 0.0

Financial liabilities measured at amortized cost (except for derivatives)

Non-Current

Long-termbond 641.8 629.7 0.0 0.0

Financialliabilities 224.7 0.0 224.7 0.0

Current

Derivativesinstruments-forexswap 0.1 0.0 0.1 0.0

Derivativesinstruments-forexforward 0.7 0.0 0.7 0.0

Derivativesinstruments-crosscurrencyswap 0.0 0.0 0.0 0.0

Financialliabilities 1,409.7 0.0 1,409.7 0.0

Total financial liabilities 2,277.0 629.7 1,635.2 0.0

Thefairvalueofthenon-currentandcurrentfinancialassetsmeasuredatamortizedcostandthenon-currentandcurrentfinancialliabilitiesmeasuredatamortizedcost,approximatetheircarryingamounts.Astheyarenotmeasuredatfairvalueinthestatementoffinancialpositiontheirfairvalueshouldnotbedisclosed.

Duringtheperiodtherewasnotransferbetweenfairvaluehierarchylevelsandtherewerenochangesinthevaluationtechniquesandinputsapplied.

Financial assets measured at amortized costTheincreaseofthefinancialassetsmeasuredatamortizedcostwasmainlyduetotheincreaseofthecashandcashequivalents(EUR 214.1 million).

Financial liabilities measured at fair value - non currentAttheendof2018,thenon-currentfinancialliabilitiesconsistedof:

• USD 185.0 milliontermunsecuredloan.ThisloanstartedonJuly 3,2018withamaturityof3 yearswithtwopossibleextensionsofoneyeareach.

• EUR 650.0 millionbond.The8-yearbondhasbeenissuedinJuly 2018withacouponof1.25%.Inanticipationofthisissuance,inFebruary 2018bpostenteredintoaforwardinterestrateswapfor10 yearswithanominalamountofEUR 600.0 milliontohedgetheinterestriskofthebond.

• EUR 27.3 millionEIB(EuropeanInvestmentBank)loan.bposttookoutaEUR 100.0 millionloanfromtheEIBonMay 5,2007.IthasayearlyreimbursementofEUR 9.1 millionandlastpaymentisforeseenin2022.TheyearlyamountofEUR 9.1 millionisincludedinthesection“Interest-bearingloansandborrowings-current”.

Derivative instrumentsbpostisexposedtocertainrisksrelatingtoitsdailybusinessoperations.Theprimaryriskmanagedusingderivativeinstrumentsistheforeigncurrencyrisk.bpostusesforeignexchangeforwardcontractsandforeignexchangeswapcontractstomanagesomeofitsexposuresinforeigncurrencies.Thosecontractshavebeenunderwritteninordertohedgetheexchangerateriskslinkedtotheintercompanyloansgrantedbybposttoitssubsidiaries.Atyearend2018theimpactofthefairvalueoftheforwardcontractsandforeignexchangeswapcontractsamountedtoanincreaseoftheliabilitiesbyEUR 0.8 million.



6.31Derivativefinancialinstrumentsandhedging

Derivative instrumentsbpostusesforeignexchangeforwardcontractsandforeignexchangeswapcontractstomanagesomeofitsexposuresinforeigncurrencies.Thosecontractshavebeenunderwritteninordertohedgetheexchangerateriskslinkedtotheintercompanyloansgrantedbybposttoitssubsidiaries.Atyearend2018 hadfourforeignexchangeswapsandthreeforeignexchangeforwardsoutstanding.

Interest Rate SwapInFebruary 2018,bpostenteredintoaforwardstartingInterestRateSwapwitha10-yearmaturityandanominalamountofEUR 600.0 million.Thetransactionwascontractedinordertohedgetheinterestrateriskonthecontemplatedissuanceofalong-termbondtorefinancetheacquisitionbridgeloanenteredintoinNovember 2017fortheacquisitionofRadial.

InJuly 2018,bpostfinallyissuedaEUR 650.0 million8-yearbond.DuetothefactthatthedurationandthenominalamountoftheissuedbondhadchangedcomparedtoFebruary 2018,theamountofthecash-flowhedgeineffectiveness(basedonthehypotheticalderivativemethod)amountedtoEUR 1.5 millionanditwasrecognizedinprofitorlossasfinanceexpense.Theeffectivepartofthecash-flowhedge(EUR 20.0 million)hasbeenrecognizedinothercomprehensiveincome(amountnetoftaxisEUR 14.8 million)ascash-flowhedgereserve.Thiscash-flowhedgeisreclassifiedtoprofitorlossduringthesameperiodsasthelong-termbonds’cash-flowswillaffectprofitorlossover8 yearsasfromitsissuancedate.In2018 anamountofEUR 1.2 millionhasbeenreclassifiedtotheprofitandloss statement.

Net investment hedgeInthethirdquarterof2018,bpostenteredintoaUSDtermloan,withamaturityof3 yearswithtwopossibleextensionsofoneyeareach.bpostwithEURasitsfunctionalcurrencyalongwiththeissuanceofthebond,borrowedUSDinordertorefinancetheNovember 2017acquisitionofRadialHoldings,LP.bpostborrowedapartinUSDtomitigatetheriskonforeignexchangeratedifferencesontheforeignoperations,hencebpostperformedanetinvestmenthedge.Consequently,theeffectiveportionofchangesinthefairvalueofthehedginginstrument,isrecognizedinothercomprehensiveincome.ThenotionalamountofthehedgingamountedtoUSD 143.0 million,whereasthecarryingamountconvertedintoEuroamountedtoEUR 124.9 million.AtDecember 31,2018thenetlossontherevaluationoftheUSDloanrecognizedinothercomprehensiveincomeandaccumulatedintheforeigncurrencytranslationreserveamountedtoEUR 5.7 million.TherewasnoineffectivenessintheyearDecember 31,2018.

Financial liabilities measure at amortized cost – currentDuring2018bpostreimbursedthebridgeloanenteredintoin2017tobuyRadial.Furthermoreatyearend

2018theoutstandingcommercialpaperissuedbybpostamountedtoEUR 165.0 million.Thematurityofthedifferentcommercialpapersrangesbetween1to6 months.Giventhecurrentmarketconditions,bpostcanbenefitfromnegativeinterestrates.

6.32Contingentliabilitiesandcontingentassets

Asdescribedundernote 6.29,theBrusselsCourtofAppealannulledtheBelgianCompetitionAuthority’sdecisionimposingafineofEUR 37.4 milliononNovember 10,2016.TheBelgianCompetitionAuthorityappealedthisjudgmentbeforetheSupremeCourtonpointsoflaw.TheSupremeCourtissueditsdecisiononNovember 22,2018,itpartiallyupheld

theappeal.ThiswillleadtoanewtrialbeforetheBrusselsCourtofAppeal.TheforegoingconstitutesacontingentassetshouldtheCourtofAppealannultheBelgianCompetitionAuthority’sdecisionagain,bpostmayrecoverthefineofEUR 37.4 million(excludinginterests).



6.33Rightsandcommitments

Guarantees receivedAt31 December 2018,bpostbenefitsfrombankguaranteesinasumofEUR 19.4 million,issuedbybanksonbehalfofbpost’scustomers(2017:EUR 13.3 million).Theseguaranteescanbecalledinandpaidagainstintheeventofnon-paymentorbankruptcy.Theythereforeofferbpostfinancialcertaintyduringtheperiodofcontractualrelationswiththecustomer.

Goods for resale on consignmentAt31 December 2018,merchandiserepresentingasalesvalueofEUR 1.7 millionhadbeenconsignedbypartnersforthepurposeofsalethroughthepostalnetwork.

Revolving credit facilitiesbposthastwoundrawnrevolvingcreditfacilitiesforatotalamountofEUR 375.0 million.ThesyndicatedfacilityamountstoEUR 300.0 millionandexpiresinOctober 2022(possibleextensionuntil2024)whilethebilateralfacilityofEUR 75.0 millionexpiresinJune 2023(possibleextensionuntil2025)andallowsforEURandUSDdrawdowns.TheinterestrateofEUR 300.0 millionrevolvingcreditfacilitychangesaccordingtobpost’ssustainabilityratingasdeterminedbyanexternalparty.

Guarantees givenbpostactsasguarantor(EUR 1.1 millionguarantee)intheframeworkoftheDoMyMovecollaborationagreementbetweenbpostandEngieElectrabel.

bposthasanagreementwithBelfius,INGandKBC,accordingtowhichtheyagreetoprovideforuptoEUR 82.1 millioninguaranteesforbpostuponsimplerequest.

Currency SwapAtyear-end2018bposthadfourforeignexchangeswapsandthreeforeignexchangeforwardsoutstanding,sixwithINGandonewithKBC.

OnJanuary 5,2018bpostenteredintoaswapcontracttoexchangeSGD0.5 millionagainstEUR 0.3 milliontocoverthecurrencyriskofaspecificdebtinSGD.OnMarch 28,2018bpostenteredinaforeignexchangeswapwithKBCtoexchangePLN1.9 millionagainstEUR 0.4 milliontocoverthecurrencyriskofaspecificdebtinPLN.TheothertwoforeignexchangeswapsstartedbothonApril 13,2018toexchangeUSD 0.5 millionwithEUR 0.4 million.FurthermoreonMay 2,2018bpostunderwrotethreeforeignexchangeforwardstoexchangeUSD 8.9 millionwithEUR 7.0 million.AlltheUSDcontractsareusedtocoverthecurrencyriskofspecificdebtsinUSD.

Funds of the Statebpostsettlesandliquidatesthefinancialtransactionsofgovernmentinstitutions(taxes,VAT,etc.)onbehalfoftheState.ThefundsoftheStateconstitutetransactions“onbehalfof”andarenotincludedinthestatementoffinancialposition.

6.34Relatedpartytransactions

a) Relations with the shareholdersThe Belgian State as a shareholderTheBelgianState,directlyandthroughtheSociétéFédéraledeParticipationsetd’Investissement/FederaleParticipatie-enInvesteringsmaatschappij(“SFPI/FPIM”),isthemajorityshareholderofbpostandholds51.04%ofbpost.Accordingly,ithasthepowertocontrolanydecisionattheShareholders’Meetingrequiringasimplemajorityvote.

TherightsoftheBelgianStateasbpost’sshareholderaredefinedinthecorporategovernancepolicies(publiclyavailableonbpostwebsite).

The Belgian State as public authorityTheBelgianStateis,togetherwiththeEuropeanUnion,themainlegislatorinthepostalsector.TheBelgianInstituteforPostalservicesandTelecommunications(“BIPT”),thenationalregulatoryauthority,isthemainregulatorofthepostalsectorinBelgium.

The Belgian State as a customerTheBelgianStateisoneofbpost’slargestcustomers.IncludingtheremunerationfortheServicesofGeneralEconomicInterest(“SGEIs”),10.2%ofbpost’stotaloperatingincomein2018wasattributabletotheBelgianStateandStaterelatedentities.

bpostprovidespostaldeliveryservicestoanumberofministries,bothoncommercialtermsandpursuanttotheprovisionsofthemanagementcontract.

bpostprovidesuniversalpostalservicesandSGEIsentrustedtoitbytheBelgianState,coveringpostal,financial,andotherpublicservices.TheLawofMarch 21,1991,thePostalLawofJanuary 26,2018,themanagementcontractaswellasconcessionagreementssetouttherulesandconditionsforcarryingouttheobligationsthatbpostassumesinexecutionofitsuniversalpostalservicesandSGEIs,and,whereapplicable,thefinancialcompensationpaidbytheBelgianState.



2013amendingtheRoyalDecreeofJanuary 12,1970regulatingthepostalservice.

ThecompensationgrantedtobpostinrespectoftheSGEIsisbeingdisclosedinnote 6.8oftheannualreportandamountedtoEUR 271.4 millionfor2018(EUR 270.0 millionin2017).

ThecompensationofSGEIsisbasedonanetavoidedcost(“NAC”)methodology.Thismethodologyprovidesthatcompensationshallbebasedonthedifferencebetween(i) thenetcostfortheproviderofoperatingwiththeSGEIobligationand(ii) thenetcostforthesameproviderofoperatingwithoutthatobligation.

Thecompensationforthedistributionofnewspapersandperiodicalsconsistsofaflatamountandavariablefeebasedupondistributedvolumes.Thiscompensationissubjecttofurtherex-postverificationsandmustbeNACcompliant.

In2015,theBelgianStateunilaterallydecidedtoreducethecompensationfor2015byEUR 6.5 million.Nevertheless,bposthasreserveditsrightsandbookedanequivalentamountofdoubtfuldebtthatisstilloutstandingperendofDecember 2018.Includingthedoubtfuldebtor,theoutstandingamountownedbytheBelgianStatefortheSGEIremunerationonDecember 31,2018amountedtoEUR 107.6 million(EUR 100.2 milliononDecember 31,2017).bposthasalsoprovidedabankguaranteeofEUR 5.4 millionwithrespecttotheSGEIremunerationtotheBelgianState.

ExcludingtheSGEIremuneration,theservicesprovidedtoStaterelatedcustomersdonotexceed5%ofbpost’stotaloperatingincome.

b) Consolidated companiesAlistofallsubsidiaries(andequity-accountedcompanies),togetherwithabriefdescriptionoftheirbusinessactivities,isprovidedinnote 6.35ofthisannual report.

Balancesandtransactionsbetweenbpostanditssubsidiaries,whicharerelatedpartiesofbpost,havebeeneliminatedwithintheconsolidatedfinancialstatementsandarenotdisclosedinthisnote.

c) Relations with associatesbpostbankisa50%associateofbpost.bpostbank’sothershareholderisBNPParibasFortiswiththeremaining50%.

Asaregisteredbankingandinsuranceintermediary,bpostdistributesbankingandinsuranceproductsonbehalfofbpostbank.bpost,initsqualityofserviceprovider,furthermoreprovidesbackofficeactivitiesandotherancillaryservicestobpostbank.Severalagreementsandarrangementsexistinthisrespectamongthethreecompaniesasdetailedbelow.

Themainbankingandinsuranceproductsdistributedbybpostbankthroughbpostarecurrentaccounts,savingaccounts,termaccounts,certificateofdepositsandfundsorstructuredproductsprovidedbyBNPParibasFortis,respectivelyaccidentand/orhealthinsurances,andannuityandpensionproducts,including‘branch21’and‘branch23’lifeinsurancesprovidedbyAGInsurance.

TheSGEIsentrustedtobpostunderthemanagementcontractincludethemaintenanceoftheretailnetwork,theprovisionofday-to-daySGEIs(i.e.,“cashatcounter”servicesandhomedeliveryofpensionsandsocialallowances)andtheprovisionofcertainadhocSGEIs,whichareSGEIsthatbytheirnatureareprovidedwithoutanyrecurrence.AdhocSGEIsincludethesocialroleofthepostman,especiallyinrelationtopersonswholivealoneoraretheleastprivileged(thisserviceisrenderedthroughtheuseofhandheldterminalsandtheelectronicIDcardbymailcarriersontheirround),the“PleasePostman”service,thedistributionofinformationtothepublic,cooperationwithregardtothedeliveryofvotingpaperpackages,thedeliveryofaddressedandunaddressedelectionprinteditems,thedeliveryataspecialpriceofpostalitemssentbyassociations,thedeliveryofletterpostitemsfallingwithinthefreepostsystem,thepaymentofattendancefeesduringelections,thefinancialandadministrativeprocessingoffines,theprintingandsaleoffishingpermitsandthesaleofpoststamps.

TheSGEIsentrustedtobpostunderthemanagementcontractareaimedatsatisfyingcertainobjectivesrelatedtothepublicinterest.Inordertoensureterritorialandsocialcohesion,bpostmustmaintainaretailnetworkconsistingofatleast1,300 postalservicepoints.Atleast650ofthesepostalservicepointsmustbepostoffices.

Tariffsandothertermsfortheprovisionofcertainoftheservicesprovidedunderthemanagementcontractaredeterminedinimplementingagreementsbetweenbpost,theBelgianStateand,whererelevant,theotherpartiesorinstitutionsconcerned.

The5th managementcontractexpiredonDecember 31,2015.OnDecember 3,2015,bpostandtheBelgianStatesignedthe6thmanagementcontract.ThismanagementcontractprovidesforacontinuedprovisionoftheaforementionedSGEIsforanewperiodoffiveyears,endingonDecember 31,2020.

bpostfurthermorecontinuestoprovidetheSGEIsofearlydeliveryofnewspapersanddistributionofperiodicals.UntilDecember 31,2015,theseserviceswereprovidedunderthe5thmanagementcontract.InaccordancewiththeBelgianState’scommitmenttotheEuropeanCommission,acompetitive,transparentandnon-discriminatorymarketconsultationprocedurewithrespecttotheseserviceswasorganized,followingwhichtheprovisionoftheserviceswasawardedtobpostinOctober 2015.Consequently,sinceJanuary 1,2016,theservicesofdistributionofnewspapersandperiodicalsaredeliveredinaccordancewiththeconcessionagreementsexecutedbetweenbpostandtheBelgianStateinNovember 2015.

OnJune 3,2016,theEuropeanCommissionapprovedboth the 6thmanagementcontractandtheconcessionagreementsondistributionofnewspapersandperiodicalsunderthestateaidrules1.

bpostalsoprovidescashaccountmanagementservicestotheBelgianStateandcertainotherpublicentitiespursuanttotheRoyalDecreeofJanuary 12,1970regulatingthepostalserviceasamendedpursuanttotheRoyalDecreeofApril 30,2007regulatingpostalfinancialservicesandtheRoyalDecreeofApril 14,

(1) InOctober 2016,theFlemishFederationofPressVendors(‘VlaamseFederatievanPersverkopers’)soughttheannulmentoftheEuropeanCommission’sclearancedecisionbeforetheGeneralCourtonproceduralgrounds.InFebruary 2019,theGeneralCourthasremovedthecasefromtheregisterfollowingtherequestbyVFPtodiscontinuetheproceedings.



bpostbankhadapproximately735,000 currentaccountsand909,000savingsaccountsasofDecember 31,2018.Allaccountsincludebasicservicessuchasdebitcards,accesstopaymentandmoneytransferservicesandcashwithdrawalsatpostofficetellersorATMs.bpostalsoofferstheMasterCardbpostbankcreditcard.

bpostbank’scustomerlendingactivityconsistsofgrantingorofferingconsumercreditsandmortgagescredits.AsofDecember 31,2018,bpostbankhadapproximatelyEUR 4,936 millioninloansonitsbalancesheet.

bpostbankdoesnotperformanyassetmanagementactivitiesnoranyprivatebankingorcommerciallending.

Banking and insurance partnership agreementThecooperationbetweenbpostbankandBNPParibasFortiswithrespecttobpostbankissetoutinabankingpartnershipagreementthatwasrenegotiatedandsignedonDecember 13,2013.

Theframeworkagreementprovidesinsubstancethat(i) bpostandBNPParibasFortiswillcontinuetocooperatethroughbpostbank,whichwillcontinuetobeanassociateofbpost;(ii) bpostwillremain,subjecttocertainexceptionsprovidedforinthepartnershipagreement,theexclusivedistributorofbpostbank’sproductsandservicesthroughitsnetworkofpostoffices;and(iii) bpostwillcontinuetoprovidebackofficeactivitiesandotherancillaryservicestobpostbank.

TheinsuranceproductsofAGInsuranceareofferedandmarketedviabpostbankusingthedistributionnetworkof bpost.

ThecooperationbetweenAGInsurance,bpostbankandbpostissetoutinaninsurancedistributionagreementthatwasrenegotiatedandsignedonDecember 17,2014.

Thedistributionagreementprovidesforanaccessfee,commissionsonalltheinsuranceproductssoldbybpostandadditionalcommissionsifcertainsalesobjectivesareachieved.

bpostbankpaysbpostacommissiondeterminedinaccordancewithmarketconditionsforthedistributionofbankingandinsuranceproductsandfortheperformanceofcertainback-officeactivities.Theamountofthecommissionforthedistributionofbankingandinsuranceproductsdepends,interalia,ontheinterestmarginrealizedbybpostbank,theassetsundermanagementandthesalesoffinancial/insuranceproductsrealizedbybpost’sretailnetwork.TotalincomerelatedtobankingandfinancialproductsamountedtoEUR 167.1 millionin2018(2017:EUR 182.6 million),ofwhichasignificantamountisrelatedtothecommissionpaidbybpostbank.TheamountowedbybpostbanktobpostonDecember 31,2018amountedtoEUR 7.2 million(2017:EUR 5.7 million).

Working capitalbpostbankhasplacedaworkingcapitalofEUR 12.0 millionatthedisposalofbpostwithoutguaranteeorpaymentofinterestbybpost.Thisworkingcapitalremainsavailabletobpostthroughoutthetermofthebankingpartnershipagreement.Itisintendedtoconstitutetheworkingcapitalenablingbposttoconductbusinessonbehalfofbpostbank.

DividendIn2018bpostreceivedatotaldividendofEUR 4.0 millionfrombpostbank(EUR 11.75 millionin2017).

d) Compensation of key managementKeymanagementpersonnelarethosepersonswithauthorityandresponsibilityforthestrategicorientationofthecompany.Forbpost,keymanagementpersonneliscomposedofallmembersoftheBoardofDirectorsandGroupExecutiveCommittee.

AsfurtherdescribedintheRemunerationReport,theremunerationofthemembersoftheBoardofDirectors(withtheexceptionoftheCEO)wasapprovedbytheGeneralShareholders’Meetingof25 April 2000 andcontinuedtobeapplicablein2018.

TheBoardofDirectors’members,withexceptionoftheCEO,areentitledtoafixedannualremuneration.TheyarealsoentitledtoanattendancefeeperattendedmeetingoftheAdvisoryCommitteemeetings.

In2018,totalremunerationpaidtotheBoardofDirectors’members(excludingtheCEO)amountedtoEUR 0.33 million(2017:EUR 0.35 million).

TheremunerationpackageoftheCEOandthemembersoftheGroupExecutiveCommitteeconsistsof(i) abaseremuneration,(ii) ashort-termincentivevariableremuneration,(iii) apensioncontributionand(iv) variousotherbenefits.

FortheyearendedDecember 31,2018,aglobalremunerationofEUR 4.06 million(2017:EUR 2.88 million)excludingthevariableremunerationwaspaidtoCEOandthemembersoftheGroupExecutiveCommittee,andcanbebrokendownasfollows:

• baseremuneration:EUR 3,489,148.24(2017:EUR 2,458,846.37)

• pensioncontribution:EUR 327,859,56(2017:EUR 227,723.16)

• otherbenefits:EUR 238,206.00(2017:EUR 198,415.74) • insurancecoveringdeath-in-service,disabilityandmedicalcoverage:EUR 90,549.57(2017:EUR 74,685.96)

• representationfees:EUR 29,319.58(2017:EUR 24,529.86)

• leasingcostsforcompanycar:EUR 118,336.85(2017:EUR 99,199.92)

Inaddition,theCEOandthemembersoftheGroupExecutiveCommitteereceivedin2018aglobalvariableremunerationofEUR 1,210,367.99(2017:EUR 1,196,125.45)becausethecorporateobjectivesandtheindividualtargetsfortheyearthatendedonDecember 31,2017weremet(the2017assessmentwasonlycompletedin2018).

Noshares,stockoptionsorotherrightstoawardssharesweregrantedtoorexercisedbytheCEOortheothermembersoftheGroupExecutiveCommitteeorhaveexpiredin2018.Nooptionsunderpreviousstockoptionplanswerestilloutstandingforthefinancialyear2018.

Amoredetailedoverviewofthecompensationofkeymanagementofbpostandbpost’sremunerationpolicyisincludedintheremunerationreport.



6.35GroupcompaniesThebusinessactivitiesofthemainsubsidiariescanbedescribedasfollows:

• Euro-Sprintersoperatesbpost’sspeciallogisticsnetwork,mainlyincludingcourierservices.

• Speos Belgiummanagesoutgoingdocumentflowsforitscustomers,specializingintheoutsourcingoffinancialandadministrativedocuments,suchasinvoices,bankstatementsandsalaryslips.Servicesincludedocumentgeneration,printing(blackandwhiteorfullcolor)andenclosing,electronicdistribution(email,zoomit,webservices)andarchiving.Speosalsooffersbackupandpeaksolutionsforcompanieshavingtheirownprintshop.FurthermoreSpeosoffersdedicatedend-to-endsolutions(e.g.EuropeanLicensePlate).

• Certipostprovidesdocumentsecurity,digitalcertificationandBelgiane-IDactivities.

• Mail Services Incorporated (MSI)basedintheUSA,isacross-bordermailconsolidatorofferingmainlyinternationaloutbounddistributionproducts.In2018IMEX Global Solutions andM.A.I.L.werebought andtogetherwithMSIthey areoperatingastheMailGroup. IMEXGlobalSolutionsisa3rdpartylogisticscompanyintheUS,activeincross-borderpublicationandmaildelivery.M.A.I.L.isactiveinthefieldofbusinessmail/cataloguedistributionforre/e-tailersandmail-roomservicesaswellasparceldistribution.

• Landmark Global (UK) isaUKbasedmail,parcelandtransportcompanyprovidinggloballogisticssolutionstothemarketinUK.BasedneartoHeathrowairport,LandmarkGlobal(UK)hasacustomsbondedfacilityenablingtooffercustomsclearanceservicesandx-raysecurityscreeningservices.LandmarkGlobal(UK)actsasaninboundandoutboundgatewayforotherbpostentitiesaroundtheworld.

• ThroughLandmarkGlobal(UK),bpostisactiveinAsia,operatinginSingaporethroughbpost Singapore Pte andinHongKongthroughbpost Hong Kong.Thesecompaniesoriginallyfocusedondeliveryoffinancialdocuments,butbpostistransformingbpostHongKongtoprovideafullrangeofdeliveryandlogisticssolutions,includingcross-bordermailandparcelsande-commercefulfillment.Theircustomersarespreadacrossthebanking,insurance,assetmanagement,publishingandprintingsectors.SimilartoMSI,theyaremainlyfocusedondirectlycollectingparcelsfromoversease-commercecompaniesandbusinessesfordeliveryinEuropeandotherregions.bpost International Logistics (Beijing) Co.isacompanyaffiliatedtobpost Hong Kong andisestablishedinBeijing(China).Itoffersafullrangeofcross-borderparceldistributionservicestotheChinesee-tailersandconsolidators,withastrongfocusondeliveryofparcelstoEuropeanandotherglobalbuyers.ItisprimarilyactiveinBeijing,ShanghaiandShenzhen.

• Landmark GlobalbasedintheUSAandtheCanada-basedLandmark Trade Services companyareleadinginternationalparcelsconsolidators,activeintheUnitedStatesandCanada.Theyaremainlyfocusedonthedistributionofe-commerceparcelsfromU.S.-basede-tailersintoCanada,EuropaandAustralia.ItalsooffersvariousfulfillmentservicesinlocationsintheUnitedStatesforitse-commercecustomers.

Overthelastyearsithasexpandedinofferingvariouslogisticssolutionstoitsexistingclientbase.

• Landmark Global (PL) providesfulfillment,logisticsanddistributionactivities.ItoperatesaslogisticsanddistributionpartnerfordirectsellingcompaniesacrossWestern,CentralandEasternEurope.

• Landmark Global (Netherlands) providesimportservicesforUScustomerslookingtoselltheirproductsinEurope.Thisincludescustomsclearanceservices,warehousing,pick&packandlastmiledelivery.Landmark Trade Services (Netherlands) is a spin-offcompanyofLandmarkGlobal(Netherlands)whichfocusesonadvisingnewUScustomersonhowtoentertheirproductsintoEurope.Thisincludesbothadviceoncustoms/VATset-upandonproductregistrationinthevariousEuropeancountries.

• Landmark Trade Services (UK) providesimportservicesforgoodsenteringtheUK.ItslocationrightnexttoLondonHeathrowmakesitideallysuitedtoserviceUStoUKairliftimports.Landmark Trade Services USAprovidesimportservicesforgoodsenteringtheUS.

• Freight Distribution Management Systems PTY and FDM Warehousing PTYarespecializedinprovidingapersonalizedcustomerserviceforwarehousing,fulfillmentanddistributingproductsinAustralia.Itsbusinessconsistsofthirdpartylogistics(3PL)warehousing,transport&distribution.

• Apple Express Courier andApple Express Courier’s businessconsistsofthelastmiledelivery,transportationandfulfillmentservicesforclientsinCanadaandtheUS.

• TheactivitiesofUbiway Group relate to press logistics,non-presslogisticsandconvenience&proximityretail.AMPisaprominentplayerintheBelgianpressdistributionmarketwithalargenumberofpointsofsaleservicedandalargenumberoftitlesdistributed.UbiwayGroupalsooffersnon-presslogisticsservicesrelatedtoparcelsandvalue-addede-commercesolutions,suchas3PLlogistics(supplychainservices)andanopenaccessnetworkofparcelpick-upanddeliverypointsinBelgiumundertheKariboo!brand.ConveniencedistributionrelatestoBurnonvillewhichdistributesnon-pressandnon-food(impulse)productstoretailers. Ubiway Retail isasignificantplayerinthenationalpress,tobaccoandconvenienceretailmarketwithanetworkofshopsmostlyoperatedunderthePressShop,Relay,Hello!andHubizbrands.

• Radialisaleadingplayerinintegratede-commercelogisticsandomnichanneltechnology,enablingbrandsandretailerstoprofitablyexceedretailcustomerexpectations.Radial’stechnical,powerfulomnichannelsolutionsconnectsupplyanddemandthroughefficientfulfillmentandtransportationoptions,intelligentfraudprotection,payments,andtaxsystems,andpersonalizedcustomercareservices.HundredsofretailersandbrandsconfidentlypartnerwithRadialtosimplifytheirpost-clicke-commerceandimprovetheircustomerexperiences.Radialbringsflexibilityandscalabilitytotheirsupplychainsandoptimizeshow,whenandwhereordersgofromdesiretodelivery.

• DynaGroup offersarangeofspecializedlogisticalservicesandsoftware,fromtherepairofelectronics(fromsmartphonesanddronestocoffeemachines)topersonalizede-commercedeliveryservices,forbothsmallproducts(rangingfrompassportsto



smartphoneswithcontractfinalizationonthedoorstep)andlargeconsumerproducts(suchasthedeliveryandinstallationoflargetelevisions,washingmachinesandfurniture).

• Leen Menken Foodservices Logisticsisalogisticoperatorforthetransportofrefrigeratedandfrozenproductsfore-commerce.

• ThebusinessactivitiesofActive Ants consists of productstoring,picking,packing,organizationoftransportactivities,returnshandlingandshippingfore-commercebusinesses.

Name

Shareofvotingrightsin%terms Countryof

incorporation2018 2017

bpostbankNV-bpostbanqueSA 50% 50% Belgium

Name

Shareofvotingrightsin%terms Countryof

incorporation2018 2017

AlterisNV-SA 100.0% 100.0% Belgium

LandmarkGlobal(Belgium)NV-SA 100.0% 100.0% Belgium

CertipostNV-SA 100.0% 100.0% Belgium

Euro-SprintersNV-SA 100.0% 100.0% Belgium

CityDepotNV-SA 99.7% 99.7% Belgium

ParcifyNV-SA1 100.0% 51.0% Belgium

LandmarkGlobal(PL)Spzo.o. 100.0% 100.0% Poland

SpeosBelgiumNV-SA 100.0% 100.0% Belgium

MailServicesINC 100.0% 100.0% USA

LandmarkGlobal(UK)LTD 100.0% 100.0% UK

bpostHongKongLTD 100.0% 100.0% HongKong

bpostSingaporePte.LTD 100.0% 100.0% Singapore

bpostInternationalLogistics(Beijing)Co.,LTD 100.0% 100.0% China

bpostU.S.HoldingsINC 100.0% 100.0% USA

LandmarkGlobal,INC 100.0% 100.0% USA

LandmarkTradeServices,LTD 100.0% 100.0% Canada

LandmarkGlobal(Australia)DistributionPTYLTD 100.0% 100.0% Australia

LandmarkGlobal(Netherlands)BV 100.0% 100.0% Netherlands

LandmarkTradeServices(Netherlands)BV 100.0% 100.0% Netherlands

LandmarkTradeServices(UK)LTD 100.0% 100.0% UK

LandmarkTradeServicesUSA,INC 100.0% 100.0% USA

AppleExpressCourierINC 100.0% 100.0% USA

AppleExpressCourierLTD 100.0% 100.0% Canada

FreightDistributionManagementSystemsPTY,LTD 100.0% 100.0% Australia

FDMWarehousingPTY,LTD 100.0% 100.0% Australia

AMPNV-SA 100.0% 100.0% Belgium

BurnonvilleNV-SA 100.0% 100.0% Belgium

ImportLuxBurnonvilleSARL 100.0% 100.0% Luxemburg

AlvadisNV-SA 100.0% 100.0% Belgium

UbiwayNV-SA 100.0% 100.0% Belgium

Distrisud-BellensNV-SA 100.0% 100.0% Belgium

UbiwayServicesNV-SA 100.0% 100.0% Belgium

InternationaleBoekhandelDistributiedienstNV-SA 100.0% 100.0% Belgium



DistridijleNV-SA 100.0% 100.0% Belgium

UbiwayRetailNV-SA 100.0% 100.0% Belgium

Kariboo!NV-SA 100.0% 100.0% Belgium

deBurenInternationaalBV1 51.0% 51.0% Netherlands

deBurenNederlandBV1 51.0% 51.0% Netherlands

deBurenAfhaalcentrumBV1 51.0% 51.0% Netherlands

deBurenTechniekBV1 51.0% 51.0% Netherlands

DragstraAutomatiseringBV1 51.0% 51.0% Netherlands

Nuleverbaar.NLBV1 51.0% 51.0% Netherlands

deBurenBelgiumNV-SA1 51.0% 51.0% Belgium

deBurenFinancialBV 51.0% - Netherlands

BubblePostNV-SA 100.0% 100.0% Belgium

BubblePostBV2 - 100.0% Netherlands

ParcifyBV2 - 51.0% Netherlands

WelcomeMediaNV-SA 100.0% 100.0% Belgium

DynagroupBV 100.0% 100.0% Netherlands

DynafixRepairBV 100.0% 100.0% Netherlands

DynalogicBeneluxBV 100.0% 100.0% Netherlands

DynafixCareBV 100.0% 100.0% Netherlands

DynalogicCourierBV 100.0% 100.0% Netherlands

DynafixComputerRepairBV 100.0% 100.0% Netherlands

DynasureBV 100.0% 100.0% Netherlands

DynafixOnsiteBV 100.0% 100.0% Netherlands

DynalinqBV 100.0% 100.0% Netherlands

DynalogicBelgiumNV 100.0% 100.0% Belgium

RadialSolutionsHongKongLTD 100.0% 100.0% HongKong

RadialHoldingsLP 100.0% 100.0% USA

RadialCommerceINC 100.0% 100.0% USA

RadialSouthLP 100.0% 100.0% USA

RadialINC 100.0% 100.0% USA

935HQAssociatesLLC 100.0% 100.0% USA

RadialLuxembourgSARL 100.0% 100.0% Luxembourg

RadialOmnichannelTechnologiesIndiaPrivateLTD 100.0% 100.0% India

TradePortDriveLLC 100.0% 100.0% USA

RadialOmnichannelInternationalSLU 100.0% 100.0% Spain

RadialFullfillmentGmbH 100.0% 100.0% Germany

RadialGmbH 100.0% 100.0% Germany

RadialCommerceLTD 100.0% 100.0% UK

RadialSolutionsSingaporePTELTD 100.0% 100.0% Singapore

RadialE-commerce(Shanghai)Corp.LTD 100.0% 100.0% China

bpostNorthAmericaHoldings,INC 100.0% 100.0% USA

RadialIIIGP,LLC 100.0% 100.0% USA

RadialSouthGP,LLC 100.0% 100.0% USA

IMEXGlobalSolutions,LLC 100.0% - USA

M.A.I.L.(MailingAssistanceInLafayette),INC 100.0% - USA

LeenMenkenFoodserviceLogisticsBV 100.0% - Netherlands

ActiveAntsBV 63.6% - Netherlands

AnthillBV 63.6% - Netherlands

(1) Fullyconsolidated

(2) Liquidatedduringtheyear2018



50.00%

100.00%

100.00%

100.00%

99.99%100.00%

100.00%

100.00%

99.99%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

63.60%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

0.10%

100.00%

100.00%

100.00%

7.40%

100.00%

100.00%

0.02%

1.00%

100.00%

0.01%

0.02%

99.69%

92.60%

99.98%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

99.98%

100.00%

51.00%

100.00%

99.99%98.39%

99.92%

0.01%

1.61%0.01%

99.99%

100.00%

0.08%

0.01%

0.01%

100.00%

100.00%

100.00%

100.00%

100.00%

99.90%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

99.99%99.00%

100.00%

100.00%

100.00%

GP interest

GP interest

100.00%

100.00% 100.00%

100.00%

100.00%

100.00%

100.00%

bpost NV-SA

bpost group structure

Asper31December2018

FDM Warehousing PTY. LTD

LANDMARK TRADE SERVICES (UK) LTD

Mail Services. INC

LANDMARK TRADE SERVICES. LTD

LANDMARK GLOBAL (Netherlands) BV

LANDMARK GLOBAL. INC

LANDMARK TRADE SERVICES USA. INC

Apple Express Courier. LTD

LANDMARK GLOBAL (PL) Sp z o.o.

BPOST SINGAPORE PTE. LTD

LANDMARK GLOBAL (UK) LTD

DYNAGROUP BV

LEEN MENKEN FOODSERVICE LOGISTICS BV

ANTHILL BV

ACTIVE ANTS BV

BPOST HONG KONG LTD

Freight Distribution Management Systems PTY. LTD

LANDMARK GLOBAL (Australia) Distribution PTY LTD

bpost US Holdings. INC

LANDMARK TRADE SERVICES (Netherlands) BV

Apple Express Courier. INC

M.A.I.L., Inc (Mailing Assistance In Lafayette, Inc)

IMEX GLOBAL SOLUTIONS, LLC

BPOST INTERNATIONAL LOGISTICS (Beijing) CO LTD

DYNALOGIC BELGIUM NV

DYNASURE BV

DYNALOGIC COURIER BV

DYNALINQ BV

DYNAFIX CARE BV

DYNAFIX ONSITE BV

DYNAFIX COMPUTER REPAIR BV

DYNALOGIC BENELUX BV

DYNAFIX REPAIR BV

Radial GmbH

Radial Omnichannel International SLU

Radial Solutions Hong Kong Ltd

Radial Commerce Ltd

Radial Solutions Singapore PTE Ltd

Radial Fulfillment GmbH

Radial e-commerce (Shanghai) Corp. Ltd

Radial Luxembourg S.à.r.l.

Radial III GP. LLC

Radial Commerce. Inc.

935 HQ Associates. LLC

Radial South GP. LLC

Radial. Inc. Trade Port Drive, LLC

bpost North America Holdings. Inc

Radial Holdings. L.P.

Radial Omnichannel Technologies India Private Ltd

Radial South. L.P.

BPOST BANK NV / BPOST BANQUE SA (equity method)

BUBBLE POST NV-SA

DE BUREN NEDERLAND BV

DE BUREN INTERNATIONAAL BV

DE BUREN TECHNIEK BV

NULEVERBAAR.NL BV

DRAGSTRA AUTOMATISERING BV

DE BUREN AFHAALCENTRUM BV

BURNONVILLE NV-SA

ALVADIS NV-SA

IMPORT LUX BURNONVILLE

UBIWAY SERVICES NV-SA

DISTRIDIJLE NV-SA

KARIBOO! NV-SA

UBIWAY RETAIL NV-SA

DISTRISUD-BELLENS NV-SA

Internationale Boekhandel Distributiedienst NV-SA

ALTERIS NV-SA

PARCIFY NV-SA

CITYDEPOT NV-SA

SPEOS BELGIUM NV-SA

CERTIPOST NV-SA

EURO-SPRINTERS NV-SA

LANDMARK GLOBAL (Belgium) NV-SA

WELCOME MEDIA NV-SA

DE BUREN BELGIUM NV-SA

DE BUREN FINANCIAL BV

AMP NV-SA

UBIWAY NV-SA



6.36Eventsafterthestatementoffinancialpositiondate

InFebruary 2019,bpostagreedtoexititsparticipationindeBuren.IntheprocessbpostacquiredthedeBurenassetsinBelgium.ThiswillallowbposttofurtherboostitslastmileparcelserviceofferinginBelgiumthroughadensenetworkofparcellockerswalls.



Summary of the financial statements of bpost NV/SA

ThefullversionoftheannualaccountsisfiledwiththeNationalBankofBelgiumandarealsoavailablefreeofchargeonthebpost’swebsite.

Thissectioncontainsasummaryversionofthestatutory(non-consolidated)annualaccountsofbpostNV/SA.ThestatutoryauditorissuedanunqualifiedopiniononthestatutoryaccountsofbpostNV/SAasofandfortheyearendedDecember 2018.

Balance sheet of bpost NV/SA (summary)As at 31 December


Assets

Non-current assets

Intangibleassets(includingformationexpenses) 24.6 14.5

Tangibleassets 302.9 329.3

Financialassets 1,496.7 1,344.5

1,824.2 1,688.3

Current assets

Inventories 8.3 9.1


Cashandcashequivalents 490.2 354.2

Deferredchargesandaccruedincome 42.3 22.8

1,046.7 830.1

Total assets 2,870.9 2,518.4

Equity and liabilities

Equity

Issuedcapital 364.0 364.0

Reevaluationsurpluses 0.1 0.1

Reserves 50.8 50.8

Retainedearnings 172.8 172.5

587.7 587.4

Provisions

Pensionrelatedprovisions 29.7 26.3

Provisionforrepairsandmaintenance 0.1 1.2

Otherliabilitiesandcharges 139.4 155.6

169.1 183.1

Non-current liabilities

Longtermdebts 860.3 68.4

860.3 68.4

Current liabilities

Tradeandotherpayables 224.0 206.3

Shorttermdebts 199.9 724.1

Socialdebtspayable 346.4 354.3

Incometaxpayable 24.9 46.3

Otherdebts 328.2 219.3

Accruedchargesanddeferredincome 130.4 129.3

1,253.8 1,679.6

Total liabilities 2,870.9 2,518.4



Income statement of bpost NV/SA (summary)For the year ended 31 December


Revenue 2,128.2 2,114.7

Otheroperatingincome 51 .0 40.9

Non-recurringoperatingincome 1.2 0.0

Total operating income 2,180.4 2,155.7

Materials costs 6.2 7.9

Payrollcosts 1,091 .0 1,087.8

Servicesandothergoods 661.2 606.3

Otheroperatingexpenses 10 .5 13.5

Provisions (14.0) (5.6)

Depreciationandamortization 54 .9 53.1

Non-recurringoperatingcharges 1.0 1.1

Total operating expenses 1,810.8 1,764.1

Profit from operating activities 369.6 391.6

Financialgains/(losses) 11 .7 30.7

Nonrecurringfinancialgains/(losses) (15.6) 0.3

Profit before tax 365.8 422.6

Incometaxexpense 103 .5 131.6

Earnings after taxes 262.3 291.0


MANAGEMENT RESPONSIBILITY STATEMENT

Management Responsibility StatementKoenVanGerven,ChiefExecutiveOfficerandBaudouindeHepcée,ChiefFinancialOfficeradinterim,declareintitleandfortheentitythattothebestoftheirknowledge:

• theconsolidatedfinancialstatementsforthefinancialyears2017 and2018,preparedinaccordancewith“InternationalFinancialReportingStandards”(IFRS)asacceptedbytheEuropeanUnionupuntilDecember 31,2018,giveatrueandfairviewofthenetassets,thefinancialpositionandtheresultsofbpostNV/SAandtheentitiesincludedintheconsolidationscope;and

• themanagementreportrelatedtotheconsolidatedfinancialstatementsgiveatrueandfairviewofthedevelopmentandtheresultofbpost’sactivities,aswellasthepositionofbpostNV/SAandtheentitiesthatareincludedintheconsolidationscope,togetherwithadescriptionofthemainrisksanduncertainties that bpost faces.

KoenVanGerven BaudouindeHepcée

ChiefExecutiveOfficer ChiefFinancialOfficera.i.

CSR Review

CSR Strategy – People, Planet, Proximity

AsoneofthelargestemployersinBelgium,bpostplaysamajorroleinsociety.Itisourdutytosetanexample.Thisiswhyourambitionistomakeourcompanyprocessesandculturesustainable.Insodoing,weareabletoachieveasustainablegrowthandberecognizedbyourstakeholders(customers,shareholders,government,employees,suppliers,tradeunions,NGOs)asasociallyresponsiblecompany.Itisalsoimportanttousthatourcustomersknowthattheirletters,parcelsandlogisticsareprocessedinaresponsibleway.Oneofthekeyexamplesofbpost’sstrivingforsustainablegrowthisthesustainabilityloanittookoutattheendof2017.TheinterestrateofthisEUR300millionrevolvingcreditfacility(RCF)changesaccordingtobpost’ssustainabilityratingasdeterminedbyanexternalparty.TheloanwasthefirstofitskindinBelgiumandincentivizesourorganizationtobecomeevenmoresustainable.

Togetherwithourstakeholders,weperformedamaterialityassessment,basedonwhichwedefinedourCSRstrategystructuredinthethreefollowingpillars:

• People:wecareaboutouremployeesandarecommittedtothem.

• Planet:westrivetoreduceourimpactontheenvironment.

• Proximity:weareclosetothesocietyanditsemergingneeds.

Moreaboutourmaterialityassessmentmethodologyandourstakeholderdialoguecanbefoundonourwebsite.

Foreachofthesepillars,wehavelinkedourmaterialtopicsandstrategicKPIsonwhichweintendtofocus:

Green fleet

SHARED VALUECREATION

• Employee health and safety

• Employee training and talent development

• Ethics and diversity• Social dialogue

• • Green buildings• Waste management

• To our community• To our suppliers• To our customers

through our services

• Continuity of our business• Employee satisfaction and engagement• Customer satisfaction

PEOPLEWe care aboutour employees

and engage them

PLANETWe strive to reduce

our impact on the

environment

PROXIMITY

We are close tothe society


CSR REVIEW

https://corporate.bpost.be/sustainability/csr-governance/stakeholder-engagement?sc_lang=en

Our CSR priorities (material topics)

Related risk & opportunities Strategic KPI Target Result 2018 vs target Result 2018 vs. external environment

People

Employeehealthandsafety

Casesofinjuryand/orillnesscanrepresentacostforbpostaswellasfortheemployeeconcerned.Also,apreventivewell-beingpolicycanhelpdecreasestresslevelsandhence,absenteeism.

Absenteeism bpostBelgiumhassetanewtargetfor2019-5%decreasecomparedto2018.

bpostBelgium:7.85%

AccordingtoaSecurexstudy1,theBelgianaverageabsenteeismratewas7%in2017.

Employeetrainingandtalentdevelopment

Trainedemployeescandemonstrateanincreaseinefficiencyandpromoteemployeeengagement,whichcanimproveemployeeretention.

Ethicsanddiversity

Theethicalanddiversitypolicyaffectsbpost’sreputation,itsemployee’sengagementandretention.

Employeeengagement

Toexceedor meet the Belgiannationalbenchmarkonengagement(2017:5,10).

Results2017:4.8.Thenextemployeesatisfaction surveywillbeperformedinQ12019.

ThecompanyPulseperformedastudyoverthe2014-2017periodinwhichtheysurveyed81,000 employeesfrom215Belgiancompanies.Theoverallengagementratewasthenbeencorrectedusingspecificcriteria(e.g.worktype,age)andafactorfromtheKULuniversity.Fromthisresearchitappearsthatthenationalbenchmarkforemployeeengagementis5,10.

Social dialogue

Aneffectivesocialdialoguehelpspreventpossiblestrikesandrelatedcostsbutalsoensuresemployeesatisfactionandengagement

Planet

Greenfleet Havingagreenfleethelpsimproveourcarbonfootprintandbringsaboutapositivepublicimageofthecompany.Italsogeneratesfuelcostsavings.Moreover,itisawaytomitigateexpectedrisingcarbontaxes.

CO2 footprint scope 1,2and3

• -20%scope 1and2GHGemissionsby2030comparedto baseline 2017:114,395tCO2-eq.

• -20%scope3GHGemissionsby2030fromUpstream Transportation andDistribu-tioncomparedto baseline 2017:218,016tCO2-eq.

Results2018:Scope 1&2 emissions increasedby2%to116,467 andscope3emissions decreasedto192,390allowingforanoveralldecreaseofCO2 emissions of7%(scope 1,2and3).

Forthesixthtime,bposthasbeenrecognizedgreenestpostaloperatorbytheIPC.Everyyear,IPC’sEnvironmentalMeasurementandMonitoringSystem(EMMS)measuresthecarbonemissionsofagroupoftwentypostaloperatorsworldwide.In2017,thesetwentycompaniesintheEMMSgenerated6,211,000 tonsofCO2forscope 1and2,and17,363,000 tonsofCO2forscope 1,2and3.bpost’semissionsof308,857tCO2-eq(scope 1,2and3

2) are thus betterthanaverage(310,550 tonsofCO2).

Greenbuildings

Greenbuildingsgenerateenergy-relatedcostsavingsandimproveour carbon footprint.

Wastemanagement

Asoundwastemanagementbringsapositiveimageofthecompanyandimprovesourscope3carbonfootprint.Assuch,itcanalsogeneraterevenuesbyvalorizingwasteasarawmaterial.

(1)Source:https://www.securex.be/nl/publicaties/wp/absenteisme-in-2017

(2)Source:https://www.ipc.be/sector-data/sustainability/emissions


CSR REVIEW

Our CSR priorities (material topics)

Related risk & opportunities Strategic KPI Target Result 2018 vs target Result 2018 vs. external environment

Proximity

Proximitytooursociety

Proximitytosocietyispartofbpost’smission.Forgettingthelocalcommunitywouldbedetrimentaltobpost’sreputation.

Number of social initiatives

Toberecognizedbyourcommunityasa sustainable partner

13 OurDuoForaJobinitiativewasawarded“CoupdeCœur2018”bythejuryofPostEurop.

Proximitytoour suppliers

Havingaclearoverviewofoursupplychainbringsefficiencyandhelpsavoidsupplyrisks(e.g.financialorsupplystability).Also,includingsustainabilityrequirementshelpsmitigatereputationalriskslinkedtounethicalbehaviororenvironmentaldamage.

Share of significanttier1suppliers coveredbyour Supplier CodeofConduct

100% 100% Since2018,100%ofbpostBelgiumsuppliersarecoveredbythesuppliercodeofconducts(nowincludedinourgeneraltermsandconditionsforallourcontracts).Ecovadissurveyed120 companiesontheirprocurementpracticesin20171.Fromthissurvey,itappearsthatnotmorethan45%ofthecompaniesspend75%ormoreoftheirprocurementvolumeonstrategicsupplierscoveredbytheirsustainableprocurementpolicy.

Proximityto our customers throughourservices

Enhancingourcustomerexperienceandimprovingourofferimprovescustomerretention.Moreover,developingmore sustainable solutions givesanopportunitytogobeyondcustomerexpectations,thusimprovingourmarketpositioning.

Customersatisfaction

Toexceedormeetthelevelofpreviousyear(2017bpostBelgium:86).

bpostBelgium:84One of the reasonsbehindthedeclineof customer satisfaction canberelatedtothestrikesthatoccurredinQ4of2018,whichaffectedthe timeliness andqualityof the mail distribution.

bpost measures customer satisfaction ona7-pointscale.Othercompaniestendtousea5-pointor10-pointscale.Moreover,wemixresultsofbothresidentialandbusinesscustomers in our approach. This makesitdifficulttocompareresultswithothercompaniesorbenchmarks.

(1)Source:Ecovadis-ScalingUpSustainableProcurement,2017.


CSR REVIEW

Key achievements in 2018

Our CO2 Science Based Target has been approved

WeareawarethatouractivitiesgenerateasignificantlevelofGHGemissions.Reducingourecologicalimpactispartofthepromisewehavemadetoourcustomersandstakeholders.

Bytheend2017,bposthadsuccessfullyreduceditsgreenhousegasemissionsby-37%since2007.In2018,wewereawarded“greenestpostaloperatorintheworld”forthesixthyearinarowbytheInternationalPostCorporation.Thisyear,tofurtherpushoureffortstomeetthe2015ParisClimateAgreement,wedecidedtosetanambitious“Science-BasedTarget”forthecarbonfootprintoftheentirebpostgroup:-20%CO2emissionsby2030,comparedtoournewbaselineyear2017.

Comparedtobusinessasusual,thisrepresentsareductionofnearly-40%.

Wewereproudtoseeournewtargetapprovedbythe“ScienceBasedTarget”initiative.ThismeansourambitionisrecognizedashavingthepotentialtocontributetokeeptheriseinglobaltemperaturebelowtwodegreesCelsiuscomparedtopre-industrialtemperatures.

Toachievethisgoal,wewillexchange50%ofourdieselvehiclesby2030foranelectricalalternative.InBelgium,therewillbemorethan600 newelectricvehiclesby2022,andmorethan3,400by2030.Thisisambitiouscomparedtotheoverallexpectationsregardingtheelectricalvehiclesmarket.Indeed,accordingtoaBloombergprediction1,55%ofallnew

carsalesand33%oftheglobalfleetwillbeelectricby2040.Butatbpost,weareaimingfor50%by2030.

Otherinitiativesalsoaimtoreduceourcarbonfootprint,suchasthepurchaseofgreenelectricity,“ecodriving”training,electricalcompanycarsandalternativewaystocometowork.Atoursubsidiaries,wewanttoswitchtoelectricalvehicles,purchasegreenelectricity,andswitchtoLEDlightingwhenrelevant.

SDG Roundtable with the QueenbposthascommittedtocontributetotheUnitedNationsSustainableDevelopmentGoals(SDGs).Asanenvironmentallyandsociallyresponsiblepubliclyquotedcompany,weacknowledgeourroleandsharedresponsibilityintheimplementationofthesegoals.Inthiscontext,wehaveendorsedtheBelgianSDGChartersince2016.Morespecifically,ouroperationscontributemosttothefollowingSDGs:9 (Industry,innovationandinfrastructure),12 (Responsibleconsumptionandproduction),8 (Decentworkandeconomicgrowth),13 (Climateaction)and11 (Sustainablecitiesandcommunities).

On14thJune 2018,ourCEOKoenVanGervenparticipatedinaroundtablediscussionontheSDGspresidedbyHerMajestytheQueen.AdozencompaniesattendedtheeventtodiscusstheirideasregardingsustainabilityinlinewiththeUnitedNations’DevelopmentGoals.OurCEOpresentedseveralbpostinitiativestotheQueenandtheMinister.Attheendofthemeeting,KoenofferedQueenMathildeahoneypotfromour“Beepost”production,locatedontherooftopofourheadquartersinBrussels.

(1)Source:Bloomberg(2018)–ElectricVehicleOutlook2018.https://about.bnef.com/electric-vehicle-outlook/


CSR REVIEW

bpost signed the Green Deal BiodiversityProximitywithwidersocietyispartofourmission.Weareindailycontactwiththelocalcommunities.Wethereforewanttotakethisopportunitytoimprovethebiodiversityandenvironmentthatsurroundthem.

Tothisend,bpostBelgiumhassubscribedtotheGreenDealBiodiversitywithmorethan110 companies,organizationsandlocalgovernments.

AGreenDealisavoluntaryagreementbetweenpublic/privatepartnersandtheFlemishGovernmenttostartajointgreenproject.ThroughtheGreenDealBiodiversity,bpostcommitstoincreasingbiodiversityinsideandoutsideitscorporatesitesoverthenextthree years.

Specifically,relativelysimplemeasuresarebeingtakentoenhancethenaturalvalueofoursites.AnexampleistheinstallationofaninsecthotelatourheadofficeinBrussels.

Our efforts for more inclusiveness have been awarded “Coup de Cœur 2018” by PostEurop

bpostcaresaboutitspeople,butalsoaboutthecommunityandinclusion.Atbpost,weengagewithsocietybysupportingprojectsandorganizationsthatalignwithourmission.

Asapartofoureffortsforincreasedsocialinclusion,wepartneredwithDuoforaJob.ThisBelgianorganizationmatchesyoungimmigrantjobseekerswithover50-yearolds.Thankstotheirprofessionalskillsandexperiencesinrelatedfields,theseover-50scanaccompanyandsupporttheyoungprofessionalsintheirjobsearch.

Theobjectiveoftheinitiativefor2018wastohave26bpostvoluntarymentorstrainedandoperationalbytheendoftheyear.

Wevaluethisprojectasitisfacilitatingthefutureemploymentofyoungpeoplewithoutanetworkwhilerecognizingthevalueoftheexperienceofolderbpostemployees.Forbothparticipants,theexperiencebringsabouthighmotivation,recognitionandhumanimpact.Theinitiativealsomadeitpossibleforbposttobeawarded“CoupdeCœur2018”bythejuryofPostEurop.

Together towards the future: re-establishing trust through social dialoguebpostprovidesstablefull-timejobswithmeaningfulwork,especiallyforthe70%ofouremployeeswithlowqualifications.Ouremployeesarethusattheheartofourbusiness.Iftheyfeelsatisfiedandenthusiastic,theycan,inturn,enthuseourcustomersandearntheirloyalty.Thisencouragesbposttoworkhardtopromotewell-beingandgoodworkingconditionsforouremployees.

Nevertheless,ourbusinessisconstantlychanging,andnewchallengesariseallthetime.

Ourchallengeistofindtherightbalancebetweenadjustingtomarketchangesandensuringstableworkingconditions.Therefore,wetrytofosteragooddialogueandrelationshipwiththeunionsinordertoreactpromptlytoincidents,avoidescalationandmitigatesocialconflicts.

Weendedtheyearwithimportantagreementsregardingthewell-beingofouremployeesandthefutureofbpost.Theobjectivewastoanswerouremployees’workloaddemandsandtorestoretrust.Thisresultedinanewcollectivelaboragreementfor2019-2020inwhich,measurestoincreasethepurchasingpower,decreasetheworkloadandsecurefuturejobpreservationwerelaiddown.ThisagreementwillimpactbpostBelgium’scostbasebyaboutEUR 20 millionannually.

Intheend,thoseproposalsbringtogethermanypositiveelementswhichrepresentabreakthroughforthewell-beingofouremployeesandforthefutureofourcompany.

Challenge of 2018


CSR REVIEW

CSR consolidated statements

About our CSR consolidated statements

ThisCSRreporthasbeenpreparedinaccordancewiththeGRI(GlobalReportingInitiative)Standards(coreoption)andisstructuredbasedonourmaterialaspects.TheGRIContentIndexcanbefoundonourwebsite.

Scope and boundariesTheinformationusedforthisCSRconsolidatedstatementwascollectedfrominternaldepartmentsandismainlybasedoninformationavailablethroughinternalreporting.Theinformationregardsthe2018calendaryearandcoversallofbpost’sactivities,includingthoseofitssubsidiaries,unlessspecificallystatedotherwise.

Thecompletelistofbpost’ssubsidiariescanbefoundinbpost’sFinancialConsolidatedStatements.Wedefineasubsidiaryasanentityinwhichbpostownsmorethan50%ofthesharesandthatissignificantintermsofturnoverandemployees.Subsidiariesincludedforourreporteddataarelistedbelow.

Thesubsidiariesinscopeareincludedasofthedateofacquisition.Ifthesubsidiarywasacquiredin2018,thedataonlycoverstheperiodafterthedateofacquisition.ThisisthecaseforthesubsidiaryActive Ants.

bpost entities Ownership Scope %ofFTE Planet People Proximity

bpostBelgium (bpost SA/NV) 100% Yes 75

Radial 100% Yes 18

LandmarkGroup 100% Yes 2

Dynagroup (incl.LeenMenken) 100% Yes 2

Ubiway(incl.Kariboo!) 100% Yes 1

Speos 100% Yes 1

AppleExpress 100% Yes 1

FDM 100% Yes <1

ActiveAnts 63.6% Yes <1

CityDepot 99.7% Yes <1

Euro-Sprinters 100.0% Materialonlyforsubcontractedtransport n/a n/a n/a

deBuren 51.0% NotmaterialbasedonFTE n/a n/a n/a n/a

bpostbank 50.0% No operational control n/a n/a n/a n/a

Limiteddataavailable forsubsidiary

Data almost complete forsubsidiary

Data complete forsubsidiary


CSR CONSOLIDATED STATEMENTS

https://corporate.bpost.be/sustainability/csr-governance/csr-governance?sc_lang=en

Data quality and reliabilityThequalityandreliabilityofenvironmentaldataintheCSRconsolidatedstatementisensuredbytheEnvironmentalandEnergyDepartmentofbpostBelgium,whichperformsyearlydatachecksandanalyses,developsreductionplansandworkscloselywiththedifferentauthorities.Weinvolvedvariousexternalpartieswhenassessingthequalityofthereporteddata:CO2Logic,ISWEuropaandDeloitte.

TheHRdataintheCSRconsolidatedstatementaremostlyreportedtoexternalparties,suchastheNationalSocialSecurityOffice.

In2018,wetookfurtheractionsinourinternalreportingprocessesinordertoimprovethereliabilityofdataprovidedbyoursubsidiaries.Tothisend,weformalizedthedefinitionsofourindicators.Asaconsequence,wemadesomerestatementsconcerning2017datapublished.

External verificationDNV,anexternalbody,verifiesthequalityofbpost’s CO2emissionsdataaccordingtotheISO 14064Standards.Also,bposthasobtainedISO 14001certificationforitsstrategicsitesinBelgiumfromAIBVincotte.bpostwantstofurtherformalizethedatareportingofitssubsidiariesbeforesubmittingitsentireCSRreportforexternalverification.

FormoreinformationrelatedtoourCSRgovernanceandawardsandpartnerships,werefertoourwebsite.

PeopleAtbpost,webelieveitisessentialtoengageandenthuseouremployeesinourmissiontobeamajorpartofourcustomers’dailylives.Withemployeesallovertheworld,humancapitalisapriorityforus.Wevaluethewidearrayofskills,competencesandunyieldingloyaltyouremployeesofferourcompany.

Itisourdutytoprovideallofouremployeeswiththebestcorporateculture,safeguardinggoodworkingconditions,ethicalbehavior,health,safetyandwellbeingatwork.Weachievethisbytakingvariousactionswithinthedifferentcountries,businessesandbusinessunitstostrengthenandanchorthis“cultureshaping”process.Forinstance,thebpostCodeofConductwasrevisedin2018toalignourvalueswithinallbpostsubsidiaries.

Bymeasuringtheemployeeengagementscoreandabsenteeismlevel,weareabletokeepaneyeonhowourpeoplefeelabouttheirjobs.Sincetheseindicatorsareoutcomesofouremployee-relatedpolicies,suchashealthandsafety,traininganddevelopment,ethicsanddiversityandsocialdialogue,theyprovidegoodinsightintoourcompanycultureandhelpustomakemodificationswhenandwherenecessary.

People–StrategicKPIs

bpostBelgium Subsidiaries bpost Group

Unit 2016 2017 2018 Trend 2018 2018

Employeeengagement1 Score 4.9 4.8 n/a n/a n/a

Absenteeism2 % 7.61 7.57 7.85 n/a n/a

(1) ThenextbpostBelgiumsurveywillbeperformedinQ12019.Moreover,wearecurrentlyinvestigatingthepossibilitiesforconsolidatingemployeeengagementmeasurementsfromourdifferentsubsidiaries.

(2) Duetodifferentlegislationsandassociateddefinitionsregardinghealthandsafetyfiguresamongoursubsidiaries,wearenotabletoconsolidatethefiguresatthegrouplevel.




(1) Duetodifferentlegislationsandassociateddefinitionsregardinghealthandsafetyfiguresamongoursubsidiaries,wearenotabletoconsolidatethefiguresatthegrouplevel.

Employee health and safety

People–Employeehealthandsafety


Unit 2016 2017 2018 Trend 2018 2018

Health and safety of own employees

Occupationalaccidentsofownemployees

Number 921 918 944 138 1,082

Lostdaysofownemployees

Days 31,432 30,850 30,890 1,313 32,203

Severityrateofownemployees

Lostdaysper1,000hoursworked

0.91 0.9 0.9 0.1 n/a1

Frequencyrateofownemployees

Accidentsper1,000,000hoursworked

26.84 26.83 27.48 8.46 n/a1

Absenteeismofownemployees

% 7.61 7.57 7.85 n/a n/a1

Total number of fatalitiesownemployees

Number n/a 1 0 0 0

Health and safety of temporary staff

Occupationalaccidentsoftemporarystaff

Number n/a 57 86 41 127

Lostdaysoftemporarystaff

Days n/a 365 294 76 370

Severityrateoftemporarystaff

Lostdaysper1,000hoursworked

n/a 0.19 0.14 0.01 0.04

Frequencyrateoftemporarystaff

Accidentsper1,000,000hoursworked

31.23 29.87 42.36 5.16 12.73

Total number of fatalitiestemporarystaff

Number n/a 0 0 0 0

Total number of hours workedbytemporarystaff(actual)

Hoursworked n/a 1,908,050 2,030,019 7,949,699 9,979,718



(1) Thefiguresonroadsafetyonlycontainthebpostentitieswithadeliveryfleet:bpostNV/SA,DynaGroup,Euro-SprintersandCityDepot.

(2) Restatementbasedonstandardizationofdefinition.

(3) BelgianLaw:Actof4 August 1996onwell-beingofworkersintheperformanceoftheirwork,“Codexoverhetwelzijnophetwerk”or“LeCodesurlebien-être”.http://www.employment.belgium.be/defaultTab.aspx?id=556

(4) “Toezichtophetwelzijnophetwerk”or“Contrôledubien-êtreautravail”:http://www.emploi.belgique.be/cbe.aspx

People–Employeehealthandsafety


Unit 2016 2017 2018 Trend 2018 2018

Road safety1

Blameworthyroadtrafficincidentsonbehalfoftheentityper100,000km2

% n/a 3.63 3.44 3.07 3.41

Sharedblameworthyroadtrafficincidentsonbehalfoftheentityoftotalroadtrafficincidents

% 62 772 75 40 75

Numberofroadfatalitiesdrivers/millionkm(duringworkinghours)onbehalfoftheentity

Number per millionkmdriven

n/a 0.012 0.00 0.00 0.00

Thewellbeingofouremployeesisparamountforbpost’soperations.Wethereforehaveastrictpreventionpolicytoavoidoccupationalandroadaccidents,stressandillnessandtoensurethatouremployeesremainsafeandhealthy.Inthisregard,wecomplywithandanticipateregulations,monitorrisksforsafetyandwellbeing,andcontinuouslystrivetoimprovethoseaspects.

InBelgium,ouremployeewellbeingpolicyisbasedontheFederalGovernment’sActof4 August 1996onwell-beingofworkersintheperformanceoftheirwork3.Thisisenforcedbyanexternalcommittee4 thatperformsrandomcomplianceinspections.Italsoperformsregularinspectionsforspecificsubjects.Forinstance,in2018bpostBelgiumwascheckedonitsprocessesforoccupationalaccidents.BothtradeunionsaswellasemployeescanrequestinspectionthroughtheBelgianFederalGovernment.

Lookingatoursubsidiaries,thehealthandsafetyprocessesatRadialarecompliantwithOSHA(OccupationalHealthandSafetyAct).Dynagroup,inTheNetherlands,worksaccordingtotheDutchnationaloccupationalhealth&safetylegislation(Arbo)basedonhealth&safetyRiskInventorieswithassociatedcontrolmeasures.RiskInventoriesarealsoperformedandformallyassessedbyanexternalcompany.Furthermore,AppleExpressinCanadaiscompliantwithOHSAS18001(OccupationalHealthandSafetyAssessmentSeries)requirementsandUbiwayandLandmarkhaveahealthandsafetymanagementsysteminplace.

Themostprevalentsafetyincidentsinourbusinessareslipping,falling,trippingortheimproperuseofvehicles.Tolimittherisksofaccidentsandhealthissues,weperformregularriskanalyses.Theidentifiedrisksarecommunicatedwithintheorganizationtogetherwithclearmeasurestobetaken.In2013,ariskanalysiswasperformedforourbusinessdivision“Mail”.Sincethenumberofparcelsisincreasing,wewillperformanupdatein2019.Thereisalsoaworksafetyandergonomicsanalysisplannedatalloursortingcenters,andariskanalysisforvehicle-relatedincidents.

Weimplementedseveralsuccessfulinitiativesconcerninghealthandsafety,whichledtoasignificantdecreaseinoccupationalaccidentsbetween2010 and2014.Examplesaretheuseofasafetycornerontheshopfloor,encouragingemployeestoreportanytypeofsafetyincident,andsafetycommunicationcampaigns.ASafetyRegisterhelpstofollowsafetychecksinastructuredmanner.FromtheSafetyRegister,wecandrawimportantlessonslearned,whicharethencommunicatedtoouremployees.

Toevenfurtherimprovethisperformanceandboostsafetyculture,bpostlaunchedthreeinitiativesinBelgiumin2018.Thefirstinitiativewasthe“SafetyPerformanceBarometer”,whichisanimprovedwell-beinginstrumentthatmeasuressafetyperformance.Itwastestedin2017 andisnowusedbyourmanagement.



http://www.employment.belgium.be/defaultTab.aspx?id=556

http://www.emploi.belgique.be/cbe.aspx

(1) “FormationRationelleetAcceléréedesConducteurs”

Itworksasfollows:byconsolidatingdifferent,alreadyexisting,safetyperformanceindicators,wegaininsightintheoverallsafetyperformanceofaregionandcanprioritizewhereandforwhichaspectstheneedisgreatest.ThesafetyperformancebarometerislinkedtothebpostSafetyRegister.

Secondly,wetrainedouremployeesonsafetyusingasafetygame.Anapplicationsendsthemtwoquestionsperdayonissuesrelatedtoanyhealthandsafetymattertorefreshtheirmemory.Thereisatotaloffiftyquestions,andtheyvarydependingontheseason.Forinstance,inwintertherewillbequestionsonroadsafety,insummerondrinkingenoughwater.Wealsoincludedquestionsonhealthyfood.Foreverycorrectanswertheemployeecanwintenstamps.Thethirdinitiativein2018isane-learningmoduleaboutfirepreventionforallmembersofafirepreventionteam.Theseemployeesfollowedacompleteonlinetrainingwithanimationsoneverythingrelatedtofirepreventionandsafetyandwhattodoincaseofanemergency.Afterthetraining,theemployeesweretestedonthecontentofthemodule.

Roadsafetyisalsoakeyconcernforus.Weaimtototallyeliminateroadaccidents.In2018,weranalargetrainingprojectconcerningroadsafetyinBelgium.Foreveryvehicle(includinge-bicyclesandinternaltransport),itwasmandatorytoreceivedrivingtrainingatbpost’sdrivingschool(FRAC1).Thetrainingsfocusonimprovingdrivingknowledgeandskills;threedifferentlevelsareproposed,dependingonthecurrentqualificationsofthedriver.

Wealsowanttomakesureouremployeesremainhealthy,andincludepsychosocialaswellasphysicalaspects.Tothisend,bpostpromotesandoffersaccesstonon-occupationalmedicalandhealthcareservices,suchascompanydoctors.OurBelgian“HealthSurveillance”systemprovidesmandatorymedicalcheck-upsforallbpostpostalworkers:athirty-minutecheck-up,includingacardiovascularandmusculoskeletalscreeningeveryfiveyearsfortheunder45sandeverythree yearsforthe45 plus.Weevenaskouremployeesinsortingcenterstogoonanannualbasis.In2018,atotalof6,300 bpostemployeesand1,600 interimworkersgotamedicalcheck-up.bpostemployeescanalsogetvaccinatedagainstthefluintheFall.

Forthepsychosocialwellbeingofouremployees,weorganizeasurveytomeasurethelevelofemployeeengagementandorganizeapersonalized“balancetool”sothatemployeescangaininsightintotheirpersonalstressandmotivationlevels.Basedontheresult,wegivepersonalizedtipsandtricks.OuremployeeAssistanceProgram(externalpsychologists)isavailableformorecomplicatedindividualproblems.Wewillimplementthesetoolsonaglobalscaleinthenearfuture.Employeessufferingfromstresscanaskamemberofourspecializedteamofstresscoachesforhelponavoluntarybasisandstaffmanagementreceivespsychologicaltrainingonrecognizingsignsofdistressintheiremployees.Also,wehaveasecurityline,whichouremployeescancallanytime24/247/7.

Moreover,wehaveamanagerresponsibleforadvisingandintegratingergonomicsintheworkenvironment,bothintheoffice,inoursortingcentersandforourpostmenandpostwomen.Forinstance,acoupleofyearsagoweswitchedfrombikeswithtwowheelstothreewheels.Wealsomeasurethedifferentlightingandairqualitysettings(includinghumidity)toimprovetheworkingenvironment.

Unfortunately,in2018,ourabsenteeismandfrequencyrateofouremployeesandtemporarystaffhaveincreased.ThisismainlyduetoournewsortingcentreNBX,whichwasfullyactivein2018.Thesortingcentreforparcelsdeliveriesentailsnewactivitieswithverydifferentriskprofilethanourcurrentmailactivities.Thefiguresarethereforenotcomparablewithpreviousyears.However,weaimtoworkontheseaspectsinthecomingyears.Ourobjectiveisadecreaseoffrequencyrateby3%comparedto2018andadecreaseof5%ofabsenteeismcomparedto2018.



Employee training and talent development

People–Employeetrainingandtalentdevelopment


Unit 2016 2017 2018 Trend 2018 2018

Training hours

Totaltraininghoursperownemployees

TraininghoursperFTE

n/a 20.89 21.52 12.41 19.25

Totaltraininghourspertemporarystaff

TraininghoursperFTE

n/a n/a 7.71 n/a n/a n/a

Formal training

Formaltraininghoursperownemployees

TraininghoursperFTE

n/a 5.71 5.57 8.93 6.41

Formaltraininghourspertemporarystaff

TraininghoursperFTE

n/a n/a 28.67 n/a n/a n/a

Informal training

Informaltraininghoursperownemployees

TraininghoursperFTE

n/a 15.18 15.95 3.48 12.84

Developingtheskillsandcompetencesofouremployeesissomethingweparticularlyvalueatbpost.Weareconvincedthattrainedemployeescanincreaseefficiencyandcanalsobemoreengaged.Atbpost,wehaveourownacademyforofferingemployeestrainingopportunities.Overthepastyears,wehavetakenfurtherstepstoenhanceourtrainingoffertobettermeettheneedsofspecifictargetgroupsatbpostBelgium(e.g.juniors).

Besidesthejob-specifictrainingsessions,allbpostBelgiumemployeesareofferedtrainingincommunication,sales,languageandleadership.Forexample,theSummerAcademyencouragesemployeestoworkontheirskillsandwellbeingduringthelowseason.There,theylearnaboutarangeofpersonaldevelopmentsubjects.

Since2011,bpostBelgiumhasbeenrunningthe“Futureme”program.Thistwo-yearprogramrecognizestheskillsandknowledgeacquiredonthejob.Assuch,employeesaregiventheopportunitytoearnahighersecondaryschooldiploma,mainlybydistancelearning.

SeniorBelgianbpostemployeescanapplyforvacanciesatotherorganizationsthroughtheco-sourcingplatformExperience@work,bpost’spartnersincelastyear.Theplatformwascreatedin2015tolinkuporganizationsthatneedexperiencedpeoplewithorganizationsthathaveanabundanceofexperiencedpeopleandsenioremployeeswhowanttoputtheirexperiencetobetteruse.Experience@workgivestheseorganizationstheopportunitytohiresenioremployeesatajuniorpaylevel,andallowssenioremployeestousetheirtalent,experienceandexpertiseinanewworkingenvironment,whileremainingonbpost’spayroll.

Lookingatthecareerdevelopmentofourstaff,ouremployeesreceiveabroadrangeofcareerdevelopmentopportunities.Atbpost,internalmobilityisalsovalued.Tothisend,bposthasdevelopedasolidperformancemanagementprocessthatfollowsmostemployeesovertheyear.Assuch,employees’businessobjectives,performanceanddevelopmentsarediscussedannuallywiththeresponsiblemanager.Theagreeddevelopmentplanisreviewedaftersixmonthsduringthemid-yearreview.Attheendoftheyear,theemployeeandhismanagerreviewthetargetsset.Duringthisprocess,informaltouchpointsarealsoorganizedtofollow-uponobjectives,performance,developmentandcareer.

Alongsideourownemployees,weareconstantlyrecruitingnewstaff.OurstrongcollaborationwithVDABandForeminBelgiumhelpsusbeindirectcontactwithcompaniesthatarerestructuringandrecruitingadditionalstaff.



Ethics and diversity

People–Ethicsanddiversity


Unit 2016 2017 2018 Trend 2018 2018

Totalownemployees Headcount 25,371 25,460 25,770 n/a 8,164 33,934

Totalmaleownemployees

Headcount 17,107 17,269 17,585 n/a 4,203 21,788

Totalfemaleownemployees

Headcount 8,264 8,191 8,185 n/a 3,961 12,146

TotalFTE FTE 23,178 23,353 23,658 n/a 7,849 31,507

TotalmaleFTE FTE 16,013 16,202 16,500 n/a 4,085 20,584

TotalfemaleFTE FTE 7,165 7,152 7,158 n/a 3,768 10,926

Diversity of own employees (in headcount)

Shareoffemale(ownemployees)

% 32.6 32.2 31.8 48.5 35.8

Shareofwomeninexecutivelevelpositions

% n/a 0.00 0.00 14.29 13.04

Shareofwomeninmanagementpositions(excl.executivelevel)

% 36 35.06 36.79 37.79 37.23

Headcount by type of contract

Totalownemployeeswithfixedtermcontracts

Headcount 282 607 613 n/a 534 1,147

Totalmaleownemployeeswithfixedterm contracts

Headcount n/a 296 244 n/a 312 556

Totalfemaleownemployeeswithfixedterm contracts

Headcount n/a 311 369 n/a 222 591

Totalownemployeeswithopen-endedcontracts

Headcount 22,896 24,853 25,157 n/a 2,624 27,781

Totalmaleownemployeeswithopen-endedcontracts

Headcount n/a 16,973 17,341 n/a 1,749 19,090

Total female ownemployeeswithopen-endedcontracts

Headcount n/a 7,880 7,816 n/a 875 8,691





Unit 2016 2017 2018 Trend 2018 2018

Headcount by full-time/part-time

Totalownemployeescontractedonafull-time basis

Headcount 18,901 19,137 19,370 n/a 7,418 26,788

Totalmaleownemployeescontractedonafull-time basis

Headcount n/a 14,039 14,285 n/a 3,905 18,190

Total female ownemployeescontractedonafull-time basis

Headcount n/a 5,098 5,085 n/a 3,513 8,598

Totalownemployeescontractedonapart-time basis

Headcount 6,470 6,323 6,400 n/a 745 7,145

Totalmaleownemployeescontractedonapart-time basis

Headcount n/a 3,230 3,300 n/a 301 3,601

Total female ownemployeescontractedonapart-time basis

Headcount n/a 3,093 3,100 n/a 444 3,544

Headcount by age group

Totalownemployees≤ 30 yearsold

Headcount 3,811 4,205 4,497 n/a 1,912 6,409

Totalownemployeeswithintheagegroup31-50

Headcount 12,922 12,717 12,601 n/a 3,957 16,558

Totalownemployeeswithintheagegroup50+

Headcount 8,638 8,538 8,672 n/a 2,234 10,906

Employee turnover

EmployeeTurnoverofownemployees

% 11.30 10.941 10.49 41.33 17.91

EmployeeTurnoverMaleofownemployees

% 11.44 11.141 10.43 20.99 16.27

EmployeeTurnoverFemaleofownemployees

% 10.97 10.511 10.63 20.34 20.83

VoluntaryEmployeeTurnoverofownemployees

% n/a 5.82 5.75 24.24 10.20

VoluntaryEmployeeTurnoverMaleofownemployees

% n/a 5.96 5.91 11.59 9.11

VoluntaryEmployeeTurnoverFemaleofownemployees

% n/a 5.52 5.40 12.65 12.14






Unit 2016 2017 2018 Trend 2018 2018

Ethics

Numberofregisteredcomplaints on unethicalworkplacebehavior

Number 16 11 10 40 50

Numberofregisteredcases of corruption andbribery

Number n/a 0 0 0 0

Monetaryamountoflegalandregulatoryfinesandsettlementsabove10,000 USDlinkedtodatabreaches,corruptionorenvironmentdamage

Euros n/a 0 0 0 0

Diversity and inclusiveness

Atbpost,weaimtoattractandretainindividualsfromdifferentbackgrounds,cultures,perspectivesandexperiencesbycreatingandsupportingacollaborativeworkplaceculture.Weareconvinceddiversitycontributestoabetterconnectionwithourcustomersandwithourworkforce,tosurroundourselveswiththebesttalentinallcategoriesofthepopulationandtobemoreagile.

WedesignedourDiversityPolicy(availableonthebpostwebsite)basedontheseconvictions.Thepolicyservesasaguidelinetocreateaculturewherediversityandinclusionareadailypracticeandhasbeentranslatedintovariouspoliciesandprograms.

Tocontinuetoexpandourrecruitmentchannels,weformedpartnerships,amongotherthings,withtheVDAB,WannaWork,Diversicom,andPluribusEurope.Theseorganizationsarededicatedtoinclusionintheemploymentmarketbasedonpeople’scompetencesandpromotingdiversityatwork.OnegoodexamplewasourpartnershipwiththeVDABinBelgiumin2018whichaimedtore-integrate20 peoplewithhealthproblemsintothelabormarket.Viathisproject,wetrainedthesepeopletobecometruckdriversatbpostandhence,helpingthemtofullyorpartiallyreturnto work.

In2017,wesetupandreviewedadiversityportaldesignedforpeoplemanagers.Theportalallowsourpeoplemanagerstogetacquaintedwiththeissuesofdiversityandinclusion,toidentifytheapplicableframework,theroletheyneedtoplay,andalsooffersthemtrainingopportunities.Additionally,wearecurrentlycreatingagroupofDiversityambassadorswithintheorganizationwhosefunctionwillbetopromotediversityandpreventdiscrimination.

Sincelastyear,wehaveaspecificculturalexchangeprogram,leading@bpost,whichisaimedatcreatingabalancedleadershipstyleamongbpostgroupleaders.Interalia,theprogramisbasedoncuriosityandopennesstoothersandtheirwayofthinking.

WealsopartnerwithDuoforaJob,aBelgianorganizationmatchingyoungjobseekerswithanimmigrantbackgroundtopeopleover50 yearsold.Theinitiativebringsabouthighmotivation,recognitionandhumanimpact,andwasevenawarded“CoupdeCœur2018”bythejuryofPostEurop.

TheBoardofDirectorsandGroupExecutiveCommitteehavealsotheirroletoplayregardingdiversity.Itistheirresponsibilitytosetthetone.Theydosobyorganizingworkshopsaroundthemesofdiversityandinclusion,andtheBoardofDirectorsassesseseveryyearwhetherdiversitywithinthegrouphasimproved.Also,specialattentionispaidtodiversityinthecompositionoftheBoardofDirectorsandGroupExecutiveCommittee.Variousdiversitycriteriaregardinggender,age,professionalbackgroundandgeographicdiversityaretakenintoaccountwhenconsideringcandidatesforvacancies.Formoreinformationontheboardcomposition,seethecorporategovernancestatement.

Ethics

Atbpostweareproudofourhighprofileinsocietyandoftheroleweplay.Tous,goodconductisimportant to earn trust as part of our responsible corporatevalues.Webelieveeveryhumandeservesthesamerightsand,asacompany,wecannotgetinthewayofthat.Asapubliclistedcompany,wealsoensuremaximaltransparencyintermsofgovernanceanddecision-makingprocesses,inaccordancewiththehigheststandardsinthisarea.

Weadoptazero-tolerancepolicyregardingviolationsofhumanrightsoranti-corruptionlaws,inlinewiththeUniversalprinciplesofHumanRightsandtheILO(InternationalLaborOrganization)conventions.Withthispolicy,bpostwantstopreventthenegativefall-outarisingfromhumanrightsviolations,illegalorfraudulentactsorpracticesonhumanity’swell-being,ourreputation,andthecontinuityofourbusiness.Ifanemployeewitnessesasituationofmisconduct,s/hecancallourSpeak-Upline(thecontactinformationisincludedinourCodeofConduct).TheSpeak-Upline



isconnectedtoapersonoftrust,available24 hoursadaytoansweranyquestionorsignalfromemployees.

Thisyear,wedecidedtoputdiversityandbusinessethicsforwardandthereforedidadeepstructuralredesignandrevisionofourCodeofConductsothatournewconstructionwouldworkatgroup-level.OurnewCodeofConductwaslaunchedinFebruary 2019fortheentiregroup.Itsetsoutthenorms,valuesandminimalstandardsofbehaviorandconductexpected

ofallouremployees,contractorsandconsultantsatanylevelandinanycompanyofthebpostgroupworldwide.ItfurtherenablesappropriatemeasureswhentheCodeofConductisnotabidedby.Arevisedversionofbpost’s“Religionatwork”brochurewillbelaunchedin2019onGrouplevelaswell.

Social dialogue



Unit 2016 2017 2018 Trend 2018 2018

Averagenumberofstrikeactiondays

strikedaysper1,000employees

n/a 1.55 2.6 0 1.97

ShareofownemployeescoveredbyaCBA

% n/a n/a 96 n/a 5 74

bpostworkshardtopromotewellbeingandgoodworkingconditionsforallemployeesandthusstaysawareofouremployees’needs.Aspectssuchasworkinghoursandwagesareinlinewithlegislationandwerespectouremployees’FreedomofAssociationrights.InBelgium,96%ofouremployeesand5%oftheemployeesatoursubsidiariesarecoveredbyaCollectiveLaborAgreement(CLA).

SincebpostisanautonomousenterprisewiththeBelgianstateasitslargestshareholder,itsarticlesofassociationexplicitlyprovideforastructureandprocessesatvariouslevelstofacilitateefficientnegotiations,consultationsandinformationsharing.Tofosterconstructivedialogueandrelationswiththeunions,bpostBelgiumhasitsownJointCommitteeandseveralotherforums.Moreover,twosenior-leveldirectorshavebeenappointed,whichdemonstratesourmanagement’sinvolvementinthesocialdialogue.Thisclosecollaborationallowsustohearandpromptlyreacttoouremployees’needsinordertomitigatesocialconflicts.

bpost’stransformationfromapostalcompanytoaninternationallogisticsande-commerceplayergivesrisetonewchallenges,impactingbothforourorganizationandouremployees.Theresultingworkloadincreaseunfortunatelyledtoanemployeestrikein2018.Afterconstructivenegotiationswithoursocialpartners,wewereabletocometoanagreementprovidingapositiveresponsetoouremployees’demands.Theresultingplanwillmakethefieldjobsmoreattractiveandwillre-establishtrustinthecompany.Allpartiesinvolvedsharethesamelong-termgoalofmeetingfast-changingcustomerneedsaswellasrespectingbpost’semployees.

bpostBelgium’snewcollectivelaboragreementappliesto2019-2020.Throughthisagreement,measureshavebeentakentoraisepurchasingpowerthroughimprovedfinancialconditions.Furthermore,theincreasedworkloadwillbeaddressedbyattractingadditionalfieldstaff(1,000FTEs),additionaldaysoffandimprovementofourrecruitingchannels.Todoso,wewillestablishconsultingcommitteestotackletheexistingandpotentialfutureissues.Thelastpillaroftheagreementistosecureourfuture,forexamplethroughjobpreservation.ThisagreementwillimpactbpostBelgium’scostbasebyaboutEUR 20 millionannually.



Planetinitiativeapprovedthisemissionsreductionobjective.Thisorganizationaimstopromotecorporateclimate-change-relatedambitionsbysupportingthemtosetobjectivesinlinewithaglobaltemperatureincreasebelow2°Celsius.Todecreasethisenvironmentalfootprint,wefocusonourbuildings,ourfleetandourwaste.

In2018,theCO2footprintscope1,2 and3forbpostBelgiumdecreasedby7%comparedto2017.

Unit2017

(restated)1 bpostGroup

2018 bpostGroup Trend

Scope 1 tCO2 82,826 87,825

Naturalgas&heatingoil tCO2 21,786 22,442

Postal“fleet”diesel&petrol(incl.servicevehicles) tCO2 53,193 57,266

Fuelcompanycars tCO2 7,847 8,117

Scope 2 (net) tCO2 31,569 28,642

Electricity(market-based)2 tCO2 30,938 28,156

DistrictHeating tCO2 631 463

Oilforgenerators tCO2 n/a 23

Scope 1 & 2 tCO2 114,395 116,467

Scope 3 tCO2 218,016 192,390

Employeecommuting tCO2 36,320 34,147

Businesstravel tCO2 1,844 1,349

Subcontractedroadtransport tCO2 117,699 111,939

Subcontractedairtransport3 tCO2 55,459 38,944

Waste tCO2 6,694 6,011

TOTAL CO2 emissions (Scope 1+2+3) tCO2 332,411 308,857

(1) Therestated2017CO2footprintisbasedon100%accountsforRadial’sactivitydata(comparedto16.7%in2017),andusesactual2017consumptionforitselectricity(insteadofanestimation).Inaddition,retroactively,Ubiwaydataoncompanycarshasbeenadded.

(2) Themarket-basedmethodreflectsbpost’schoicesintermsofelectricitysupply,suchasthepurchaseofelectricityfromrenewableenergysources.Thisissetoutindetailincontractsbetweenbpostanditsenergysuppliers.

(3) Subcontractedairtransportfiguresforsubsidiaries,incl.LGIandIMEX,wereexcluded.

Asalogisticservicesprovider,wehaveanimpactontheenvironmentatdifferentlevels:throughourfleet’sCO2emissions,energyconsumption,employeecommutes,wasteproductionorsubcontractedtransport.

bpostmanagesandsteersitsenvironmentalpillar,“planet”,usingourCO2footprintasmetric.In2018,wesetanambitiousobjectivefortheGroup:ourgoalistoachieveby2030a20%reduction-comparedto2017levels-ingreenhousegasemissionsresultingfromouractivities..The“ScienceBasedTargets”



Green fleet

Planet–Greenfleet1


Unit 2016 2017 2018 Trend 2018 2018

Share of last mile alternativefuelvehicles(bikes,ebikes,etrikes,EVvans)

% 35 352 33 13 33

ShareofEURO5andEURO6standard

% 782 862 96 100 96

Averagevanfueluse Literper100km

9.3 9.3 9.4 13.58 9.5

Averagetruckfueluse Literper100km

26.8 26.5 26.4 n/a 26.4

andby203050%ofourlast-milefleetshouldbeelectric(about3,400vehicles).Wearealsoinvestinginagreenerfleetbyreplacingourolderconventionaltruckswithnewermodels.Secondly,andinlinewiththeaimtoadaptfurtheritsmodeltotheexpectationsandbehaviorofitscustomers,bposthasintroducedtheNon-Prioritystamps.Thisallowsustobundlethemailvolumesmoreefficientlyand,hence,makethedeliveryschedulemoreefficientandenvironmentalresponsible.Thirdly,wepromoteeco-drivingwithourownandsubcontracteddriversthroughDataLoggers.Finally,weencourageouremployeestocommutetoworkinamoreenvironmentallyfriendlymannerbystructurallysupportingalternativewaystocometowork(incl.carpooling,promotinge-bikes)and/orflexibleworking.

Anextensiveandsolidfleetisoneofthemostimportantassetsforapostalandlogisticscompany.bposthasoneofBelgium’slargestmailandpackagedeliveryfleets.However,thisfleetisalargecontributortocarbonemissionsandclimatechange.Sincebposthasdecidedtobeafrontrunnerinsustainabilityefforts,wearetakingseveralmeasurestoreduceourfleets’impact.

Firstofall,wearetransformingourfleetbyselectingvehicleswithalower-to-nocarbonfootprint,suchas(electric)bicycles,deliverythree-wheelersandelectricvans.ThisyearwestartedapilotprojectinMons,whereweopenedourfirstelectricvansmailcenter,withtwentynewe-vansforthedistributionofmailandpackages.Thisisonlythebeginning,andbposthashighambitions.By2022weaimtohave600newelectricbpostvansdrivingaroundinBelgium

(1) ThefiguresonGreenFleetonlycontainthebpostentitieswithadeliveryfleet:bpostNV/SA,Dynagroup,EurosprintersandCitydepot.




Green buildings

Planet–Greenbuildings

bpostBelgium Subsidiaries bpostGroup

Unit 2016 2017 2018 Trend 2018 2018

Energy consumption

Totalenergyconsumption per employee

kWh/Head-count

n/a 5,580 5,370 17,026 8,174

Totalenergyconsumption

kWh n/a 142,055,757 138,382,365 138,997,379 277,379,744

Totalrenewableelectricityconsumed

kWh 69,849,643 65,862,630 67,728,515 10,548,597 78,277,112

Share of renewableelectricity

% n/a 941 95 11 46

Totalnon-renewable/greyelectricityconsumed

kWh n/a 4,029,115 3,840,338 86,272,565 90,112,903

Shareofnon-renewableelectricity

% n/a 6 5 89 54

Totalnaturalgasconsumed

KWh 61,732,115 56,892,060 54,194,732 40,614,887 94,809,619

Totalheatingoilconsumed

KWh 12,418,553 12,049,785 10,110,389 1,512,050 11,622,439

Totaldistrictheatingconsumed

KWh n/a 3,183,941 2,470,491 0 2,470,491

Other(fueloil,diesel)

KWh n/a 38,225 37,900 49,281 87,181

Electricity production

Shareofrenewableelectricityproduced

% n/a 5 5 0.01 2.14

Totalrenewableelectricitycapacityinstalled

MWp 1 3.421 4.83 0.05 4.88

Total surface of solar electricitycapacityinstalled

m2 15,000 22,1331 31,503 354 31,857

Water consumption

Totalwaterconsumed

m3 n/a n/a 144,017 n/a n/a n/a

(1)Restatementbasedonstandardizationofdefinition.



bpostisalsomakinginvestmentstoreducetheenvironmentalimpactofallitsoperations,itsbuildingsandfacilities,allofwhichconsumeelectricity,gasandwater.Whereelectricityisconcerned,bposthasbeenheavilyinvestinginrenewableelectricity.Almost100%oftheelectricityconsumedinBelgiumisrenewableandweproduce5%ofourelectricityconsumptionourselves.Todoso,andtosupportourScienceBasedreductionTarget,wehaveintroducedabout8,000 m2 ofphotovoltaiccellsinourAntwerpXsortingcenter.Wearealsoplanningtobuildourfirstwindturbine(2.5 MW).Itisourambitiontofurthercompensatetheshareofnon-renewableelectricityconsumptionofoursubsidiaries.

Furthermore,bpostisworkinghardtodecreasetheenergyweconsumebyimprovingtheenergyefficiencyofouroperationsandfacilities.Weinvestedatotalof

aroundEUR 450,000inrelightingandheatingprojects,bothinBelgiumandabroad.ExamplesofinvestmentsareswitchingtoLEDlighting,upgradedheatandventilationsystems,andinstallingsensorsandtimersformoreefficientuseoflightandheating.

Forinstance,bpostBelgiumopenedtwostate-of-the-artlow-energybuildingsinMonsandtheVerviersregionin2013.Also,thenewBrussels Xsortingcenter(NBX)thatopenedin2017 has100%LEDlighting.Thishasamassiveimpact,sincethiscenterisbyfarthebiggestsortingcenterinBelgium,withmorethan70,000 m2–theequivalentof14footballfields.Moreover,theretailstoresofUbiwayareexclusivelypoweredbyrenewableenergy,andonlyLEDorhigh-pressurelightingisinstalled.TheUbiwayheadquartersalsoreceivedaBREEAMin-usecertificate.

Waste management

Planet–Wastemanagement

bpostBelgium Subsidiaries bpostGroup

Unit 2016 2017 2018 Trend 2018 2018

Totalwastegenerated

Ton 6,689 7,3731 8,111 38,022 46,133

Totalnon-hazardouswastegenerated

Ton 6,689 7,367 8,067 37,959 46,026

Totalrecycledwaste

Ton 4,214 4,692 5,288 28,589 33,878

Share of recycledwaste

% 63 64 65 75 73

Totalresidualwasteincineratedforenergyrecovery

Ton 2,662 2,6751 2,778 588 3,366

Totalresidualincineratedwithoutenergyrecoveryorland-filled

Ton 0 0 0 8,782 8,782

Totalhazardouswaste

Ton n/a 5.78 44 63 107


bpostisconsciousoftheresourcesweuseandthewasteweproduceandmanagesthesewastestreamsasresponsiblyaspossible.Atallourlocationswesortaccordingtothedifferentwastestreamsandworktogetherwitharegisteredwastepartnerforrecycling(paper,drinkcartons,plasticbottles,metal)ordisposalwithenergyrecovery.InBelgium,100%ofallplastic,paperandcardboardwasteisrecycledand100%ofourunsortedwasteisincineratedforenergyrecovery.Weaimtoreachthesamefiguresatourotherlocations.

Wearealwayslookingfornewsolutionstowardsamorecirculareconomy.In2018,welaunchedanew

initiativeregardingouruniforms.bpostuniformshaveahighvisibilitysincearetobeseenalloverBelgiumeverydayanditwouldbeapitytoletthatgotowaste.Tothisend,attheendoftheirlifeatbpost,theuniformsarenowreusedorrecycledbyTerre,asocialorganizationspecializedinrecyclingtextiles.InMarch,wewereabletocollectaboutfivetonsoftextiletobeusedforanewpurpose.ThankstoTerre,thebpostuniformsstillconstitutevaluablerawmaterialsattheendoftheirworkinglife..



Proximityexternalorganizationsworkingforandwithpeople,inBelgiumandabroad,isimportanttous.WealsoencourageoursupplierstoincludeCSRasfaraspossibleintheirbusinesspractices.Forourcustomers,weprovidethemwithservicestofacilitatetheirdaytodaylives.

bpostistransformingintoaninternationallogisticscompany,butalsovaluesitsproximitytothepeoplesurroundingtheorganization.WecollaboratecloselywithbothBelgianandinternationalsociety,withourcustomersandoursuppliers.WevaluetheserelationshipsthatallowustorespondtocurrentandfutureneedsinBelgiumandabroad.Oursupportto

Proximity–StrategicKPIs


Unit 2016 2017 2018 Trend 2018 2018

Totaldonations 1,000Euros 229 371 349 41 390

Shareofsignificanttier 1supplierscoveredbytheSupplierCodeofConduct

% 85 90 100 n/a n/a

Customersatisfaction1 Score 87 86 84 n/a1 n/a1

(1) ThecustomersatisfactionmethodologyusedbybpostBelgiumisveryspecifictotheorganization(includesbothresidentialandbusinesscustomersandisbasedona7 pointsscale).Thismakesitdifficulttoconsolidatetheoutcomeswithoursubsidiaries.Wewillinvestigatehowwecandevelopacommon metrics in the future.

Proximity to society

Proximity–Proximitytosociety


Unit 2016 2017 2018 Trend 2018 2018

Totaldonations 1,000Euros 229 371 349 41 390

bpostdoesn’toperateinisolation,butwithinsocietyatlarge.Thissocietyconsistsofdifferentcommunities,forwhichwearegrateful:theymakeourworkinterestingandworthwhile.Asbpostgrows,thesecommunitiesgrowwithus:westartedasaBelgianpostaloperator,butourbusinessandcommunitieshaveamoreinternationalcharactertoday.Tostayclosetoourroots,wesupportanumberofsocialandbiodiversityprojectsinBelgium.

bpost Literacy Fund

In1997,thebpostLiteracyFundwasestablishedtoimproveliteracyratesbysupportingnewliteracyprojectsrunbyvariousorganizations.ManagedbytheKingBaudouinFoundation,thebpostLiteracyFundwasboostedin2009,whenwestarteddonatingapartoftherevenueofaChristmasstampsale.Sincethen,theFundhasreceivedaboutEUR1.5 million.In2018,itreceivedEUR130,000 worthofgrants.

Doctors without borders

Asanincreasinglyinternationalorganization,bpostalsowantstohelplocalcommunitiesabroad.Since

2017,wehaveestablishedapartnershipwithDoctorswithoutBorders,anorganizationprovidingmedicalsupporttolocalcommunitiesinemergencies.InadditiontobothbeingorganizationsthatcoordinateourglobaloperationsandactivitiesoutofheadquartersinBrussels,wealsosharecommonvaluesofproximity,neutralityandinclusivity.In2018,wecontributedEUR80,000 toDoctorswithoutBorders.

Ninth edition of Star4U

Star4Uisbpost’sinitiativetoencourageemployeestovolunteerforsocial,culturalorenvironmentalprojectsthatarecloselyrelatedtobpost’svalues.Theprojectsarechosenbyapanelofbpostemployeesandexpertsfromoutsidethecompany.In2018,99 projectsweresupportedthiswayforatotalamountofEUR75,000.

WeLoveBXL

In2018,bpostdonatedEUR35,000 totheMolenbeek-basedorganizationWeLoveBXL.Thisorganizationenablesandfostersyoungtalent.Bycreatingadiverse,dynamicandpositivecommunity-drivenenvironment,theorganizationwantstopush,inspireandstimulate



youngstersintheirpersonaldevelopmentprocess.WeLoveBXLoffersaphysicallocationtoprovideaccesstobothrecreationalandprofessionalactivities.Atbpostwebelievestronglythatsocietybenefitsfromempoweringyouthinthecontextofsocio-economicchallenges,andthisisexactlywhatthisorganizationdoes.

CAP48

CAP48isanassociationactiveintheWallonia-BrusselsFederationandintheGerman-speakingcommunity.Theorganizationaimstochangementalitiestowardsdisabilitiesandchildhoodpoverty.Tothisend,CAP48createsawarenessthroughcampaignsandfundraising,whichallowsthemtomovethingsforwardontheissueofdisabilityandyouthsupport,whilefinancingconcreteprojects.ThroughitsannualcampaignCAP48disseminatesinformationonthedifficultiesfacedbypeoplewithdisabilitiesandyoungpeoplewithintegrationdifficulties.Thisyear,bpostdonatedEUR20,000 toCAP48.

bpost forest

bpost helps to create natural habitats to maintain localbiodiversityandflora.Wecontributedbyfreeingupfora33-yearnochargeleasetwopiecesoflandownedbybpost(onenearEkerenandanotherinUccle)forabiodiversityprotectioninitiative.Ourideaistohavethosepiecesoflandrenovatedtogivethepublicaccesstonature.Inaddition,weplantedaone-hectare“bpostforest”intheWaverforestinLiertogetherwithNatuurpunt,.

Stamps for Child Focus’ twentieth anniversary

ChildFocushasbeenengagedwiththesearchformissingchildrenandthefightagainstchildabusesincethelatenineties.Inhonorofitstwentiethanniversary,bpostlaunchedinMarch 2018astampdedicatedtotheorganization’shardwork.bpostalsostartedtouseitspostofficestohelpsearchformissingchildren.Theydidsobydisplayingall-pointsbulletinsonthescreensinitspostofficestoalertthegeneralpubliclocallyornationally.

Donations through “De Warmste Week’ and ‘Viva for Life”

bpostsupportsseveralcharitiestohelppeopleinneed,amongwhichChildFocus,DoctorswithoutBorders,aswellasitsownLiteracyFund.Duringtheendofyearperiod,bpostsupportedseveralofthesecharitiesbytheVivaforLife(Vivacité)andWarmsteWeek(StudioBrussel)campaigns,andbythreespecialbpostactions.ForeachChristmasstampused,packagesentonDecember18,orMobilepostcardsentbetweenDecember18and24,acertainamountwaspaidtoacharity.

Local initiatives

AsidefromthedonationstocharitybybpostGroup,localBelgianpostofficesandsortingcentersalsocollecteddonationstogivetodifferentinitiativesoftheirchoice.Intotal,morethanEUR8,500 weredonatedthroughtheselocalinitiatives.Non-monetarydonationswerecollectedaswell.Forinstance,throughtheorganizationActie4Kids,80 shoeboxeswerefilled

withschoolmaterials,hygienicproductsandtoysforchildreninlessfortunatecircumstances.

Green deal biodiversity

Togetherwithmorethan110othercompanies,organizationsandlocalauthorities,bposthassubscribedtotheGreenDealBiodiversity.Throughthisvoluntaryagreement,wecommittotakingactiontoenhancebiodiversityandthenaturalvalueinsideandoutsideourcorporatesitesoverthenextthreeyears.Oneofbpost’sactionswithintherequirementsoftheGreendealbiodiversityistheinstallationofaninsecthotelatourheadofficeinBrussels.

Beepost

In2016,inpartnershipwithMadeinAbeillescooperative,wesetuptwobeehivesontheroofsofourBrusselsheadoffice.Theideawastopromoteabetteruseofourroofswhileofferingaresponsetothemassdisappearanceofbeesandtheassociatedlossofbiodiversity.Hostingseveralbeecoloniesenablesbposttostrengthenitsenvironmentalinitiativesandtocontributetomeetingthechallengesofbiodiversitywhilereducingitsecologicalfootprint.

House Martins

Atbpost,wehaveasmallprojectcontributingtothesurvivaloftheHouseMartinsinFlanders.Inthisregion,HouseMartinsareonthe“RedSpeciesList”andconsideredtobevulnerable.Duetochangesinhouseconstructionandroofdesign,andduetobuildingrenovation,nestsarebeingremovedordestroyedandnaturalnestingsitesareindecline.bpostcontributesbyplacingartificialnestsundertheeavesofitspostofficesintheperimeterofcoloniesofHouseMartins,believingthatthiswillencourageHouseMartinstobuildnestsnearby.Wehaveinstalled5x2artificialnestsundertheroofedgeofthepostofficeintheCityHarelbeke,and2x2inAnzegem.



Proximity to our suppliers

Proximity–Proximitytooursuppliers


Unit 2016 2017 2018 Trend 2018 2018

Shareofsignificanttier 1supplierscoveredbytheSupplierCodeofConduct

% 85 90 100 n/a n/a

Share of procurement spentonsignificanttier 1suppliersscreenedonCSRbyEcovadis

% n/a n/a 40 n/a n/a n/a

Share of paper procurement spent onpapercomingfromcertifiedforests(e.g.PEFC,FSC,SFI)1

% 99 100 100 n/a1 n/a1

1.Thisindicatorisspecifictothepostalactivities(bpostBelgium)and,thereforenotmonitoredatoursubsidiaries.

Sinceoursuppliersarealsoresponsibleforthequalitywedeliver,it’scrucialtoworkinclosecollaborationwiththem.OurmostcriticalsuppliersinBelgiumarefleet,subcontractorsandinterimandsortingmachines.Often,wearealsooneofoursuppliers’largerclients.Agreeingonhowtoworktogetheristhereforebeneficialtobothparties,asitimprovesourcollaborationtodayandinthefuture.Inthesecollaborations,sustainabilityisanimportanttopicandistakenintoaccount:inourprocurementpolicy,intheproducts,materialsandserviceswebuyandintheassessment of our suppliers.

bpostadherestothehigheststandardsofbusinessethics,including,amongothers,humanrights(laiddown,forinstance,intheUniversalDeclarationofHumanRights,nationallegislationandbpostinternalregulationssuchasitsCodesofConduct).bpostdoesnotintendtodobusinesswiththirdpartieswhichdonotfullycomplywiththesestandards.

Procurement policy

Inbpost’stransitiontowardsamoresustainablebusinessmodel,significantchangeshavebeenmadetotheprocurementprocess.WehavedevelopedasustainableprocurementpolicyatbpostBelgium.Wearenowdiscussinghowwecanimplementitinallofourworldwidesubsidiaries.ThefoundationfortheprocurementpolicyistherequirementsoftheEuropeanCommission’sDGEnvironmentforGreenPublicProcurement(GPP).Intheserequirements,differentproductgroupscanbedifferentiatedbasedontheirtechnicalaspectsandtheirsocialandenvironmentalperformance.Ifacontractexceedsapredefinedvalueandhasasustainabilityimpact,itisheldagainstdifferentsustainabilitycriteria.Wearestrivingtohaveasmanyprocurementcontractsaspossiblecoveredbythesustainableprocurement

policy,takingintoaccountthattheprocurementprocessisdifferentforeverykindofbusinessandgeographicallocation.

Itisimportanttonotethat,sincebpostisasemi-publiccompany,itisnotallowedtoincentivizeorgrantcontractstosupplierswithspecificcriteria.Wecanonlysetcriteriafortheproductorserviceweprocure,butnotthesupplieritself.However,bposthasincludedaclauseintheSupplierCodeofConduct,whichrequiressupplierstoperformaCSRriskassessment.

Asapostaloperator,responsiblepaperconsumptionisoneofourhighestsustainabilitypriorities.WearecommittedtobecomingthebestinclassandworktogetherwithPEFCandFSCtoreachthatobjective.Variousmeasuresareinplace,whichhaveresultedin100%ofpaperthatisPEFCorFSCcertified.Furthermore,100%oforstampsareprintedonFSCcertifiedpaper.

Supplier assessment

Toensurethatthesustainableprocurementpolicyisadheredto,weincludebothanenvironmentalandsocialclauseinourprocurementcontracts,whichreferstoourSupplierCodeofConduct.Allbpost’requirementsregardingitssuppliersareclearlydescribedinitsSupplierCodeofConductanditsSuppliergeneralterms.There,itisexplicitlymentionedthatbpostreservestherighttorequestaninternalassessmentoranassessmentbyanindependentorganizationactingonbehalfofbpost(Ecovadisorequivalent)regardingcompliancewiththisCodeandspecificaspectsofsustainability.Ifasupplierisnotabletocomplywithbpost’srequirements,wemaybeforcedtoterminatethecontractinextremecases.WeareinvestigatingwhetherwecanapplytheSupplierCodeofConducttoallofoursubsidiaries.



WepartnerwithEcovadistoensurethecomplianceofoursupplierstoourSupplierCodeofconduct.ThisexternalpartyconductssupplierCSRRiskassessmentsandtakesintoaccountenvironmental(energy,water,waste,products)andsocialperformance(healthandsafety,workingconditions,childandforceslabor).UsingtheEcovadisassessment,oursuppliersaregivenascorefrom1to100.Iftheyscoretoolow,westarttalkswiththemtoseeifwecanhelpimproveoursupplier’sCSRperformance.

Since2017,inadditiontotheassessmentsperformedbyEcovadis,wealsoperformedon-siteauditsonhigh-riskprofilesuppliers(e.g.textileforournewuniforms).Theseauditsfocusonchildlabor,humanrights,workingenvironment,possibledangers,environmentallyfriendlyproduction,cleanlinessandcompliancewithbpostrequirements.Today,bpostauditsshowthatthereisahighlevelofsafetyandenvironmentalcontrol,thatnochildlaborisallowedandthatbothemployeesandtheenvironmentarerespected.

Proximity to our customers

Proximity–Proximitytoourcustomers


Unit 2016 2017 2018 Trend 2018 2018

Customersatisfaction1 Score 87 86 84 n/a1 n/a1

Amount of letters for whichthecustomershaveoffsettheirmailcarbon emissions2

Million letters 148 159 162 n/a2 n/a2

Total carbon emissions offsetforthecustomers2

CO2teq. 2,056 2,404 2,533 n/a2 n/a2

Total number of municipalitiesusingbclose2

Number 13 7 8 n/a2 n/a2

Ouremployeesareintouchwithourcustomersdaily.Becauseofthisproximitytoourcustomers,wemaintainourawarenessoftheircurrentandfutureneeds.Sincecustomerscareabouttheimpacttheymake,weofferthemresponsiblechoices.Wearedoingeverythingwecantoimproveourservicesandmakeourcustomershappy.OurU.S.-basedsubsidiaryRadialisspecializedinservicesrelatedtocustomercare,fromwhichwelearnandwhichwetrytoimplementeverywhereatbpost.

Unfortunately,customersatisfactiondecreasedin2018comparedto2017and2016.OneofthereasonsbehindthisdeclinecanberelatedtothestrikesthatoccurredinQ4of2018,whichaffectedthetimelinessandqualityofthemailandparceldistribution.

Carbon Meter service

WithourCarbonMeter,wehelpourcustomersmakewell-informeddecisionsthatminimizetheirenvironmentalimpact.Depending,forexample,onthetypeofpaper,useofcardboard,sizeandink,theycanmeasurethecarbonfootprintoftheiradvertisingmailflows.

Carbon offsetting service

Inadditiontolettingcustomerscalculatetheircarbonfootprint,weofferthemtheoptiontooffsettheircarbonemissionsgeneratedduringthedeliveryoftheirmailitems.TogetherwithCO2logic,weraisefinancingforGoldStandardcertifiedclimateprojectstocutgreenhouseemissionsinemergingcountries.Foreachoftheseprojects,wealsocontributetokeyUNSDGs,suchasclimateaction,lifeonland,sustainablecommunities,nopoverty,orgoodhealth.Thisyear,weinvestedinefficientcookstovesinMalawi.93%oftheMalawipopulationusesbiomass(wood&charcoal)forthedailycooking.TheMalawiefficientcookstoveenablesaCO2reductionofmorethan50%comparedtotheusual3-stonecooking.Butitalsopreventshealthissueslinkedtoindoorairpollutionanddeforestation.

In-home delivery in collaboration with Zalando

In2018,bpost’sFutureLabcollaboratedwiththeGermane-commercecompanyZalandotocreateasmarthometechnologyallowingtomanagedeliveriesandreturnsremotely.Theideaisthefollowing:thanks

(1) ThecustomersatisfactionmethodologyusedbybpostBelgiumisveryspecifictotheorganization(includesbothresidentialandbusinesscustomersandisbasedona7 pointsscale).Thismakesitdifficulttoconsolidatetheoutcomeswithoursubsidiaries.Wewillinvestigatehowwecandevelopacommon metrics in the future.

(2) Thisindicatorisspecifictothepostalactivities(bpostBelgium)and,thereforenotmonitoredatoursubsidiaries.



toa“smartlock”andtoa“smartdoorbell”,Zalandocustomerscanopentheirdoorsremotely,sothatatrustedbpostdeliverypersoncanslidetheirpackageinsideorpickitup.Anappcontrolstheentireprocessandenablesthecustomerandthedeliverertointeracttogether.ThispilotsolutionhasbeentestedinadozenofparticipatinghomesinAntwerp,Belgium,wherethefindingsoftheexperimentareencouragingandshowthatpeoplearereadytousethenewtechnology.

Cubee

Wetrytoprovideourcustomerswithflexibleandsustainablesolutions.OneofthesesolutionsisCubee,anindependent,opennetworkofparcellockersforretailers,onlinecustomersandcouriers.ConsumerscanchoosetoshiptheirparcelstoaCubeelocker,whichtheycanpickupwheneverconvenientusingtheirsmartphone.TheCubeelockersareconvenientlylocatedathighlyvisitedplaces,forexampleattrainstations.

bclose service

ForsociallyisolatedpeopleinBelgium,ourlocalpostmenandpostwomenarefamiliarfacesandtrustedpeople.Bywalkingpasteverydooreveryday,localpostmenandpostwomencanplayasignificantroleinassessingwhetherolderadultsaresociallyisolated.Therefore,ineightBelgianmunicipalities,bpoststartedthebcloseserviceincollaborationwiththelocalsocialservices.Afterapprovalbytheolderadults,theirtrustedpostmanorwomanpaysthemahomevisittoasksomebriefquestions,inordertogetinsightintowhattheymightneed.Thisinformationprovidedbyourbclose’sservicescanbeusedconfidentiallytotakeactiontohelptheisolatedpeopleandintegratethemintocommunitylife.In2018,westartedanewwaveofhomevisitsinthemunicipalityofOlen,intheprovinceofAntwerp.

Dynasure passport delivery

ThankstooursubsidiaryDynasure,Antwerpcitizenscannowreceivetheirrenewedpassportwhenitssuitsthembest.Alltheyhavetodoisgotothelocalgovernmentofficetoapplyfortheirpassport,providetheirdigitalfingerprintsandsign.Then,Dynasuredeliverstheirpassportwhenitismostconvenientforthem.Thismakestheirlifealittleeasier,ascitizensnolongerhavetofittheirschedulesaroundtheopeninghoursoflocalgovernmentoffices.



an(internalorexternal)educatororeducationalinstitution.

Frequency rateThetotalnumberofwork-relatedoccupationalaccidentsthathappenedinthereportingyear,outofthetotalnumberofhoursworkedinthereportingyear,multipliedby1,000,000hoursworked.

Informal trainingInformaltraininghoursareeducationalactivitieswithahighdegreeofself-organization(thereisnoeducatororeducationalinstitution),aboutcontentbasedontheindividualneedsoftheemployeesandwithadirectrelationtotheworkactivity.

Lost daysThenumberofworkingdayseployeesdidnotcometoworkduetooccupationalaccidentsinvolvingemployees,notcountinganydaysonwhichtheemployeewouldnothaveworked(soexcludinge.g.weekends,holidays,part-timedays,etc.).Thisnumberdoesnotincludethedayonwhichtheoccupationalaccidentoccurred.

Occupational work accidentsTotalnumberofoccupationalaccidentsleadingtoalost-timeinjuryorawork-relatedfatalityduringthereportingperiod.

Severity rateThetotallostdaysinthereportingyearoutofthenumberofhoursworkedinthereportingyear,multipliedby1,000hoursworked.

Significant tier 1 suppliersSignificanttier 1suppliersarethesuppliersthatmakeupminimum80%oftheprocurementspentduringthereportingperiod.

Reference to external documentsForourSustainabilityGovernance,werefertothefollowingsectiononourwebsite.

Toreadabouthowweengagewithourstakeholders,werefertothefollowingsectiononourwebsite.

bpost’sAnnualReport2018 hasbeenpreparedinaccordancewiththeGRIStandards:Coreoption.Ourmaterialityanalysis,materialitymatrix,GRIcontentindexforthisreportcanbefoundonourwebsite.

Anoverviewofbpost’sawardsandpartnerships,werefertothefollowingsectiononourwebsite.

GlossaryAbsenteeismTotalnumberofdayswhereemployeeswereabsentinthereportingyear(duetowork-relatedoccupationalaccidentsorillness)outofthenumberofdaysworkedinthereportingyeartimes100.

Blameworthy road traffic incidentsThenumberofaroadtrafficincidents(leadingtonear-miss,injuryorfatality)duringworkinghourscausedbyabpostdriver(employeeortemporarystaffoftheentityperformingworkonbehalfoftheentity).

CO2 eq. emissionsbpostGroupusestheGreenhouseGasProtocol-ACorporateAccountingandReportingStandard(RevisedEdition)aswellasthejointmethodologyofUPU(universalpostalunion),PostEuropeandIPC(internationalpostalcorporation)–“GHGInventorystandardforthepostalsectorlastversion 2010standard”tocollectactivitydataandcalculateemissions.bpostGroupreportsCO2emissionsonly.HFCsemissionsfromon-siterefrigerationorair-conditioningarenegligiblysmall.EmissionsfromNH4,N2O,PFCsorSF6 arenegligibleandnotrelevantforbpost’sactivities.Therefore,theIPCGHGprogramhasnotincludedtheseemissionsinthescopeofemissionstobemonitored.ThemajorityoftheconversionfactorsusedarederivedfromIPCorprovideddirectlybytherelevantsupplier.

Customer satisfactionThebpostBelgiumcustomersatisfactionsurveyisbasedona7 pointscaleinwhichlevel7 and6designateenthusiasticcustomersandlevel5satisfiedcustomers.Itincludesbothresidentialandbusinesscustomers.

Employee engagementEmployeeengagementisdeterminedbyanindependentthirdpartyviaanemployeeengagementsurvey,inwhichtheaverageofthequestionscoresprovidesthelevelofengagement.

Employee turnoverThetotalnumberofemployeesthatlefttheentityduringthereportingperiod(yearx)devidedbytheaveragenumberofemployeesinyearxandyearx-1,multipliedby100.

Energy consumptionThetotalenergyconsumedinKWhbythebuildingsandbytheactivitieswithinthebuildings,excludingenergyconsumptionfortransportationandlogisticspurposes,duringthereportingperiod.Thisconsistsofelectricity,naturalgas,heatingoil,districtheating,fueloilconsumedforgeneratorsanddieselforlifttrucks.

Formal trainingPlannedtraining,instructionand/oreducationforemployeesortemporarystaff,paidbybpost,duringandoutsideworkinghoursforthereportingperiod.Formaltrainingsareorganizedincollaborationwith




https://corporate.bpost.be/sustainability/csr-governance/stakeholder-engagement?sc_lang=en


https://corporate.bpost.be/sustainability/csr-governance/awards-partnerships?sc_lang=en

CORPORATE GOVERNANCE STATEMENT


Corporate governance statement

amendedbytheBoardofDirectors’decisionofMarch 19,2019.

TheBoardofDirectorsregularlyreviewsbpost’sCorporateGovernanceCharterandadoptsanychangesdeemednecessaryandappropriate.

TheCorporateGovernanceChartercontainsruleswithrespectto:

• thedutiesoftheBoardofDirectors,BoardCommittees,GroupExecutiveCommittee,andCEO;

• theresponsibilitiesoftheBoardofDirectors’ChairpersonandCorporateSecretary;

• therequirementsthatapplytotheBoardofDirectors’memberstoensurethattheyhaveadequateexperience,expertise,andcompetencestofulfilltheirdutiesandresponsibilities;

• adisclosuresystemonmandatesheldandrulesaimedatavoidingconflictsofinterestsandprovidingguidanceonhowtoinformtheBoardofDirectorsinatransparentwayincaseconflictsoccur,andaprohibitionondirectorparticipationinthedeliberationsandvotingonanymatterinwhichheorshehasaconflictinginterest.

Reference CodebposthasdesignatedtheBelgianCodeonCorporateGovernanceofMarch 12,2009(the“Corporate Governance Code”)asitsreferencecode2. The CorporateGovernanceCodeisbasedona“complyorexplain”approach.BelgianlistedcompaniesarerequiredtofollowtheCorporateGovernanceCode,butmaydeviatefromitsprovisionsprovidedtheydisclosethejustificationforanysuchdeviation.

Deviations from the Corporate Governance CodebpostcomplieswiththeCorporateGovernanceCode,withtheexceptionofthefollowingthreedeviations,whichwereimposedunderthe1991Law(beforeitsamendmentbytheLawofDecember 16,2015(the“December 2015 Law”)thatenteredintoforceonJanuary 12,2016):

• TheCorporateGovernanceCode(provision4.2)statesthattheBoardofDirectorsproposesdirectorsforappointmentbytheShareholdersataShareholders’Meeting.However,somedirectorsappointedbeforeJanuary 12,2016weredirectlyappointedbytheBelgianStateinaccordancewiththeformerArticle 18,§2junctoArticle 148bis/3ofthe1991Law.AsfromJanuary 12,2016,all(new)directorsare(re)appointedbydecisionoftheShareholdersataShareholders’Meeting;

Reference Code and introductionInthisCorporateGovernanceStatement,bpostoutlinesthekeyaspectsofitscorporategovernanceframework.ThisframeworkisconsistentwiththerulesandprinciplessetoutintheLawofMarch 21,1991onthereformofcertaineconomicpubliccompanies,asamendedfromtimetotime(the“1991 Law”),theArticlesofAssociation,andtheCorporateGovernanceCharter.

Asalimitedliabilitycompanyunderpubliclaw,bpostisgovernedbytheBelgianCompaniesCodeandCorporateGovernanceCode,unlessotherwisestipulatedinthe1991LaworotherBelgianlawsorregulations.Inparticular,anychangestobpost’sArticlesofAssociation,whichhavetobeapprovedbytheShareholders’Meeting(generallyrequiringa75%majorityanda50%quoruminaccordancewithArticle 558oftheBelgianCompaniesCode),mustalsobeapprovedbyaRoyalDecreefollowingadebateintheCouncilofMinisters.

Thelatestversionofbpost’sArticlesofAssociationwasadoptedattheShareholders’MeetingofMay 11,2016andwasapprovedbytheRoyalDecreeofSeptember 1,20161.

Themaincharacteristicsofbpost’sgovernancemodelarethefollowing:

• the Board of Directorssetsbpost’sgeneralpolicyandstrategyandoverseesoperationalmanagement;

• theBoardofDirectorssetupaStrategic Committee,anAudit CommitteeandaRemuneration and Nomination Committee to assistandmakerecommendationstotheBoardofDirectors;

• the Ad Hoc CommitteecomprisesallindependentdirectorsoftheBoardofDirectorsandinterveneswhentheprocedureprescribedbyArticle 524oftheBelgianCompaniesCode,asincorporatedinbpost’sCorporateGovernanceCharter,istriggered;

• theChiefExecutiveOfficer(“CEO”) is responsible for operationalmanagement;theBoardofDirectorshasdelegatedthepowersofday-to-daymanagementtotheCEO;

• the Group Executive CommitteeassiststheCEOwithoperationalmanagement;

• thereisacleardivisionofresponsibilitiesbetweentheBoardofDirectorsandtheCEO.

Corporate Governance CharterTheBoardofDirectorsadoptedtheCorporateGovernanceCharteronMay 27,2013.TheCharterhasbeenineffectsinceJune 25,2013andwaslast

(1) ThisRoyalDecreewaspublishedintheBelgianStateGazetteonSeptember 19,2016andhasbeenineffectsinceSeptember 29,2016.

(2) TheCorporateGovernanceCodeisavailableonthewebsiteoftheCorporateGovernanceCommittee(www.corporategovernancecommittee.be).



• TheCorporateGovernanceCode(provision6.3)statesthattheBoardofDirectorsappointstheCEO.ThecurrentCEOwasappointedbytheBelgianStatebyRoyalDecreefollowingadebateintheCouncilofMinisters,inaccordancewiththeformerArticle 20,§2ofthe1991Law.FutureCEOswillbeappointedbytheBoardofDirectors;and

• TheCorporateGovernanceCode(provision4.6)statesthatthetermofaBoardmandateshouldnotexceedfouryears.However,thedirectorsappointedbeforeMay 15,2014wereappointedforsixyearsinaccordancewiththeformerArticle 18,§3andArticle 20,§2(firstsentence)ofthe1991Law.(New)directors(re)appointedafterMay 15,2014 havebeen(re)appointedtoservea(new)termoffouryears.

Board of DirectorsComposition

General rules governing the composition of the Board of Directors

SincetheDecember 2015LawenteredintoforceonJanuary 12,2016,thecompositionoftheBoardofDirectorshasbeengovernedasdescribedbelow.

• TheBoardofDirectorsconsistsofamaximumof12directors,includingtheCEO,andcomprisesonlynon-executivedirectors,exceptfortheCEO.

• Alldirectorsareappointed(andcanberemoved)bytheShareholdersataShareholders’Meeting,onproposalbytheBoardofDirectorsandfromcandidatesnominatedbytheRemunerationandNominationCommittee.

• Directorsareappointedforarenewabletermoffouryears,totheextentthatthetotaltermoftheirmandate(asrenewed)doesnotexceed12 years.Toensurecontinuityintheorganization,thelimitationof12 yearsdoesnotapplytotheCEO.

• Anyshareholderholdingatleast15%ofbpost’sshareshastherighttonominatedirectorsforappointment pro rataitsshareholding(“nominationright”).Directorsnominatedbyashareholdermaybeindependent,providedtheyfulfillthecriterialaiddowninArticle 526teroftheCompaniesCode,butdonothavetobeindependent.

• Alldirectors,otherthantheCEOandthoseappointedthroughtheaforementionednominationright,mustbeindependentdirectors.Inanycase,theBoardofDirectorsmustcompriseatalltimesatleastthreedirectorsfulfillingtheindependencecriterialaiddowninArticle 526teroftheBelgianCompaniesCode.ThebpostCorporateGovernanceCharterfurtherprovidesthatatleasthalfofthedirectorsmustatalltimesmeettheindependencecriteriaassetoutinArticle 3.2.4ofthebpostCorporateGovernanceCharter(basedonthecriterialaiddowninArticle 526teroftheBelgianCompaniesCode).

• Alldirectors(includingthedirectorspreviouslyappointedbytheBelgianState)canberemovedbydecisionoftheShareholdersataShareholders’Meeting.TheDecember 2015Lawexplicitlyprovidesthatitsentryintoforcedidnotterminatethecurrentdirectors’mandates.Thesemandateswerethereforecontinuedandwillexpireasinitiallyprovided,notwithstandingthepossibilityfortheShareholderstoendthesemandatesattheShareholders’MeetinginaccordancewiththeBelgianCompaniesCode.

• Shouldanydirectormandatebecomevacant,theremainingdirectorshavetheright,inaccordancewithArticle 519oftheBelgianCompaniesCode,totemporarilyfillsuchvacancyuntilafinalappointmenttakesplaceinaccordancewiththeabovementionedrules.

ThecompositionoftheBoardofDirectorsshouldreflect:

• thegenderrepresentationrequirementssetforthin(i) Article 18,§2bis ofthe1991Lawand(ii) Article 518bisoftheBelgianCompaniesCode.bpostcomplieswiththesegenderrepresentationrequirements;

• thelanguagerequirementssetforthinArticle 16and148bis/1ofthe1991Law.

Finally,inaccordancewiththeLawofSeptember 3,2017ondisclosureofnon-financialanddiversityinformationbycertainlargeundertakingsandgroups,bpostappliesadiversitypolicyinrelationtoitsadministrative,management,andsupervisorybodieswithregardtoaspectssuchas,e.g.,age,gender,educationaland/orprofessionalbackgrounds.Adescriptionofthispolicy,itsobjectives,howithasbeenimplemented,andtheresultsinthereportingperiodisprovidedfurtherinthisAnnualReport.

TheBoardofDirectorswas,perDecember 31,2018,composedofthefollowing9 members:



Name Position Director since

Mandateexpires

FrançoisCornelis1 ChairpersonoftheBoardofDirectors 2013 2019

KoenVanGerven2, 3 CEOandDirector 2014 2020

JosDonvil2 Non-ExecutiveDirector 2017 2021

BernadetteLambrechts2 Non-ExecutiveDirector 2014 2020

Michael Stone 4 IndependentDirector 2014 2022

RayStewart 4 IndependentDirector 2014 2022

ThomasHübner 5 IndependentDirector 2017 2021

FilomenaTeixeira 5 IndependentDirector 2017 2021

SaskiaVanUffelen 5 IndependentDirector 2017 2021

(1) AppointedbytheGeneralMeetingofMay 27,2013(confirmedbydecisionofJune 25,2013)andappointedasChairpersonoftheBoardofDirectorsbyaBoardofDirectorsdecisionofMay 10,2017.

(2) AppointedbytheBelgianState.

(3) AppointedasCEObyRoyalDecreeofFebruary 26,2014followingadebateintheCouncilofMinisters.

(4) AppointedbytheGeneralMeetingofallShareholdersofbpostotherthanPublicInstitutionsheldonSeptember 22,2014.TheirmandatewasrenewedbytheGeneralMeetingofShareholdersheldonMay9,2018.

(5) AppointedbytheannualGeneralMeetingofShareholdersofbpostheldonMay 10,2017.

Changes in the composition of the Board of Directors

AttheShareholders’MeetingofMay 9,2018:

• themandateofLucLallemand,LaurentLevaux,andCarolineVenwasnotrenewedsincetheBelgianStaterequestedtopostponetheappointmentofthreereplacementdirectorstobenominatedinaccordancewithitsnominationright;

• theShareholdersdecided,onrecommendationoftheRemunerationandNominationCommittee,torenewthemandatesofRayStewartandMichaelStoneasindependentdirectorsforatermoffouryearsuntilthecloseoftheannualShareholders’Meetingof2022.

AttheShareholders’MeetingofMay 8,2019,themandateofFrançoisCornelisasindependentdirectorwillexpire.Inaddition,theBelgianStatemaydecidetonominatethreedirectorsinaccordancewithitsnominationright.

TheBoardofDirectorsintendstorecommendcandidates,nominatedbytheRemunerationandNominationCommittee,forappointmentbytheShareholdersattheannualShareholders’MeetingofMay 8,2019toreplacethedirectorswhosemandatehasexpiredorwillexpire.

Newlyelecteddirectorscanchoosetoparticipateinaninductionprogramaimedatacquaintingthemwithbpost’sactivitiesandorganizationaswellaswiththeruleslaiddownintheCorporateGovernanceCharter.Thisprogramincludesvisitingoperationalandsortingcenters.

Powers and functioning

Powers and responsibilities of the Board of Directors

TheBoardofDirectorsisvestedwiththepowertoperformallactsthatarenecessaryorusefulfortherealizationofbpost’spurpose,exceptforthoseactionsthatarespecificallyreservedbylawortheArticles

ofAssociationtotheShareholders’Meetingorothermanagementbodies.

Inparticular,theBoardofDirectorsisresponsiblefor:

• definingthegeneralpolicyofbpostanditssubsidiaries;

• decidingallmajorstrategic,financialandoperationalmattersofbpost;

• overseeingthemanagementofthecompanybytheCEOandtheGroupExecutiveCommittee;

• allothermattersreservedtotheBoardofDirectorsbytheBelgianCompaniesCodeorthe1991Law.

TheBoardofDirectorsisentitledtodelegatespecialandlimitedpowerstotheCEOandothermembersofseniormanagementandcanallowsub-delegationofsaidpowers.OnJune 30,2017,theBoardofDirectorsdecidedtoapproveadelegationofauthorityformalizingthedelegationofspecificpowersbytheBoardofDirectorstotheCEOandothermembersoftheGroupExecutiveCommittee.Thispolicy,whichdoesnotaffectthepowersgrantedtotheBoardofDirectorsbyorpursuanttobpost’sArticlesofAssociation,hasbeenpublishedintheannexestotheBelgianOfficialGazetteonNovember 16,2017.

Acquisition and divestiture of own shares, profit-sharing certificates or associated certificates

FollowingthedecisionstakenattheShareholders’MeetingofMay 27,2013,theBoardofDirectorswasauthorized,withoutanypriordecisionoftheShareholders,inaccordancewithArticles620etseq. of theBelgianCompaniesCodeandwithinthelimitssetoutintheseprovisions,toacquire,onoroutsidethestockmarket,itsownshares,profit-sharingcertificatesorassociatedcertificatesforapricerespectingthelegalrequirements.Inparticular,thepriceshouldnotbelessthan10%belowthelowestclosingpriceinthelast30tradingdaysprecedingthetransactionandnotmorethan5%abovethehighestclosingpriceinthelast30tradingdaysprecedingthetransaction.Thisauthorizationcoveredtheacquisitiononoroutsidethestockmarketbyadirectsubsidiarywithinthe



meaningandthelimitssetoutbyArticle 627,indent1oftheBelgianCompaniesCode.ThisauthorizationwasvalidforfiveyearsfromMay 27,2013andwasnotrenewedattheShareholders’MeetingofMay 9,2018.

TheBoardofDirectorsisfurtherauthorizedtodivestitselfofpartoforallthebpostshares,profit-sharingcertificatesorassociatedcertificatesatapriceitdetermines,onoroutsidethestockmarketorintheframeworkofitsremunerationpolicytoemployees,directorsorconsultantsofbpostortopreventanyseriousandimminentharmtobpost.Thisauthorizationisvalidwithoutanytimerestriction.Theauthorizationcoversthedivestmentofthecompany’sshares,profit-sharingcertificatesorassociatedcertificatesbyadirectsubsidiarywithinthemeaningofArticle 627,indent1oftheBelgianCompaniesCode.

Functioning of the Board of Directors

TheBoardofDirectorsmeetswhenevertheinterestsofthecompanysorequiresorattherequestofatleasttwodirectors.Inprinciple,theBoardofDirectorsmeetsseventimesayearandinanyeventnotfewerthanfivetimesayear.In2018,theBoardofDirectorsmet11times.

Ingeneral,theBoardofDirectors‘andBoardCommittees’decisionsaretakenbysimplemajorityofthedirectorspresentorrepresented,althoughforcertainBoardmattersatwo-thirds’majorityisrequired(suchas,e.g.,decisionsontheapprovalofallrenewalsoramendmentstotheManagementContractandcertaindecisionsontheadministrativelawstatusofstatutoryemployees).Inthecaseofatie,theChairpersonhasacastingvote.

ThebpostCorporateGovernanceCharterreflectstheprinciplesbywhichtheBoardofDirectorsandtheBoardCommitteesoperate.

TheCorporateGovernanceCharterprovides,inter alia,thattheBoardofDirectors’decisionsofstrategicimportance,includingtheadoptionofthebusinessplanandtheannualbudgetanddecisionsregardingstrategicacquisitions,alliancesanddivestituresmustbepreparedbyastandingoranadhocBoardCommittee.Foranysuchdecisions,theBoardofDirectorsshallstrivetoachievebroadsupportacrossitsvariousconstituencies,itbeingunderstoodthat,followingappropriatedialogueandconsultations,theBoardofDirectors’Chairpersonmaycallforadecisionandtheproposalshallcarryifadoptedbyamajorityofthevotescast.

Evaluation process of the Board of DirectorsUndertheChairperson’slead,theBoardofDirectorsconductsregularevaluationsofitsscope,composition,andperformance,alongwiththoseoftheBoardCommittees,aswellastheinteractionwiththeGroupExecutiveCommittee.Ifneeded,theChairpersonshallproposethenecessarymeasurestoremedyanyweaknessesoftheBoardofDirectorsorofanyBoardCommittee.

Followinganexternalassessmentin2015,theBoardofDirectorsdecidedtomonitorandevaluateonaregularbasisthemainfocusareasidentifiedintheexternalassessment.In2018,theBoardofDirectors,BoardCommittees,andtheGroupExecutiveCommitteeperformedformalandcomprehensiveself-evaluation.Theassessmentfocusedonthecompositionand

structureoftheBoardofDirectorsanditscommittees,itsroleandobjectives,itsfunctioning,theinformationflowswithintheBoardofDirectorsandwiththeGroupExecutiveCommittee,aswellasitscompliancewithgovernancestandards.

TheBoardofDirectorscontinuouslyevaluatesandimprovesitsfunctioninginordertosteerbposteverbetterandmoreefficiently.

Transactions between bpost, its Board members and executive managersAgeneralpolicyonconflictsofinterestapplieswithinbpostandprohibitsanyconflictofinterestssituationofafinancialnaturethatmayaffectadirector’spersonaljudgmentorprofessionaltaskstothedetrimentofbpost’sgroup.

InaccordancewithArticle 523oftheBelgianCompaniesCode,KoenVanGervendeclaredtohaveapersonalconflictofinterestofpatrimonialnatureinconnectionwithhisannualevaluationasCEO.HisannualevaluationwasanitemontheagendaoftheRemunerationandNominationCommittee’smeetingofMarch 12,2018,andtheBoardofDirectors’meetingofMarch 13,2018.Heinformedbpost’sAuditorsofthisconflictofinterestanddecidednottoparticipateinthedeliberationorvotingonthisitem.BelowfollowstheextractoftheBoardofDirectors’minutesrelatingtotheannualevaluationoftheCEO:

“PriortodiscussingtheannualevaluationoftheCEO,theCEOdeclaredtohaveapersonalconflictofinterestofapatrimonialnatureaimedatbyArticle 523oftheBelgianCompaniesCodeinrespectoftheagendaitemwhichrelatestotheevaluationofhis annual performance.

TheCEOleftthemeetingroomanddidnotparticipateinthedeliberationorthedecisionregardinghisannualevaluation.TheCEOwillinstructtheauditorsofhisconflictofinterest,inaccordancewithArticle 523oftheBelgianCompaniesCode.

UponrecommendationoftheRemunerationandNominationCommittee,theBoardofDirectorsunanimouslyapprovedtheevaluationoftheperformanceoftheCEOandtheproposedscore.”

Transactions between bpost and its majority shareholdersbpost’sCorporateGovernanceCharterrequiresthattheproceduresetforthinArticle 524oftheBelgianCompaniesCodebeobservedforanydecisionsregardingtheManagementContractorotheragreementswiththeBelgianStateorotherPublicInstitutions(otherthanthosewithinthescopeofArticle 524,§1,lastsub-paragraphoftheBelgianCompaniesCode).Insummary,thesedecisionsaresubjecttoapriornon-bindingreasonedopinionofan AdHocCommittee,consistingofatleastthreeindependentdirectors.TheAdHocCommitteeisassistedbyanindependentexpert,selectedbytheAdHocCommittee,andbpost’sauditorsvalidatethefinancialdataused.TheprocedurethenrequirestheBoardofDirectorstosubstantiateitsdecisionandtheauditors–tovalidatethefinancialdatausedbytheBoardofDirectors.

TheBoardofDirectorshasestablishedanAdHoc Committee,forthepurposeoftheUSOManagementContract,composedofallindependentdirectors.The



AdHocCommitteemettwotimesin2018.

Committees of the Board of DirectorsApart from the AdHocCommittee,theBoardofDirectorshasestablishedthreeBoardCommitteeswhichassisttheBoardofDirectorsandmakerecommendationsinspecificfields:theStrategicCommittee,theAuditCommittee(inaccordancewithArticle 526bisoftheBelgianCompaniesCode),andtheRemunerationandNominationCommittee(inaccordancewithArticle 526quateroftheBelgianCompaniesCode).ThetermsofreferenceoftheseBoardCommitteesaresetoutintheCorporateGovernanceCharter.

Strategic Committee

TheStrategicCommitteeadvisestheBoardofDirectorsonstrategicmattersandshall,inparticular:

• regularlyreviewindustrydevelopments,objectivesandstrategiesofbpostanditssubsidiariesandrecommendcorrectiveactions;

• reviewrisksandopportunitiesofthestrategyasidentifiedbytheCompany’sstrategicriskassessmentandotherprocesses,andtheimpactoftherelevantindustrytrendsandchanges,emergingorevolvingcompetitiveactivity,governmentalorlegislativedevelopmentsandtheCompany’sperformanceagainstthefinancialtargetsagreedbytheBoardofDirectorsandcommunicatedtotheCompany’sshareholders;

• reviewthedraftbusinessplansubmittedeachyearbytheGroupExecutiveCommitteeandprovideguidanceforthestrategicplanningprocesstoensurethatthestrategicimplementationplanisdeveloped,adheredto,andembeddedintheCompany;

• reviewstrategictransactionsproposedbytheCEOorGroupExecutiveCommittee,includingstrategicacquisitionsanddivestitures,formationandterminationofstrategicalliancesorlonger-termcooperationagreements,launchingofnewproductsegmentsandentryintonewproductsorgeographicareas;

• monitortheimplementationofsuchstrategicprojectsandofthebusinessplanincludingtheCompany’sprogressagainststrategicgoalsusingpredefinedandagreedkeyperformanceindicators(KPIs)andprovidefeedbackandadviceonbusinesstactics,mergerandacquisitionstrategy,marketcapabilities,andresourcerequirementsandallocation;

• reviewtheexecutionoftransactions,post–acquisitionimplementationandtherealisationoftheforeseenvalueoftheacquisitiontotheCompany’sstrategicobjectives,includingevaluatingpost-transactionauditstotrackperformanceagainstacquisitionplantargetsandthecreationofvalueandrealisationofsynergies;

• makereportstotheBoardofDirectorsonitsactivitiesincludinganannualreviewoftheperformanceofthecommitteeandanyrecommendationsforchangesinthescopeofitsduties,composition,andworkingpractices.

TheStrategicCommitteeconsistsofmaximumsixdirectors,includingatleastthreeindependentdirectors.TheStrategicCommittee’sChairpersonisdesignatedbytheStrategicCommittee’smembers.

TheStrategicCommitteewas,perDecember 31,2018,composedofthefollowingfivemembers:

Name Position

Michael Stone (Chairperson) IndependentDirector

JosDonvil Non-ExecutiveDirector

ThomasHübner IndependentDirector

KoenVanGerven CEOandDirector

RayStewart IndependentDirector

TheStrategicCommitteemettwotimesin2018.

Audit Committee

TheAuditCommitteeadvisestheBoardofDirectorsonaccounting,audit,andinternalcontrolmatters,andshall,inparticularbeinchargeof:

• monitoringtheintegrityofbpost’sfinancialstatementsandbpost’saccountingandfinancialreportingprocessesandfinancialstatementsauditsaswellasbpost’sbudget;

• monitoringtheeffectivenessofbpost’sinternalcontrolandriskmanagement;

• monitoringtheinternalauditfunctionanditseffectiveness;

• monitoringtheperformanceoftheJointAuditorsandthestatutoryauditoftheannualandconsolidatedaccounts,includinganyfollow-uponanyquestionsandrecommendationsmadebytheJointAuditors;

• reviewingandmonitoringtheAuditors’independence,especiallyinviewoftheprovisionsoftheBelgianCompaniesCode;

• proposingcandidatestotheBoardofDirectorsforthetwoAuditorstobeappointedbytheShareholders’Meeting;

• informingtheBoardofDirectorsontheresultsofthestatutoryauditandtheperformanceofitstasks;

• appointing,dismissing,replacing,andannuallyevaluatingtheperformanceoftheChiefAuditOfficer.

TheAuditCommitteeconsistsofmaximumfivenon-executivedirectors,includingatleastthreeindependentdirectors.TheAuditCommittee’sChairpersonisdesignatedbytheAuditCommittee’smembers.

Collectively,theAuditCommittee’smembershavesufficientrelevantexpertiseinthefieldofaccountingandaudittofulfilltheirroleseffectively,notablyinfinancialmatters.RayStewartiscompetentinaccountingandauditing,asevidencedbyhisformerexecutivepositionsatNyrstarandProximus(previouslyBelgacom).TheothermembersoftheAuditCommitteeholdorhaveheldseveralboardorexecutivemandatesintop-tiercompaniesororganizations.

TheAuditCommitteewas,asofDecember 31,2018,



Name Position

FrançoisCornelis(Chairperson)

ChairpersonoftheBoardofDirectors

ThomasHübner IndependentDirector

SaskiaVanUffelen IndependentDirector

FilomenaTeixeira IndependentDirector

TheRemunerationandNominationCommitteemetfivetimesin2018.

In2018,theRemunerationandNominationCommitteereflected,inter alia,onchangestotheremunerationpolicy(e.g.,long-termincentiveschemes,variablepayindicators)basedonanewbenchmarkexercisewithcompetitivecompanies.

Executive ManagementCEOThecurrentCEOwasappointedforatermofsixyearsbyRoyalDecreeofFebruary 26,2014followingadebateintheCouncilofMinisters,inaccordancewiththeprovisionsofthe1991LawbeforeitwasamendedbytheDecember 2015Law.ThenextCEOwillbeappointedbytheBoardofDirectors,followingnominationbytheRemunerationandNominationCommittee.

TheCEOisvestedwiththeday-to-daymanagementofbpostandreportstotheBoardofDirectors.HeisalsoentrustedwiththeexecutionoftheBoardofDirectors’decisionsandherepresentsbpostwithintheframeworkofitsday-to-daymanagement,includingexercisingthevotingrightsattachedtosharesandstakesheldbybpost.

TheCEOcanberemovedbytheBoardofDirectors.

Group Executive Committeebpost’soperationalmanagementisensuredbytheGroupExecutiveCommitteeandisledbytheCEO.TheGroupExecutiveCommitteeconsistsofmaximumninemembers,appointed(forthedurationdeterminedbytheBoardofDirectors)andremovedbytheBoardofDirectors,followingarecommendationbytheCEOandadviceoftheRemunerationandNominationCommittee.

TheGroupExecutiveCommitteeconvenesregularlyattheinvitationoftheCEO.TheGroupExecutiveCommitteeisassistedbytheGroupExecutiveCommitteeSecretary.

TheindividualmembersoftheGroupExecutiveCommitteeexercisethespecialpowersdelegatedtothembytheBoardofDirectorsortheCEO,asthecasemaybe.Withinthelimitsofthesepowers,themembersoftheGroupExecutiveCommitteemaydelegatetooneormoremembersofbpost’sstaffspecialandlimitedpowers.TheGroupExecutiveCommitteemembersmayallowsub-delegationofthesepowers.

TheGroupExecutiveCommitteeprepares,underdirectionoftheCEO,abusinessplanassessingbpost’smedium-termpurposesandstrategy.ThisbusinessplanissubmittedtotheBoardofDirectorsforapproval.

TheGroupExecutiveCommitteewas,asofDecember 31,2018,composedofthefollowingmembers:

composedofthefollowingfourmembers:

Name Position

RayStewart(Chairperson) IndependentDirector

Michael Stone IndependentDirector

SaskiaVanUffelen IndependentDirector

BernadetteLambrechts Non-ExecutiveDirector

TheAuditCommitteemetsixtimesin2018.

Remuneration and Nomination Committee

TheRemunerationandNominationCommitteeadvisestheBoardofDirectorsprincipallyonmattersregardingtheappointmentandremunerationofdirectors,CEO,andGroupExecutiveCommitteeandshallinparticular:

• identifyandnominateBoardcandidatestofillvacanciesastheyarise,therebyconsideringproposalsmadebyrelevantparties,includingshareholders;

• nominateforappointmentcandidatesfortheBoardofDirectorstobeappointedbyshareholders(whetherornotinapplicationoftheirnominationrightsetforthinArticle 21,§2oftheArticlesofAssociation);

• advisetheBoardofDirectorsontheappointmentoftheBoardofDirectors’Chairperson;

• advisetheBoardofDirectorsontheappointmentoftheCEOandontheCEO’sproposalsfortheappointmentofothermembersoftheGroupExecutiveCommittee;

• advisetheBoardofDirectorsontheremunerationoftheCEOandothermembersoftheGroupExecutiveCommitteeandarrangementsonearlytermination;

• reviewanyshare-basedorotherincentiveschemeforthedirectors,membersoftheGroupExecutiveCommittee,andemployees;

• establishperformancetargetsandconductperformancereviewsfortheCEOandothermembersoftheGroupExecutiveCommittee;

• advisetheBoardofDirectorsontheremunerationofthedirectors;

• advisetheBoardofDirectorsontalentmanagementanddiversity&inclusivenesspolicy;

• submitaremunerationreporttotheBoardofDirectors;

• leadtheprocessforsuccessionplanningforBoardofDirectorsandGroupExecutiveCommitteemembers,takingintoaccountthechallengesandopportunitiesfacingbpostandtheskillsandexpertiseneededineachposition.

TheRemunerationandNominationCommitteeconsistsofminimumthreeandmaximumfivenon-executivedirectors,withatalltimesamajorityofindependentdirectors.

TheRemunerationandNominationCommitteewas,perDecember 31,2018,composedofthefollowingfourmembers:



(1) KoenBeeckmanslefttheCompanyasChiefFinancialOfficer,ServiceOperations&ICTonJanuary 15,2018.HenrideRomréewasappointedbytheCEO(empoweredbytheBoardofDirectors(decisionofDecember 4,2017)uponrecommendationoftheNominationandRemunerationCommittee),asnewChiefFinancialOfficerandasGroupExecutiveCommitteememberasofJanuary 15,2018.

(2) LucCloetandPierreWinandwereappointed,withimmediateeffect,bytheBoardofDirectors,uponrecommendationoftheNominationandRemunerationCommittee,onApril 17,2018.

(3) KurtPierlootresignedasDirectorMail&RetailwitheffectasfromJanuary 24,2019.HenrideRomréewasappointedasnewDirectorMail&RetailasfromJanuary 24,2019.BaudouindeHepcéewasappointedasChiefFinancialOfficeradinterimasfromJanuary 24,2019untilanewChiefFinancialOfficerisappointed.

(4) ByadecisiondatedOctober 3,2018,theCourtofAudit(Rekenhof/CourdesComptes)decidedtoreplace–witheffectasfromOctober 1st,2018–Mr. JozefBeckers(MemberoftheCourtofAudit)byMrs. HildeFrançois(ChairpersonoftheCourtofAudit)asbpost’sJointAuditor,forarenewabletermofthreeyears.

Name Function

KoenVanGerven ChiefExecutiveOfficer

HenrideRomrée1 ChiefFinancialOfficer

MarkMichiels ChiefHumanResources&Organization

DirkTirez ChiefLegal&RegulatoryOfficerandCompanySecretary

NicoCools ChiefITOfficerandChiefDigitalOfficer

KurtPierloot3 Director Mail & Retail

LucCloet2 DirectorParcels&LogisticsEuropeandAsia

PierreWinand2 DirectorParcels&LogisticsNorthAmerica

1991 Law CommitteeThe1991Lawcontainsseveralprovisionsdetailingthecomposition,appointment,andfunctioningofa“1991LawCommittee.”SincetheentryintoforceoftheDecember 2015Law,thepowerstobeassignedtothe1991LawCommitteearelimitedtothenegotiationoftheManagementContractwiththeBelgianState(itbeingunderstoodthattheManagementContractrequiresthesubsequentapprovaloftheBoardofDirectors).Therefore,the1991LawCommitteeremainsinexistenceonlyforthelimitedpurposesandtasksassignedtoitbytheamended1991Law.

The1991LawCommitteewas,asofDecember 31,2018,composedoftheCEO,whochairstheCommittee,andtwoothermembersoftheGroupExecutiveCommittee(oneDutch-speakingmemberandoneFrench-speakingmember):MarkMichielsandHenrideRomrée.

Company SecretaryTheBoardofDirectorsandtheAdvisoryCommitteesareassistedbytheGroupCompanySecretary,DirkTirez,whoisalsobpost’sChiefLegal&RegulatoryOfficer.HewasappointedinOctober 2007.FrançoisSoenenistheGroupExecutiveCommitteeSecretary.

Joint AuditorsTheJointAuditorsauditbpost’sfinancialconditionaswellasconsolidatedandunconsolidatedfinancialstatements.TherearefourbpostJointAuditors:(i) twoAuditorsappointedbytheShareholders’Meetingand(ii) twoAuditorsappointedbytheCourtofAudit,theBelgianinstitutionresponsiblefortheverificationof public accounts (CourdesComptes/Rekenhof). The JointAuditorsareappointedforrenewableterms

ofthreeyears.TheShareholders’MeetingdeterminestheremunerationoftheJointAuditors.

bpost’sJointAuditorswere,asofDecember 31,2018:

• Ernst&YoungRéviseursd’Entreprises–BedrijfsrevisorenSCRL/CVBA(“EY”),representedbyMr. RomualdBilem(memberoftheInstitutdesRéviseursd’Entreprises/InstituutvandeBedrijfsrevisoren),DeKleetlaan2,1831Diegem,Belgium(untiltheannualShareholders’Meetingof2021);

• PVMDRéviseursd’Entreprises-BedrijfsrevisorenSCRL/CVBA(“PVMD”),representedbyMrs. CarolineBaert(memberoftheInstitutdesRéviseursd’Entreprises/InstituutvandeBedrijfsrevisoren),Tweekerkenstraat44,1000Brussel,Belgium(untiltheannualShareholders’Meetingof2021);

• Mr. PhilippeRoland,FirstPresidentoftheCourtofAudit(Rekenhof/CourdesComptes),RuedelaRégence2,1000Brussels,Belgium(untilSeptember 30,2019);and

• Mrs. HildeFrançois4,ChairpersonoftheCourtofAudit(Rekenhof/CourdesComptes),RuedelaRégence2,1000Brussels,Belgium(untilSeptember 30,2021).

EYandPVMDareresponsiblefortheauditofbpost’sconsolidatedfinancialstatements.FortheyearendedDecember 31,2018,EYandPVMDreceivedEUR1,265,275(excludingvalueaddedtax)infeesfortheauditoffinancialstatementsofbpostanditssubsidiariesandEUR626,481(excludingvalue-addedtax)infeesfornon-auditservices.ThetwoAuditorsappointedbytheCourtofAuditreceivedEUR 39,134.81inremunerationfortheirservicesinconnectionwiththeauditofbpost’snon-consolidatedfinancialstatementsfortheyearendedDecember 31,2018.



Shareholding structure and shareholders rightsbpost’ssharesareregisteredordematerialized.AtDecember 31,2018,bpost’ssharecapitalwasrepresentedby200,000,944 shares,listedontheregulatedmarketofEuronextBrussels.

With,respectively,48,263,200and53,812,449bpostsharesintheirpossessiononDecember 31,2018,theBelgianStateandtheSFPI/FPIMtogetherhadaparticipationof51.04%(respectively,of24.13%and26.91%)ofbpostissuedvotingshares.TheremainingsharesareheldbyindividualshareholdersandEuropeanandinternationalinstitutionalshareholders.

Inthecourseof2018andinaccordancewiththeLawofMay 2,2007onthedisclosureofsignificantshareholdingsinlistedcompaniesandtheArticlesofAssociation,bpostpublishedanumberoftransparencydeclarationsdisclosingthatanotificationthresholdwasreached(crossedupwardordownward).Thetransparencynotificationsareavailableonbpost’swebsiteathttp://corporate.bpost.be/investors/share-information/transparency-declarations.

TheCompany’ssharesarefreelytransferable,providedthat,accordingtoArticle 147bisofthe1991LawandArticle 16oftheArticlesofAssociation,thedirectparticipationofPublicInstitutionsintheregisteredcapitalhastoexceed50%.However,followingtheentryintoforceonJanuary 12,2016oftheDecember 2015Law,theBelgianGovernmenthadtheoption,untilDecember 31,2018,toapprovebyRoyalDecreefollowingadebateintheCouncilofMinisters,transaction(s)thatcausethedirectparticipationofPublicInstitutionstodropbelow50%plusoneshare(Article 54/7§1ofthe1991Law).TheBelgianGovernmentdidnotmakeuseofthisoption.

AtDecember 31,2018,bpostdidnotholdanyofitsownshares.

Eachshareentitlesitsholdertoonevote.Apartfromtherestrictionsonvotingrightsimposedbylaw,theArticlesofAssociationprovidethat,ifsharesareheldbymorethanoneowner,arepledged,oriftherightsattachedtothesharesaresubjecttojointownership,usufructoranyotherkindofsplitofsuchrights,theBoardofDirectorsmaysuspendtheexerciseoftherightsattachedtosuchsharesuntilonepersonhasbeenappointedasthesolerepresentativeoftherelevantsharesvis-à-visbpost.

http://corporate.bpost.be/investors/share-information/transparency-declarations

http://corporate.bpost.be/investors/share-information/transparency-declarations



Remuneration Reportbpost’sremunerationpolicyrelatingtotheremunerationoftheBoardofDirectors’membersandbpost’smanagementisbasedoncurrentlegislation,theCorporateGovernanceCode,marketpracticesandtrends.

bpostconsidersessentialtransparencyandclearcommunicationontheprinciplesandimplementationofthepolicy.Itthereforesharesrelevantinformationin this report.

General remuneration policy and remuneration principlesbposthasdevelopedadynamic,rewarding,andresponsibleremunerationpolicy.Thispolicyisregularlyassessedandupdatedtoensurebpost’ssustainability.

Theremunerationpolicyhasmultipleobjectives,inter alia:

• offeringthecompany’semployeesafairremuneration,inconsultationwiththetradeunions,whileremainingcompetitivecomparedtothereferencemarketsofmail,parcels,logisticsande-commercecompaniesinEurope;

• stimulatingperformanceatboththecollectiveandindividuallevelstocreatesustainableandprofitablelong-termgrowth,whilesafeguardingthewellbeingofourstaff.Withthisinmind,theremunerationplanintegratesaspectsrelatedto(i) bpost’sresults(e.g.,EBITresultsalongwithcriteriarelatingtothewellbeingofthestaffandcustomersatisfaction);and(ii) theindividualperformanceandskills;

• identifyingandpromotingbpost’scorporatevaluesandculture;

• attracting,retaining,andmotivatingqualifiedandspecializedindividualsneededtoachievethecompany’sstrategicandoperationalgoalsinthetransformation of its business into one of the leadinge-commerce&logisticscompaniesinEuropeandbeyond.

Theremunerationpolicydescribedaboveshouldnotsubstantiallychangeinthetwocomingfinancialyears.

TheRemunerationandNominationCommitteeregularlyexaminesthepolicy’sprinciplesandtheirconcreteapplication,andwillcontinuetodosointhecomingtwofinancialyears.In2019,alimitedandresponsibleflexibleremunerationplanwillbeintroduced,enablingmanagement-levelemployeestochoosebetweenvariousbenefitswithinafixedbudgetatnoadditionalcostsforthecompany.TheRemunerationandNominationCommitteewillalsoreviewthepensionplanforitsemployees,tobeinlinewiththeabovereferencemarket.

TheBoardofDirectorsandtheRemunerationandNominationCommitteewillalsoexaminethepossibilityandfeasibilityofintroducingalong-termincentiveplan.Thepurposeofthisplanwouldbetobetteraligntheactionsandinitiativesofmanagementwiththelong-termperformanceofthecompany.

Thisreportdoesnotincludebpost’sBelgiansubsidiaries,whoseremunerationpolicyisinlinewiththenationalreferencemarket,orbpost’sforeignsubsidiaries,whoseremunerationpoliciesareinlinewithlocalreferencemarketsofrelevantcompaniesandaimtoattractandretainqualifiedandexperienceddirectorsandmanagers.Inthatregard,theRadial

Grouphasitsownincentiveplan,inaccordancewithUSmarketpractices.

Procedure for establishing the remuneration policy and setting the individual remuneration of the Board of Directors’ members and bpost’s managementAsalimitedliabilitycompanyunderpubliclawandincompliancewiththeapplicablecorporategovernancerequirements,bposthasdevelopedaspecificremunerationpolicyforthemembersofitsBoardofDirectorsandmanagement.ThispolicywasintroducedbytheBoardofDirectorsonrecommendationbytheRemunerationandNominationCommitteeandisregularlyassessedandupdated.EverychangeinthispolicyshallbeapprovedbytheBoardofDirectorsonrecommendationoftheRemunerationandNominationCommittee.

Itisabalancedremunerationpolicybasedontheoverallremunerationpolicyassetoutabove,withtheaimof(i) attractingandretainingqualifiedmanagersanddirectors,(ii) encouragingthemtogeneratesustainableandprofitablelong-termgrowth,inlinewiththegeneralstrategyofbpost,(iii) reflectingtheirindividualdutiesandskills,and(iv) aligningtheinterestsofmanagementandshareholders.Theremunerationpackageofthemanagementtherefore:

• providesforavariableremuneration(asdescribedbelow)basedonstrictlydefinedquantitativeandqualitativeperformancecriteriaanddrivenbybpost’sgrowth;

• offersremunerationincashalongwithothernon-financialbenefits;and

• isregularlyassessedinlightofmarketpractices.

bpostdistinguishesthreedifferentgroupsforwhichtheremunerationprinciplesaresetoutbelowindetail:

• theBoardofDirectors’members; • theCEO; • theGroupExecutiveCommitteemembers.

Theindividualremunerationofthemanagersanddirectorsdependsonthecategorytheybelongto.

Allamountsmentionedinthisreportaregrossamountsbeforetheemployer’ssocialcontribution.

Principles of remuneration of the Board of Directors’ members and bpost’s management

Remuneration of the Board of Directors’ members

TheremunerationoftheBoardofDirectors’members(withtheexceptionoftheCEO)wasapprovedattheGeneralShareholders’MeetingofApril 25,2000andcontinuedtoapplyin2018.Itconsistsoftwoelements:(i) amonthlyfixedremunerationand(ii) anattendancefeeforeachAdvisoryCommitteemeetingattended.

NootherbenefitsarepaidtotheBoardofDirectors’membersfortheirdirector’smandate,exceptforacompanycarallocatedtotheBoardofDirectors’Chairman.



Monthly fixed remuneration

TheBoardofDirectors’members(withtheexceptionoftheCEO)areentitledtothefollowingmonthlyfixedremuneration:

• EUR 3,463.04fortheBoardofDirectors’Chairman,whoalsochairsbpost’sJointIndustrialCommittee(ParitairComité/CommissionParitaire),asindexedonMarch 1,20181,andacompanycar;

• EUR 1,731.52fortheotherdirectors(withtheexceptionoftheCEO)asindexedonMarch 1,20181.

Attendance fees

TheBoardofDirectors’members(withtheexceptionoftheCEO)arealsoentitledtoanattendancefeeofEUR 1,731.52perattendedAdvisoryCommitteemeeting.

Theseamountsareindexed1annually.

TheCEOisnotentitledtoremunerationforhisattendanceattheAdvisoryCommitteemeetings.

Overall remuneration

Forthefinancialyear2018,theremunerationgrantedtoalltheBoardofDirectors’members(withtheexceptionoftheCEO)totaledEUR 331,510.77.

ThetablebelowshowsthetotalannualremunerationpaidonanindividualbasistoeachoftheBoardofDirectors’members(withtheexceptionoftheCEO)basedonhis/herparticipationintheAdvisoryCommitteemeetings2:

(1) Thebenchmarkindexusedfortheindexationisthehealthindex.

(2) Theseamountscoverallamountspaidinthefinancialyear2018.PleasenotethatattendancefeesarepaidinthemonthfollowingtheattendedAdvisoryCommitteemeeting.Thismeansthattheamountspaidoutinfinancialyear2018relatetoattendancetomeetingsoftheBoardofDirectorsortheAdvisoryCommitteemeetingsheldfromDecember 2017untilNovember 2018.

(3) UntilMay 9,2018

Member

BoardofDirectors

StrategicCommittee

Remuneration andNominationCommittee

Audit Committee

AdHoc Committee Total an-

nualremu-neration

(EUR)Amount (EUR)

Amount (EUR)

Meetings Amount (EUR)



Meetings

LucLallemand3 8,609.34 1,707.39 1/2 NA NA NA 10,316.73

Laurent Levaux3 8,609.34 NA 3,438.91 1/52 NA NA 12,048.25

CarolineVen3 8,609.34 NA NA 5,170.43 3/6 NA 13,779 .77

FrançoisCornelis(ChairmanoftheBoard)

41,459.96 NA 10,340.86 5/52 NA 3,463.04 2/2 55,263.86

RayStewart 20,729.98 1,731.52 1/2 NA 10,364.99 6/6 3,463.04 2/2 36,289.53

Michael Stone 20,729.98 3,438.91 2/2 NA 10,364.99 6/6 3,463.04 2/2 37,996.92

BernadetteLambrechts 20,729.98 NA NA 10,364.99 6/6 NA 31,094 .97

JosDonvil 20,729.98 1,731.52 1/2 NA NA NA 22,461.50

Thomas Hübner 20,729.98 0 0/2 8,633.47 5/5 NA 3,463.04 2/2 32,826.49

FilomenaTeixeira 20,729.98 NA 10,340.86 5/52 NA 3,463.04 2/2 34,533.88

SaskiaVanUffelen 20,729.98 NA 10,340.86 5/52 10,364.99 6/6 3,463.04 2/2 44,898.87

212,397.84 8,609.34 43,094.96 46,630.39 20,778.24 331,510 .77



Remuneration of the CEO

TheCEO’sremunerationisapprovedbytheBoardofDirectorsonrecommendationoftheRemunerationandNominationCommittee.Itconsistsof:(i) baseremuneration,(ii) short-termincentivevariableremuneration,(iii) apensioncontribution,and(iv) variousotherbenefits.

Pension contribution

TheCEO’spensioncontributionforthefinancialyear2018amountedtoEUR 47,724.96.

Other benefits

TheCEOhasotherbenefits,e.g.,aninsurancecoveringdeath-in-serviceanddisability,medicalinsurance,representationfees,andacompanycar.

Global remuneration

TheglobalremunerationpaidtotheCEO,Mr. KoenVanGerven,in2018forhisperformanceduringtheyearthatendedonDecember 31,2018,amountstoEUR 593,179.95excludingvariableremuneration(comparedtoEUR 585,977.10in2017excludingvariableremuneration)andcanbebrokendownasfollows:

• baseremuneration:EUR 488,841.75(gross); • pension:EUR 47,724.96; • otherbenefits:

• insurancecoveringdeath-in-service,disabilityandmedicalcoverage:EUR 33,462.72;

• representationfees:EUR 3,300.00;and • leasingcostsforcompanycar:EUR 19,850.52.

Inaddition,theCEOreceivedvariableremunerationofEUR 308,944.00in2018becausethecorporateobjectivesandtheindividualtargetsfortheyearthatendedonDecember 31,2017weremet(giventhatthe2017assessmentwasonlycompletedin2018).Thisamountisbasedon(i) theperformanceofbpostin2017,and(ii) thesurpassingoftheCEO’sindividualtargets,andthelong-termvaluethattheseachievementscreated.Variableremunerationfor2018willbedeterminedandpaidin2019,aftertheperformance assessment.

Noshares,stockoptions,orotherrightstoacquiresharesweregrantedtoorexercisedbytheCEO,orhaveexpiredin2018.Nooptionsunderpreviousstockoptionplanswerestilloutstandingforthefinancialyear2018.

NosubstantialchangesweremadetotheremunerationoftheCEOcomparedtothepreviousfinancialyear.

Remuneration of the Group Executive Committee members

TheremunerationoftheGroupExecutiveCommitteemembersisapprovedbytheBoardofDirectorsonrecommendationoftheRemunerationandNominationCommittee.ItisregularlyreviewedonthebasisofabenchmarkingexercisecoveringlargeBelgiancompaniessoastoofferatotalremunerationinaccordancewiththemedianonthereferencemarket.

TheremunerationpackageoftheGroupExecutiveCommitteemembersconsistsof:(i) baseremuneration,(ii) variableremuneration,(iii) apensioncontribution,and(iv) variousotherbenefits.

Relative importance of the various elements of the CEO’s remuneration (2018)

BASE REMUNERATION

VARIABLE REMUNERATION

(OBJECTIVES 2017)

PENSION CONTRIBUTION

OTHER BENEFITS

Base remuneration

TheCEO’sbaseremunerationforthefinancialyear2018amountedtoEUR 488,841.75(asindexedonOctober 1,2018).

Variable remuneration

ThebaseamountoftheCEO’sshort-termvariableremunerationvariesdependingon(i) thecorporateobjectivesand(ii) individualtargets.Performanceisassessedannuallyinlightofthetargets.

• FortheCEO,thecorporate objectives relate to financialresults:70%ofthevariableremunerationallocatedbasedonthecorporateobjectivesdependsonEBITand30%-onoperationalCashFlow.ThepaygridwasestablishedandvalidatedbytheBoardofDirectorsonrecommendationoftheRemunerationandNominationCommittee(thisgridissetoutbelowintheSectionontheRemunerationoftheGroupExecutiveCommitteemembers).Dependingontheresultsofthese-auditedandregularlypublished-criteria,thepay-outpercriterioncanreach135%ofthebaseamountoftheshort-termvariableremunerationforthiscriterion.

• The individual targets areagreedonbetweentheCEOandtheBoardofDirectorsatthebeginningofeachyear.Clearandmeasurabletargetsareset,whicharetobeachievedwithinanagreedtimeframe.TheCEO’sindividualperformanceismeasuredagainstthesetargetsandmayvaryfrom0%ofthebaseamountoftheshort-termvariableremunerationintheeventofunderperformanceto160%intheeventofoverperformance.

TheCEO’sperformanceisassessedannuallyduringthefirstquarterfollowingtheendofthefinancialyear,aspartofaPerformanceManagementProcess(“PMP”),directedbytheBoardofDirectors.



Base remuneration

Baseremunerationreflectstheresponsibilitiesandcharacteristicsoftheposition,thelevelofexperienceandtheperformanceoftheGroupExecutiveCommitteemembersduringthepastyear.Itisgrantedindependentlyofbpost’sresults.Itispaideverymonth

andisrevisedannuallybasedonabenchmarkstudythatcoverslargeBelgiancompanies.

Variable remuneration

Short-termvariableremunerationisapercentageofthebaseremunerationandaimstoreinforcetheperformance-basedmanagerialculture.Thebaseamountofthevariableremunerationactuallyallocatedvariesdependingon(i) thecorporateobjectives,and(ii) individualtargets.Performanceisassessedannuallyinlightofthetargets.

• The corporate objectivesarerelatedtothefinancialresults(70%dependsontheEBIT)aswellastheloyaltyofbpost’scustomersmeasuredthroughtheCustomerLoyaltyIndex(30%):

• EBIT(70%):apaygridisdeterminedandvalidatedeachyearbytheBoardofDirectorsonrecommendationoftheRemunerationandNominationCommittee(seethegridbelow).DependingonEBIT,thepayoutcanreach135%ofthebaseamount;

• CustomerLoyaltyIndex(30%):thepay-outforthiscriterionisequaltotheresultsforthegivenyear.TheCustomerLoyaltyIndexfor2017reachedascoreof69,5%leadingtoapayoutof69,5%forthiscriterionin2018.

From2018(fortheshort-termvariableremunerationtobepaidin2019),thecorporateobjectiveswillstillincludeEBIT(70%)andCustomerLoyaltyIndex(15%)andintroduceastaffwellbeingdimension(15%),tobemeasuredbythelevelofshort-termabsenteeism.

Relative importance of the various elements of the global remuneration of the members of the Group Executive Committee (2018)

BASE REMUNERATION

VARIABLE REMUNERATION

(OBJECTIVES 2017)

PENSION CONTRIBUTION

OTHER BENEFITS

Table: Grid of 2018 remuneration (percentage of base remuneration based on EBIT)

Results (EBIT2017)

Variable remuneration (%)

≤92.5% 30%

95% 60%

97.5% 80%

100% 100%

102.5% 110%

106% 120%

108% 125%

110% 130%

≥112.5% 135%

CUST SAT (obj. 75)

DOT (obj. 98)

NPS (obj. 0)

BELEX (obj. 95)

72.2%

-2.45

91.6%

93.7%

CUSTOMER INDEX

69.5 (obj. 100)



• The individual targets aremutuallyagreedonandapprovedbytheCEOatthebeginningofeachyear.Clearandmeasurabletargetsareset,whicharetobeachievedwithinanagreedterm.Theindividualperformanceismeasuredagainstthesetargetsandmayvaryfrom0%ofthebaseamountoftheshort-termvariableremunerationintheeventofunderperformanceto160%intheeventofoverperformance.

TheperformanceofeachGroupExecutiveCommitteememberisassessedannuallyduringthefirstquarterfollowingtheendofthefinancialyear,aspartofaPMP,directedbytheCEO.

Pension contribution

TheGroupExecutiveCommittee’sglobalpensioncontributionforthefinancialyear2018amountedtoEUR 280,134.60.

Other benefits

bpostoffersotherbenefitstotheGroupExecutiveCommitteemembers,e.g.,insurancecoveringdeath-in-serviceanddisability,medicalinsurance,representationfees,mealvouchers,andacompanycar.

Thesebenefitsarebenchmarkedregularlyandadaptedaccordingtostandardpractices.

Global remuneration

Theglobalremunerationpaidin2018totheGroupExecutiveCommitteemembers(otherthantheCEO)duringtheyearthatendedonDecember 31,2018amountedtoEUR 3,462,033.851excludingvariableremuneration(comparedtoEUR 2,299,008.17in2017excludingvariableremuneration)andcanbebrokendownasfollows:

• baseremuneration(includingtheend-of-yearbonusandholidaypay):EUR 3,000,306.49;

• pension:EUR 280,134.60; • otherbenefits:

• insurancecoveringdeath-in-service,disabilityandmedicalcoverage:EUR 57,086.85;

• representationfeesandmealvouchers:EUR 26,019.58;and

• leasingcostsforcompanycars:EUR 98,486.33.

Inaddition,theGroupExecutiveCommitteemembers(otherthantheCEO)receivedaglobalvariableremunerationofEUR 901,423.99in2018becausethecorporateobjectivesandtheindividualtargetsfortheyearthatendedonDecember 31,2017weremet(giventhatthe2017assessmentwasonlycompletedin2018).Theglobalvariableremunerationfor2018willbedeterminedandpaidin2019aftertheperformanceassessmentofeachmemberoftheGroupExecutiveCommittee.

Noshares,stockoptionsorotherrightstoacquiresharesweregrantedtoorexercisedbytheGroupExecutiveCommitteemembers,orhaveexpiredin2018.Nooptionsunderpreviousstockoptionplanswerestilloutstandingforthefinancialyear2018.

NosubstantialchangesweremadetotheremunerationoftheGroupExecutiveCommitteememberscomparedtothepreviousfinancialyear.

Clawback provisions

Thecurrentremunerationpolicydoesnotprovideforaspecificcontractualclawbackprovisioninfavorofbpostforvariableremuneration.

Changes to the composition of bpost’s Group Executive Committee

ThefollowingchangesinthecompositionoftheGroupExecutiveCommitteeoccurredin2018:

• Mr. DirkTirez,ChiefLegal&RegulatoryOfficerandCompanySecretaryandMr. NicoCools,CIO&ChiefDigitalOfficer,wereappointedasGroupExecutiveCommitteememberswitheffectasfromDecember 4,2017andhavebeenremuneratedasmembersofthebpostGroupExecutiveCommitteesinceFebruary 1,2018;

• Mr. HenrideRomréewasappointedasnewChiefFinancialOfficerandasGroupExecutiveCommitteememberandwasremuneratedinthatcapacityasfromJanuary 15,2018;

• Mr. MarcHuybrechts,DirectorMail&RetailSolutions,positionasGroupExecutiveCommitteememberendedonApril 17,2018.HecontinuedtoworkforthegroupuntilAugust 31,2018andreceivedseverancepayofatotalamountofEUR 400,000;

• Mr. PhilippeDubois,DirectorMailServicesOperations,lefttheGroupExecutiveCommitteeonApril 17,2018tobecomeDirectorStrategy,Transformation&Performanceofbpost;

• Mr. LucCloet,DirectorParcels&LogisticsEurope&AsiaandMr. PierreWinand,DirectorParcels&LogisticsNorthAmerica,wereappointedasnewGroupExecutiveCommitteemembersandremuneratedinthatcapacityasfromApril 17,2018.

Inadditiontotheforegoingchanges:

• Mr. KurtPierlootresignedasDirectorMailandRetailwitheffectfromJanuary 24,2019.Mr. HenrideRomréewasappointedasnewDirectorMailandRetailasfromJanuary 24,2019;

• Mr. BaudouindeHepcéewasappointedasChiefFinancialOfficeradinterimasfromJanuary 24,2019,untilanewChiefFinancialOfficerisappointed.

Termination provisions and non-compete clauses

NomemberoftheGroupExecutiveCommitteeisentitledtospecificcontractualterminationarrangements,exceptfortheCEO,whoisentitledtoaseverancepayofEUR 500,000intheeventofearlyterminationbybpostforanyotherreasonthanmaterialbreach.Additionally,theCEOisentitledtotheuseofacompanycarforsixmonthsafterhisdeparture,includingallexpensesrelatingtotheusethereof,exceptforthefuelcard.

(1) Thisamountcomprisesthepro rataremunerationpaidtotheGroupExecutiveCommitteememberswhoresigned/startedin2018.



Intheeventofautomaticterminationonexpiryofthesix-yeartermandtheappointmentbybpostofanotherCEO,theCEOissubjecttoanon-competeclauseforaperiodofoneyearasfromthedateofterminationofhismandate.Hewillreceiveanon-competitionindemnityofEUR 500,000,unlessbpostwaivestheapplicationofsuchclause.

AllmembersoftheGroupExecutiveCommittee,exceptforMr. MarkMichiels,aresubjecttonon-competeclauses,prohibitingthemfromworkingforbpost’scompetitorsforaperiodof12 monthsfromthedateoftheirresignationorterminationoftheircontract.Allsuchmembersareentitledtoreceiveanamountequaltosixmonthsofremunerationifbpostdecidestoapplythesenon-competeclauses.

FormembersoftheGroupExecutiveCommitteewhocarryouttheirfunctionunderanemploymentagreementundertheLawof3 July 1978,becauseoftheirsenioritywiththecompany,theapplicationofthemandatoryrulesontheterminationoftheiremploymentagreement,mayresultinanentitlementtoaterminationpaymentabove12or18 months’remuneration.



Internal control and risk managementbpost’sEnterpriseRiskManagement(“ERM”)frameworkassistsbpostinmanagingriskseffectivelyandinimplementingthenecessarycontrolstopursueitsobjectives.TheERMframeworkcovers:(i) riskmanagement,allowingbposttotakeinformeddecisionsonrisksitiswillingtotaketoachieveitsstrategicobjectives,therebytakingintoaccountexternalfactors;and(ii) internalcontrolactivities,whichincludeallinternalpolicies,proceduresandbusinesspracticestomitigaterisks.Bestpracticesinriskmanagementandinternalcontrolactivities(e.g.,internationalstandardISO31000)andtheCommissiononCorporateGovernance’sdirectionshavebeenusedasreferencestodefinetheERMframework.

Ingeneral,theobjectiveistoprovideareasonableassuranceregarding(i) compliancewithapplicablelawsandregulations,(ii) reliabilityoffinancialandnon-financialinformation,and(iii) effectivenessofinternalprocesses.A“reasonableassurancelevel”isahigh,butnotanabsolutelevel,giventhatallinternalcontrolsystemshavelimitationslinkedto,e.g.,humanerror,wrongdecisionsorchoicesoncost/benefitofcontrol.

Thefollowingdescriptionofbpost’sinternalcontrolandriskmanagementactivitiesisfactualandaimstocovertheactivities’maincharacteristics.

Control environmentThecontrolenvironmentpromotesemployeeawarenessandcompliance,definesclearrolesandresponsibilities,publishesqualityguidelines,anddemonstratesthecommitmentofbpost’sGroupExecutiveCommitteeandBoardofDirectors.

Commitment to integrity and ethical values

“Earningtrust”isoneofbpost’skeyvalues.TheBoardofDirectorsandGroupExecutiveCommitteehaveapprovedbpost’sCodeofConduct,whichwasfirstissuedin2007andlastreviewedin2019.

TheCodehasgeneralprinciplesthatdescribethevaluesandethicalstandardsforeverybodyworkinginthegroupandenablesappropriateresponsesintheeventthatitisnotfollowed.Theseprinciplesarereinforcedbytherelevantregulations,policiesandproceduresthatareinplaceacrossbpost’sbusinesses,affiliatesandventures.TheCodeofConductisprovidedtoallnewemployeesaspartoftheonboardingprocessandsystematicallyintroducedinthebpostsubsidiaries.Itisalsomadeavailableonbpost’sintranetandreferredtoduringtrainings.AnyviolationsoftheCodeofConductmustbereportedtotheimmediatesuperiororthereferencepersonoftheemployee,ortothelegaldepartmentofbpost,asthecasemaybe.

Furthermore,tocomplywithinsidertradingandmarketmanipulationregulations,bposthasadoptedaDealingandDisclosureCode.ThisCodeisamendedfromtimetotimetobeinlinewiththemostrecentmarketabuselawsandregulations.TheDealingandDisclosureCodeaimstocreateawarenessaroundpossibleimproperconductbyemployees,senioremployees,andpersonsdischargingmanagerialresponsibilities(beingmembersoftheBoardofDirectorsandoftheGroupExecutiveCommittee)andtheirassociatedpersons.TheDealingandDisclosure

Codecontainsstrictrulesonconfidentiality,non-useof“pricesensitive”information,anddealingrestrictions.TherulesofthisCodehavebeenwidelycommunicatedwithintheGroupandtheCodeisavailabletoallemployees,senioremployeesandpersonsdischargingmanagerialresponsibilities.InconformitywiththeMarketAbuseRegulationofApril 16,2014,personsdischargingmanagerialresponsibilitiesatbposthavebeeninformedoftheirobligationsinrelationtoinsidertradingundertheMarketAbuseRegulation.

Commitment to corporate governance fostering accountability

TheBoardofDirectorssupervisestheCompany’soperationalmanagement.TheAuditCommitteeadvisestheBoardofDirectorsonaccounting,audit,andinternalcontrolmatters.WithoutprejudicetothemonitoringroleoftheBoardofDirectors,theGroupExecutiveCommitteeestablishesriskmanagementandinternalcontrolguidelinesandproceduresandmonitorstheireffectiveroll-out.A“threelinesofdefense”modelhasbeenimplemented:

• Theoperationalmanagementisresponsibleforthedesignandmaintenanceofriskmanagementandinternalcontrols(firstline);

• Thesecondlinefunctions,suchasLegal,Compliance,Health&Safety,SecurityorIntegrity,provideexpertsupporttothefirstlineoperationalmanagement.Theoverallroll-outandcoordinationoftheriskmanagementandinternalcontrolactivitiesiscentralizedwithintheRisk&Controldepartment.AllsecondlinefunctionsreportatleastannuallytotheGroupExecutiveCommitteeontheriskevolutionintheirrespectivedomains;

• Finally,CorporateAudit,responsiblefortheinternalauditsofbpostGroup,constitutesthethirdlineofdefense.TheCorporateAuditDirectorreportstotheAuditCommittee’sChairpersonandCEO.

Commitment to employee development and competence

Goodleadershipisinvaluableandgeneratesbetterresultsforbpost.InSeptember 2015,bpostrolled-outthe“Leading@bpost”programthatidentifiesaccountabilityandcontinuouslearningastwokeyvalues.Todevelopskills,bposthasestablisheditsowntrainingcenter.Technicalcoursesareheldinthe business units (e.g.,trainingontheInternationalFinancialReportingStandards(“IFRS”)usedtopreparebpost’sconsolidatedfinancialstatement)andadhoccoursesaredevelopedonaneed-to-havebasis.Personaldevelopmentisdrivenbyclearjobdescriptionsandastructuredbi-annualevaluation.Adhoccoachingsessionsarepromoted.

Risk assessmentThepurposeofriskmanagement,embeddedintheERMframework,istodeliveraconsistentcorporateapproachandestablishasoundriskmanagementculture.Threetypesofriskmanagementactivitiesareperformed.First,astrategicriskassessmenttakesplaceaspartoftheprocesstodefine/revisebpost’sstrategy.EachBusinessUnitfurtherassessesitsoperationalrisksonasemi-annualbasis.Finally,thereisriskandinternalcontrolmanagementataprocess,productorprojectlevel.Thisincludesanevaluationoftheadequacyofthemostimportantinternalcontrolstomitigaterisksataprocess,productorprojectlevel.Thesamestructuredriskmanagementprocessis



appliedtothefollowingthreetypesofriskactivities:

• Identificationoftherisksthatmayhaveanimpactonrealizingtheobjectives;

• Assessmentofrisksinordertoprioritizethem; • Decisiononriskresponsesandactionplanstoaddresskeyrisks;

• Monitoringactionplanimplementationandoverallriskevolutionsandidentificationofemergingrisks.

Thecoherenceofthethreedifferenttypesofriskactivitiesisensuredbyusingasingleframeworkofriskevaluationcriteriatoassesstherisks.Thisensurestherightrisksarecirculated,bothtop-downandbottom-up.

Moreinformationcanbefoundinthe“RiskManagement”sectionoftheannualreport(note 6.5).

Control activities

In general

AprocessmanagementframeworkisdefinedbasedontheBusinessProcessMethodology(“BPM”).Policiesandproceduresareestablishedforthekeyprocesses(accounting,procurement,investments,treasury,etc.). Theyaresubjecttoregularcontrols.Internalcontroldashboardsaremonitoredwhererelevant.

AllGroupcompaniesuseanEnterpriseResourcePlanning(“ERP”)systemoraccountingsoftwaretosupportefficientprocessingofbusinesstransactions,toperformaccountingandtodeliverdataforconsolidation.Thesesystemsprovidemanagementwithtransparentandreliableinformationitneedstomonitor,control,anddirectbusinessoperations.AclosemonitoringofpotentialconflictsofseparationofdutiesintheERPsystemiscarriedoutonaregularbasis.bposthasestablishedmanagementprocessestoensure the implementation of appropriate measures onadailybasistosustaintheperformance,availabilityandintegrityofitsITsystems.TheadequacyandeffectivenessismonitoredthroughinternalservicelevelagreementsaswellasperiodicperformanceandincidentreportingtothedifferentBusinessUnitsinvolved.

Specifically related to the financial statements

Systematicandstructuredfinanceprocessesensureatimelyandqualitativereporting.Theseprocessesincludethefollowingmainactivitiesorcontrols:

• Carefulanddetailedplanningofallactivities,includingownersandtiming;

• CommunicationbytheGroupFinanceDepartmentpriortotheclosingofguidelines,includingonallIFRSaccountingprinciples,tobeappliedbyalllegalentitiesandoperatingunits;

• Separationofdutiesbetweentheaccountingteamsinthedifferentlegalentitiesactuallyperformingtheaccountingactivitiesandthedepartmentsresponsibletoreviewthefinancialinformation.Thereviewisperformedmorespecificallyby(i) businesscontrollersresponsible,interalia,forthereviewoffinancialinformationintheirareaofresponsibility,and(ii) theGroupFinanceDepartment,whichisresponsibleforthefinalreviewofthefinancialinformationofthedifferentlegalentitiesandoperatingunitsandforthepreparationoftheconsolidatedfinancialstatements;

• Systematicaccountjustificationandreviewafter

theclosingtriggeringfollow-upandfeedbackofthetimelines,qualityandlessonslearnedinordertostriveforcontinuousimprovement.

Information and communicationTheInternalCommunicationdepartmentusesawidevarietyoftools,suchastheCompany’sintranetandemployeenewsletters,tocirculatemessagesinastructuredandsystematicwaybothfromtopmanagementandoperationallevel.

FinancialandperformanceinformationissharedbetweenoperationalandfinancialmanagementandtheGroupExecutiveCommittee.BesidesthemonthlyreportinganalysispreparedbytheBusinessControllers,theGroupExecutiveCommitteeconductsathoroughquarterlyreviewofthedifferentBusinessUnits’performance.

Properassignmentofresponsibilitiesandcoordinationbetweentherelevantdepartmentsensuresanefficientandtimelycommunicationprocessforperiodicfinancialinformation.TheGroupFinanceDepartmentcommunicatesonaregularbasisallIFRSaccountingprinciples,guidelinesandinterpretations,tobeappliedbyalllegalentitiesandoperatingunits,totheaccountingteamsofthedifferentlegalentitiesandoperatingunits.

Externally,thePressRelationsandPublicAffairsdepartmentmanagesstakeholders,e.g.,pressandpublicauthorities.ThisdepartmentcentralizesandvalidatesexternalcommunicationswithapotentialimpactatGrouplevel.Thisincludes,butisnotlimitedto,financialinformation.

Financialinformationismadeavailabletothemarketonaquarterly,semi-annualandannualbasis.Priortoexternalpublication,financialinformationissubjectto(i) anextensiveinternalvalidationprocess,(ii) reviewbytheAuditCommittee,and(iii) approvalbybpost’sBoardofDirectors.

Monitoring

Corporate Audit (internal) and Joint Auditors (external)

bposthasaprofessionalinternalauditdepartmentthatworksinlinewiththeInstituteofInternalAuditors’standards.Thedepartmentissubjecttoanexternalqualityrevieweveryfiveyears.CorporateAuditconductsanannualriskassessmentwithasemi-annualrevisiontodeterminetheauditprogram.Viaitsauditassignments,CorporateAuditprovidesreasonableassuranceoninternalcontroleffectivenessinthedifferentprocessesorprojectsreviewed.

TheJointAuditorsprovideanindependentopiniononthefullyearstatutoryandconsolidatedfinancialstatements.Theyperformalimitedreviewonthehalf-yearinterimcondensedfinancialstatementsandthestatutoryBGAAPfiguresofbpostNV/SAperendofOctober,whichservesforthedistributionofaninterimdividend.Inaddition,theyreviewmaterialchangestotheIFRSaccountingprinciplesandevaluatethedifferentidentifiedkeycontrolsontheprocessesthatsupporttheset-upofthefinancialstatements.

Audit Committee and Board of Directors

TheAuditCommitteeadvisestheBoardofDirectorsonaccounting,audit,andinternalcontrolmatters.



Todoso,theAuditCommitteereceivesandreviews:

• AllrelevantfinancialinformationtoenabletheAuditCommitteetoanalyzethefinancialstatements;

• Thequarterlytreasuryupdate; • AnysignificantchangeoftheIFRSaccountingprinciples;

• RelevantfindingsresultingfromtheactivitiesoftheCorporateAuditDepartmentand/ortheJointAuditors;

• TheCorporateAudit’ssemi-annualstatusreportonthefollow-upofauditrecommendationsandannualactivityreport;

• TheGroupExecutiveCommittee’sannualconclusionontheeffectiveexecutionofbpost’sriskmanagementandinternalcontrolactivitiesaswellasperiodicinformationonthemainbusinessandrelatedriskevolutions.

TheBoardofDirectorsultimatelyensurestheestablishmentofinternalcontrolsystemsandprocedures.TheBoardofDirectorsmonitorsthefunctioningandadequacyoftheinternalcontrolsystemsandprocedures,consideringtheAuditCommittee’sreview,andtakesthenecessarymeasurestoensuretheintegrityofthefinancialstatements.Aprocedureisinplacetoconvenebpost’sappropriategoverningbodyonshortnoticeifandwhencircumstancessodictate.

MoredetailedinformationonthecompositionandfunctioningoftheAuditCommitteeandtheBoardofDirectorsisincludedinthesectionofthisCorporateGovernanceStatementontheBoardofDirectorsandtheAuditCommittee.



anddepthofworkexperience,and(ii) high-potentialyoungertalentswhoareeagertolearn.

• Professional background:tostaycompetitiveinachangingenvironment,bpostmustattractandretaintalentwithdiverseprofessionalbackgrounds.Diversityofprofessionalbackgroundsprovidesbpostwitharangeofexpertiseandexperiencenecessarytorespondtothecomplexchallengesitfaces.Toachieveprofessionalbackgrounddiversitywithinitsmanagement,bpostaimstoidentifypeoplewho(i) havedistinctprofessionalbackgrounds,and(ii) comefromvarioussectorsatdifferentpointsintheir career.

• Geographic diversity:geographicdiversityissignificantandpositivelycorrelatedwithfirmperformance,especiallyinincreasingbusinessandstrategyinternationalization.Tostimulategeographicdiversity,bposttakesintoaccountforeignelementsintheprofileandthepathofitscandidates.

TheBoardofDirectorsassessesannuallywhetherdiversitywithinthebpostmanagementhasimproved.

DiversityCreating a culture of Diversity and Inclusionbpostisahighlydiversecompanyintermsofitsworkforceandiscommittedtocreatingandsupportingacollaborativeworkplaceculture.Suchadiverseenvironmentallowsthegrouptooptimizeinteractionwithitscustomersandstakeholders,andrespondtochallengesindifferentandefficientways.

Inthatcontext,bposthasdesignedaDiversityPolicy(availableonbpost’swebsite)aimedatcreatingdiversityandinclusionawarenesswithinthegroup.ThepurposeofthisDiversityPolicyistosupportbpostemployeesandmanagementinbuildingaculturewherediversityandinclusionareadailypractice.

Theprogramfocusesonengagement,awareness,andinvolvement.TheBoardofDirectorssetsthetoneatthetopandisthetruesponsorofthediversityandintegrationworkshopsorganizedforteamsinvestingindiversityandinclusionawarenessand/ordealingwithspecifictopicswithinthediversityandinclusionframework.

Diversity within the Board of Directors and the Group Executive CommitteebpostadherestotheviewthatdiversityofcompetencesandviewsoftheBoardofDirectorsandGroupExecutiveCommitteefacilitatesagoodunderstandingofthebusinessorganizationandaffairs.Itenablesthememberstoconstructivelychallengestrategicdecisions,ensureriskmanagementawareness,andbemoreopentoinnovativeideas.

bpostcomplieswiththeprovisionsofArticle 518bis oftheBelgianCompaniesCodeintermsofgenderdiversity,buttheDiversityPolicyforthemembersofitsmanagementgoesbeyondthisstrictlegalminimum.

InthecompositionoftheBoardofDirectorsandGroupExecutiveCommittee,specialattentionispaidtodiversityintermsofcriteriasuchasage,professionalbackground,gender,andgeographicdiversity.Whenconsideringcandidatesforvacancies,theRemunerationandNominationCommitteetakesintoaccountbalancedscorecardsofsuchdiversitycriteria.

DiversityaspectsthataretakenintoaccountinrelationtothebpostBoardofDirectorsandGroupExecutiveCommitteemembersarethefollowing:

• Gender:genderdiversitypromotesabetterunderstandingofthemarketplace,increasescreativity,producesmoreeffectiveleadershipandpromoteseffectiveglobalrelationships.Toachievegreatergenderdiversitywithinitsmanagement,bpostaimsto(i) identifypotentialfemaletalentsatanearlystage,(ii) provideopportunitiesthatallowwomentoreachtheirfullpotential,(iii) enrollwomenindevelopmentprogramsthatpreparethemformanagementroles.

• Age:agediversityintheworkplaceispartofthehumancapitalandprovidesalargerspectrumofknowledge,values,andpreferences.Suchage-diversemanagementwillprovideamoredynamicenvironmentwithcontinuousmovement.Toachieveagediversity,bpostaimstoensurethatismanagementcounts(i) oldertalents,withbreadth

17%

8%

18%

10%

19%

13%

7%

8%

16%

9%

15%

9%

18%

17%

7%

9%


Diversity aspects – Implementation & outcome

Gender diversity

Age diversity

Geographical diversity

Professional Background

Board members

GEC members

Finance&Accounting,RiskManagement,Audit

Transport&Logistics,Fullfilment,Warehousing,E-commerce

Banking

Postalservices

Parcelservices

Retail

Digital,Technology,Telecommunication,Innovation

HumanResourcesManagement

100%men

1/3women

2/3men

50-59years: 5members

50-59years: 4members

60yearsand+:4members

40-49years: 2 members

60yearsand+: 2 members

OnDecember31,2018,theoutcomeofdiversityaspectsinrelationto thebpostBoardofDirectorsandGroupExecutiveCommitteemembersisthefollowing:

REPORT OF THE JOINT AUDITORS


Report of the Joint Auditors to the General Meeting of bpost SA de droit public / bpost NV van publiek recht for the year ended 31 December 2018

Basis for the unqualified opinionWeconductedourauditinaccordancewithInternationalStandardsonAuditing(“ISAs”).Ourresponsibilitiesunderthosestandardsarefurtherdescribedinthe“OurresponsibilitiesfortheauditoftheConsolidatedFinancialStatements”sectionofourreport.

WehavecompliedwithallethicalrequirementsthatarerelevanttoourauditoftheConsolidatedFinancialStatementsinBelgium,includingthosewithrespecttoindependence.

WehaveobtainedfromtheBoardofDirectorsandtheofficialsoftheCompanytheexplanationsandinformationnecessaryfortheperformanceofourauditandwebelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasis for our opinion.

Key audit mattersKeyauditmattersarethosemattersthat,inourprofessionaljudgment,wereofmostsignificanceinourauditoftheConsolidatedFinancialStatementsofthecurrentreportingperiod.

Report on the audit of the Consolidated Financial StatementsUnqualified opinionWehaveauditedtheConsolidatedFinancialStatementsofbpostSAdedroitpublic/bpostNVvanpubliekrecht,whichconsistoftheconsolidatedstatementoffinancialpositionasat31 December 2018,theconsolidatedincomestatement,theconsolidatedstatementofcomprehensiveincome,theconsolidatedstatementofchangesinequityandtheconsolidatedstatementofcashflowsoftheyearandthedisclosures,whichshowaconsolidatedbalancesheettotalofEUR 3,345.1 millionandofwhichtheconsolidatedincomestatementshowsaprofitfortheyearofEUR 263.6 million.

Inouropinion,theConsolidatedFinancialStatementsgiveatrueandfairviewoftheconsolidatednetequityandfinancialpositionasat31 December 2018,andofitsconsolidatedresultsanditsconsolidatedcashflowsfortheyearthenended,preparedinaccordancewiththeInternationalFinancialReportingStandardsasadoptedbytheEuropeanUnion(“IFRS”)andwithapplicablelegalandregulatoryrequirementsinBelgium.

AsrequiredbylawandtheCompany’sarticlesofassociation,wereporttoyouasstatutoryjointauditorsofbpostSAdedroitpublic/bpostNVvanpubliekrecht(the“Company”)anditssubsidiaries(togetherthe“Group”).Thisreportincludesouropinionontheconsolidatedstatementoffinancialpositionasat31 December 2018,theconsolidatedincomestatement,theconsolidatedstatementofcomprehensiveincome,theconsolidatedstatementofchangesinequityandtheconsolidatedstatementofcashflowsfortheyearended31 December 2018andthedisclosures(allelementstogetherthe“ConsolidatedFinancialStatements”)aswellasourreportonotherlegalandregulatoryrequirements.Thesetworeportsareconsideredonereportandareinseparable.WehavebeenappointedasstatutoryjointauditorsbytheShareholdersMeetingof9 May 2018,inaccordancewiththepropositionbytheBoardofDirectorsfollowingrecommendationoftheAuditCommitteeandonrecommendationoftheWorkersCouncil.OurmandateexpiresattheShareholdersMeetingthatwilldeliberateontheConsolidatedFinancialStatementsfortheyearending31 December 2020.We performedtheauditoftheConsolidatedFinancialStatementsoftheGroupduring10 consecutive years.



ThesematterswereaddressedinthecontextofourauditoftheConsolidatedFinancialStatementsasawholeandinformingouropinionthereon,andconsequentlywedonotprovideaseparateopiniononthese matters.

Long term employee benefits

Description of the key audit matter

ProvisionsforlongtermemployeebenefitsamounttoEUR 308.4 millionasof31 December 2018andaredisclosedinnote 6.27totheConsolidatedFinancialStatements.Thisareaisimportanttoourauditbecauseofthemagnitudeoftheamounts,thejudgmentsinvolvedconcerningthekeyactuarialassumptions(suchasdiscountrates,inflation,mortality,increaseinsalariesandmedicalcosts, …)andthetechnicalexpertiserequiredtoevaluatetheseprovisionsandtoproperlyreflecttheimpactsintheConsolidatedFinancialStatementsinaccordancewithIAS 19.Inaddition,appropriateinternalcontrolproceduresareimportanttoensurethattheunderlyingparticipantdata(suchaspopulation,age,yearsofservice,wage, …)arecorrectlymanagedandtheamendmentstotheplansareproperlyandtimelyreflectedintheConsolidatedFinancialStatements.

Summary of the procedures performed • WehaveperformedadetailedreviewoftheactuarialreportpreparedbytheexternalactuaryengagedbytheCompanytoensurethatallcharacteristicsoftheplanshavebeenproperlyconsideredintheactuarialcalculations.

• Wehaveassessedtheexpertise,independenceandintegrityoftheexternalactuaryengagedbytheCompany.

• Wehavecomparedtheinputdatausedforthecalculationoftheprovisionsbytheexternalactuary(suchaspopulation,age,yearsofservice,wage, …)withsourceinformationofthehumanresourcesdepartmentoftheCompany.

• Wehaveassessedtheappropriatenessofthekeyactuarialassumptions(suchasdiscountrates,inflation,mortality,increaseinwagesandmedicalcosts, …)withtheassistanceofourinternalactuarial specialists.

• WehaveverifiedthattheactuarialcalculationsareproperlyreflectedintheprovisionsrecordedintheConsolidatedFinancialStatementsandensuredthatimpactsarecorrectlyrecordedinaccordancewithIAS19.

• Wehaveperformeddetailedanalyticalreviewsontheimportantlongtermemployeebenefitsplansbyreviewingtheroll-forwardoftheprovisionstounderstandthechangesinthevaluationoftheprovisionscomparedtolastyear.

• Wehaveassessedtheadequacyandcompletenessofthedisclosurespresentedinthenote 6.27oftheConsolidatedFinancialStatementbasedontherequirementsofIAS19.

Business Combination


Intherecentpast,theCompanyenteredinseveralsignificantbusinesscombinationsleadingtoatotalcarryingvalueofgoodwillrecognizedforEUR 683.6 millionasof31 December 2018and

forwhichearn-outliabilitiesareestimatedbasedonthecontingentconsiderationarrangements(EUR 10.7 millionasof31 December 2018).Asdescribedinnotes6.6and6.19totheConsolidatedFinancialStatements,severalsignificantpurchasepriceallocationexerciseshavebeencompletedduringtheyearinaccordancewithIFRS 3.GoodwillamountingtoEUR 4.9 millionisstillprovisionalconsideringthattheCompanyhasoneyeartoperformthepurchasepriceallocationinaccordancewithIFRS 3.

ThepurchasepriceallocationexerciserequiresthealignmentoftheaccountingrecordsoftheacquiredentitieswiththeaccountingpoliesoftheCompanyandinvolvessignificantjudgmentsandestimatesbythemanagementtoassessthefairvalueoftheassetsacquiredandliabilitiesassumedinaccordancewithIFRS 3.Inaddition,thevaluationoftheearn-outliabilitiesrequiresalsosignificantjudgementsontheunderlyingassumptionsusedinthecalculationmodelswhicharemainlybasedonbudgetedKeyPerformanceIndicators’s(KPI’s)asdeterminedinthesharepurchaseagreements.

Summary of the procedures performed • Wehaveperformedauditproceduresonthefinancialinformationoftheacquiredentitiesatthedateofacquisition.WehaveassessedanddiscussedthekeyfindingsidentifiedduringtheduediligenceproceduresperformedbytheexternalexpertsengagedbytheCompany.Finally,wehavevalidatedthealignmentofthelocalfinancialinformationwiththeaccountingpoliciesoftheCompany.

• Wehavevalidated,withtheassistanceofourinternalvaluationexperts,thatthemethodologiesusedbytheCompanyfortheestimationofthefairvalueofassetsacquiredandliabilitiesassumedareinaccordancewithIFRS 3andindustrypractices.

• Withtheassistanceofourinternalvaluationexperts,wehaveassessedandbenchmarkedthekeyinputsandassumptions(underlyingopeningbalances,businessplans,discountrates,EBITDAmargins,growthrates, …)usedinthepurchasepriceallocationcalculationspreparedbytheCompanywithassistanceofthethirdpartyvaluationexperts.

• Wehaveassessedthecompetence,independenceandintegrityofthethirdpartyvaluationexpertsusedbytheCompany.

• Wehavevalidatedallsignificantaccountingentriesrelatingtothefairvalueimpactsonassetsacquiredandliabilitiesassumedresultingfromthepurchaseprice allocation.

• Withrespecttothevaluationoftheearn-outliabilities,wehaveanalyzedthecontractualagreementsandverifiedwhethertheconditionsarecorrectlyreflectedinthevaluationoftheestimatedearn-outliabilities.Wehaveassessedanddiscussedthebusinessplansoftheacquiredentitiesthatareusedasbasistodeterminetheearn-outliabilities.Finally,wehaveassessedthemathematicalaccuracyofthedetailedcalculationssupportingthevaluationoftheseearn-outliabilities.

• Furthermore,wehaveassessedtheadequacyandcompletenessofthedisclosuresinnotes6.6and6.19totheConsolidatedFinancialStatementsbasedontheIFRSrequirements.



Impairment of long term assets


Asdescribedinnote 6.19,relatingtoimpairmenttestingonlongtermassets(includinggoodwill),theCompanyreviewsthecarryingamountsofitscashgeneratingunits(“CGU”)annuallyofmorefrequentlyifimpairmentindicatorsarepresent.TheimpairmentassessmentinvolvesacomparisonoftheestimatedvalueinuseoftheCGUtoitscarryingamount.TheassessmentisajudgmentalprocesswhichrequiresestimatesconcerningtheprojectedfuturecashflowsassociatedwiththeCGU,theweightedaveragecostofcapital(“WACC”)andthegrowthrateofrevenueandcoststobeappliedindeterminingthevalueinuse.

Thisareaisimportanttoourauditbecauseofthemagnitudeoftheamounts,thejudgmentsandthetechnicalexpertiserequiredtoperformtheimpairmenttestingonlongtermassets.

Summary of the procedures performed • Wehaveassessedthedesignandimplementationoftheinternalcontrolsrelatingtomanagement’simpairmenttestingofgoodwillandlongtermassets.

• Wehavetestedtheaccuracyoftheunderlyingmodeltoassesswhethertheprocessesareappliedtothecorrectinputdata.

• Wehavechallengedeachofthekeyassumptionsemployedintheannualimpairmenttest.ThesekeyassumptionsincludetheWACC,thegrowthratesandprojectedcashflows.Wehaveinvolvedourinternalvaluationspecialiststoassessandbenchmarkthoseassumptionstocomparableindependentdata.WehavetestedthereasonablenessofprojectedcashflowsinthelightoftheGroup’shistoricforecastingaccuracyandcomparedtheseprojectionswiththelongtermplanasapprovedbytheBoardofDirectors.

• Wehaveconcludedonthereasonabilityofconclusionreachedbymanagementnottoimpairthegoodwillorwhenanimpairmentwasnecessaryonthevaluationoftheimpairmentloss.

• Wehaveassessedmanagement’ssensitivityanalysesandtheappropriatenessandcompletenessofthesensitivitydisclosures.

• WehaveassessedtheappropriatenessandcompletenessofthedisclosuresinaccordancewithIAS36asincludedinnote 6.19totheConsolidatedFinancialStatements.

Revenue recognition


Revenuerecognitionisakeyauditmatterinourauditresultingconsideringtheamountsinvolved(EUR 3,850.2 millionofoperatingincomefor2018)andthecomplexityandassumptionsusedtoestimateseveralrevenuestreamsatyear-endinaccordancewithIFRS 15.Themainriskareasrelateto:

• RevenuerelatingtothefinancialcompensationforServicesofGeneralEconomicInterest(“SGEI”)andforthedistributionofpressandperiodicalsthatareestimatedatyear-endbasedoncomplexcalculationsandprinciplescontractuallyagreedandwhichamountstoEUR 271.4 millionfor2018asdisclosedinnote 6.8totheConsolidatedFinancialStatements.Thesecontractsincludevariouscalculationmodelsforthedetermination

oftheannualfinancialcompensationforwhichthelowestcompensationisgrantedandthustakenintoconsiderationfortherevenuerecognition.Thesecalculationmodelsarebasedonvariousinputdata(suchasactualvolumes,qualitytargets,incurredcostsrelatingtotheconcernedservices, …)andinvolvesmanagementestimates.

• RevenueofDecember 2018forRadialthatisestimatedatyear-endandwillbebilledtocustomersinJanuaryofthenextyear.RadialisprovidingE-commerceoutsourcingservices(Technologyservices,paymentprocessingservices,shippingandhandlingservices,24/7 customerservicesrelatedtothewebstores,ordermanagementandfulfillment)andotherprofessionalservicestoitscustomers.TheestimationoftheDecember 2018revenueinaccordancewithIFRS 15iscomplexconsideringthevariousinputdatausedinthecalculations,thevolumeoftransactionsandthespecificcontractualconditionsagreedwithcustomers.

• Revenuewithotherpostaloperators(“terminaldues”)thatisestimatedbasedoncomplexcalculationsinvolvingvariousinputdata.Theestimationoftheserevenuesisbasedonvolumesexchanged(inkilogram’sandperitem),thepricesagreedwiththeforeignpostaloperatorsandalsoothercontractualconditions(e.g.qualityofserviceofthemaildistribution).

Summary of the procedures performed • Wehavegainedanunderstandingofinternalcontrolenvironmentrelatingtotherevenueprocesses,performedwalkthroughsofthesignificantrevenueclassesoftransactionsandevaluatedthedesignandoperatingeffectivenessofkeyinternalcontrols.WehavealsoevaluatedtheITgeneralcontrolsandkeyITapplicationcontrolssupportingtherevenueprocesseswithassistanceofourinternalITexperts.

• Wehaveassessedthemanagement’sestimationprocessandchallengedtheircalculationsbyperforming(i) anassessmentandcomparisonofthekeyinputsandassumptionsinthecalculationmodels,withthecontractualagreements,(ii) avalidationonwhetherthetransferofrisksandrewardsareproperlyreflectedbasedonthecontractualagreementsand(iii) areconciliationofthekeyunderlyingdatausedintherevenuecalculationmodels(e.g.volumes,prices, …)withunderlyingITsystems,contractsandotherdocumentsprovidedbyexternalparties.

• Wehaveperformedanalyticalproceduresontheimportantrevenuestreamstodetectunusualtrendsortransactionsbycomparingrevenuewithlastyearandperforminganmonthlyanalysisofrevenue.

• Wehaveperformedsubsequenteventsproceduresbyreviewingsignificanttransactionsrecordedduring2019andcomparingthesetransactionswithestimatesrecordedatyear-end.

• WehaveassessedtheadequacyandcompletenessofthedisclosuresonrevenueintheConsolidatedFinancialStatementsbasedontheIFRSrequirements.

Responsibilities of the Board of Directors for the preparation of the Consolidated Financial StatementsTheBoardofDirectorsisresponsibleforthepreparationoftheConsolidatedFinancialStatements



thatgiveatrueandfairviewinaccordancewithIFRSandwithapplicablelegalandregulatoryrequirementsinBelgiumandforsuchinternalcontrolsrelevanttothepreparationoftheConsolidatedFinancialStatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

AspartofthepreparationofConsolidatedFinancialStatements,theBoardofDirectorsisresponsibleforassessingtheCompany’sabilitytocontinueasagoingconcern,andprovide,ifapplicable,informationonmattersimpactinggoingconcern,TheBoardofDirectorsshouldpreparethefinancialstatementsusingthegoingconcernbasisofaccounting,unlesstheBoardofDirectorseitherintendstoliquidatetheCompanyortoceasebusinessoperations,orhasnorealisticalternativebuttodoso.

Our responsibilities for the audit of the Consolidated Financial StatementsOurobjectivesaretoobtainreasonableassurancewhethertheConsolidatedFinancialStatementsarefreefrommaterialmisstatement,whetherduetofraudorerror,andtoexpressanopinionontheseConsolidatedFinancialStatementsbasedonouraudit.Reasonableassuranceisahighlevelofassurance,butnotaguaranteethatanauditconductedinaccordancewiththeISAswillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisoftheseConsolidatedFinancialStatements.

AspartofanauditinaccordancewithISAs,weexerciseprofessionaljudgmentandwemaintainprofessionalskepticismthroughouttheaudit.Wealsoperformthefollowingtasks:

• identificationandassessmentoftherisksofmaterialmisstatementoftheConsolidatedFinancialStatements,whetherduetofraudorerror,theplanningandexecutionofauditprocedurestorespondtotheserisksandobtainauditevidencewhichissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingmaterialmisstatementsresultingfromfraudishigherthanwhensuchmisstatementsresultfromerrors,sincefraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol;

• obtaininginsightinthesystemofinternalcontrolsthatarerelevantfortheauditandwiththeobjectivetodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheCompany’sinternalcontrol;

• evaluatingtheselectedandappliedaccountingpolicies,andevaluatingthereasonabilityoftheaccountingestimatesandrelateddisclosuresmadebytheBoardofDirectorsaswellastheunderlyinginformationgivenbytheBoardofDirectors;

• concludeontheappropriatenessoftheBoardofDirectors’useofthegoing-concernbasisofaccounting,andbasedontheauditevidenceobtained,whetherornotamaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheCompany’sorGroup’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,weare

requiredtodrawattentioninourauditor’sreporttotherelateddisclosuresintheConsolidatedFinancialStatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedonauditevidenceobtaineduptothedateoftheauditor’sreport.However,futureeventsorconditionsmaycausetheCompanytoceasetocontinueasagoing-concern;

• evaluatingtheoverallpresentation,structureandcontentoftheConsolidatedFinancialStatements,andevaluatingwhethertheConsolidatedFinancialStatementsreflectatrueandfairviewoftheunderlyingtransactionsandevents.

WecommunicatewiththeAuditCommitteewithintheBoardofDirectorsregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.

Becauseweareultimatelyresponsiblefortheopinion,wearealsoresponsiblefordirecting,supervisingandperformingtheauditsofthesubsidiaries.Inthisrespectwehavedeterminedthenatureandextentoftheauditprocedurestobecarriedoutforgroupentities.

WeprovidetheAuditCommitteewithintheBoardofDirectorswithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.

FromthematterscommunicatedwiththeAuditCommitteewithintheBoardofDirectors,wedeterminethosemattersthatwereofmostsignificanceintheauditoftheConsolidatedFinancialStatementsofthecurrentperiodandarethereforethekeyauditmatters.Wedescribethesemattersinourreport,unlessthelaworregulationsprohibitthis.

Report on other legal and regulatory requirementsResponsibilities of the Board of DirectorsTheBoardofDirectorsisresponsibleforthepreparationandthecontentoftheBoardofDirectors’reportontheConsolidatedFinancialStatements,thenon-financialinformationattachedtotheBoardofDirectors’report,andotherinformationincludedinthe annual report.

Responsibilities of the Joint Aud itorsInthecontextofourmandateandinaccordancewiththeadditionalstandardtotheISAsapplicableinBelgium,itisourresponsibilitytoverify,inallmaterialrespects,theBoardofDirectors’reportontheConsolidatedFinancialStatements,thenon-financialinformationattachedtotheBoardofDirectors’report,andotherinformationincludedintheannualreport,aswellastoreportonthesematters.



Aspects relating to Board of Directors’ report and other information included in the annual reportInouropinion,aftercarryingoutspecificproceduresontheBoardofDirectors’report,theBoardofDirectors’reportisconsistentwiththeConsolidatedFinancialStatementsandhasbeeninpreparedaccordancewitharticle 119oftheBelgianCompanyCode.

InthecontextofourauditoftheConsolidatedFinancialStatements,wearealsoresponsibletoconsiderwhether,basedontheinformationthatwebecameawareofduringtheperformanceofouraudit,theBoardofDirectors’reportandotherinformationincludedintheannualreport,being:

• Overviewofthekeyfigures; • Messagetothestakeholders; • Keyeventsoftheyear;

containanymaterialinconsistenciesorcontainsinformationthatisinaccurateorotherwisemisleading.Inlightoftheworkperformed,therearenomaterialinconsistenciestobereported.Inaddition,wedonotprovidereasonableassuranceregardingtheBoardofDirectors’reportandotherinformationincludedintheannual report.

Thenon–financialinformationrequiredbyarticle 119,§ 2,oftheBelgianCompanyCodehasbeenincluded

Ernst&YoungRéviseursd’EntreprisesSCCRL Representedby

RomualdBilem Partner* *ActingonbehalfofaBVBA/SPRL

PVMDBedrijfsrevisorenBCVBA Representedby

CarolineBaert Partner* *ActingonbehalfofaBVBA/SPRL

intheannualreportontheConsolidatedFinancialStatements.TheCompanyhaspreparedthisnon-financialinformationbasedonGlobalReportingInitiativesStandards.However,wedonotcommentonwhetherthisnon-financialinformationhasbeenprepared,inallmaterialrespects,inaccordancewithGlobalReportingInitiativesStandards.Wedonotexpressanyformofreasonableassuranceregardingtheindividualelementsincludedinthisnon-financialinformation.

Independence mattersOurauditfirmsandournetworkshavenotperformedanyservicesthatarenotcompatiblewiththeauditoftheConsolidatedFinancialStatementsandhaveremainedindependentoftheCompanyandtheGroupduringthecourseofourmandate.

ThefeesforadditionalservicesthatarecompatiblewiththeauditoftheConsolidatedFinancialStatementsasreferredtoinArticle 134oftheBelgianCompanyCodehavebeencorrectlydisclosedanddetailedintheConsolidatedFinancialStatements.

Other communications • ThisreportisconsistentwithoursupplementarydeclarationtotheAuditCommitteeasspecifiedinarticle 11oftheregulation(EU)nr.537/2014.

Brussels,19 March 2019

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