Always on the

bpost activity report 2016

bpostis the leading operator of postal services and logistics solutions to, from and within Belgium. Each year over 27,000 employees deliver 8.6 million letters and 148,000 parcels on the threshold of more than 4.7 million households and businesses.

... always on the movebpost’s strategy is based on four strategic pillars: support and promote our core business, mail; achieve growth; make our way of working lean, agile and flexible and strengthen ties with our stakeholders.2016 showed that we can be confident that our strategy will lead us towards further success. Proving our relevance every day, moving forward every day and grasping our future: that means that we are always on the move to bring our customers closer and make their lives easier.

We are mail We grow We are lean, agile & flexible

We are @core

Key events

On March 21, 2016 bpost acquired Freight Distribution Management (FDM)

In August bpost took a strategic stake in Parcify

In October bpost was rewarded for its sustainable development initiatives

On November 30, 2016 bpost finalised the acquisition of the

Belgian activities of Lagardère Travel Retail

On December 12, 2016 bpost and DynaGroup joined forces and combined their logistical expertise

On June 1, 2016 bpost acquired

Apple Express and Matt’s Express

In September the management of bpost and the social partners approved a new collective agreement for the period 2016-2017

In October Belfius, bpost and Proximus joined forces to

strengthen the local economy

In December bpost decided not to pursue an offer for PostNL and continues to explore others growth opportunities

On June 20, 2016 bpost launched bringr

In September bpost invested in de Buren

On November 10, 2016 the Brussels Court of Appeal annulled a decision of the Belgian Competition Authority

In December bpost and DHL Parcel started non-exclusive cooperation in

B2C parcel delivery on a  pan-European level

MAIN LOGO

STANDALONE ICON

BLACK & WHITE

Key figures

1,337 post offices and post points

24,850 FTE and interim (average)

-36%carbon emissions in 2016 vs. 2007

8.6 million letters handled every day

87%satisfied customers

148,000 parcels handled every day

Contents

Profile Key events of the year Key figures 2016 Message to our stakeholders Our strategy We are mail We grow We are lean, agile & flexible We are @core Financial review The bpost share GRI Standards Content Index

Message to our stakeholders

We also aim to expand our proximity and convenience offering.

That’s why, in 2016, we took big strides in our ambition to make it even easier for our customers to receive and send parcels. We continued to work with a number of major shippers to enable parcel delivery in the evenings and at the weekend, and we enlarged our parcel network through innovative solutions, allowing customers to select the solution that suits them best.

For example, in 2016 we took a strategic stake in Parcify and de Buren, two start-ups that capitalise on the promising innovative technology for last-mile delivery services with greater convenience for both senders and recipients. Parcify uses the geotracking facility on smartphones to deliver parcels to recipients when and where they want. de Buren runs an open network of secure, sometimes cooled, parcel locker walls in the Netherlands, which are accessible 24/7 using an app. The ultimate goal is to cover the whole of Belgium with 500 locker locations in addition to our own parcel lockers, and to expand the current offer in the Netherlands from 50 to 1,000 locations.

We also launched bringr, a complementary service based on an innovative collaborative platform app allowing smartphone users to find a driver for delivering goods. All these initiatives enable us to continue building a hybrid network that responds to each and every specific need of our customers.

bpost aspires to play a leading role in the European postal market. We also have the resources to realise that ambition. In 2016 we further endorsed that ambition and audacity.

2016 was a year in which bpost was always on the move, to bring our customers closer and to make their lives easier. Always on the move...

To support and promote our core business, mailIn 2016 we proved that our domestic mail is resilient. At 5%, the decrease in our traditional mail volumes remained under control.

We achieved good results in advertising mail in particular. We slowed down the decrease here by targeting business sectors where mail continues to be a relevant part of the communication mix. To this end, we respond to the market trend in commercial communication to combine various channels that strengthen the message to consumers. The stopping power of mail reinforces a digital message that is less powerful, but has a greater reach.

To achieve growthWe achieved growth on the domestic parcel market of no less than 17.1% compared with 2015. That solid growth is the consequence of a booming e-commerce sector and the many efforts we have invested on the parcel market. Our acquisition strategy to strengthen our service offering and the non-exclusive partnership we established in 2016 with DHL Parcel for the delivery of B2C parcels at European level will certainly help us to continue to grow.

Always on the move...

2016 was a good year for bpost in many respects. Not simply because we were able to present strong results and keep our promises, but also because we made progress on the various cornerstones of our strategy. We showed resilience in traditional mail, achieved solid growth in parcels, laid the foundations for new future growth and remained on track with our productivity improvements. We did all of this without losing sight of our stakeholders.

“bpost aspires to play a leading role in the European postal market. We also have the resources to realise that ambition. In 2016 we further endorsed that ambition and audacity.”

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To make our way of working lean, agile and flexibleWe implemented our productivity improvements in a disciplined way and according to plan in 2016. We are right on schedule with our Vision 2020 project, the aim of which is to further automate sorting and set down the future mail organisation. We remain on track with the construction of the new Brussels X, our largest sorting center, where, among other things, all domestic parcels will be sorted from October 2017. The building was made watertight and windproof in the summer of 2016, enabling the 25,000 m2 parcel sorting hall to be finished, among other things. The installation of the parcel sorting machine itself began in early 2017.

Five additional MSM (Mixed Sorting Machines) were also taken into use in 2016. The MSM is a highly advanced sorting machine that will form the backbone of our future mail sorting activity. Of the planned 30 MSMs, 16 were operational by the end of 2016. Technological development did not stand still in other areas either: 70 sorting cabinets were taken into use, facilitating manual sorting by means of optical address recognition (by camera). The reform of our network to 60 mail centers continued unabated.

We also continue to work on other projects in all other departments to make our organisation more efficient, agile and flexible.

Internationally, the acquisition of DynaGroup, which offers a range of logistical services, enables us to add more logistical solutions to our service for e-commerce customers. For that matter, 2016 was a challenging year on the international parcel market. We primarily focused on expanding our network and services through our subsidiary Landmark Global. We strengthened our international parcel strategy with the acquisition of Freight Distribution Management (Australia) and Apple Express (Canada).

Another step within our growth and diversification strategy in proximity and convenience was the finalisation of the acquisition of the Belgian activities of Lagardère Travel Retail. That enabled us to further diversify our range of products and services to our customers and enlarge our network of parcel pick-up points.

We also continued to enlarge our other solutions, wherefore we mainly leverage the strength of our dense network and the trust people show in our postmen.

“We are right on schedule with

our Vision 2020 project and the

construction of the new

Brussels X.”

Françoise Masai Chairperson of the Board

Koen Van GervenCEO

“2016 showed that we can be confident that our strategy will lead us towards further success.”

To strengthen ties with our  stakeholdersWe are a company of people, for people. We can count on the loyal engagement and knowhow of our employees. Their wellbeing is therefore a key concern for us. With that in mind, as well as the usual monitoring of stress and engagement indicators, in 2016 we took a number of additional steps to increase the wellbeing of our employees, such as initiatives with regard to guidance for newcomers, training, improved leave planning and balanced workload allocation for all. We also entered into a new collective bargaining agreement for 2016-2017. It provides for a number of major measures to increase purchasing power, while agreements were also reached on measures to promote employment.

Our customers are our raison d’être. Our aim is to bring them closer and make their lives easier. Through the density of our network of post offices and post points, by offering them more options for receiving their parcels, by constantly introducing more innovative services and products… Those efforts paid dividends in 2016 again: 87% of our customers expressed satisfaction about bpost.

Lastly, bpost remains committed to developing its activities in a sustainable way. Our aim is to be a socially responsible company. In 2016 we again placed first in the International Post Corporation’s (IPC) global environmental management ranking. We also signed the Belgian charter for the United Nations Sustainable Development Goals (UNSDG) and we deepened our engagement by incorporating them into our CSR strategy.

All efforts to ensure the flawless implementation of our strategy were reflected in our good financial results. Normalised turnover rose by almost one percent (from EUR 2,407.6 million in 2015 to EUR 2,425.2 million in 2016). Operating profit also increased. Normalised EBITDA increased from EUR 583.6 million in 2015 to EUR 586.9 million in 2016 (+0.6%). This is despite receiving EUR 22.9 million less in 2016 from the Belgian state for providing the services of general economic interest (SGEI).

Based on the net profit of parent company bpost SA/NV, the Shareholders’ Meeting approved for 2016 payment of a gross dividend of EUR 1.31 per share, a rise compared with 2015.

2016 showed that we can be confident that our strategy will lead us towards further success. Proving our relevance every day, moving forward every day and grasping our future: that means that we are always on the move to bring our customers closer and make their lives easier, in 2017 and the years that follow too.

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Our strategy

2. We growTo grow we need to capitalize on the many opportunities the world now offers us. For instance, we use the expansion of e-commerce to set the tone in parcels in Belgium and abroad. In doing so, it is vital that we make it as easy as possible for our customers to send and receive parcels.

We also want to enlarge our proximity and convenience offering. As well as the continued diversification of our businesses and offerings, and our financial products, we work on developing new solutions that capitalize on our USPs as a postal operator: the density of our delivery and point of sales network, our field knowledge, our operational expertise and, above all, our postmen.

3. We are lean, agile and flexibleWe work in a focused, fast and proactive way. By keeping costs under control, improving productivity and achieving operational excellence we can adapt our organization as effectively as possible to meet the expectations of our customers and the trends in a fast changing world.

4. We are @coreOur employees are our biggest asset in creating value for the whole of society. Their loyal engagement and knowhow ensure that our customers are enthusiastic about our services, remain loyal to us and recommend us to others. Obviously we also want to reward our shareholders, in a sustainable and socially responsible way.

The fundamental transformation of bpost over the past decade shows that we are always looking for ways to bring our customers closer and make their lives easier. It all began with mail and that will continue to play an important role in the future of our company. In the meantime we have adapted to meet the changing needs of our customers. We have built a dynamic offering of domestic and international parcels and we provide innovative services that capitalize on proximity and convenience. At the same time, in recent years we have implemented substantial productivity improvements throughout the company. All that, without losing sight of our stakeholders.

The successful, targeted approach we have taken in recent years forms the basis of the strategic direction of bpost going forward, which we defined more precisely in 2016. This ambition is based on four strategic pillars that will guide us in the coming years.

1. We are mail We still generate the biggest part of our revenues in mail. Although this business is under pressure in our digital world, we believe strongly in the power of the letterbox as a communication channel. The fact that people give more attention to a letter (which thus has more stopping power) means that mail has added value in a company’s communication mix. Today, the ideal marketing mix combines digital communication with a large reach and paper communication with a big impact (call to action). We promote and defend our core business, mail. In addition, bpost also takes care of the daily delivery of newspapers and magazines.

In recent years bpost has adapted to a rapidly evolving world and the changing needs of our customers. Our good results, increased productivity and improved service are the best proof of that. So our strategy is working. In 2016 we confirmed our strategic direction and defined it with greater precision.

Targeted and based on 4 pillars

We are @core

We are mail

We grow

We are lean, agile and flexible

Our

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We are mail

Advertising mailMail is a very effective channel for getting across commercial messages. In addition, a well-balanced combination of digital communication (with a large reach) and paper communication (with great stopping power) offers the best marketing results. Which is why bpost responds to the marketing communication needs of its customers, not least with its range of addressed advertising mail and door-to-door leaflets, as well as making available qualified addresses.

bpost endeavours to capitalize on the growth opportunities in advertising mail to the full. In doing so, in 2016 we focused on two target groups: SMEs, which we convince through our office network, our contact centers and online media, and big companies.

In the case of the latter, we concentrate on five high-potential sectors: supermarkets, cars, fashion, travel and fast-moving consumer goods. These are sectors where mail often has a major impact in the commercial communication mix. To convince customers in this sector we count on our own sales teams and we conduct campaigns that are sometimes linked to major events, such as the 2016 Motor Show Brussels and the European Football championship. But we also work through other indirect channels. In 2016, for example, we set up “Welcome Media”, which helps media agencies provide better advice to their clients, among other things with a tool that enables them to reach their target group more easily.

Paper remains an important medium for communicating information and emotions. Consumers prefer to receive important administrative and commercial information by mail and mail also has added value for companies. People give more attention to mail (stopping power), which more often has a call to action, such as requesting more information or making a purchase. Combined with the possibilities offered by digital communication, mail has great added value in a company’s communication mix.

We still generate more than half of our income in traditional mail. So mail remains at the heart of what we do. 2016 showed again that our domestic mail business is resilient. We achieved good results in advertising mail in particular. The letterbox remains a powerful communication channel.

Support and promote our core business, mail

“Combined with the possibilities offered by digital communication, mail has great added value in a company’s communication mix.”

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We also invest in innovation, with the help of new products and services, to respond to the needs of customers. In doing so we make full use of the digital possibilities and we offer integrated solutions, such as Mailing Maker, which we rolled out on a large scale in 2016. Mailing Maker is an online tool that SMEs and the self-employed can use to create impactful direct mailings.

In a changing world we not only need to think about new services and products, but also about how established services and products can be brought up to date. The postcard is a good example. It is a carrier of emotions that tells stories and connects people. Mobile Postcard allows everyone with a smartphone or a tablet to create and send their own personalized postcard. You could say that we have reinvented the postcard for the digital age. Successfully: use has increased more than 20% year on year. Companies, too, are using Mobile Postcard more and more.

“Mailing Maker, Mobile Postcard and Quick Stamp are just a few examples of our new offer in the mail segment.”

Transactional mailMail also continues to be an important channel for administrative and financial communication. A study published on the website http://mafacturemonchoix.be to make consumers aware of the right they have to decide for themselves how they receive their bills (paper or digital) shows that 80% of consumers prefer to receive paper invoices.

bpost endeavours to continue to work to convince its customers of the value of mail for transactional purposes. We also want to make it as easy as possible for large senders to send their mail efficiently. With that in mind, in 2016 we continued to invest in modernization and convenience, where this has a positive effect on the satisfaction of our customers or a clear impact on our efficiency. An example is the new product Quick Stamp, which allows SMEs to frank their registered mail online, saving them a considerable amount of time. Customers who use Quick Stamp, which was launched in 2016 as a pilot project, can drop their registered mail in a regular red post box rather than having to go to a post office.

Newspapers and magazinesbpost delivers newspapers and magazines to households throughout Belgium. The Belgian state has awarded us the concession for 2016-2020, so we will continue to do so going forward. Newspapers are delivered before 7.30 am on weekdays and before 10 am on Saturdays.

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“At Great Traiteur we are specialised in event catering. A few years ago we launched skipack.be. Customers can order ready-made packaged meals they can easily take with them on a ski trip and

heat up there. To arouse their interest in this solution, every year around late November, early December we would post a mailing to 2,000 or so customers, both earlier users and people who signed up to our mailing list. We supplemented that with emails and Facebook posts.

Different and freshThe traditional mailing, consisting of a leaflet in an envelope, worked fairly well, but last winter we wanted to try something new. We also felt our customers needed something different, something fresh. That’s how we arrived at Mailing Maker.

Everything under control

With Mailing Maker we could be as creative as we wanted to be, even all the way down to the font. The postcard format also allows us to make something fun. It did not take us long to make something attractive and uploading our own database was easy. Plus we now have everything under control and we no longer need to worry about coordination with the printer. I really thought it was brilliant and great value for money.

Enthusiastic customers

The customers also proved enthusiastic, judging by the many positive responses. They were pleasantly surprised by the agreeable postcard format and the friendly message. People often left the card lying about for longer, so it was viewed more often. Mailing Maker certainly helped us create the buzz we wanted around skipack. So it was a very successful experience!”

“Thanks to Mailing Maker we managed to create quite a buzz.”Gilles Molitor, Great Traiteur

We grow

of B2C parcels at pan-European level. That gives DHL Parcel access to bpost’s leading B2C delivery network for the constantly growing number of private parcels recipients in Belgium. In turn, bpost gains access to the DHL Parcel Europe network, which currently offers a single, standardised, high-quality cross-border product - DHL Parcel Connect - in 18 European countries. This partnership allows both parties to tackle the fast-growing B2C e-commerce sector in Belgium and across Europe.

Continuing to put our growth strategy into practice, in 2016 bpost joined forces with Belfius (bank) and Proximus (telecommunication company) to strengthen the local economy through a digital platform, Citie, which brings together merchants, consumers and local governments. The digitization of our world and the growth of e-commerce create new possibilities but also new challenges for SMEs and their customers. The Citie app is already available in various towns and cities, including Bruges, Antwerp, Roeselare, Ostend and Genk. For merchants, Citie is a digital display window with integrated online store. This enables their customers to shop and pay online, ahead of delivery by bpost.

Our growth strategy is focused on three areas: parcels in Belgium, international parcels, and proximity and convenience. We are convinced that we have the right assets and expertise to make a difference in these fields. The goal is always the same: making it easier for customers to work with us.

Domestic parcelsWe achieved growth on the domestic parcel market of no less than 17.1% in 2016 compared with 2015. That growth outpaces overall e-commerce growth in Belgium, the engine that powers the expansion of the parcel market.

bpost is active in three parcels segments, with a complete range in parcels and express items: B2C (goods sent to consumers by businesses, such as e-tailers), B2B (goods sent between businesses, such as spare parts and retail stock) and C2C (goods sent between consumers, such as gifts and second-hand items).

In 2016 we particularly saw a strong rise in parcel volumes sent by major senders, not only within Belgium but also from neighbouring countries. Also in 2016, bpost and DHL Parcel set up a non-exclusive partnership for the delivery

To grow we need to capitalize on the many opportunities the world now offers us. With this in mind, in 2016 we took advantage of the further expansion of e-commerce to increase our parcel volume significantly, both in Belgium and internationally, linked to improved convenience for our customers. We also want to enlarge our proximity and convenience offering, by making optimal use of our strengths to offer innovative solutions and by continuing our diversification efforts, through Ubiway, for example.

Achieve growth

“Our growth strategy is focused on three areas: parcels in Belgium, international parcels, and proximity and convenience. We are convinced that we have the right assets and expertise to make a difference in these fields.”

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The more consumers adopt e-commerce, the more important it is to offer them maximum convenience. bpost aims to play a leading role in that, making e-commerce as accessible as it can be. That’s why, in 2016, we took big strides in our ambition to make it even easier for our customers to receive and send parcels. We continued to work with a number of major shippers to enable parcel delivery in the evenings and at the weekend, and we even trialled same-day delivery. In addition, we enlarged our parcel network on the basis of innovative solutions, allowing customers to select the solution that suits them best. That way we are building a hybrid network that provides flexible solutions for specific personalised delivery needs alongside our long-established distribution network for standard deliveries by our postmen.

In that regard, in 2016 bpost took a strategic stake in Parcify and de Buren, two start-ups that capitalize on promising innovative technology for last-mile delivery services, characterized by greater convenience for both senders and receivers. Formed in 2015, Parcify was the first to launch an app to enable delivery of parcels to the addressee’s precise location. The technology uses the geo-location of the customer’s smartphone. So Parcify ensures that you never need miss another parcel delivery. Parcify is now available in Brussels, Antwerp and Ghent. The technology also fits in with the ambition of bpost to get to know its customers better. Knowing where and how customers want to receive their parcels is another step towards a stronger network and even better service.

“In 2016 bpost took a strategic stake in

Parcify and de Buren, two start-ups

that capitalize on promising innovative

technology for last-mile delivery services,

characterized by greater convenience

for both senders and receivers.”

de Buren is a Netherlands-based company that operates an open network of 50 locker walls in that country. This network consists of secure (and sometimes chilled) lockers that are accessible 24/7 and can be controlled with an app, which makes it possible to offer a large number of services. It is an open network, which means that every customer can use unoccupied lockers in the de Buren network. Everyone, including e-commerce players but also businesses like dry cleaners, pharmacies and retailer stores can leave a parcel for pick up by the customer. The ultimate goal is to cover the whole of Belgium with 500 locker locations in addition to our existing parcel lockers, and to expand the current offer in the Netherlands from 50 to 1,000 locations.

Lastly, bpost also launched bringr, an innovative sharing platform that enables smartphone users to find a driver to transport goods they wish to send. With bringr, a first for Belgium, bpost supplements the existing range with a complementary service that enables users to find a driver to pick up their goods at point A and deliver them to point B. The role of bpost is to facilitate the sharing platform. People who want to work as drivers are not under contract at bpost but they are required to follow all applicable rules and regulations. For the pilot, bpost selected Antwerp province as goods pick-up location. The delivery address is agreed between the two parties, which means it is not restricted to Antwerp. By the beginning of April 2017, about 3,600 drivers and 7,800 users had already registered with the platform. The service is now also available in Ghent and Brussels, including their environs.

International parcelsThrough its Landmark Global subsidiary bpost also aims to be a player on the international parcel market, offering its customers the best solutions. This cross-border parcel strategy, driven by e-commerce, was supported by the acquisitions of FDM and Apple Express in 2016.

FDM (Freight Distribution Management) is specialized in providing a personalized service to customers for the storage and distribution of products in Australia. FDM’s business is third party logistics, warehousing, transport and distribution. Apple Express is a Canadian company that primarily provides last mile delivery, transport and fulfilment services to customers in Canada and the United States.

Landmark Global has various strategic facilities that are located close to customers in the United States, Canada, the United Kingdom, the Netherlands, Belgium, Poland, China, Hongkong, Singapore, Australia and New Zealand. To further strengthen our position on the international parcels market our domestic and international parcels organizations were merged in 2016. The new organization goes by the name “Parcels & Logistics”. This enables us to capitalize more readily on the growth of the parcel market and develop new e-commerce activities.

“In 2016 our domestic and international parcels organisations have been merged into an adapted organiza­tional structure that goes by the name Parcels & Logistics.”

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Schoenen Torfs has made a name for itself in the footwear and clothing industry. The company is best known for its customer focus. “By innovating continuously and responding to important market trends, we try to offer the best service in order to make the entire process as easy as possible for our online customers”, Frederik Wybo says.

Customers in control“Online customers can always choose from four different delivery methods. This type of convenience is very important to us. They must be able to choose where and when they receive their parcel. We can offer these options, thanks to bpost. Customers can have their parcels delivered at home or at the office, collect them from a pick-up point or go for a parcel locker.

We also allow our customers to choose their time of delivery. Our customers can simply choose a time that suits them best. They can specify any weekday they like for their parcel’s home delivery during the day, but they can also choose an evening delivery between 6 and 9 pm or a Saturday delivery.”

Sustainable processes

Torfs is all about customer focus, but also sees sustainability as an absolute priority. “We think it makes sense that our delivery partner also pays a lot of attention to their environmental impact. bpost delivers its letters and parcels with as little impact on the environment as possible. We support this and we consider it important.

Contributing to innovation

Besides sustainability, we also focus constantly on innovation. We want to lead, and to do that, we have to innovate. bpost is happy to contribute in this respect. Evening and Saturday deliveries are an example of this. They also seek different opportunities to optimize home delivery, for example by delivering parcels to the neighbors or at a safe place in our customer’s garden. bpost understands that e-commerce is a very important growth area for us. Because it continues to innovate itself in order to respond to important market trends, it is an excellent logistics partner for us.”

“We want to lead, and to do that, we have to innovate. bpost is happy to contribute in this respect.”Frederik Wybo, e-commerce manager Schoenen Torfs

As part of our hybrid network strategy, the 2016 acquisition of DynaGroup enables us to add more logistical solutions to our service for e-commerce customers. DynaGroup, which was formed in 1995 and has its head office in Sittard (Netherlands), offers a range of logistical services and software, including the repair of electronics (from smartphones to coffee machines) and personalized e-commerce

“In 2016 we further modernized our post offices and

continued to put effort into multi­channel ways for

our clients to contact bpost.”

delivery services for both small products (ranging from passports to smartphones with contract finalization on the doorstep) and large consumer products (such as the two-man delivery and installation of washing machines). The company has thus successfully specialized in integrated end-to-end solutions and software, which offer clear added value to our parcel customers.

Proximity and convenienceA third growth hub alongside domestic and international parcels is proximity and convenience. Our dense point-of-sale network and our postmen, who enjoy the confidence of our customers, ensure that we are close to our customers and able to offer them innovative solutions.

Our networkOur close-knit sales network ensures that we are never far from our customers. At the end of 2016 there were 662 post offices in the sales network, which is completely in line with the agreements in the management contract between bpost and the Belgian state.

In 2016 we continued to work on modernizing those post offices:

The visual aspect of the exterior of 41 offices was freshened up.

The interior of 102 offices was renovated.

In 2016 a lot of initiatives were also launched to improve the customer experience:

82 offices opened a dedicated SME counter staffed by an expert in the specific needs of SMEs.

An improved queuing system was rolled out in 149 offices.

A great many improvement actions regarding parcels were set up in 2016 too:

Parcel fast lanes were set up in 9 offices, enabling parcel service customers to get immediate assistance from a member of staff.

Unstaffed parcel counters were set up in 37 offices. Here, customers can drop off parcels for sending without having to queue.

83 offices were equipped with drop boxes, primarily in the self-service areas, where customers can drop their parcels between 6 am and 11 pm, seven days a week.

The opening times of some post offices were changed in 2016, based on a selection of parameters, such as the number of customer contacts, the nature of the transactions and the time they take, the customer average waiting time before being served, and busy and less busy periods. In 2016, the number of visitors and transactions in the post offices actually increased for the first time in seven years, as a consequence of the rise in the number of parcels. Lots of customers actually prefer to drop off or pick up their parcels at a post office or post point. The post points (there were 675 of them at the end of 2016) also recorded a rise in the number of transactions compared with 2015 (+10%).

As well as the post offices and post points, customers have a range of ways to contact bpost and use our services. These include 3,830 stamp shops, contact centers, parcel lockers and online services like e-shop, e-banking and apps.

Bank and financial productsAfter acquiring credit firm Krefima in 2015, bpost bank had a special focus on mortgage credit in 2016. After an intense training program for all customer advisors, office heads and deputy heads, mortgage products are now offered at 160 post offices. bpost recorded a gradual rise in the number of applications and approved applications, with exponential growth towards the end of the year on the back of a marketing campaign in November 2016.

125,000In 2016 we have sold 125.000 bpaid cards and special attention went to mortgage credit.

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Worldwide money transfer through Western Union remains a successful financial business for bpost. The number of transactions grew by 4.5% in 2016 and the service was rolled out to an additional 40 post points. As a result, Western Union is now available at all post offices and at 200 post points. This service certainly adds value to the bpost product range, not least because Western Union offers cross-selling opportunities, such as opening a bank account or buying a bpaid payment card. More than 125,000 bpaid cards were sold in 2016. This card is not only a safe means of payment when shopping online. It also hands users the possibility of keeping their spending under control as they cannot spend more than the amount they have put on the prepaid card.

SolutionsOur proximity to customers is a huge advantage we are able to capitalize on. Our dense point-of-sale network, but also our postmen, who enjoy the confidence of our customers, offer a lot of opportunities. That proximity enables us to offer innovative solutions.

Solutions that simplify administrative or operational processes. These are often solutions for public services and public sector companies, which bpost helps to set up simple, user-friendly processes when new measures or procedures are introduced. These solutions were expanded and refined in 2016. Examples include the management of traffic fines, the processing and delivery of RIZIV/INAMI health care provision certificates and the delivery of number plates. The scope of this last contract was enlarged to include the registration of old mopeds.

“Our dense point-of-sale network and

our postmen, who enjoy the confidence

of our customers, ensure a lot of

opportunities to offer our customers

innovative solutions.”

Solutions relating to observation or enquiry. For example, in 2016 we continued our checks ensuring that building permits were displayed where they should be. The “bclose” project was also very successful. Here postmen gather information during their round on a group of senior citizens as identified by the client, the local social security department (OCMW/CPAS), to assess whether they are socially isolated. In 2016 a pilot was conducted on behalf of a telecommunication operator, in which postmen collected information during their round needed in connection with the renewal of cables (such as distance between the house and the street and the type of subsoil).

The home delivery of food shopping services, provided under the combo brand name in 2015, was rolled out to the inhabitants of Ghent, Deinze, Wetteren, Lokeren, Dendermonde and Aalst and surrounding towns in 2016.

We also continued with the delivery of new decoders and modems for telecommunication operator Proximus in 2016. Together with its subsidiaries bpost prints information letters for customers, agrees delivery windows, and delivers the decoders. bpost had delivered almost 300,000 decoders by the end of 2016.

Diversification through UbiwayAnother step within our growth and diversification strategy in proximity and convenience was the finalization of the acquisition of the Belgian activities of Lagardère Travel Retail, which was approved by the Belgian Competition Authority at the end of 2016.

LS Distribution Benelux and Lagardère Services Travel Retail Benelux have changed their name to Ubiway and Ubiway Retail respectively. The commercial entities such as AMP, the Press Shop/Relay network, the kariboo! pick-up points and the subsidiaries Alvadis and Burnonville will continue to operate under their existing name.

As part of the deal, bpost and Lagardère Travel Retail have signed a franchise agreement to operate and develop the international brands of Lagardère Travel Retail, including Relay, hubiz, Hello!, So! Coffee and Hub convenience.

Ubiway enables bpost to invest in the proximity and convenience sector by opening more points of sale and diversifying the range of products and services for our customers. At the same time, that allows us to expand our network of pick-up points, so that we are able to offer a wider range of services and delivery options for parcels.

Through this, bpost also aims to be a reliable long-term partner within the press industry and will continue to work hard to provide a high-quality press distribution service.

“Ubiway enables us to expand our points of sale and pick­up points network.”

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of 2016, enabling the 25,000 m² parcel sorting hall to be finished. The installation of the parcel sorting machine began in early 2017. Its conveyer belt runs for more than a kilometre, enabling us to sort 300,000 parcels per day, twice as many as we actually handle on average per day. The lines and machines at the current Brussels X will be relocated to the two mail sorting halls, which cover 50,000 m² in total.

Five additional mixed sorting machines (MSM) were also taken into use at our sorting centres in 2016. The MSM is a highly advanced sorting machine that will form the backbone of our future mail sorting activity. Of the planned 30 MSMs, 16 were operational by the end of 2016.

Technological development did not stand still in other areas either: 70 manual sorting assistants (MSA) were taken into use, facilitating manual sorting by means of optical address recognition (by camera). The camera registers the address and the compartment in which the mail item should be placed is displayed on the screen. As a result, the sorter no longer needs to know the sorting plan, which saves time and means that staff can be deployed more widely. In 2016 we tested a first prototype of a system to easily merge mail from the manual and mechanical sorting flows without prior knowledge.

Controlling costs, raising productivity and pursuing operational excellence are constant concerns at bpost. We innovate, deploy new technologies, update our working methods and work to constantly improve the quality of the services we offer to our customers.

On a daily basis, across the whole company, we consider ways to work faster, more efficiently and at a reduced cost. There are also strategic programs, such as Vision 2020.

Vision 2020The Vision 2020 program, the aim of which is to further automate sorting and set down the future mail organization, is without doubt the most important concrete expression of our ambition to continually improve how we work.

As part of Vision 2020, the 400 local mail offices we still had in 2010 are being consolidated into 60 mail centers. 240 mail offices remained at the end of 2016.

In 2016 work was also continued on the construction of the new Brussels X in Neder-Over-Heembeek, set to be the biggest sorting centre in Belgium. From October 2017 all domestic parcels will be sorted there and the mail distribution for Brussels and Flemish Brabant will be prepared there. The building, which covers a total surface area of 80,000 m², was made watertight and windproof in the summer

By continually improving how we work we are able to achieve our targets and remain healthy as a company. By being lean (drilling down to the essence), agile (adapting quickly) and flexible (being open to the world) in how we work, we can adapt our organization as effectively as possible to meet the expectations of our customers and the trends in a fast changing world.

Make our way of working lean, agile and flexible

5“By taking into use 5 mixed sorting machines (MSM) and 70 manual sorting assistants (MSA), the technological evolution continued.”

60We consolidate our 240 local mail offices into 60 mail centres.

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Hybrid networkIn a fast-changing world, it is important for us to constantly adapt to trends in society and the expectations of our customers. With that in mind, we maintain a close relationship with our customers and we listen to them to understand what they really want.

We meet the expectations of most of our customers through our standard distribution network. But to be able to respond to the specific needs of specific customers, we are building a special network for sending and receiving parcels with supplementary added value. That will give us a hybrid parcel delivery network: our traditional network for standard deliveries and large volumes and complementary solutions such as CityDepot, Euro-Sprinters and bringr (see “We grow” for more details) for highly specific deliveries.

We not only deploy new technology in our sorting and preparation. The distribution network also gets its fair share. In 2016 we began replacing the mobile devices (mobis) used by postmen with a new generation that looks very similar to a smartphone. It is not only more intuitive for staff, but also easier to use for customers, when they need to sign for an item, for example. The new software helps postmen get through their duties smoother and accompanies him or her through the new solutions we offer our customers, such as checking that building permit applications are clearly displayed and delivering decoders for a telecommunication company. After a pilot at a number of offices in 2016, all old mobile devices will be replaced by a new version by the end of May 2017.

“We build a hybrid parcel delivery

network: our traditional network

for standard deliveries and

large volumes and complementary

solutions for specific deliveries.”

This network not only enables us to respond with flexibility to the different needs of our customers but also to capture new parcel business. So the hybrid network strengthens the position of bpost on the parcel market, too.

Alongside all these initiatives, we also continue to work on other projects in other departments to make our organization more efficient, more agile and more flexible.

De Serrano is a flower shop in Merksem that prioritizes quality, creativity and originality at an affordable price. “I have deliveries every day to customers who buy flowers over the phone or by email,” says Rik. “I used to do it all myself, now I leave a lot of it to bringr. That means I no longer need to close the shop unexpected. I can also spend more time on putting together bouquets and taking care of plants. I’m a florist again rather than a part-time driver.

Goodbye to stress Some days someone else was able to look after the shop when I had to make deliveries, but other days I was on my own. I drove out early in the morning and crossed my fingers that I wouldn’t get stuck in traffic. Or I jumped in the car after closing time. I made deliveries nearby in my lunch break. But it was very stressful.

Within 5 minutesI’ve used bringr for a long time now and the number of drivers has increased significantly in recent months. At the beginning it could take a while before getting a response when I posted something, but now I always have a driver within 5 minutes. I don’t even have to worry about my long-distance deliveries. And my flowers are always delivered in good condition.

Big changeNow I think about it, working with bringr has brought about quite a big change. I can accept orders I used to refuse because the delivery address was too far away. And I no longer have to outsource artistic work. It’s strange to think that’s down to bpost, an organization you would not immediately associate with my business. I’m pleasantly surprised that bpost is working with things like bringr. It’s a sign that they are taking a dynamic approach to transport and logistical innovation.”

“I’m a full-time florist again rather than a part-time driver.”Rik Spoormans, owner of De Serrano flower shop

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We are @core

Employee health and safetyThe safety of our employees is a priority at bpost. We work hard to keep them safe and target zero occupational accidents, based on a robust prevention policy. Again in 2016, various actions were taken, especially in our operational departments, such as internal awareness-raising campaigns, safety trainings (including specific safety days) and campaigns on dealing with verbal aggression. The number of occupational accidents rose slightly in 2016 (920 versus 888 in 2015) due to an increase in the number of hours worked. The frequency (the ratio between the number of accidents and the number of hours worked) fell significantly, however, from 31.47 in 2015 to 26.79 in 2016.

The wellbeing of employees is also promoted by physical and psychological health support. The Psychosocial Prevention department helps employees to deal with work-related stress. As such, it organizes prevention campaigns, raises awareness among managers, registers complaints, provides guidance and offers support and training. It also offers support in response to traumatic events, such as physical and verbal aggression, the death of a colleague and occupational accidents, as well as conflicts between members of staff or complaints about mobbing or harassment.

At bpost the wellbeing of our employees is an overriding concern. We closely monitor two wellbeing parameters - engagement and stress complaints. In 2016 surveys were held among a representative sampling of the workforce every three months (the bpeople barometer), enabling us to keep our finger on the pulse. Based on the results local and national initiatives were launched with regard to information provision, working together, leadership training and health.

Our corporate social responsibility (CSR) program is based on three main cornerstones: people, planet and proximity. bpost integrates economic, ecological and social sustainability into the company’s culture and activities. In 2016 we backed up that engagement by signing the Belgian charter for the United Nations Sustainable Development Goals (UNSDG) and incorporating them into our CSR strategy.

bpost reports in detail on its CSR strategy and the various initiatives it takes in this field at http://corporate.bpost.be/sustainability.

PeopleWe are a company of people, for people. We count on the loyal engagement and knowhow of our employees. They are our biggest asset and we work hard to offer them the best working conditions so that they are able to give the best of themselves.

Our employees are at the heart of our company, so it’s important that they feel well. Their wellbeing is key in the people@core project, where we monitor that wellbeing based on three indicators: the bpeople barometer (see below), the absenteeism and the customer loyalty index. Those indicators teach us which initiatives are required to stimulate our employees’ well-being, both at a company wide level as specifically adapted to the employee’s working environment. In 2016 we worked on the recruitment of new talents and the onboarding of new employees, improved the rest and leave planning and we took measures to allow a balanced and consistent workload allocation.

Our employees are our biggest asset in our pursuit of loyal customers. Their wellbeing is therefore a priority for us. As a company with deep roots in society, bpost also has its social role very much at heart. By working sustainably we aim to create value for the whole of society.

Strengthen ties with all our stakeholders

In 2016 bpost signed the United Nations Sustainable Development Goals (UNSDG).

“Our employees are at the heart of our company, so it’s important that they feel well. Their well-being is key in the people@core project.”

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Training and talent developmentWe encourage our employees to follow training to continue to develop and grow. In 2016, 10,898 employees followed some 22,171 days of training or coaching. As well as traditional trainings, bpost also invests lots of efforts in online learning. In 2016, 4,521 employees followed 3,179 hours of online training, twice the number of hours compared with 2015. We also hosted our fifth Summer Academy in 2016. With this initiative we encourage our employees to use this less busy period to work on their skills. All told, around 400 employees registered for one or more of the 55 sessions on offer.

Having a qualification is a valuable asset in a career. It increases a person’s employment possibilities and future prospects within the company. With this in mind, bpost launched the “Recognizing Experience” initiative in 2011. This aims to offer employees the possibility of earning a higher secondary education diploma when they have not had this opportunity in the past. “Recognizing Experience” is a collaborative effort

between the company and ten adult education centers, and consists of a training course lasting around two years, mainly by distance learning, promoting skills and knowledge already acquired on the job, with the additional possibility of earning a higher secondary school diploma. In 2016, 110 employees earned their diploma through this route.

bpost offers employees who are moving their career in a new direction the opportunity to develop their skills by working somewhere else for a while, before returning to bpost.

Good leaders help make a difference. With that in mind, we target a leadership style founded on three behaviours: the leader as guide, as role model and as developer. In 2016 Leading@bpost was rolled out further and penetrated deeper into the organization. Every manager at bpost will have completed the course by the end of 2017. The programme will help them strengthen their leadership and role as a leader in line with our culture and strategy.

Leading@bpostprogram improving specific leadership

qualities

People@coreprogram monitoring

the well-being and engagement of our

employees

Ethics and diversityIt is our ambition to create a working environment for our employees that promotes ethics, diversity, equal opportunities and non tolerance of bribery. Our diversity programme, our code of conduct and our eDiv platform help us to put this ambition into practice.

The goal of our diversity and integrity programme is to support bpost employees in their efforts to build a culture in which diversity and integration become daily practice.

bpost has had a code of conduct since 2007. It sets out what the company expects from every employee with regard to professional ethics and working together in harmony. For example, in the event of corruption, attempted corruption or active or passive participation in corruption, both the company and the employee are liable for heavy fines or a custodial sentence. The strongest disciplinary measures may be taken in response.

As a listed company since 21 June 2013, bpost also has its own Trading and Communication Code, the principles of which apply to all employees and the purpose of which is to prevent any abuse of insider knowledge. This code applies to all bpost employees and to persons who are “associated” with them, such as their partners and dependents.

We even go further: we have introduced the issues of diversity and integration into our corporate leadership model. This will enable us to enumerate the most important behaviours expected of our leaders with respect to these issues.

The guidelines with regard to religion and work help leaders to integrate religion on the work floor, with respect for every faith and good work practices to maintain performance at an acceptable level.

Developed and managed by the Equal Opportunities Center, our eDiv online learning platform enables us to:

Gain insight into the legal framework with regard to discrimination.

Identify, avoid and resolve potential situations of discrimination.

Initiate processes to manage the diversity of our teams better.

We continue to give a lot of attention to problems of diversity and integration in workshops on the work floor and through various communication tools.

Social dialoguebpost has a long tradition of social dialogue, a tradition we value greatly and continue to defend. The law applicable to bpost as an autonomous state enterprise and its articles of association provide for a structure and processes at various levels with a view to efficient negotiation, dialogue and information. bpost has its own joint committee and various other forums at national level (including sub-committees and strategic committees) and regional level (such as consultation committees) to promote adequate dialogue and good relations with the unions. This way of working together enables fast responses to incidents, which prevents escalation and limits social conflicts.

Pay and conditions, collective bargaining agreements, restructuring, and safety and wellbeing at work are examples of topics that may be examined and discussed every month.

22,171 days of training for 10,898 employees

3,179hours of online training, double the number of 2015

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The agreement that the unions and bpost management reached on the new collective bargaining agreement for 2016-2017 is proof that social dialogue works. The new collective bargaining agreement provides for a number of important measures to improve purchasing power, such as increasing the face value of meal vouchers, topping up the end-of-year bonus and higher commuting expenses reimbursements. Agreement has also been reached on measures to promote employment. Among other things, management has undertaken to avoid compulsory redundancies for the whole duration of the collective bargaining agreement. New employees will also be given more training and support.

Constructive social dialogue in 2016 also resulted in a number of additional steps to increase the wellbeing of our employees, such as initiatives with regard to guidance for newcomers, training, improved leave planning and balanced workload allocation for all.

PlanetBy the very nature of our activities, bpost inevitably has an environmental impact, be that the carbon emission of our fleet, our energy consumption or our waste production. However, through our sustainability programme we aim to minimise our footprint and reassure our customers that their mail and parcels are sent in the most environmentally responsible way possible.

All those initiatives are paying dividends: in 2007-2016 at bpost we were able to reduce our carbon footprint by 36% and (in 2005-2016) cut our energy consumption by 17.2%. We produced 16% less waste in 2009-2016.

For the fourth year in succession, bpost placed first in the International Post Corporation’s (IPC) global environmental management ranking.

Green fleetOur fleet - with 7,090 vans, 1,162 mopeds, 426 trucks, 2,632 bikes, 2,392 e-bikes, 24 electric three-wheel scooters, 3 e-trikes and 2 electrical vans - constitutes a great environmental challenge for bpost.

bpost aims to make that fleet greener through various initiatives. We are fully committed to alternative means of transport to make our fleet more environmentally friendly. In recent years, for instance, we have replaced a lot of mopeds with e-bikes and in 2016 we tested the use of electrical scooters, e-trikes with large storage platform and electric vans. bpost also studied the possibility of converting some of its trucks to run on gas.

We also continue to train our drivers to drive in an environmentally sustainable way, including a biannual Eco-Driving Challenge. In 2016 we hosted an international Eco-Driving Challenge in Spa-Francorchamps. Representatives from many different European postal operators took part. In 2014 we began installing dataloggers in our vans and trucks, which warn drivers when they do not drive in an environmentally friendly way.

We also give special attention to our employees’ commutes. bpost has a green car policy to encourage members of management to opt for means of transport that emit less carbon dioxide. We also have a solution to encourage employees to share their ride (bpost.carpool.be).

Green buildingsIt is not only our fleet we aspire to make greener, but the some 950 premises in our portfolio too. In addition to compliance and proper application of the environmental regulations, bpost is actively working on the introduction of environmental management systems. We hold ISO 14001 certification for our biggest sites (the five sorting centers, Stamps Production Belgium in Mechelen and the head office in Brussels). bpost also invests to cut energy consumption in its premises, including smart lighting systems, insulation and improved heating and air-conditioning systems.

We will always need electricity, however. bpost consumes 100% green electricity and we increasingly produce our own electricity. In recent years we have installed 15,000 m² of solar panels on the roofs of our premises.

100%consumption of

green energy

Waste managementWe constantly work to reduce waste and improve our waste management. Sound waste management is very important at all our sorting centers, mail centers and administrative premises. This covers the meticulous sorting of all our waste flows, proper collection and removal of our waste by a registered partner and recycling (paper, cartons, plastic bottles, metal) or processing with energy production.

To ensure we are able to achieve our recycling goals, we focus on appropriate waste selection through awareness-raising campaigns and internal audits. Between 2009 and 2016 we were able to cut waste by 16%, which means we are well on our way to achieving our target (-20% of the 2009 figure by 2020).

ProximityOne of the biggest assets bpost has is our presence throughout the country each and every day. That is expressed through our accessible network of points of sale and the fact that our postmen visit every letterbox in the country every working day. We work every day to maintain that proximity, to ensure that we are as close as possible to society and to anticipate and respond to current and future needs.

Proximity to our communitybpost is involved in local communities with our support of a number of social projects, particularly the fight against illiteracy in Belgium. We also give financial

incentives to employees who do voluntary work for charity. We do not only look at the social aspect, we also want to improve biodiversity and the environment in our local communities.

Fight against illiteracy and encouraging writingSince 1997 bpost has been involved in the fight to eradicate illiteracy in Belgium. This commitment is made on the basis of financial support to the bpost Literacy Fund, which is managed by the King Baudouin Foundation, specifically by donating part of the price of the Christmas stamp to the fund. Since 2010, the fund has received over EUR 1.25 million, which has been used to support new literacy projects run by various associations.

bpost encourages writing through various initiatives. In 2009 we launched the “Letter Brigade”, an initiative targeting schools. Our aim is to get children aged between 2½ and 12 years old interested in writing and stamps. Teachers can download a set of educational materials from the bpost website. These are tailored to the various stages of education and are updated every year.

Every year, from November to early December, children can send letters to St Nicolas, as per the Belgian custom. More than 300,000 children did so in 2016. bpost employees give the good man a helping hand by sending a gift to every child who sends him a letter.

-36%less CO2 emissions in the period 2007-2016

-17%less energy consumption in the period 2005-2016

-16%less waste in the period 2009-2016

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Encouraging voluntary workSince 2010 bpost has encouraged employees who actively and fully volunteer for societal, cultural, social or environmental projects. The Star4U initiative has been a rousing success. In total, bpost has already granted financial support of EUR 487,000 over the 571 selected projects. The selected projects are closely connected to bpost’s values: social service, care, culture, development aid, sport, nature and the environment. The merits of the applications are evaluated by a panel of judges made up of bpost employees and independent experts. A new edition of the initiative will be launched in 2017.

Protecting biodiversitybpost aims to strengthen its environmental initiatives and contribute to biodiversity challenges to reduce the environmental footprint.

In the Beepost project, in 2016 bpost set up various bee colonies on the roof of the Brussels head office in association with the Made in Abeilles cooperative. This project promotes the multifunctional use of our roofs, responds to the mass disappearance of bees and the related loss of biodiversity.

In addition, bpost works to maintain biodiversity and local flora across its sites. For example, a plot in the Oude Landen area close to Ekeren has been transformed into a nature reserve managed by Natuurpunt and Raspail Park in Uccle, Brussels is now run by the municipality of Uccle. Natuurpunt and bpost have also planted a one-hectare bpost forest at the Waver forest in Lier.

Proximity to our suppliersOur ambitions are not limited to our own company,they apply to the entire value chain. Throughout our whole organisation, a responsible and sustainable contracting practice is stimulated with our suppliers.

Sustainable procurement policyThe technical aspects, social and environmental performance of each purchased product is assessed. An environmental and social clause is included in the implementation conditions to ensure a sustainable procurement process.

Local procurement is important for our stakeholders, so we monitor our spend at local suppliers.

As well as our procurement policy, bpost is also determined to be the best in class with regard to responsible paper consumption. Our partners PEFC and FSC help us achieve this goal. Various steps have been taken in recent years: 99% of paper purchased is PEFC and/or FSC-certified or recycled and 100% of our stamps are printed on FSC paper.

Supplier evaluationWe work with Ecovadis to conduct CSR risk assessments on our suppliers. These assessments are focused on gaining insight into their vision and results with regard to sustainability. Both environmental (energy, water, waste, products) and social performances (health and safety, working conditions, child and forced labour) are taken into account. 211 suppliers have been assessed since 2011.

Proximity to our customers through our servicesWe offer reliable products and services to give our customers the opportunity to make sustainable choices and assess the impact of those choices.

Carbon servicesAn example is our Carbon Meter, which customers can use to calculate the carbon footprint generated in performing their postal services. That helps them make well-informed decisions that minimize the impact on the environment (such as the paper type, use of cardboard, size and ink).

Alongside the tool, bpost gives customers the possibility to offset the emissions generated by their mail flows. This service was developed with CO2logic to fund climate-related projects in order to reduce greenhouse gases in emerging countries.

More than 148 million customers mail items were sent in a carbon-neutral way in 2016. Those carbon-neutral mail items resulted in a carbon offset of 2,056 tonnes in 2016.

487,000 EUR

financial support for 571 selected

projects

1.25 million EUR

to support the bpost Literacy Fund

CityDepotCityDepot delivers goods from haulers, large retailers and (semi-)public bodies to retailers and consumers in the city center. It does so in a safe, combined, sustainable and personalized way, with electric vehicles and cargo bikes.

99%of paper purchased is PEFC and/or FSC-certified or recycled and 100% of our stamps are printed on FSC paper

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This efficient delivery method benefits retailers and haulers, local government and residents in the city. Fewer heavy trucks, less noise and lower carbon emissions improve the liveability of the inner city. CityDepot now serves virtually the whole of Belgium, with branches in Brussels, Antwerp, Ghent, Bruges, Leuven, Hasselt and, since 2016, Charleroi and Liege too.

“Corporate social responsibility and sustainability are very important for today’s transport companies. That’s because the

haulage industry is often under pressure, both on motorways and in city centres. CityDepot’s sustainable concept offers us numerous opportunities and its green values are definitely a plus.

Sustainable haulers...The service has been very good from the very beginning of our partnership with CityDepot and it has only got better over the years. Communication is also very open, clear and transparent. And CityDepot offers us additional storage space in its warehouses. This enables us to free up more space at our own site for new customers and new business, which means we can grow as a business. As such CityDepot also contributes to our success.”

...and satisfied merchantsNot only haulers but merchants too are very positive about CityDepot. “We have been a customer from the very beginning and believe strongly in the CityDepot concept,” says Mario Dewarier, store manager of Standaard Boekhandel in Hasselt. “For us CityDepot is without doubt the right partner because of the convenience and service they offer. We experience the same customer friendliness every time. The drivers are very able and highly customer-oriented; they are more like deliverers than drivers for us. Plus CityDepot is always able to answer all of our questions quickly.

CityDepot enables us to focus on the things we are good at. CityDepot feels like an extra employee we can rely on to ensure our parcel sending process goes smoothly. We also note that CityDepot is growing into an increasingly good partner for our online ambitions and e-commerce solutions and we are looking forward to new innovations.”

“CityDepot enables us to work on sustainability.”Filip Christiaens, Managing Director Rotra

Financial review

1.1 CONSOLIDATED INCOME STATEMENTThe following table presents bpost’s financial results for years 2014, 2015 and 2016:

For the year ended 31 December

In million EUR 2016 2015 2014Evolution

2016-2015Turnover 2,399.4 2,393.4 2,441.7 0.3%Other operating income 25.8 40.3 22.9 -35.9%TOTAL OPERATING INCOME 2,425.2 2,433.7 2,464.7 -0.3%

Materials cost (60.4) (26.6) (27.4) 127.4%Services and other goods (665.2) (645.6) (644.1) 3.0%Payroll costs (1,111.1) (1,185.8) (1,199.9) -6.3%Other operating expenses (1.7) (20.5) (21.3) -91.7%TOTAL OPERATING EXPENSES EXCLUDING DEPRECIATIONS/AMORTISATIONS

(1,838.4) (1,878.5) (1,892.6) -2.1%

EBITDA 586.9 555.2 572.0 5.7%Depreciation, amortisation (90.3) (89.1) (91.9) 1.3%

PROFIT FROM OPERATING ACTIVITIES (EBIT) 496.5 466.1 480.2 6.5%

Financial income 10.7 5.3 5.5 101.7%Financial cost (27.6) (10.9) (42.7) 153.6%

Share of profit of associates 9.9 10.2 11.2 -2.8%

PROFIT BEFORE TAX 489.5 470.6 454.1 4.0%

Income tax expense (143.2) (161.4) (158.6) -11.2%

PROFIT FOR THE YEAR 346.2 309.3 295.5 12.0%

Maintain our financial solidity

346.2 million EUR reported profit for 2016

2,425.2 million EUR reported operating income in 2016

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Total operating income (revenues)Total operating income (revenues) decreased by 0.3% to EUR 2,425.2 million (compared to EUR 2,433.7 million in 2015). The evolution per product line can be summarised as follows:

For the year ended 31 December

In million EUREvolution

2016 2015 2014 2016-2015Domestic mail 1,414.4 1,464.2 1,523.0 -3.4%

Transactional mail 873.3 917.6 943.2 -4.8%Advertising mail 247.8 250.9 271.4 -1.2%Press 293.2 295.6 308.4 -0.8%

Parcels 379.4 340.7 307.2 11.3%Domestic parcels 181.8 161.2 151.3 12.8%International parcels 189.5 170.0 143.3 11.5%Special logistics 8.0 9.6 12.6 -16.3%

Additional sources of revenues 600.1 589.0 612.5 1.9%International mail 162.0 175.7 203.7 -7.8%Value added services 103.1 96.2 95.4 7.1%Banking and financial products 192.4 205.1 207.5 -6.2%Other 142.6 112.0 106.0 27.4%

Corporate (Reconciling post) 31.4 39.8 21.9 -21.1%TOTAL 2,425.2 2,433.7 2,464.7 -0.3%

Excluding the anticipated lower compensation for SGEI (EUR 22.9 million, in line with the conditions applicable as of January 1, 2016 for the 6th management contract and the press concessions), the acquisition of Ubiway (EUR 43.8 million in revenues, included in the portfolio Other) and the sale of a sizeable building in 2015 on which a capital gain of EUR 26.1 million was realised and which had been considered as non-recurring, operating income slightly decreased by EUR 3.3 million. The increase of Parcels (EUR 38.6 million) with double digit growth for both Domestic and International Parcels, the price increases in Domestic Mail (EUR 21.1 million) and the increase of Corporate (EUR 17.7 million) were slightly offset by the volume decrease of Domestic Mail (EUR 68.4 million) and the lower revenues relating to Additional Sources of Revenues (EUR 12.4 million).

Revenues from Domestic Mail decreased by EUR 49.8 million to EUR 1,414.4 million in 2016. Excluding the lower compensation for SGEI (EUR 2.5 million), the underlying decline of Domestic Mail amounted to EUR 47.3 million. The price and the mix improvement had a positive impact of EUR 21.1 million, while the underlying volume decline of 5.0%, which is identical as the volume decline for 2015, impacted revenues by EUR 68.4 million.

58.32%

24.74%

1.29%

15.64%

Domestic mail Parcels Other sources of revenues and retail network Corporate

Income

Parcels grew by EUR 38.6 million to reach EUR 379.4 million or +11.3% driven by: the good performance of the International Parcels (EUR +19.5 million), mainly due to the positive contribution from acquisitions, partially offset by lower volumes to China; excellent Domestic Parcels volume growth of 17.1% in 2016 versus 12.6% in 2015 and 7% in 2014. This increase was driven by the continued growth of e-commerce and the strong positive trend in C2C parcels (online product offering). Price increases were fully offset by the evolution of the client and product mix (faster growth of large e-tailers with high volumes and lower prices compared to smaller customers), resulting in a negative price mix effect of -3.2%.

Total operating income from the Additional Sources of Revenues increased by EUR 11.1 million to EUR 600.1 million in 2016. Excluding the impact of the lower compensation for SGEI (EUR 20.4 million) and the acquisition of Ubiway (EUR 43.8 million, included in the portfolio Other), operating income decreased by EUR 12.4 million. This decrease was mainly due to the decrease of International Mail (EUR 13.7 million), in turn due to the decline in mail volumes and the wholesales business in order to safeguard reasonable profit margins. Value Added Services increased to EUR 103.1 million compared to EUR 96.2 million in 2015, thanks to Speos and to the development of customised solutions and services, such as European License Plates, the delivery process of new decoders and modems for clients of a telecom operator and CityDepot (substainable urban distribution). The lower compensation for SGEI impacted Banking and Financial Products as well as Other for an amount of respectively EUR 10.3 million and EUR 10.1 million.

The evolution of total operating income of Corporate (reconciling category) was mainly impacted by the sales of buildings and revenue recognition. In 2015, the sale of one sizeable building generated a capital gain of EUR 26.1 million. Not taking into account this non-recurring item total operating income of Corporate increased by EUR 17.7 million in 2016.

Operating expensesOperating expenses, including depreciation, amortisation, and impairment charges, amounted to EUR 1,928.7 million (2015: EUR 1,967.6 million) and decreased by EUR 39.0 million compared to last year.

This decrease was mainly due to the decrease of the payroll charges (EUR 74.8 million), the other operating expenses (EUR 18.8 million), partially offset by the increase of the material cost (EUR 33.8 million), services and other goods (EUR 19.6 million) and the depreciation and amortisation (EUR 1.2 million).

Material costsMaterials costs, which include the cost of raw materials, consumables and goods for resale, increased by EUR 33.8 million to EUR 60.4 million (2015: EUR 26.6 million) primarily due to the integration of Ubiway.

Services and other goodsThe cost of goods and services increased by EUR 19.6 million or 3% (excluding interim costs(1), the cost of goods and services decreased by EUR 5.1 million).

(1) Interim costs are analysed together with payroll costs, as they are better performance indicator of human capital utilisation. In certain cases of natural attrition, personnel is replaced by interims to anticipate reorganisations and productivity improvement programs.

-5.0% volume decline for Domestic Mail in 2016

+17.1% volume increase for domestic parcels in 2016

-39 million EUR decrease of operating expenses in 2016

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For the year ended 31 December

In million EUREvolution

2016 2015 2014 2016-2015Rent and rental costs 72.6 66.7 68.7 8.9%Maintenance and repairs 77.5 78.7 75.4 -1.5%Energy delivery 33.7 37.0 37.2 -8.9%Other goods 22.7 21.1 21.4 7.4%Postal and telecom costs 6.3 6.4 5.7 -1.1%Insurance costs 12.4 12.0 13.7 2.7%Transport costs 217.2 212.6 218.4 2.2%Publicity and advertising 14.3 16.6 18.9 -14.0%Consultancy 15.5 12.8 19.4 21.6%Interim employees 54.8 40.3 36.4 35.9%Third party remuneration. fees 118.9 118.3 109.4 0.6%Other services 19.2 23.0 19.5 -16.4%TOTAL 665.2 645.6 644.1 3.0%

Rental costs have increased by EUR 5.9 million, or 8.9%, mainly due to higher costs for fleet and the consolidation of Ubiway.

Maintenance and repairs slightly decreased by EUR 1.2 million, or 1.5%, this was mainly caused by cost savings related to maintenance costs of machines in sorting centers.

Energy delivery costs have decreased by EUR 3.3 million, or 8.9% mainly due to a positive price evolution of energy costs for both vehicles and buildings.

Transport costs amounted to EUR 217.2 million and excluding the impact of Ubiway, increased by EUR 2.9 million. This increase was mainly explained by growth in international parcels, lower favorable settlement of previous years’ terminal dues (EUR 0.5 million) and the settlement on terminal dues with another postal operator.

Publicity and advertising costs decreased by EUR 2.3 million, or a 14.0% decline in comparison with 2015.

The consultancy costs grew by EUR 2.8 million, or 21.6%, due to increased costs related to strategic corporate projects.

The growth in interim costs was driven by higher use of temporary personnel (an increase of 286 FTE on average over the year; see also section payroll costs).

Not taking into account the consolidation of Ubiway, third party remunerations and fees decreased by EUR 3.6 million, amongst others driven by the internalisation of newspaper delivery (=Deltamedia).

Payroll costsPayroll costs (EUR 1,111.1 million) and interims costs (EUR 54.8 million) in 2016 amounted to EUR 1,165.8 million and decreased by EUR 60.3 million, 2015 had been impacted by the provision for the Alpha social plan (EUR 54.5 million). Excluding this non-recurring item, payroll and interims costs decreased by EUR 5.8 million (payroll costs decreased by EUR 20.2 million and interims costs increased by EUR 14.5 million), or 0.5 % compared to 2015.

The integration of FTE and interims of the new subsidiaries, the internalisation of newspaper delivery (= Deltamedia) and additional workforce to absorb growth of parcels volumes and solutions led to a reported average year-on-year increase of 147 FTE and generated extra costs of EUR 5.7 million. The total impact of the above mentioned items amounted to 833 FTE and interims. Therefore, the underlying average reduction in FTE and interims amounted to 686 for the year.

-20.2 million EUR decrease of payroll costs in 2016

The recruitment of auxiliary postmen created a positive mix effect of EUR 8.0 million. Additionally, a lower number of management functions due to a hiring freeze and reorganisation, created a positive mix effect of EUR 12.2 million.

The indexation of salaries combined with the first impacts of the new CLA and the normal salary and merit increases, partially compensated by the impact of the tax shift, lower lay-off costs and lower provisions for bonuses, led to a negative price impact EUR 4.9 million.

Besides this, costs associated with the employee benefits increased with EUR 4.1 million. Finally, the payroll costs were impacted negatively by a settlement of social charges, which was more important last year than this year (EUR 1.0 million).

Other operating expensesOther operating charges decreased by EUR 18.8 million versus last year, mainly driven by lower costs of provisions, mainly resulting from the reversal of provisions related to a terminal dues settlement with another postal operator for which the corresponding costs have been booked within the transport costs. Furthermore last year’s earn-out for Gout (EUR 2.0 million) and the higher increase of recoverable VAT (EUR 3.0 million, percentage of recoverable VAT increased from 13% in 2014 to 14% in 2015 and 18.79% in 2016) add to the decrease.

Depreciation and amortisationDepreciation, amortisation and impairment charges have increased by EUR 1.2 million, or 1.3%, to EUR 90.3 million in 2016 (2015: EUR 89.1 million).

EBITExcluding the non-recurring items, i.e. in 2015 the accrual related to the Alpha social plan (EUR 54.5 million) and the impact of the sale of a sizeable building (EUR 26.1 million), EBIT increased by EUR 2.1 million or 0.4%.

Despite the anticipated reduced SGEI compensation (EUR 22.9 million), lower Domestic Mail revenues (EUR 47.3 million) and the decrease of the Additional Sources of Revenues (EUR 12.4 million, not taking into account the consolidation of Ubiway), EBIT grew thanks to parcels performance (EUR 38.6 million), the normalised increase of Corporate revenues (EUR 17.7 million) and lower costs (EUR 28.8 million not taking into account the consolidation of Ubiway), driven by cost control measures and productivity improvements.

Net financial resultNet financial result decreased by EUR 11.4 million due to increase of non-cash financial charges related to IAS 19 employee benefits as a result of the decrease in the discount rates.

Share of results of associatesThe share of results of associates relates to bpost bank and Citie and decreased by EUR 0.3 million to EUR 9.9 million.

Income tax expenseIncome tax expense decreased from EUR 161.4 million in 2015 to EUR 143.2 million in 2016. bpost’s effective tax rate decreased from 34.3% in 2015 to 29.3% in 2016. In 2016 Deltamedia SA-NV has been liquidated, triggering a positive impact of EUR 22.2 million. The loss on the participation incurred by bpost SA-NV was tax deductible upon liquidation to the extent it represented previously fiscally paid-up capital in Deltamedia SA-NV and has been excluded from the normalised results due to its non-recurring nature.

496.5 million EUR EBIT 2016

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1.2 STATEMENT OF FINANCIAL POSITION

AssetsProperty, plant and equipment

Property, plant and equipment have increased by EUR 13.1 million from EUR 548.5 million to EUR 561.6 million. This increase was explained by: the incorporation of new subsidiaries EUR 20.1 million; acquisitions (EUR 72.7 million) related to production facilities for sorting and printing activities (EUR 23.0 million), mail and retail network infrastructure (EUR 20.4 million), ATM and security infrastructure (EUR 4.4 million), transportation related infrastructure (EUR 7.5 million), IT and other infrastructure (EUR 15.9 million) and land (EUR 1.5 million);

depreciation and impairment amounted to EUR 71.4 million and slightly increased compared to last year (2015: EUR 69.4 million);

transfer to assets held for sale (EUR 8.6 million) and from investment property (EUR 0.2 million).

Intangible assets

Intangible assets have increased by EUR 134.7 million from EUR 89.6 million to EUR 224.4 million, due to: the incorporation of new subsidiaries EUR 12.7 million; Goodwill throughout acquisitions in 2016 of EUR 128.5 million. A major part of these goodwill calculations are still provisional because purchase price allocation of some acquisitions are still under review;

investments in software and licences (EUR 2.8 million), development costs capitalised (EUR 7.2 million) and other intangible assets (EUR 2.2 million);

amortisation and impairments amounting to EUR 18.5 million.

Investment properties

Investment properties decreased from EUR 6.5 million in 2015 to EUR 6.2 million in 2016, or by 5.2% as the number of buildings, which were rented out, slightly decreased.

Investments in associates

Investments in associates decreased by EUR 1.4 million, or 0.4%, to EUR 373.7 million, reflecting bpost’s share of bpost bank’s profit for the amount of EUR 10.0 million, the entry in scope of Citie for EUR 0.8 million reduced by the loss of EUR 0.1 million of Citie and the decrease in the unrealised gain on the bond portfolio of bpost bank in the amount of EUR 12.0 million, reflecting an average increase of the underlying yield curve by 44 basis points (bps). End 2016, investments in associates comprised net unrealised gains in respect of the bond portfolio in the amount of EUR 166.9 million, which represented 44.7% of total investments in associates. The unrealised gains were generated by the lower level of interest rates compared to the acquisition yields of the bonds. Unrealised gains are not recognised in the Income Statement, but directly in equity in the Other Comprehensive Income caption.

Deferred Tax assets

Deferred tax assets amounted to EUR 48.2 million (2015: EUR 47.2 million) and mainly relate to the timing difference between the accounting and the tax value of the employee benefits.

Property, plant and equipment Intangible assets Investment properties Investments in associates Deferred Tax assets Inventories Current trade and other receivables Cash and cash equivalents

Assets9.9%

16.5%

0.3%

1.6% 2.1%

21.2%

23.7% 24.7%

Equity Non-current interest-bearing loans and borrowings Non-current trade and other liabilities Employee benefits Non-current provisions Current provisions Current trade and other liabilities Other

2.1%1.7%

1.9%

42.1%

15.6%1.4%1.2%

34.0%

Inventories

Inventories increased by EUR 25.6 million and amounted to EUR 36.7 million (2015: EUR 11.1 million), this increase is mainly due to the inventory of Ubiway per end of December amounting to EUR 25.5 million.

Current trade and other receivables

Current trade and other receivables increased by EUR 70.6 million to EUR 481.8 million (2015: EUR 411.2 million), driven by a rise in trade receivables of EUR 60.7 million as a result of the consolidation of Ubiway.

Cash and cash equivalents

Cash and cash equivalents decreased by EUR 76.8 million, or 12.5%, to EUR 538.9 million. This decrease is mainly due to the normalised free cash flow (EUR 193.9 million) being offset by the payment of EUR 262.0 million dividends.

Equity and LiabilitiesEquityEquity increased by EUR 84.6 million, or 12.2%, to EUR 779.3 million as of December 31, 2016 from EUR 694.8 million as of December 31, 2015. The increase was mainly due to the realised profit (EUR 346.2 million) and the revaluation of the contractually agreed future purchase of the remaining shares of Landmark and CityDepot (impact of both amounted to EUR 15.6 million). This was partially offset by the net actuarial losses on post-employment benefits, the fair value adjustment in respect of bpost bank’s bond portfolio and the payment of dividends, respectively for an amount of EUR 4.8 million, EUR 12.0 million and EUR 262.0 million.

Non-current interest-bearing loans and borrowingsInterest-bearing loans and borrowings decreased by EUR 8.5 million to EUR 47.7 million as an amount of EUR 9.1 million, corresponding to the loan amount to be repaid to the European Investment Bank in 2017, was transferred to current financial liabilities.

Non-current trade and other liabilitiesNon-current trade and other liabilities decreased by EUR 21.4 million (2015: EUR 61.7 million), mainly due to the transfer of the remaining 24.5% of the shares of Landmark from long-term to short-term and the revaluation of the earn out of CityDepot, partially offset by the commitments relating to earn outs for de Buren.

Employee benefitsAs at 31 DecemberIn million EUR 2016 2015 2014Post-employment benefits (82.1) (77.7) (85.4)Long-term employee benefits (107.7) (108.9) (118.3)Termination benefits (4.1) (11.6) (13.3)Other long-term benefits (162.8) (148.1) (151.5)TOTAL (356.7) (346.2) (368.6)

Equity and Liabilities

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Employee benefits increased by EUR 10.5 million, or 3.0%, to EUR 356.7 million in 2016 from EUR 346.2 million in 2015.

The increase mainly reflects: the payment of benefits for an amount of EUR 33.0 million, which included EUR 4.3 million for the payment of early retirement and part-time work benefits;

operational actuarial gains (EUR 11.4 million), mainly linked to the part-time regime (50+), to the Accumulated Compensated Absences, to the Medical Expenses, and the Workers Compensation Accident Plan, partially offset by operational losses linked to the Pension Saving Days benefits;

additional service costs (EUR 30.5 million) and interest costs (EUR 5.7 million); financial actuarial losses of EUR 12.9 million caused by changes in the discount rates; an actuarial loss of EUR 5.8 million related to post-employment benefits, recognised through Other Comprehensive Income.

After deduction of the deferred tax asset relating to employee benefits which amounted to EUR 48.4 million, the net liability amounted to EUR 308.3 million (2015: EUR 297.1 million).

Non-current provisionsNon-current provisions amounted to EUR 31.6 million (2015: EUR 29.2 million) and are in line with last year.

Current provisionsCurrent provisions decreased to EUR 27.1 million (2015: EUR 35.0 million), mainly due to the reversal of provisions related to a terminal dues settlement with another postal operator for which the corresponding costs have been booked within the transport costs.

Current trade and other liabilitiesCurrent trade and other liabilities increased by EUR 126.4 million EUR, or 15.1%, to EUR 964.8 million in 2016. This variance is mainly due to the increase of trade payables and other payables, which respectively increased by EUR 125.9 million and EUR 32.9 million, partially offset by the decrease of the payroll and social security payables by EUR 32.4 million. The increase of the trade and other payables is mainly due to the integration of Ubiway whereas the increase of the other payables was caused by the transfer from long-term to short-term of the liability relating to the acquisition of the remaining shares of Landmark, the earn outs relating to the acquisition of FDM and Apple Express and the consolidation of Ubiway. The decline of payroll and social security payables is mainly explained by the impact in 2015 of the Alpha social plan.

1.3 STATEMENT OF CASH FLOWSIn 2016, bpost generated EUR -76.2 million of net cash. This is a decrease of EUR 128.4 million compared to the net cash inflow of EUR 52.1 million in 2015. Cash flow from operating activities resulted in a cash inflow of EUR 352.6 million, EUR 8.4 million less than in 2015. Cash generation from operating activities had been negatively impacted by:

the lower compensation and change in payment terms for SGEI (EUR -35.9 million); the net impact of Alpha pay-outs (EUR -8.3 million); the payment of terminal dues (EUR -16.8 million), which was mainly phasing as costs were booked in previous years in transport costs and; the phasing in bpost bank dividend (EUR -5.0 million).

Income tax paid relating to previous years was lower in 2016 compared to 2015 (EUR +21.1 million) and tax prepayments in 2016 were EUR +10.0 million lower than in 2015. Excluding these elements, results of operating activities increased by EUR 16.1 million and working capital improved by EUR 10.3 million.

Investing activities generated a cash outflow of EUR 158.7 million in 2016 compared to an outflow of EUR 45.1 million last year, resulting from higher cash outflows related to the acquisition of new subsidiaries and activities (EUR -75.4 million), lower proceeds from sale of property, plant and equipment (EUR -22.2 million, as 2015 included the sale of a major building), investment securities (EUR -12.0 million) and higher capital expenditures (EUR -4.0 million).

The cash outflow relating to financing activities amounted to EUR 270.1 million, an increase by EUR 6.3 million compared to last year given the higher final and interim dividends and the dividend to minority interests paid in 2016.

1.4 RECONCILIATION OF REPORTED TO NORMALISED FINANCIAL METRICSbpost also analyses the performance of its activities on a normalised basis or before non-recurring items. Non-recurring items represent significant income or expense items that due to their non-recurring character are excluded from internal reporting and performance analyses. bpost strives to use a consistent approach when determining if an income or expense item is non-recurring and if it is significant enough to be excluded from the reported figures to obtain the normalised ones.

A non-recurring item is deemed to be significant if it amounts to EUR 20 million or more. All profits or losses on disposal of activities are normalised whatever the amount they represent. Reversals of provisions whose addition had been normalised from income are also normalised whatever the amount they represent.

The presentation of normalised results is not in conformity with IFRS and is not audited. The normalised results may not be comparable to normalised figures reported by other companies as those companies may compute their normalised figures differently from bpost. Normalised financial measures are presented below.

75.4 million EUR important cash outflow in 2016 related to the acquisition of new subsidiaries

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Income Statement relatedOperating income for the year ended 31 December

In million EUR 2016 2015 2014Evolution

2016-2015Total operating income 2,425.2 2,433.7 2,464.7 -0.3%Sale of sizeable building (1) (26.1)NORMALISED TOTAL OPERATING INCOME 2,425.2 2,407.6 2,464.7 0.7%

Operating expenses for the year ended 31 December

In million EUR 2016 2015 2014Evolution

2016-2015Total operating excluding depreciation. amortisation

(1,838.4) (1,878.5) (1,892.6) -2.1%

Social plan - Alpha project (2) 54.5NORMALISED TOTAL OPERATING EXPENSES EXCLUDING DEPRECIATION. AMORTISATION

(1,838.4) (1,824.0) (1,892.6) 0.8%

EBITDA for the year ended 31 December

In million EUR 2016 2015 2014Evolution

2016-2015EBITDA 586.9 555.2 572.0 5.7%Sale of sizeable building (1) (26.1)Social plan - Alpha project (2) 54.5NORMALISED EBITDA 586.9 583.6 572.0 0.6%

EBIT for the year ended 31 December

In million EUR 2016 2015 2014Evolution

2016-2015Profit from operating activities (EBIT) 496.5 466.1 480.2 6.5%Sale of sizeable building (1) (26.1)Social plan - Alpha project (2) 54.5NORMALISED PROFIT FROM OPERATING ACTIVITIES (EBIT)

496.5 494.4 480.2 0.4%

Profit (EAT) for the year ended 31 December

In million EUR 2016 2015 2014Evolution

2016-2015Profit for the year 346.2 309.3 295.5 12.0%Sale of sizeable building (1) (17.2)Social plan - Alpha project (2) 36.1Liquidation of Deltamedia (3) (22.2)NORMALISED PROFIT OF THE YEAR 324.1 328.1 295.5 -1.2%

(1) In December 2015 bpost sold a sizeable building on which a capital gain of EUR 26.1 million was realised. Given the nature of the gain and the fact that it exceeds the threshold of EUR 20.0 million. this gain was considered as non-recurring.

(2) On July 23. 2015 during the joint committee. bpost management and representatives of the workforce reached an agreement concerning the social plan related to the Alpha project in the support departments. The agreement contains the conditions for early retirement and deter-mines the layoff conditions. in case certain employees are not selected for a new job. The estimated impact of this agreement has been accrued for within the payroll costs during the third quarter of 2015.

(3) In December 2016, Deltamedia SA-NV, a 100% subsidiary of bpost SA-NV, has been liquidated. The loss on the participation incurred by bpost SA-NV was tax deductible upon liquidation to the extent it represents previously fiscally paid-up capital in Deltamedia SA-NV.

Cash Flow Statement relatedFor the year ended 31 December

In million EUR 2016 2015 2014Evolution

2016-2015Net Cash from operating activities 352.6 361.1 451.5 -2.3%Net Cash used in investing activities (158.7) (45.1) (78.2) 251.8%OPERATING FREE CASH FLOW 193.9 315.9 373.3 -38.6%Deposits received from third parties (0.0) (0.0) 0.2 0.0%NORMALISED OPERATING FREE CASH FLOW 193.9 315.9 373.5 -38.6%

Operating free cash flow represents net cash from operating activities less acquisition of property, plant and equipment (net of proceeds from sale of property, plant and equipment), acquisition of intangible assets, acquisition of other investments and acquisition of subsidiaries (net of cash acquired).

For 2015 and 2016 no non-recurring cash flow statement related items were identified.

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1.5 FROM IFRS CONSOLIDATED NET PROFIT TO BELGIAN GAAP UNCONSOLIDATED NET PROFITFor the year ended 31 DecemberIn million EUR 2016 2015 2014IFRS Consolidated Net Profit 346.2 309.3 295.5Results of subsidiaries and deconsolidation impacts (39.5) (11.3) (4.0)Differences in depreciation and impairments (2.6) 0.2 (3.8)Differences in recognition of provisions 0.2 (6.5) (7.4)Effects of IAS19 2.3 (17.3) 15.6Deferred taxes 0.3 10.2 2.5Other 1.8 3.0 (1.5)BELGIAN GAAP UNCONSOLIDATED NET PROFIT 308.7 287.7 296.9

bpost’s unconsolidated profit after taxes prepared in accordance with Belgian GAAP can be derived from the consolidated IFRS profit after taxes in two stages.

The first stage consists of un-consolidating the profit after taxes under IFRS, i.e.: subtracting the results of the subsidiaries, i.e. removing the profit after tax of the subsidiaries; and

eliminating any other Income Statement impact the subsidiaries had on bpost (such as impairments) and adding the dividends received from these subsidiaries.

The table below sets forth the breakdown of the above mentioned impacts:

For the year ended 31 DecemberIn million EUR 2016 2015 2014Profit of the Belgian fully consolidated subsidiaries (local GAAP) (9.3) (7.0) (8.7)Profit of the international subsidiaries (local GAAP) (18.4) (7.5) (3.2)Share of results of associates (local GAAP) (11.5) (10.1) (10.3)Other deconsolidation impacts (0.3) 13.3 18.1TOTAL (39.5) (11.3) (4.0)

The reversal of impairments on subsidiaries within bpost SA-NV in 2014 (EUR 8.0 million), partially compensated by higher dividends in 2015 explain the evolution of the other deconsolidation impacts in 2015 compared to 2014. The evolution of the other deconsolidation impacts in 2016 compared to 2015 was mainly explained by lower dividends in 2016.

The second stage consists of deriving the Belgian GAAP figures from the IFRS figures and is achieved by reversing all IFRS adjustments made to local GAAP figures. These adjustments include, but are not limited to the following: differences in the treatment of depreciation and impairments: Belgian GAAP allows different useful lives (and hence depreciation rates) for fixed assets from IFRS. Goodwill is amortised under Belgian GAAP while IFRS requires impairment testing for goodwill. IFRS also allows intangible assets to be recorded on the balance sheet under different conditions from Belgian GAAP; recognition of provisions is subject to different criteria under Belgian GAAP and IFRS; IFRS requires that all future obligations to personnel be recorded as a liability under IAS 19, whereas Belgian GAAP has no such obligation. The movements in the IFRS liability are reflected on bpost’s Income Statement under payroll costs (EUR 16.1 million in 2016 versus EUR 15.6 million in 2015) or provisions (EUR 0.2 million in 2016 versus EUR 1.1 million in 2015), except for the impact of changes in the discount rates for the future obligations, which was recorded as a financial result (negative EUR 18.7 million in 2016 versus positive EUR 0.6 million in 2015); the evolution of IAS 19 is mainly explained by the increase of the financial charges related to employee benefits in 2016, which was due to the decrease in the discount rates.

Outlook for 2017The outlook for 2017 includes the acquisitions of FDM, Apple Express, Ubiway, DynaGroup and the stakes in Parcify and de Buren.

We expect revenues to slightly grow driven by:

a double digit volume growth in Domestic Parcels, with a price/mix effect of around -3%;

continued growth in international parcels supported by acquisitions;

growing Ubiway retail revenues;

partly offset by an underlying Domestic Mail volume decline between 5 and 6%. The price increase on the small user basket has not yet been approved and is therefore uncertain. The first quarter of 2017 will count 2 working days more, the second quarter of 2017 2 less, the third quarter 1 less on franking machines and 2 less on stamps and the fourth quarter 1 less on franking machines and 1 more on stamps compared to the same quarters of 2016.

On the cost side, we expect a slight increase driven by:

increase in transport cost reflecting growth in International Parcels;

continued productivity improvements and optimised FTE mix;

salary indexation expected as of July 2017;

integration of acquired businesses;

continued cost optimisation.

This results in our ambition to have a recurring EBITDA and dividend for 2017 at the same levels as 2016. We confirm our long-term ambition of at least EUR 620.0 million EBITDA by 2020.

Gross capex is expected to be around EUR 90.0 million mainly related to further Vision 2020 investments. On top of that, Ubiway capex will amount to a maximum of EUR 10.0 million.

“We expect a further double digit growth of domestic parcels and aim for a dividend similar to the one of 2016.”

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bpost BEL20 Index

Evolution of the share price in 2016120

100

80

the bpost share regained 6.1% to end the year at EUR 22.50, up 0.4% versus the start of the year. The BEL 20 index lost 1% over 2016.

Dividend policyCreating value and rewarding shareholders is at the heart of the company’s strategy. The dividend policy of the company is to distribute minimum 85% of the net profits of bpost SA/NV in two installments. Firstly, an interim dividend is paid in December based on the results of the 10 months period from January through October of the current year. Secondly, a final dividend payment is proposed to the Shareholders’ Meeting based on the results of the last two months of the year before. In 2016, the company paid a final dividend based on 2015 results of EUR 0.24 gross per share in May and an interim dividend of EUR 1.06 gross per share in December. This means a dividend yield of 8.97% for investors having purchased shares at

Development of the share price over the yearThe bpost share started the year at EUR 22.41 and closely followed the evolution of the BEL 20 index until February 11, 2016 when the share reached its lowest closing price of EUR 20.51, while the BEL 20 index was down 14.1% over the same period. From that date, the share started a steady ride up reaching its highest closing price of EUR 24.91 on March 18, 2016 and outperforming the BEL 20 index until end of October. On October 31, 2016 the share price closed at EUR 24.24, a 18.2% gain versus the low in February and comparing against a BEL 20 index performance of +13.1% over the same period. In November 2016, the share lost 12.5% to close at EUR 21.20 on November 30, 2016. This was a combination of uncertainty around a possible combination with PostNL following bpost’s friendly offer to combine both companies and third quarter results which were below market expectations. During December,

On June 21, 2013 bpost became a stock listed company after a successful initial public offering on Euronext Brussels at EUR 14.50 per share. In 2014, the bpost share was included in the BEL 20 index, the main index of the Euronext Brussels stock exchange and in the DJ Euro STOXX 600 which resulted in an improved visibility of the company in the global financial markets.

The bpost share

Jan Feb Mar Apr Mei June July Aug Sep Oct Nov Dec

Full year 2015results announced

3rd quarter 2016results announced

1st quarter 2016results announced

Half-year 2016results announced

2.2%

of shares outstanding (or 13.3% of the free float shares). bpost did not own treasury shares at the end of 2016.

Investor relationsbpost is committed to communicate in a transparent way on its performance to the financial community, private and institutional investors, shareholders and analysts. It therefore discloses a full

analysis of the quarterly figures with the same level of detail as for half-yearly and yearly results via press releases available on the website of the company (www.bpost.be) and sent directly to subscribers of the mailing list of the company.

The Group Executive Management and bpost’s Investor Relations professionals meet regularly with investors of the main financial centers worldwide as well as with private investors in Belgium.

the initial public offering price. The Shareholders’ Meeting of May 10, 2017 approved the payment of a final dividend of EUR 0.25 gross per share based on the results of 2016. Consequently, the dividend paid based on the 2016 results amounts to EUR 1.31 gross per share. This is an improvement by 1.6% compared to the dividend paid on the basis of 2015 results of EUR 1.29 gross per share and reflects the positive development of the results of the company.

Our shareholdersAt the end of 2016, bpost’s main shareholder was the Belgian State, directly and through the Société Fédérale de Participations et d’Investissement/Federale Participatie- en Investeringsmaatschappij.

Together they hold 51.04% of the shares outstanding. Institutional investors hold approximately 36.5% of shares outstanding and are mainly located in North America, the United Kingdom and Ireland, Germany and France. Retail investors hold approximately 6.5%

Institutional investors Retail positions Brokers Unidentified Belgian State

Source: Estimated by Ipreo - January 2017

6.5%3.8%

51%

36.5%

Shareholders

bpost share in 2016Share price (EUR/share)

High 24.96 Low 20.32 At 31 December 22.50

Trading volume 76,569,551 Average daily trading volume 297,936 Number of outstanding shares 200,000,944 Dividends paid during the year (EUR/share, gross) 1.30 Gross dividend yield(1) 8.97%

(1) Based on initial public offering price of June 21, 2013.

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GRI Standards Content Index / Identification of reported Global Reporting Initiative parametersIn accordance with GRI Standards Core option

100 UNIVERSAL STANDARDSGRI 102 : General disclosures

1. Organizational profile102-1 Name of the organization bpost Annual Report - Consolidated financial statements - p. 21102-2 Primary brands, products and/or services bpost Activity Report - We are mail - p. 13-14

bpost Activity Report - We grow - p. 17-23102-3 Location of organization’s headquarters Brussels, Belgium102-4 Countries where the organization operates bpost group operates in Belgium, the Netherlands, Luxemburg, Poland, UK,

United States, Canada, Hong Kong, Singapore, China and Australia. The reported data in the GRI table concern the Belgian activities of bpost.

102-5 Nature of ownership and legal form bpost Annual Report - Related party transactions - p. 82102-6 Markets - Segments: mail & parcel operations and delivery

- Geographic region: Europe, US & Canada, Asia, Australia - All sectors are served: business as well as private customers

102-7 Scale of the organization a. Total number of employees: http://corporate.bpost.be/sustainability/people/ethics-and-diversity

b. Total number of operations: bpost Annual Report - Related party transactions - p. 82

c. Net sales: bpost Annual Report - Overview of the key figures - p. 3d. Total capitalization: bpost Annual Report - Summary of the financial

statements of bpost SA-NV - p. 89e. Quantity of products or services provided: bpost Activity Report - Key

figures - p. 4 and We are mail - p. 13-14102-8 Composition of workforce a. Total number of employees by employment contract (permanent and

temporary), by gender: http://corporate.bpost.be/sustainability/people/ethics-and-diversity

b. Total number of employees by employment contract (permanent and temporary), by region: http://corporate.bpost.be/sustainability/people/ethics-and-diversity (Belgian activities only)

c. Total number of employees by employment type (full-time and part-time), by gender: http://corporate.bpost.be/sustainability/people/ethics-and-diversity

d. No signficant part of the Belgian mail and parcel operations and delivery are performed by workers who are not employees.

e. The above mentioned data concern the situation on 31 December 2016.102-9 The organization’s supply chain http://corporate.bpost.be/sustainability/proximity/proximity-to-our-suppliers102-10 Significant changes during the reporting

period regarding size, structure or ownershipbpost Annual report - Corporate governance statement - p. 93

102-11 Precautionary approach or principle addressed by the organization

bpost Annual Report - Risk management - p. 39

102-12 Externally developed charters, principles or other initiatives to which the organization subscribes or which it endorses

http://corporate.bpost.be/sustainability/csr-governance/awards-partnerships

102-13 Memberships of associations, including industry associations

http://corporate.bpost.be/sustainability/csr-governance/awards-partnerships

2. Strategy102-14 Statement from senior decision-maker bpost Activity Report - Message to our stakeholders - p. 2

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3. Ethics and integrity102-16 Description of the organization’s values,

principles, standards and norms of behaviorbpost Activity Report - We are @Core - p. 28 http://corporate.bpost.be/sustainability/people/ethics-and-diversity

102-17 Mechanisms for advice and concerns about ethics

http://corporate.bpost.be/sustainability/people/ethics-and-diversity

4. Governance102-18 Governance structure bpost Annual Report - Corporate governance statement - p. 935. Stakeholders engagement102-40 List of stakeholder groups http://corporate.bpost.be/sustainability/csr-governance/stakeholder-engagement102-41 Collective bargaining agreements bpost Activity Report - We are @Core - p. 32 - referring to the collective

bargaining agreement http://corporate.bpost.be/sustainability/csr-governance/csr-reporting-materiality-assessment (DMA - GRI standards and materiality – section 3.3.2.)

102-42 Basis for identification and selection of stakeholders with whom to engage

http://corporate.bpost.be/sustainability/csr-governance/stakeholder-engagement

102-43 Approach to stakeholder engagement http://corporate.bpost.be/sustainability/csr-governance/stakeholder-engagement102-44 Key topics and concerns that have been

raised through stakeholder engagementhttp://corporate.bpost.be/sustainability/csr-governance/stakeholder-engagement

6. Reporting practice102-45 All entities included in the organization’s

consolidated financial statementsbpost Annual Report - Related party transactions - p. 82

102-46 Defining report content and topic boundaries http://corporate.bpost.be/sustainability/csr-governance/csr-reporting-materiality-assessment (DMA - GRI standards and materiality – section 2)

102-47 List of material topics http://corporate.bpost.be/sustainability/csr-governance/csr-reporting-materiality-assessment (DMA - GRI standards and materiality – section 2)

102-48 Restatements of information Not applicable102-49 Changes in reporting bpost Activity Report - Key events - cover102-50 Reporting period January 1, 2016 to December 31, 2016102-51 Date of most recent report May 31, 2016102-52 Reporting cycle Annual102-53 Contact point for questions regarding the

report bpost Activity Report - Contacts - p. 52

102-54 Claims of reporting in accordance with the GRI Standards

bpost Activity Report - GRI table - p. 48

102-55 GRI content index bpost Activity Report - GRI table - p. 48102-56 External assurance Not applicable for non-financial figuresGRI 103 : Management approach103-1 Explanation of the material topic and its

boundaryhttp://corporate.bpost.be/sustainability/csr-governance/csr-reporting-materiality-assessment (DMA - GRI standards and materiality – section 2)

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200 ECONOMIC TOPICSGRI 201 : Economic performance 2016201-1 Direct economic value a. i. Revenues: bpost Annual Report - Total operating income (revenues) - p. 9

a. ii. * Operating costs: bpost Annual Report - Operating costs/expenses - p. 10 * Employee compensation: bpost Annual Report - Payroll costs - p. 11 * Retained earnings: bpost Annual Report - p. 24, 25 * Payments to capital providers and governments: bpost Annual Report

- Equity including dividend + Interest-bearing loans and borrowings – p. 13 and 53

* Economic value retained: bpost Annual Report - 3. Consolidated statement of financial position - p. 24

* Community investments: donations and other community investments: bpost Activity Report - p. 33 (Proximity to our community)

* Payments to government: The government as shareholder of bpost is described on http://corporate.bpost.be/investors/share-information/ownership

b. Belgian activities only201-4 Subsidies en financiële steun van de overheid bpost Jaarverslag - Geconsolideerde jaarrekening - p. 82

GRI 204 : Procurement practices204-1 Proportion of spending on local suppliers http://corporate.bpost.be/sustainability/proximity/kpi

300 ENVIRONMENTAL TOPICSGRI 302 : Energy302-1 Energy consumption within the organization http://corporate.bpost.be/sustainability/planet/kpiGRI 304 : Biodiversity304-2 Significant impacts of activities, products and

services on biodiversity bpost Activity Report - We are @Core - p. 34

304-3 Habitats protected or restored bpost Activity Report - We are @Core - p. 34GRI 305 : Emissions 2016

305-1 Direct greenhouse gas (GHG) emissions (scope 1)

a. http://corporate.bpost.be/sustainability/planet/kpi b-g. bpost Carbon Management Policy

305-2 Energy indirect greenhouse gas (GHG) emissions (scope 2)

a. http://corporate.bpost.be/sustainability/planet/kpi b-g. bpost Carbon Management Policy

305-3 Other indirect greenhouse gas (GHG) emissions (scope 3)

a. http://corporate.bpost.be/sustainability/planet/kpi b-g. bpost Carbon Management Policy

305-5 Reduction of greenhouse gas (GHG) emissions a. bpost Activity Report - Key figures - cover b, c, e. bpost Carbon Management Policy d. http://corporate.bpost.be/sustainability/planet/kpi

GRI 306 : Effluents and waste

306-2 Waste by type and disposal method http://corporate.bpost.be/sustainability/planet/kpi Details on waste streams available on request

GRI 308 : Supplier environmental assessment

308-1 Suppliers that were screened using environmental criteria

http://corporate.bpost.be/sustainability/proximity/kpi

400 SOCIAL TOPICSGRI 401 : Employment 2016

401-1 New employee hires and employee turnover http://corporate.bpost.be/sustainability/people/ethics-and-diversity

GRI 402: Labor/management relations

402-1 Minimum notice periods regarding operational changes

http://corporate.bpost.be/sustainability/people/social-dialogue Principles of negotiation and dialogue are set in union status. Reorganization files have to be transmitted to union representatives within 10 working days before staff representatives consultation.

GRI 403: Occupational health and safety

403-2 Types of injury and rates of injury, occupational diseases, lost days and absenteeism and number of work-related fatalities

http://corporate.bpost.be/sustainability/people/kpi Only tracking on consolidated level, not split by gender. Belgian activities only.

GRI 404: Training and education

404-2 Programs for upgrading employee skills and transition assistance programs

bpost Activity Report - We are @Core - p. 30

GRI 405: Diversity and equal opportunity

405-1 Diversity of governance bodies and employees

bpost Annual report - Corporate governance statement - p. 93 http://corporate.bpost.be/sustainability/people/ethics-and-diversity

GRI 413: Local communities

413-1 Operations with local community engagement, impact assessments and development programs

a. Percentage of operations with implemented local community engagement, impact assessments, and/or development programs: due to the nature of bpost’s business activities proximity to our customers is fully embedded in bpost’s service offering. We refer to the following link for specific initiatives: http://corporate.bpost.be/sustainability/proximity/proximity-to-our-community

GRI 414: Supplier social assessment

414-1 New suppliers that were screened using social criteria

http://corporate.bpost.be/sustainability/proximity/proximity-to-our-suppliers http://corporate.bpost.be/sustainability/proximity/kpi

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Contacts

bpostCentre Monnaie - Muntcentrum1000 Brusselswww.bpost.be

InvestorsTel: +32 2 276 76 43http://corporate.bpost.be/investors?sc_lang=en investor.relations@bpost.be

PressTel: +32 476 517 929press.relations@bpost.be

Public AffairsTel: +32 2 276 29 41public.affairs@bpost.be

Customer service Tel: +32 22 012345

Editor-in-chief Baudouin de Hepcée Centre Monnaie-Muntcentrum1000 Brussels

Concept, content and coordinationSteve De Loor

Design and production: Chris CommunicationsPrinting: IPM PrintingPictures: bpost photo gallery