Bpost, fresh from its €2.5 billion bid for PostNL earlier this week and boosted by strong Q3 profits, is broadening its last-mile delivery operations through a takeover and two strategic investments.
The Belgian postal group said today that the Belgian Competition Authority has approved its takeover of Lagardère Travel Retail’s Belgian activities, giving it a nationwide parcel shop network and an extensive chain of consumer retail outlets. It aims to close the acquisition, whose value was not disclosed, by the end of this year.
Under the deal announced in February, bpost is buying the Lagardère Travel Retail businesses LS Distribution Benelux and AMP, which posted consolidated turnover of €440 million in 2014. They cover 220 retail outlets, including at train stations and airports, trading under well-known brands such as Press Shop and Relay and selling a wide variety of products and services. Lagardère Travel Retail also distributes newspapers and magazines to some 5,345 points of sale.
In addition, bpost will gain ownership of a network of some 735 parcel pick-up and delivery points in Belgium trading under the Kariboo! brand, as well as other value-added e-commerce solutions.
As part of the regulatory approval, bpost has committed to operating these retail outlets neutrally, and not to privilege its own points of sale. In particular, the Kariboo! parcel shops will remain open for other operators, including DHL Parcel and PostNL who both use them for final-mile deliveries in Belgium.
Bpost disclosed in its Q3 results that it has recently invested in two delivery start-ups, Parcify and De Buren, in order to speed up their business growth and expand their operations and network.
Commenting on the Q3 results, CEO Koen van Gerven stated: “Over the third quarter we continued to record solid growth in both domestic and international parcels, driven by booming e-commerce and bolt-on acquisitions to strengthen our service offering. We took strategic stakes in Parcify and De Buren, two companies which capitalize on promising innovative technology for last-mile delivery to improve convenience for both senders and receivers.”
Launched in 2015, Parcify is a crowdsourced delivery service currently active in Brussels and Antwerp that delivers parcels directly to recipients, rather than to an address. Customers can use the mobile app to select their preferred delivery time and location, and also track the progress of the courier through a geolocalisation function.
Patrick Leysen, co-founder and CEO of Parcify, said in September, when the bpost investment was announced: “We are delighted with the strategic partnership with bpost to further support the growth of Parcify. With its technology, Parcify prioritises the convenience of the consumer to create the ultimate customer experience. In addition, as a young company, it is especially encouraging to get support from an established name in the industry like bpost. We are confident that we will be able to provide them with a powerful supplement to their business model with our innovative technology.”
Dutch company De Buren currently operates an ‘open’ network of 50 parcel lockers (including refrigerated ones) in various parts of the Netherlands that are available to recipients 24/7. It aims to extend this network to 1,000 locations in the Netherlands and 500 in Belgium, bpost noted in its Q3 results statement. Business customers using the lockers to deliver to consumers include DHL Parcel, night express specialist Nox and the Spar supermarket chain, according to De Buren’s website.
Meanwhile, bpost saw revenues drop by 2.3% to €538 million in the July-September third quarter but operating profits more than doubled to €87.8 million thanks to cost savings. The EBIT margin rose to a high 16.3% from 6.7% in the same period last year. Net profits improved to nearly €61 million from €26 million last year.
The domestic mail business, which still generates the bulk of the group’s turnover, saw revenues fall by 4% to €315 million on a 5.9% volume decline. International mail revenues fell by 7% to €37 million in the quarter.
The parcels business continued to show strong growth with Q3 revenues up by 9.6% to €85.7 million. Domestic volumes rose by 12.7% and revenues by 10% to nearly €42 million driven by growth in e-commerce and C2C shipments. International parcel revenues increased by nearly 11% to just over €42 million thanks to acquisitions but export volumes to China decreased.
