BPOST: 1.52 PE seems too low.
My grandpa lost some money on EBR: BPOST. I looked into it, it's cheap af and no-one seems to talk about it.
“bpost (Belgian Post Group) is Belgium's national postal service provider, responsible for mail and parcel delivery, as well as financial and logistics services. It is a publicly traded company with the Belgian government as its majority shareholder (51%). In addition to domestic postal operations, bpost has expanded internationally, offering e-commerce logistics and supply chain solutions through subsidiaries like Radial and Landmark Global. The company plays a key role in Belgium's communication and delivery infrastructure, adapting to the growing demand for digital and parcel services.”
So basically they used to transport mail for like the past 200 years. They became a nice dividend stock liked by people such as my grandpa who enjoy getting a nice stable income from their stock investments.
The stock was doing well up until 2018 when shit started to go haywire:
Stock went from 28 EUR to under 2 EUR in the span of 7 years. This is directly linked to the dividend cut.
Bpost has undergone significant transformations in the years leading up to 2018, evolving from a traditional mail carrier into a diversified logistics and e-commerce service provider. Its journey was marked by modernization, international expansion, and financial growth.
Historical Background & Development
Originally a state-run postal service, Bpost was privatized over the years, culminating in its listing on the Brussels Stock Exchange in 2013. The company strategically diversified beyond traditional mail delivery, investing in parcel logistics and e-commerce solutions to adapt to the declining volume of letter mail.
During this period, Bpost strengthened its position in both domestic and international markets. It expanded its e-commerce and parcel delivery operations, particularly through acquisitions, aiming to compete with global logistics giants. One of the most notable developments was its push into the U.S. market through the acquisition of Radial, a major e-commerce logistics provider, in 2017. This acquisition was part of Bpost’s long-term strategy to counter the structural decline of its core mail business by tapping into the rapidly growing e-commerce sector.
Here is a quick overview of Bpost’s M&A activity since 2013:
2013 - 2017: Strategic Expansion into Parcels & Logistics
During this period, Bpost aimed to diversify beyond traditional mail services due to the ongoing decline in letter volumes. The company focused on growing its presence in e-commerce and parcel logistics.
2015: Acquisition of DynaGroup - €109.9 million
Deal Overview: Bpost acquired DynaGroup, a Dutch-based company specializing in last-mile delivery and value-added logistics (e.g., repair services, secure deliveries).
Rationale: This acquisition enhanced Bpost’s capabilities in same-day and specialized deliveries in Belgium and the Netherlands.
2016: Failed Attempt to Acquire PostNL
Deal Overview: Bpost made an unsuccessful €2.5 billion takeover bid for PostNL, the Dutch postal service.
Reasons for Failure: The bid was rejected due to opposition from the Dutch government, concerns over national postal independence, and resistance from PostNL’s board.
Impact: This rejection forced Bpost to look elsewhere for expansion opportunities.
2017: Acquisition of Radial (USA) – €820 million
Deal Overview: Bpost acquired Radial, a U.S.-based e-commerce logistics and fulfillment company, for $820 million (€700 million).
Rationale: This was a major strategic move to expand in the fast-growing e-commerce fulfillment sector, particularly in North America.
Challenges: The acquisition proved costly and complex, leading to financial strains and integration difficulties in the following years.
2018: Acquisition of Leen Menken (Netherlands)
Deal Overview: Bpost acquired Leen Menken, a Dutch provider of refrigerated logistics for e-commerce food delivery. (850k EUR)
2020-2021: No Major Acquisitions – Focus on Internal Restructuring
After challenges with Radial’s profitability, Bpost focused on improving internal efficiencies rather than large-scale M&A.
The company faced declining profits, exacerbated by high operational costs and difficulties in Radial’s U.S. business. (AND COVID)
2024: Staci Group
In April 2024, bpostgroup announced its plan to acquire Staci Group, a France-based specialist in third-party logistics, for an enterprise value of €1.3 billion. The acquisition was finalized on August 1, 2024.
Strategic Rationale
This move aligns with bpostgroup's strategy to transform into a leading international provider of high-value, flexible logistics services. Staci's expertise in complex B2B and B2B2C logistics solutions complements bpostgroup's existing capabilities, particularly enhancing its omnichannel logistics offerings.
Operational and Financial Impact
Staci operates over 90 logistics hubs across Europe, the United States, and Asia, employing more than 3,500 people. In 2023, the company reported revenues of €771 million with an EBITDA margin of 14%. The integration of Staci is expected to bolster bpostgroup's presence in key markets and diversify its service portfolio.
Leadership and Organizational Changes
Following the acquisition, Staci's CEO, Thomas Mortier, joined bpostgroup's executive committee and now leads the newly formed International 3PL (Third-Party Logistics) business unit. This structural adjustment reflects bpostgroup's commitment to integrating Staci's operations and expertise into its broader organizational framework.
So what I hear is they had some mail struggles and decided that the best strategy was to do M&A and consolidation but everything went Haywire.
Let’s now look at why the stock tanked from 28 to 6 EUR from 2018 to 2020:
Bpost's stock decline from €28 to around €6 between 2018 and 2020 was driven by several key factors:
1. Declining Mail Volumes & Structural Challenges
Traditional mail services, which were once Bpost’s cash cow, faced secular decline due to digitalization.
The company struggled to offset this decline with its parcel and logistics business.
2. Overpriced Acquisition of Radial (2017)
In 2017, Bpost acquired Radial, a U.S.-based e-commerce logistics company, for €700 million.
The acquisition was meant to diversify revenue streams but turned out to be underwhelming due to low margins, integration difficulties, and weaker-than-expected performance.
Investors viewed it as overpriced, causing a loss of confidence.
3. Dividend Cut & Profit Warnings
In 2018, Bpost cut its dividend significantly, disappointing income investors.
The company issued multiple profit warnings between 2018 and 2019, showing that earnings were under pressure.
4. Regulatory & Cost Pressures
Belgium’s government imposed price caps on postal services, limiting Bpost's ability to raise prices to offset mail decline.
Rising labor costs and inefficiencies in operations squeezed margins.
5. COVID-19 Pandemic (2020)
The COVID crisis initially hurt Bpost, as it disrupted logistics, while e-commerce growth wasn’t enough to fully offset weaknesses.
Uncertainty during the early pandemic phase accelerated stock declines.
6. Investor Sentiment & Broader Market Trends
Bpost was historically seen as a defensive, dividend-paying stock, but its weak performance and structural decline led to investor outflows.
The Belgian stock market tends to have low liquidity, making Bpost’s decline more volatile.
Conclusion
The stock crashed because Bpost failed to transition from a declining mail business to a profitable logistics giant. The Radial acquisition, profit warnings, dividend cuts, and regulatory challenges all compounded investor pessimism. The COVID-19 pandemic exacerbated the situation but was not the primary reason for the decline.
Now, let’s have a look into why the stock continued to crash from 2020 to 2024:
From 2020 to 2024, Bpost's stock collapsed from €6 to around €2 due to a combination of internal and external factors. Here’s why, based purely on my own knowledge:
1. Structural Decline in Mail Business Accelerated
The traditional postal mail business kept shrinking at a faster-than-expected pace.
Digitalization, paperless invoicing, and government agencies shifting to digital communications further reduced mail volumes.
Bpost struggled to compensate with price increases due to regulatory constraints.
2. Logistics & Parcel Growth Failed to Deliver Profitability
While e-commerce boomed during COVID-19, Bpost failed to capitalize as well as competitors like DHL, UPS, or PostNL.
Its parcel business had low margins, with rising competition from cheaper, more efficient logistics providers.
The Radial U.S. acquisition remained disappointing, failing to generate strong profits.
3. Leadership & Governance Issues
The company suffered from management instability, with several leadership changes.
A major scandal in 2023 involving fraudulent public contracts (related to newspaper distribution subsidies) further damaged investor confidence.
This led to increased government scrutiny and regulatory risks, adding uncertainty.
4. Cost Inflation & Wage Pressure
Rising labor costs in Belgium (due to indexation and union pressures) squeezed margins.
Bpost is heavily unionized, making it difficult to cut costs aggressively or restructure operations efficiently.
5. Dividend Cuts & Negative Investor Sentiment
Dividend payments were slashed further, discouraging institutional and retail investors who had historically held Bpost for yield.
As profitability declined, market confidence in Bpost’s long-term viability weakened.
6. Poor Market Perception & Liquidity Issues
The Belgian stock market is relatively illiquid, and Bpost lacks strong growth prospects, leading to fewer buyers and higher volatility.
Investors preferred stronger European logistics players, such as Deutsche Post (DHL) or PostNL, over Bpost.
Conclusion
Bpost failed to transform itself into a competitive logistics and parcel company while its core postal business collapsed faster than expected. Add in fraud scandals, high labor costs, and weak leadership, and the stock became a "value trap" rather than a recovery play. The decline from €6 to €2 reflects this fundamental loss of investor confidence in the company's future.
Alright, so what I’m getting is that they were distributing mail, making good money, they decided to go into ecommerce and saw some growth. Attracted dividend investors then came 2018 where they made messy acquisitions, got covid then inflation + the gouvernment deciding to play against them all while going through a declining mail business. That’s bad. Now everyone is disgusted, nobody wants this stock, it’s overleveraged, hasn’t shown a lot of growth nor profitability. Why would we get interested?
Well first, we can say that the acquisition of Radial is finished. While it seems it’s slightly declining. It has been absorbed an is still profitable.
Then there is the gouvernment. The old one was leftist “help the poor people who live far away even if the rich shareholders of BPOST will lose money” and they put a price cap + forced the company to keep unprofitable markets.
As of January 2025, the gouvernment is almost full center right, and they might be looking to get the stock back on track, make some money and stop with the dumb “Diversity, Equity & Inclusion DEI + Corporate social responsibility (CSR) shitshow” - If you read their annual report it’s like all they talk about. - They are also looking to decrease taxes so that’s great.
Moreover, the belgian payroll is special. It’s indexed to the inflation. This made Colruyt EBR: COLR go from 53 EUR to 21 EUR when inflation was high (because they are “the cheapest supermarket chain” so they couldn’t increase costs while they had to increase wage) - Inflation destroyed this company (-60%) but once it was gone, they managed to increase their prices and get back to making money and stock went back to 47 EUR 5 months ago.
So let’s look at their payroll from 2022 to 2023:
Do you see anything? They went from 39.3k employees to 37.8k and had to increase their payroll cost. What?
And inflation only started in 2022 ! Now that inflation is back at 2%, margins might grow at BPOST.
Alright, I’m not finished. Let’s now look at their latest acquisition: Staci. They increase their balance sheet from about 3.8B EUR to about 5.1B EUR for this.
Alright, they have a new CEO who was a partner at McKinsey - They are acquiring a logistics business from PE firm Ardian at 12 times FCF.
Let’s look at it deeper:
Staci is a third-party logistics (3PL) company that specializes in storing, managing, and delivering products for businesses. Instead of companies handling their own warehouses and shipping, they outsource these tasks to Staci.
Here’s how it works:
Storage – Businesses send their products to Staci’s warehouses, where they are safely stored.
Inventory Management – Staci keeps track of how many products are available and updates businesses when stock is low.
Order Fulfillment – When a customer places an order, Staci picks, packs, and ships the product to the right location.
Customized Logistics – Staci can handle complex distribution needs, like sending promotional materials to multiple stores or managing returns.
Staci serves a diverse range of clients across multiple industries, including:
Fast-Moving Consumer Goods (FMCG): Managing logistics for high-demand products that require efficient turnover.
Retail: Providing storage and distribution solutions for various retail businesses.
Pharmaceutical and Healthcare: Handling sensitive medical products with precision and care.
Cosmetics: Managing beauty products that often have specific storage requirements.
Industrial and Energy: Supporting logistics for heavy machinery and energy sector components.
Financial Services: Assisting with the distribution of financial documents and related materials.
Catering: Coordinating the delivery of food products and catering supplies.
Public Services: Providing logistics solutions for government and public sector entities.
Staci operates within the Third-Party Logistics (3PL) market, providing outsourced logistics services such as warehousing, transportation, and distribution to various businesses.
The global 3PL market has been experiencing significant growth and is projected to continue this trend. In 2023, the market was valued at approximately USD 1,095.85 billion and is expected to reach USD 1,877.51 billion by 2030, with a Compound Annual Growth Rate (CAGR) of 8.1% from 2024 to 2030. (Grand View Research)
Let’s now look into their dividend policy.
Since 2018, bpost's dividend policy has undergone significant changes, reflecting the company's financial performance and strategic adjustments.
Dividend Policy Evolution:
Pre-2019: bpost maintained a stable dividend payout, distributing €1.31 per share annually from 2016 through 2018.
2019: The company revised its dividend policy, targeting a payout ratio between 30% and 50% of IFRS net profit. This change aimed to align dividend distributions more closely with earnings.
So, basically, they changed their idea, going from high payout of about 80% to targeting a more conservative 30-50%. This made the investors unhappy and sold the stock. They also decided to use the cash flow generated to expland into logistics instead of relying on mail.
My current stance:
First regarding the interest expense, they only spend 74.8m EUR for their Interest bearing loans and borrowings which stands 1.291B EUR as of 31.12.2023 - That’s a 5.7% interest rate cost, not too awful.
If we look at their whole debt at that point: 3.092B EUR, their interest expense is actually 2.4%. Not too awful at all. They just have a huge working capital.
I don’t like gouvernment owned companies but Belgium is a bit different. With the new gouvernement, the end of the bad strategic acquisition, the end of covid and inflation + a new acquisition, the company could see improving margins, better profitability and growth ahead.
They have a more cash than their market cap (yes, even after the Staci acquisition). I believe in the short term future, they might see easier way of laying off employees, international growth, better margins and overall better days ahead.
2hours and 13 minutes ago I told
on Twitter/X I would do a deep dive.Here was my deep dive, I will take some time to think about it but I believe the downside is very capped here, Belgian people and managers are smart and educated and even thought people love DEI, CSR and regulations in this country, I still think they are able to produce strong qualitative long term strategies that can build long term wealth.
At today’s 1,94 EUR per share and a market capitalisation of 381M EUR, I believe the stock is severely undervalued. If they can come back to making 200M EUR+ per year of net income, that would be a PE of 1.9. If they distribute a dividend of half that as per their policy, we could be getting a dividend yield of 26.2% in a growing cash generative business with cheap debt.
I doubt they would issue new share or could have cash problems in the future.
The reason the stock is undervalued is for all the problems they have been having, the fact that people don’t invest in Europoor countries and the overregulated European Union. Yet, everything has a price and I believe this stock is wayy too cheap to ignore.
I will be taking the night to think about it.
Thanks for reading me.
Fenix Vanlangerode