InPost Group achieved in Q3 2016. PLN 72.3 million revenue in the e-commerce segment

InPost Group's revenue from continuing operations (comprising courier, parcel and e-commerce registered letter services excluding traditional letter services) in Q3 2016 amounted to PLN 72.3 million, up 117% year-on-year. The increase in revenue is due to the maintenance of very high growth in courier and parcel logistics services.

The Group significantly improved the net result on continuing operations. Net profit in Q3 amounted to PLN 1 million and was significantly better than the result in Q3 last year, which was burdened by the investment process in the courier segment.

The restructuring of the letter business was completed and the costs associated with this process were recognised in Q3, which ended on 30 September 2016. The negative impact of the restructuring of the letters business on the Q3 result was PLN 14.75 million at the EBIT level.

Of the InPost Group's services, the highest growth was recorded for InPost Courier services, which reached 4.46 million parcels - 435% more than in Q3 2015, e-commerce registered letters (including InPost's Allegro Registered), whose volume increased by 124% y-o-y and reached 1.74 million parcels. An increase was also recorded for parcels delivered to InPost Parcel Machines®, where the volume reached 5.64 million parcels, i.e. 81% higher y/y.

EBITDA in Q3 from continuing operations amounted to PLN 3.98 million and was higher y-o-y by PLN 3.49 million. The EBITDA margin also improved significantly, at 5.49% in Q3, and was improved by 4.03 percentage points year-on-year.

Rafał Brzoska, CEO of InPost Group:

When, after the first quarter, we diagnosed the structural problem of the ordinary letter segment as a result of price pressure from the market monopolist, with the tacit approval of the authorities appointed to protect competition, and made a directional decision to reduce and later withdraw from the ordinary letter market by part of the market, this was perceived as a failure of the InPost Group. At the time, we had a choice of either continuing the price battle on the shrinking, also for natural reasons, market for traditional letters or to radically cut this segment and concentrate on the e-commerce sector, which itself is growing by up to several dozen percent year-on-year. The results of continuing operations after Q3 confirm the accuracy of the diagnosis and decisions made at the time. In Q3, we show a clean result from the e-commerce market for the first time. We recorded strong year-on-year growth in all core segments.

Courier deliveries are gaining the most, such strong growth is partly due to a low base (courier services were launched for good with the start of Q3 2015), but is also a result of the constant expansion of the offer, increasing delivery efficiency and a flexible approach to customers. E-commerce registered letters have already become firmly established in the minds of consumers. These very attractively priced parcels have already become a mature substitute for courier parcels for the smallest purchases, which can be delivered from the seller to the recipient within a reasonable timeframe for a reasonable price. The delivery efficiency of e-commerce registered letters for D+3 is 97%, which is significantly better than the performance of the designated operator. We are reporting strong quarter-on-quarter growth in both volumes and revenues associated with this business segment.

After 3 quarters of 2016, thanks to marketing activities and the signing of new contracts, the Group also continued to increase the volumes of parcel parcels handled. This resulted in an increase in revenue in this segment compared to the same period last year.

Of particular note is the significant improvement in the Group's EBITDA result on continuing operations to PLN 3.98 million and the improvement in the EBITDA margin to 5.49%. This, plus the improvement in the net result on continued operations to PLN 1 million, is a very good prognosis ahead of the best fourth quarter for the industry and allows us to be optimistic about the potential of the InPost Group in the next year.

33,35

117%

EBITDA (continuing operations)

3,98

0,49

8x

EBITDA margin

5,49%

1,46%

4.03 pp

Net result (continuing operations)

1

(1,1)

+ 2,1

InPost service Courier is provided to InPost Express Sp. z o.o., InPost SA provides the logistics service

The network of Paczkomaty® under the InPost brand belongs to the easyPack company of the Integer.pl Group. InPost's Paczkomaty® in Poland are logistically operated by InPost SA - a company of the Integer.pl Group, listed on the Warsaw Stock Exchange since October 2015.