Bpost (Euronext:BPOST) Q3 2026 Earnings Call

0:00 Ladies and gentlemen, hello and welcome to the Bnode Third Quarter 2026 Analyst Conference Call. On today's call, we have Mr. Chris Peters, CEO, and Mr. Philippe Dartienne, CFO. Please note, this call is being recorded, and for the duration of the call, your line will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing pound key 5 on your telephone keypad to register your question. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. I will now hand over to your host, Mr. Chris Peters, CEO, to begin today's conference. Please go ahead, sir.

0:43 Thank you. Good morning, ladies and gentlemen, and thank you for joining us today for our third quarter results presentation. Joining me are Philippe, These materials were published on our website earlier this morning. We will first take you through the presentation and will then answer your questions. As always, we kindly ask you to limit yourselves to two questions each to ensure everyone has the opportunity to participate during the call. Philippe will first take you through our Q3 financial performance. I will then update you on our strategic plans. with our outlook for the remainder of 2026.

1:32 Philippe, over to you.

1:33 Thank you Chris and good morning everyone. As you can see from the highlights on page 3, Group Operating Income for the third quarter amounted to €1.5 billion, representing a year-on-year decrease of €24 million or minus 2%. The quarter was characterized by the usual seasonal softness combined with weaker than expected demand trends across several parts of the group. Most of the revenue decline was driven by B post, where the accelerated male volume decline reached 16.4%, while parcel volume growth remained limited at 1.3%, with September momentum falling short of typical back-to-school trends and our expectations.

2:26 At the same time, Paxon Europe delivered revenue growth of 6.6%, helping to mitigate the impact of the previously announced customer churn at Radial US and a broadly stable revenue performance at Stasi Americas. At Landmark Global, revenue was slightly higher year on year, despite the volume pressure on Asian flows following the introduction of the 3 euro levy on July 1st. This pressure was partially mitigated by temporary business opportunities with existing customers, but at a less favorable mixed profile. And that's a point I will come back on later.

3:11 Turning to our adjusted EBIT, which came at minus 21.2 million. The year-on-year decline of 18 million euros was primarily driven by B post, where the EBIT decreased by close to 20 million, reflecting the termination of the 679 banking activities and the accelerated decline in mail volume. as well as inflationary pressure on payroll despite ongoing FTE reductions. At Paxson, EBIT increased by close to 9 million year on year. In Europe, revenue growth translated into higher Profitability, while in North America profitability improved despite lower revenues, reflecting the benefit from the cost-cutting measures and operational improvements that we already discussed during the previous presentations.

4:08 At Landmark Global, as I just mentioned, revenues remain broadly stable year on year, but this resilience was supported by temporary business opportunities and this also came at the expense of profitability. As your European and US regulatory measures weight on the product mix and overall margin profile. As a result, despite relatively stable revenue, the EBIT contribution decreased by a bit more than 7 million year on year. While the third quarter is typically impacted by seasonality and summer softness, we recognize that the performance came in below our expectation.

4:55 In particular, parcel volume momentum remained subdued in September, while the impact of the new regulatory measures on Asian cross-border flows proved more pronounced than initially anticipated. As a result, and given that part of these headwinds are expected to persist into the fourth quarter, we have revisited our outlook to reflect the trends that we are currently observing across the businesses. Chris will walk you through our updated expectations at the end of the presentation. which then let me turn to the performance of the three business units.

5:42 I'm on slide five covering B post segment. Revenue declined by 26 million euros year on year to 487 million. Domestic mail revenue decreased by 24 million or 9.4%. Mail and press volume contracted by 16.4% during the quarter compared with 10.1 last year and 15.5 in H1, and in line with the mid-teens volume decline guidance we provided earlier this year. Besides the lower transactional main volumes following the introduction of the mandatory B2B invoicing at the beginning of the year, as well as the termination of several advertising contracts, the volume decline also reflects and accelerated decline in press volume of 29.5%, driven by the ongoing newspaper volume transition in the northern part of the country.

6:44 Overall, mail volume decline and a negative renew impact of around 40 million euros, only partially offset by a positive price and mix effect of 7% that translate in 16 million euros. Parcel revenues increased by a modest 3 million or 2.2% year on year. In terms of volume, we saw a growth of 1.3%. However, this figure benefited from one additional working day and on a daily average basis volumes were broadly stable at minus 0.3% year on year. In Q1, parcel volumes were growing at around 5% on an underlying basis, broadly in line with our expectation.

7:30 Since the disruptions experienced the Q2, volume momentum has remained subdued and growth has not returned to pre-strikes level. This was particularly noticeable in September, where we did not observe the usual post-summer acceleration, leading us to adopt more cautious assumptions for the fourth quarter. For Q3, several factors contributed to this software volume development. Consumer confidence continued to deteriorate throughout the quarter, while household spending remained resilient but subdued. In addition, we experienced a temporary operational disruption at one of our largest e-commerce customers, which negatively impacted volumes during the period.

8:23 Finally, exceptionally warm weather in September delayed seasonal apparel purchased and waited on apparel-related e-commerce activity during what is normally an important back-to-school month. And despite this multi-volume environment, price and mix contributed positively by close to 1%. Finally, revenues from other activities, including retail, value-added services and personalized logistics, declined by €4 million year-on-year. This mainly reflects lower revenues following the termination of the 679 banking activities at the beginning of this year. However, one should note that these impacts were partially offset by continued strong growth at Dyna Group, which delivered more than €13 million or 14% of additional revenue year to date.

9:20 Let's move to the P&L of B post on page 6. Sorry. Including inter-segment revenues from inbound cross-border volumes processed through the domestic network, total operating income declined by 23 million or minus 4.4% year on year. On the cost side, OPEX, including DNA, slightly decreased by 4 million euros or 0.7%. mainly given by two effects. First, we reduce our workforce by approximately 1,730 FTEs and interim staff representing a decrease of 7.2% year on year compared to approximately 1,500 reported at the end of the first half.

10:09 This corresponds to an immediate improvement of more than 20 million year on year and reflect the continued benefit from the ongoing regularization of our distribution and retail operations. These savings were partially offset by higher costs per FTE following two salary indexations over the past 12 months, resulting in an increase of close to 3%. Second element, transport cost increase primarily due by volume growth in post-traumatic logistics and the impact of temporary fuel surcharges. Despite significant productive effort and continued progress on the reorganization agenda, these benefits were more than offset by inflationary pressures, as well as a decline in high-margin main revenue and the termination of the 619 activities.

11:00 In addition, lower cross-border volume from landmark Asia to Belgium activities following the implementation of the 3 euro levy reduced the absorption of BIPO's fixed cost base, creating an additional drag on EBIT. As a result, and against a backdrop of muted parcels from growth, the adjusted EBIT declined by 20 million euros year-on-year to minus 29 million. Turning to Paxson on slide 7. As in previous quarters, the performance reflects two contrasting trends. At Paxson Europe, revenue increased by 5.5% year on year. Across our European businesses and geographies, we delivered growth of around 6.6% in line with Q2, with several activities continuing to grow at high single-digit rates.

11:58 This positive momentum was partially offset by the performance of Ecstasy Americas, which I remind you is reported with impacts on Europe, where revenues at constant FX rate continued to decline following contract termination announced during the fourth quarter last year. In addition, and to a lesser extent, Revenue were impacted by customer departure late in the quarter and by reduced service scope with certain existing customers. While overall growth remained solid during the quarter, we are seeing increased commercial delays. As a result, the contribution from recently signed customers is ramping up more slowly than initially anticipated, which is beginning to weight on our near-term growth Expectations.

12:55 At Paxon North America, revenues declined by €12 million. A constant exchange rate is corresponding to a decrease of around 10%, driven by three factors. First, the expected revenue churn from customer, customer contract termination announced last year. Second, mid-single digit negative same-store sales, representing a slight deterioration compared with the previous quarter. and third, these effects were only partially offset by the contribution from recently signed customers, which generated around €30 million of revenue during the quarter. The ramp-up of new customer wins continued to progress more slowly than initially anticipated and remains insufficient to fully offset churn, which is increasingly weighing on our near-term growth expectation here as well.

13:53 Let's move to the P&L of Paxson on slide 8. Against this backdrop, total operating income remained yearly stable year over year, while operating expense, including DNA, decreased by close to 3%. The development of our cost base reflects the different dynamics across our two regions. In Europe, excluding Stasi US, operating expense increased broadly in line with top line growth. In North America, Note that Stasi currently experienced some temporary customer profitability issues, but radial cost adjusted downwards along lower activity levels while maintaining strong variable contribution margins.

14:39 This was further supported by ongoing fixed cost initiative and headcount reduction at Radial, contributing to the continued improvement in profitability despite lower revenues. As a result, adjusted EBIT increased by close to 9 million to 7 million euros in the quarter. Turning now to Landmark Global on slide 9. At Landmark Europe, the main development during the quarter remained the impact of the 3 euro levy which came in force on July 1st and weighed on Asia to Belgium volumes, with an impact broadly in line with what market participants have reported over the recent months.

15:24 Importantly, we did not observe any meaningful sequential recovery throughout the quarter, with volume remaining under pressure from July through September. This volume pressure was partially mitigated by a temporary business opportunity with existing customers, which helped stabilizing overall volumes. However, this incremental volume came with a less favorable mixed profile, resulting in a slight deletion of both revenue and profitability. Beyond Asia to Belgium, we continue to see healthy momentum across most other European and UK flows, which contributed positively to the quarter, and ultimately allowed Europe to deliver a modest year-on-year revenue growth of close to 2% despite the regulatory headwinds.

16:22 At landmark North America, revenue was slightly higher year-on-year at constant exchange rate. Next to a modest volume growth consistent with a softer macroeconomic backdrop, this performance also reflects an unfavorable mixed effect driven by higher proportion of U.S. domestic volumes and lower U.S. to Canada flows, which continue to be impacted by tariff-related measures. Overall, landmark global operating income increased by 1% year over year. As shown on slide 10, OPEX and DNA increased by close to 7%, primarily reflecting two factors. First, higher transportation costs driven by volume growth, but also by temporary fuel surcharges and lower carrier rebates compared with the prior year. And second, an unfavorable phasing terminal use.

17:23 As a result, despite volume resilience across most our commercial activities, adjusted EBIT decreased by 7 million to just under 10 million, reflecting an unfavorable business mix effect already visible in previous quarter, but further exacerbated this quarter by the regulatory change impacting Asian volume in Europe. An unfavorable phasing of terminal dues which is expected to normalize over the remaining of the year. Moving on to corporate segment on slide 11. EBIT improved modestly on year to minus 9 million, driven by continued cost discipline and workforce reduction of around 4%, more than offsetting the annual salary indexation of just under 3%.

18:19 Let me turn now to cash flow on slide 12. Net cash outflow for the quarter amounted to minus 770 million compared with an outflow of around 16 million last year. This primarily reflects the repayment of the 2018 bond at maturity in July 2026. And excluding this financing effect, free cash flow remained broadly stable year on year at around 63 million. This reflects, on one hand, cash flow from operating activities of around 91 million, broadly stable with last year. The lower EBITDA was largely compensated by a favorable working capital evolution, notably at receivables level.

19:06 On the other hand, CAPEX amounted to approximately 28 million, remaining broadly stable year on year. As a result, underlying casualization remained resilient during the quarter despite the lower profitability performance. Chris, over to you.

19:26 Thank you, Philippe. I'm on slide 13 with the strategy and transformation highlights. As part of our transformation journey, we delivered several important milestones during the quarter, and the commercial launch of Paxon as our unified global 3PL platform. At the same time, as just explained, our financial performance remains affected by a combination of softer demand trends, regulatory developments and slower than expected commercial ramp-up across several activities. While some of these factors are clearly external, We see that the revenue pressure remains significant.

20:22 The accelerated decline in mail continues to outweigh parcel growth, while commercial development Another important area of focus remains on IT transformation. The realization of IT efficiency gains assumed over 2025-2027 has been slower than initially anticipated, resulting in a gap versus our longer-term cost trajectory. We completed a comprehensive review identified approximately 30 million euros of annual savings potential. We have now established a phased implementation roadmap running from 27 to 31. While this confirms our ability to capture meaningful efficiencies, the timing of these savings is are all now expected to be later than originally planned.

21:15 Despite these headwinds, execution over transformation agenda remains on track and continues to deliver tangible milestones. If you look at the operating model, in September, in pre-sorting of mail at sorting centers and later delivery start times allowing customers to inject parcels later into our network. At the same time, the rollout of our dense non-dense operating model continues according to plan and remains a key lever to further improve workforce efficiencies in the coming years.

22:02 Our out-of-home strategy also continues to gain traction. The BBOX network now exceeds 3,000 lockers with more than 600,000 new users acquired through targeted customer campaigns. And we are on track to reach approximately 3,300 lockers by year-end. We also successfully secured the renewal of the Belgian license plate production and distribution contract for another five years, ensuring a meaningful recurring B2G revenue stream through 2032. In parallel, we continue to increase the relevance of our retail network through new partnerships. The home security provider Verisuur and the telecom operator Digi are now available across the entire post office network, and others.

23:00 Finally, one should note that uncertainty remains regarding the aid management contract with the Belgian state, with the year-end deadline approaching and no further clarity having been provided at this stage. While these transformation initiatives are progressing according to plan and already contributing to workforce efficiencies, their financial and many more. Turning now to Paxon and Landmark and I'm on page 14. The launch of Paxon in September 13 marks an important milestone in the creation of our unified global 3PL brand. By bringing together Stasi radial active ends and base logistics under one commercial identity, we strengthen our positioning and our ability to serve customers globally.

23:52 In Europe, we continue to deliver revenue growth and cost synergies. However, commercial execution remains below our ambitions, both in new business acquisition and cross-selling activities. While top-line development remains positive, commercial ramp-ups are taking longer than initially anticipated. As a result, we have launched a dedicated growth plan focused on accelerating sales execution, strengthening lead generation and increasing commercial conversion. In North America, operational performance continues to improve, and the fixed cost and overhead reduction initiatives launched over the last quarter are delivering tangible profitability improvements. However, here as well, commercial momentum remains softer than expected.

24:37 Customer churn, slower market growth, and delayed ramp-up of new customer wins continues to weigh on revenue development. Strengthening commercial execution in North America is therefore Landmark continues to demonstrate commercial resilience in an increasingly challenging regulatory environment. The introduction of the €3 levy weighed on Asian volumes throughout the quarter, without any meaningful recovery from July through September. Targeted commercial opportunities and supported revenue resilience. However, these opportunities were temporary in nature and came with a less favourable mix profile and therefore impacted profitability.

25:24 Looking ahead, the introduction of the additional €2 handling fee will further increase regulatory pressure on agent flows and reinforces our focus on continuing to expand the range of commercial services offered to our customers. Finally, at group level, we recently adapted our executive committee structure and organization to support the next phase of our transformation. These changes are designed to strengthen customer focus, improve execution and accelerate decision making across the group. As Nicolas Baise prepares to become CEO and I will return fully to my Group CEO responsibilities after a period during which I combined both roles. This additional focus at Group level will allow us to further accelerate the execution of our strategic priorities across all business units.

26:19 To conclude, the transformation continues to progress and confirms the strategic direction we have set for the Group. While recent market developments and Our priorities remain unchanged. Beyond productivity initiatives, we are now placing even greater emphasis on commercial execution and customer profitability across all business units. This will be one of management's key priorities going forward. And this brings me to the outlook update for the remainder of 2026. I'm on slide 15. As Philippe highlighted earlier, third quarter performance came in below our expectation.

27:04 More importantly, several of the trends observed are not showing the improvement we had anticipating heading into the year-end peak season. Parcel volume momentum remained muted during September despite the usual back-to-school period, commercial ramp-ups are progressing more slowly than expected, and regulatory pressure on Asian cross-border flows continues to intensify, all these in a challenging macroeconomic environment. As a result we now expect fourth quarter adjusted EBIT to be between 55 million and 65 million euro with weaker revenues expectation across all of our major business units as detailed on this slide. This translates into a full year adjusted EBIT outlook of 95 million to 105 million euro compared with At the same time we remain disciplined on capital allocation and have therefore reached approximately 135 million euro. While we are clearly disappointed by this revision, we remain fully committed to delivering on our transformation agenda, accelerating commercial execution and reinforcing profitability growth across the Group.

28:30 With this, we are now ready to take your questions. Again, two questions each. Ladies and gentlemen, as a reminder, if you'd like to ask a question or contribute on today's call, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. Please also ensure your line remains unmuted locally. You will be advised when to ask your question. The next question comes from Michiel de Klerk from KBC Securities. Please go ahead.

29:09 Yes, hi, and thanks for taking my questions. A lot to digest during this results release. But my first question would be a bit on Paxon and more specifically the outlook for the fourth quarter. So in Q3, your revenues were broadly flat. You guide for high single digit decline in the fourth quarter. Can you help me understand the dynamics a bit better here? Because I understand at Radial North America, the same store sales, they go or they deteriorate a bit from mid single digits to mid to high single digits. And then in Europe, you guide for like, yeah, low same store sales.

29:58 But how does this compare to Q3 for Europe? Or how I interpret this guidance is that Europe should also experience a meaningful decline in the fourth quarter. I understand there's still that US DASI customer that is lost, but help me understand a bit here what is changing in terms of same-source sales for Europe as well and what the impact maybe is of potential new onboarding customer delays and how you look at this going into next year. And then the second question would be on the, yeah, looking a bit into 2027. So you lowered your guidance two times this year.

30:44 You're now going at around 100 million at the midpoint. Next year, you should have some tailwind from the strikes that will hopefully not reoccur. But at the other end, At Radio US, there is no improvement in size. It looks like the EU is deteriorating a bit as well at Paxon. Then you have, of course, the minimal impact at Landmark Global, which is expected to intensify further in November, if I'm not mistaken. So quite a lot of headwinds, despite Hopefully no strike impact, but how are you looking at EBIT for 2027? Do you think you can increase there or what measures can be taken to offset these challenges? Those would be my questions, please.

31:32 So thank you for your question indeed it's a lot but I think with what we have announced it's absolutely logic and normal and you know those are very good questions. In the US, I'm speaking from a radio, sorry, to go back to the old terminology, but you referred to it too. Indeed, what we are seeing is that the same-store sale really is accelerating. I think I'm looking at Antoine, but it's maybe what more than 12 or 15 quarters that we see a degradation of the same-store sale. We always believe it's the last one, but it still continues. And we don't see based on the forecast that our customers are providing us that the peak season will be a great season in the US this year. So it's part of the element.

32:26 On the other end, you also noticed that when it comes to variable contribution and effort made to adjust the structure, to the current volumes. We are continuing and I'm repeating that quarters after quarter, but it's still the case. It helps mitigating the lower development. This being said, we have also to acknowledge the fact that in terms of rates that we're receiving from transporters, So the providers, the discount we are getting are lower also. There is a huge overcapacity in transport capabilities in the US and it weights also on the rebate that they are offering us. When it comes to Paxon Europe, indeed, there will be further degradation in Q4 2026.

33:28 but it's just quote-unquote the annualization or the follow-up if you want of what happened in the third quarter namely a low growth rate and the same source sale which is not also picking up in Europe and the impact of loss of certain customers at Stasi Americas. So it's more like what we observed in Q3 was not applicable to the entire trimester, but it will be annualized or quartalized, if I could use that bad word, in the first quarter that really explains why we are more concerned for the first quarter than we were some weeks ago.

34:12 Good. On the EBIT guidance, as you know, of course, this is not the moment to give EBIT guidance for next year. We're still in the middle of the budgeting process. But I agree with you that there are a couple of, let's say, negative external trends that play against us. Most importantly, of course, the one on the tariff and handling fee from Europe versus Asian volumes. and the overall consumer confidence which gives a slower than expected possible growth environment and still a Acceleration on the mail volume mainly coming from digitalization such as Papel in Belgium that has accelerated decline in mail and we expect that to continue.

35:06 That being said of course we are putting in place a bunch of measures against that both on the cost reduction side and on the sales stimulation side so we will ensure that on those different fronts we will There are also new opportunities in the market. And as you clearly said, the big impact that we saw last year or this year in April on strike, we at least hope that there is no reason for a similar thing. The transformation now has been realized. We see that the dynamic in our personnel overall in general We have a very positive dynamic for most of our employees at this point of time.

35:56 changes but none of them with the same level of impact as the ones that we have just executed during the month of September and so therefore we're pretty confident looking at that side in it so when we will come back to you with a better guidance it will be a little bit the sum of those two an increased focus on some cost reduction measures that we have very much focus on how do we see alternative for top line growth as you know many of those Chinese platforms will likely be in Europe soon as well, and we're looking at those as well. But it will be a continuous focus on those dimensions where it really matters for us, where we can make a meaningful change in the light of the transformation we have done. I think the important message here is that the transformation as such has advanced well. A couple of external headwinds that I mentioned, internal headwinds, the strike, Looking forward to that.

36:59 External remains the same. Internally probably allows us to have more focus on both cost and revenues in the coming year. And so the balance of that we will communicate with you at the moment that we have the full year results of 26.

37:13 Okay, thank you. The next question comes from Frank Claassen from DeGroof Petercam. Please go ahead.

37:28 Yes, good morning gentlemen. My first question is on Radial US, because on one hand you've still got the client churn and on the other hand the commercial delays. Can you elaborate when we can expect some kind of turning point for Radial US? Will also be client churn still weighing on 2027 or when could we expect some kind of inflection point? And my second question is more on, let's say, the Capital Markets Day you hosted last year. Yeah, of course, obviously there have been much more headwinds than anticipated since then, but how should we look at the strategic progress so far and also the targets you gave at the Capital Markets Day? I remember also a target for next year.

38:19 So how should we look at that in the current context? Thank you.

38:26 On the radial, it's a combination of two things. It's the customer churn, 25 in 26, 26 having impact in 26, and some of them will also have impact in 27. Also, just want to remind, as I mentioned it before in the answer to the previous question, In Radial, what is positive is they are capable and have demonstrated The capability to adjust the cost base on a variable basis but also on a fixed cost basis to the level of activity. You might tell me that reducing cost is not a sustainable way of developing a company.

39:19 Totally agreed. But at least this continues to go while operational excellence is delivered to customers. In fact, the turning point, I think it's a bit too early to come to that one. It will come with the announcement of the 27 numbers, as Chris referred to, that we will bring to you with the Q4. Yes, we will be turning into a positive momentum. But the question is, what is the full impact of the customer loss in 26 that will still have an impact in 27 and the pace at which we can onboard customers? Of course, we will have also conversely the full impact and the rest of the customers that we have onboarded in 26 that will have a full year impact in 27. But for more details on that one, I ask you to have a bit of patience and wait for our budget exercise being completed and we'll come back to you on that one. On the capital market day, Chris?

40:23 Yes, so on capital market day, so we will obviously have to revisit that given the more complex external environment. That being said, the fundamental drivers of our transformation remain solid. So we had intense review of all the drivers that we had. As always said, we are in a transformation and we have to accelerate on many of those dimensions obviously the strike of this year has not helped us a lot of focus on the operational transformation that we should do and that was fairly successful in the end after the strike so that is something that we do so now we will re-emphasize the focus on some of the Thank you very much.

41:39 and Value Creation remain solid and the same.

41:44 Okay, thank you for your comments. Thank you. The next question comes from Marco Limite from Barclays. Please go ahead.

41:53 Hi, thanks for taking my questions. A similar question on Q4 high single-digit decline, but rather than on a box turning to landmark. I mean I'm aware that of course we have had several regulatory headwinds in summer from the 1st of November but just checking that the acceleration in revenue decline in Q4 versus Q3 is basically all driven by new regulatory headwinds or if there is anything else there. And the second question is just to go back on this IT transformation.

42:40 Are you able to quantify by how much you are, let's say, behind the plan? So in Euro-million terms, how much cost savings, let's say, are missing? And if I can stick a third one quickly on this license plate distribution contract. You're talking about lower annual value. Can you just remind us how lower?

43:06 Thank you. So on the Q4 forecast, Marco, in landmark, it's really, really driven by the regulatory impact. It continues, you know, we had that two waves, the three euros, and we have now The additional 2 euros for processing fees that will come into effect. So it will have an impact. This is really the main driver for the decrease that we are seeing. Historically, when we have seen a change in regulation, you have a drop. which is typically around 10-20%. And then over a period of 4-6 weeks, it goes back nearly to the same level.

43:55 Here, we experience, as a business, we experience, or the profession if you want, we experience a drop of between 30-40%. and it has not come back. So it will be an additional layer of 2 euros which wait a lot when you make purchases of an average value of 3 to 5 euros for the product itself. If you have to add another 5 on top of it, now it's really an impact on the decision of the customers. Do I buy? Yes or no? and we are really seeing an acceleration of that. When it comes to Paxon, it's again, it's just the continuation of what we have observed in Q3.

44:46 Those customers who left us or reduced scope in the context also of a lower same-store sale, it will have an even more important impact in the fourth quarter. When it comes to IT transformation, we said that we revisited what we could achieve in terms of IT efficiencies. And we mentioned a number of 30 million over four years period. which is a revised version of what we had anticipated two years ago. So it came out a bit lower. So meaning that it has an impact on non-delivered savings if you want in 26, more than 10 million.

45:38 On the license plate, I don't have the number in my head. We will refer back to you on that one.

45:48 Thank you. Just a quick follow-up on the first question around landmarks. So you are talking about 30-40% decline in volumes, which makes sense, the number I've seen elsewhere, but then how we reconcile the minus 30-40% to only, let's say, only high single digit percent decline.

46:18 Yes, so we successfully reached out to those clients and so we increased our market share in a declining volume. So we still are affected by some decline in volume, but we increased our market share in to Europe. Obviously that came based on a new product offering that we had with a lower margin than the previous one, but we took the opportunity to focus on ensuring that we would have a market share And that was successful already from starting from let's say second half of July throughout the month but you see that it has a stabilizing effect at the top line but you don't see it fully translated in the EBIT lines because you have some volume decline that we still see The next question comes from Henk Slotboom from The Idea.

47:20 Please go ahead.

47:44 Good morning and thanks for taking my questions. I've got a lot, but I'll try to wrap them into two long questions. The first one is on Landmark. Chris, you already elaborated about increasing your market share in the Asian volumes and that sort of things. At the end of the day, you already said it is a temporary thing. And we see a lot of Chinese platform moving their warehousing and fulfillment in Europe, to Europe. So that means that effectively you should switch from, say, increasingly switch from Asia, Europe into a network that is intra-Europe, cross-border.

48:33 How are your chances there? Because I asked the same question to CTT earlier this week. Everybody is talking about the same, whether I talk about SPRING or I talk about GACESA. I talk about Landmark Global. How are you going to build a position or extend the position here and what are your advantages? Is it very much the strength of Liege? So that's my first question. The second question is more on Paxson and especially on Paxson Europe. First of all, if I look at what the Chinese are doing, it looks as if they are creating their own dedicated fulfillment and warehousing capacity in Europe. Is it right to assume that Paxon is not benefiting from the relocation of the Chinese to local warehousing and fulfillment in Europe? That's one thing.

49:48 I'm a bit puzzled and maybe the explanation is easy about what you say about the prospects of Paxon Europe for the fourth quarter. It says low send or sales, but Paxon Europe is mainly B2B. Is this being caused by Stasi US or are there any other things I don't see at this moment?

50:16 yeah it's a it's a long question and so let's try to structure it a little bit so if you look at the Asian volume so indeed so the the the commercial repositioning that we did increasing market share is of temporary nature as we also mentioned in the documentation that we sent out today That being said, of course, we are of the opinion as you also underlined that those tariffs will be there to stay and that the change in the nature of the business that we will do with the Asian platforms, Chinese mainly, will change. as you know that we still have some of the business as well coming from other Asian countries coming to Belgium so there we see less of a change today than we see on the Chinese platforms and they are equipping themselves for today a build-up of fulfillment capability active and running and from everything that we can see also from every discussion that we have they run fully on their own warehouse management systems on their own order management systems and they want to operate most of those facilities today mainly positioned in Eastern Europe themselves that being said you've seen that we also did big steps already in the carving out well not carving out and so there will be increased line haul activity coming in the first phase

51:52 towards the western europe and so that's a a opportunity that we're investigating as we speak second thing is in what we understand from our conversations with those platforms is the first wave will be eastern europe with this kind of still have few days before you can deliver after your order will be also complemented with more local fulfillment In the second wave that they will do once they have established their position. And so we're looking at what the opportunities would be there. So we consider that for Pakistan fulfillment opportunities in the let's say the big volumes that you will see that still have a We don't think that we play any fulfillment role into that. We think that likely no major fulfillment player in Europe will play a role in that. That being said, around the markets that you serve, there will be opportunities when they want to increase their quality they want to move those platforms as a digital platform which is Chinese owned but with a logistical activity which is regional and in that regional play we look if there are opportunities a bit too early to say if they continue to what they say we want to partner on those ones and they execute on that one but at least they were very clear for the first bulk they don't look specifically at Partners in Fulfillment at this point of time with Pax.

53:25 Okay, that's clear.

53:28 Dan, your other question was on the Q4, maybe you can talk through that.

53:35 Yes, yes, yes. So, You are absolutely right Henk that we are mostly in Pakistan and Europe having B2B customers but nevertheless those B2B customers are also impacted by the global economic environment where we see less development in their top line and as a consequence has a ripple effect on us as well. Also in the US we said we have some customer churn Customer totally exiting us, also reducing their scope of services, but we also experience both in the US and in France some temporary profitability issues with in fact three customers that weigh quite significantly on the result and that will take a bit of time to be brought back to an acceptable level of profitability.

54:39 And maybe a clarification, not so much a question, because otherwise I would violate the rules. Be careful there, Link. The federal government wanted to cut the subsidy with 50 million. It was taking place in Belgium. I believe the Prime Minister is heading towards the King for a second time this week.

55:07 It should be there at this moment, yes.

55:09 What is the status there? Because on the one hand you said if the subsidy is cut by 50 million, we will act correspondingly. But is this still to be expected as of the 1st of January or are we going to see a push out of this whole phenomenon?

55:28 So there are a couple of let's say legal safeguards around that so it's fairly unlikely that there will be any plan that needs to be fully implemented as of 1st of January given the timeline that we're on now meaning as well that in any case there needs to be a We have reasonable implementation time of that once that decision is taken. As you can see, the political standstill that we see in this country today they will also make it unlikely that we will have that decision let's say in the coming weeks I think that we're not the highest priority file house so it's first the budget then you have a couple of other let's say very sensitive files as was published in the press We expect that the government will miss the deadline in giving us clarity before, which would mean that we would roll over next year for a couple of months in the current system and at the moment that we have an agreement who will probably then see what reasonable timing is combined with the approval of Europe to get it right. I think what is important in this for us

56:58 is that in all the negotiations that we have, I think that every party participating in the current government has also made clear that they agree that this needs to be So a little bit like what we do in the re-ORG situation in distribution where we adjust volumes with the speed of the natural attrition curves that we see within and this company. So that are the kind of scenarios that we have on the table. Now it's a little bit of course difficult to see when and which scenario they will choose but once it's there we will have an execution plan which will continue to have the logic of the management agreement which is the NAC plus agreement where we have a Ladies and gentlemen, there are no further questions, so I will hand it back to Chris to conclude today's conference.

57:56 Thank you. We would like to thank everybody in the call for having taken the time to be with us and for your interesting questions. We look forward to staying in touch. We will have, of course, more outlook as some of you asked for 27 at the moment that we have the full year results and we thank you very much and have a nice day. Thanks for participating to the call. You may now disconnect.