BPOSFBPOSFOTC
Loading
Operator: Ladies and gentlemen, hello, and welcome to the bpost Group Third Quarter 2025 Analyst Conference Call. On today's call, we have Mr. Philippe Dartienne, CFO. Please note, this call is being recorded. I will now hand over to your host, Mr. Philippe Dartienne, CFO, to begin today's conference. Please go ahead, sir.
Philippe Dartienne: Thank you very much. Good morning, ladies and gentlemen. Welcome to all of you, and thank you for joining us. I'm pleased to present to you our third quarter results as CFO for the bpost Group. Chris, our CEO, could not make it today, and I have with me Antoine Lebecq from Investor Relations. We posted the materials on our website this morning. We will walk you through the presentation, and then we'll take your questions. As always, 2 questions each will ensure everyone gets a chance to be addressed in the upcoming hour. I'll start with the quarterly financials, then move on our financial outlook and provide an update on our key transformation initiative for 2025. As you can see on the highlights on Page 3, our group operating income for the third quarter amount to EUR 1.030 billion, remaining broadly stable year-on-year and almost at constant scope as Staci has already contributed for 2 months in the same period last year. As usual, the summer quarters show some seasonal softness, but beyond this, we saw a mix of different factors. At Radial U.S., we continue to see the expected impact for the 2024 contract termination, but even more this time, the materialization effect of those announced earlier this year. As a reminder, these are the same ones that led us to take an impairment at the beginning of the year. Altogether, those elements more than offset the extra month of Staci contribution in the quarter. At the same time, we continue to see good volume growth in Asian cross-border activities. While in Belgium, the domestic mail volumes declined, this was partially compensated by a decent volume growth in Parcels. Our group adjusted EBIT came at minus EUR 3 million, representing a year-on-year decrease of EUR 16.3 million, mainly driven by Radial U.S., where despite sustained margin action, the revenue shortfall due to the anticipated churn and seasonal softness did not allow full absorption of fixed costs in the quarter. More broadly, at bpost Group level, the results we are presenting today are in line with our expectations, and we reconfirm our EBIT outlook at around EUR 180 million for the year 2025. On Slide 4, you will note that the EUR 14 million decline in net profit mirrors the EBIT evolution as in the same period last year, the acquisition of -- the acquisition debt was already on balance sheet and the financial results remain broadly stable. Let's move now to the details of our 3 segments. I'm on Page 5 with BeNe Last Mile segment. We see that the revenue declined by EUR 9 million, amounting to EUR 512 million. Domestic Mail recorded around EUR 16 million decline in revenue, of which EUR 10 million stemmed from transactional and advertising mail and EUR 6 million from press. Excluding press, mail volume contracted by 9.4% in the quarter compared to only 6.7% last year, which had benefited from the election uplift in September 2024. The decline in mail volume had a negative revenue impact of around EUR 20 million, of which was partially compensated by half through a positive price and mix effect of EUR 4.7 million or roughly EUR 10 million. As a result, domestic mail revenue were down by 4.6% or minus 10% year-over-year. On Parcels, revenue increased by EUR 4 million or 3.2% year-on-year, reflecting a volume growth of 2.8% and a slightly positive price/mix effect of 0.5% in this quarter. On the volume side, the reported 2.8% actually corresponds to an average growth of 4.4% per working day. Over the past months, this momentum has been mainly supported by the outperformance of marketplace, notably boosted by sales events and continued strength in the apparel segment. Let's move to the P&L of Last Mile on Page 6. Including some higher intersegment revenues from inbound cross-border volumes handled in the domestic network, our total operating income was slightly down by 1.4% or minus EUR 8 million. At the same time, on the cost side, our OpEx, including D&A, remained broadly stable and mainly reflects 2 effects: lower FTEs resulting from lower volume and efficiency gain, notably from the reorganization of our distribution rounds and retail offices, which are progressing in line with plan, and on the other hand, higher salary cost per FTE around up to 2% year-over-year following the March '25 salary indexation. In contrast with the first half of the year, when EBIT had contracted sharply by almost EUR 64 million year-on-year, mainly due to the end of the press concession in June '24, we see that despite structural mail decline, parcel growth and initial projects of -- sorry, and initial effects of our reorganization are helping to attenuate EBIT erosion. Moving on to 3PL on Page 7. 3PL revenues were broadly stable overall as 2 offsetting events affecting -- came into play. First, effect. 3PL Europe, where revenue increased by EUR 62 million, we benefited from 1 additional month of Staci revenue in the quarter, along with continued commercial expansion of Radial and Active Ants in Europe. That said, sales from existing customers or the famous same-store sale remained soft and even negative in certain geographies during the quarter. As a side note, since we are 1 year after the acquisition of Staci, there will be no further consolidation impact going forward. As we are now advancing in the integration of Staci, Radial Europe and Active Ants, we are really starting to operate as one single business unit as explained at our Capital Market Day in June. Our P&L is being increasingly managed together, this means that from now on, we will only report on 3PL Europe as one single business and gradually phase out stand-alone reporting from individual entities. Second effect, in 3PL North America, revenue decreased by EUR 58 million. At constant exchange rate, this corresponds to a decrease of 24%, mainly driven by revenue churn from contract announced in 2024 and even more so from those announced early '25, partially offset by in-year contribution of new customers, around 60% of which are Radial Fast Track customers as we presented to you at our Capital Market Day. While we are seeing positive and encouraging signs on that front, and I'll come back to that on a moment, we are still feeling the impact as expected of the churn. We continue to execute our sales development plan, and we are confident that these efforts will pay off, but it needs a bit of patience. Let's move on to the P&L of 3PL on Slide 8. With this, the total operating income slightly increased by 1.1%, while our operating expense and D&A increased by 4.8%, primarily driven by in Europe, Staci consolidation impact and one-off reorganization costs, including site closures and relocation of customers to further accelerate 3PL Europe integration and cost structure optimization. In North America, lower variable OpEx in line with the revenue development at Radial U.S., and sustained variable contribution margin close to record high level. The EBIT evolution at Radial U.S. is certainly one of the key highlights of this quarter performance and also the main reason for the gap versus market expectation. Despite 1 additional month of Staci contribution, the minus EUR 30 million EBIT decline in 3PL from plus EUR 1.7 million last year, indeed clearly reflects the situation at Radial U.S. After 3 consecutive years of contraction, revenues are now about 45% below their peak level in Q3 2022. In this quarter, the combined effect of churn and seasonal softness limited our ability to fully absorb fixed costs despite strong VCM discipline and tight cost control. Ironically, we are now at a point where revenue have reached their lowest level ever, and yet our VCM margin stands at all-time high. Looking ahead, the solution lies in top line recovery, and on that front, we are executing our plan and making good progress. Moving on to cross-border on Page 9. Cross-border Europe revenue increased by EUR 11 million or plus 14% year-over-year. This growth was driven by strong volume increase from Asia across all major destinations, notably Belgium, fueled by large Chinese platform and U.S. Across-border North America, Landmark Global continues to face the broader tariff environment that is weighing on existing business and delaying new opportunities. However, this was offset by strong domestic volume in Canada, resulting in an overall plus 1.4% revenue increase for North America, including a 6% negative FX impact. Overall, our cross-border operating income increased by roughly $12 million or 8.7%. As shown on Page 10, our OpEx and D&A increased at the same time by 9.6%, mainly reflecting higher transportation costs linked to the volume growth I just mentioned. EBIT slightly increased to above EUR 17 million with a margin of 11.5%, reflecting a slight dilution from commercial products. Moving on to Corporate segment on Page 11. Adjusted EBIT improved by EUR 1 million to minus EUR 9 million as cost containment measures across spend categories helped offset higher payroll driven by more FTEs and March '25 salary indexation. Then we move to the cash flow on Slide 12. The net cash outflow for the quarter amounts to minus EUR 16 million, representing an improvement of EUR 275 million year-on-year, mainly reflecting the acquisition of Staci last year, which was partially funded in cash for a bit less than EUR 300 million. Besides that, the remaining items to flag are the following: Cash flow from operating activities before change in working cap stood at EUR 71 million and decreased by EUR 7 million year-over-year, mainly reflecting higher corporate tax payment. Change in working capital and provision amounted to EUR 17 million. The plus EUR 16 million variance is primarily explained by the settlement of some terminal dues and some client balances. The net cash outflow from investing activities totaled EUR 28 million, driven by our CapEx for international e-commerce logistics, parcel lockers and capacity expansion. Also, our domestic fleet was considered into this EUR 28 million. This item constitute the main variation in our free cash flow. The net cash outflow for financing activities amounted to minus EUR 776 million and mainly consisted of lease liabilities outflows, while we had on top of the acquisition debt last year. This brings us now to the outlook and our strategic priorities of 2025. Outlook 2025. We presented our group EBIT outlook of the range EUR 150 million to EUR 180 million back in February, and during the Q2 results in August, we indicated that we were targeting the upper end of the range. With a year-to-date EBIT of EUR 97 million, the results we're presenting today are broadly in line with our plan, now allowing us to confirm our full-year outlook at around EUR 180 million. This implies achieving an EBIT of around EUR 80 million to EUR 85 million in Q4 compared with EUR 80 million in the same quarter last year -- sorry, compared to EUR 84 million last year, which we are cautiously optimistic about. Based on current assumption and expectation, we believe this is achievable, particularly thanks to our preparation and readiness for an efficient peak execution across the group. In North America, we validated client volume capacity plan. We have secured to hiring over 4,100 seasonal workers to ensure full site coverage and put peak incentive plans in place. In BeNe Last Mile, beyond the usual measures, we have implemented additional productivity initiatives, including tracking performance at each distribution offices and site and setting up a national tool to further optimize interim and reinforcement of the planning. Of course, we remain vigilant amid challenging market conditions, notably as volume development and the phasing out of end of year peak volumes in Belgium and internationally remain uncertain and partially beyond our control. To wrap up on our outlook, we are also updating our CapEx guidance with a downward revision from EUR 180 million to EUR 140 million. This reflects our disciplined approach to spending in Belgium and in the U.S. and a strategic phasing towards 2026. Overall, we remain focused on prioritization and value creation, ensuring that every euro invested is where it has the highest impact in the group. Finally, as we usually do, I take a few minutes to walk you through the progress we've made on our transformation plan over the last months as part of our Reshape2029 journey we presented to you at the Capital Market Day. When it comes to the update on the strategic initiative, bpost continues to accelerate its transformation, shifting firmly towards becoming an international logistics and parcel operator. Let me walk you through the tangible progress we've made across our segment. I'll start with BeNe Last Mile. Following 2 successful pilot phases, we launched our 9 delivery service on October 15. As new B2B service consisting in a 9-time delivery solution targeted at technician and field workers that helps eliminate detours from central depots and save up to 1.5 hours per day for these technician and field workers. In practice, parcels are collected by bpots until 6:00 p.m. on working days, sorted overnight and then delivered before 7:00 a.m. to selected parcel lockers of our network across Flanders, Brussels and Wallonia. The service is exclusively available for B2B shipment, internal deliveries or business-to-business exchanges requiring high level of reliability. Meanwhile, still in Belgium, our bbox network of parcel lockers continue to expand strongly. We have now around 2,000 active units with 800 more contracted, most of them located in prime location and high-traffic venues like supermarkets. As announced recently with Lidl, we target to have 240 lockers by the end of this year, which represents nearly 10% of the targeted APM capacity. We currently install up to 12 new lockers per day, and by the end of this year, we intend to have 2,500 lockers installed in Belgium. On our future operating model, one of the pillar is bulk rounds, consisting in dedicated parcels round in bulk, serving pickup and drop-off points, including lockers. Here as well, after a successful pilot phase, this model is now fully operational across all sorting centers, servicing 26 distribution offices and handling over 12,000 parcels a day. Before end 2025, we will extend to 29 offices with a capacity close to 21,000 parcels a day. This bulk model is set to become a cornerstone of our 2026 peak strategy capable of managing nearly half of the out-of-home volumes. Let's shift to 3PL Europe. We are entering into a new chapter in leadership with Rainer Kiefer taking over as CFO of 3PL Europe and Staci Americas as of January 2026, succeeding Thomas Mortier, who announced earlier this year its intention to step down at the end of the year and will move into a part-time advisory role starting January 2026. Rainer brings extensive experience from DSV and DB Schenker with a strong track record in transformation and scaling across Europe. This appointment reflects our ambition to accelerate the transformation of the 3PL business, strengthen our European footprint and drive value creation across the full spectrum of contract logistics, fulfillment and omnichannel solutions. With Thomas supporting this transition and Rainer taking a help, we are confident that the business is well positioned to execute the next phase of our growth strategy. In parallel, the integration of Staci remains firmly on track. As cost synergies start to materialize in the second half of the year, we expect to overdeliver on our 2025 synergy targets. The 2026 targets are already secured, fully in line with what we presented to you at the Capital Market Day. In 3PL U.S., our Radial Fast Track rollout is ahead of our plan. 16 customers are already live and 2 more are set to launch in the fourth quarter 2025, each contributing an average ACV between EUR 4 million and EUR 5 million. The in-year revenue from Fast Track is already exceeding internal targets, providing strong momentum in U.S. and validating the scalable potential of the model. As Chris mentioned it last time, there's still a lot of work ahead of us, and the first results are not always immediately visible in the P&L. This is notably the case this quarter in the U.S. That said, we are confident that we are on the right track and focused on doing the right things to deliver sustainable results. We are now ready to take your questions. Again, questions each will allow every one of you to be addressed in the upcoming hour. Operator, please open the line for questions.
Operator: [Operator Instructions] The next question comes from Frank Claassen from Degroof Petercam.
Frank Claassen: My 2 questions. First of all, on Radial, minus 25% organically in Q3. Could you split the minus 25% between, let's say, the negative same-store sales and the impact of the churn? Is this, let's say, and what can we expect going forward? Is this the bottom? Or do you expect an improving trend in the coming quarters? That's my first question. My second question on Staci. I understand that you don't break down the EBIT anymore or give the separate EBIT. Could you elaborate on how the profitability is developing? Is it according to plan? I recall that you had a sort of guidance or, let's say, target of 10% to 12% EBIT for Staci. Is that still valid? Could you elaborate on that?
Philippe Dartienne: Okay. Thank you for your 2 questions. Let's start with Radial. Indeed, we observed a severe decrease in the current quarter, which is mostly explained by the churn. Again, the churn coming that was announced in 2024 that has a full-year impact in 2025 and some churn that were announced at the beginning of the year, and then they're only materializing now. I have one very specific example in mind where the customer said, we're going to stop 1 of the 2 warehouses in the first -- sorry, in the third quarter, so meaning now. This is part of the explanation and this is the bulk of it. Same-store sales evolution is not positive, but nowhere near what we observed in the recent quarters. If you recall, we had a terrible sequence of -- if it's in 2024, minus 4 at the beginning of the year, we peaked, wrong word, but it's a high amount, even it's a negative one, around 9% in the fourth quarter 2024. The beginning of the year was also in negative territories, lower than the minus 9%. Now we are slightly negative, but it's not what it mainly explains the different impact on the EBIT. Simply why? Because the basis at which it applies is also by far lower. This being said, very important to notice that the variable contribution margin has been extremely high, again, sustained quarters-after-quarters, which is a positive sign. That's for Radial. Sorry, and there was a subset in your question about what is the trend. The trend for us is twofold. We have launched in the first quarter of this year, our new product offering or service offering, which is Radial Fast Track that aims at offering solutions which are more flexible, standardized, easy to onboard type of solution, also very asset-light in terms of CapEx and automation, and it's picking up. It's picking up. We have signed 16 customers. We will onboard another 2 between now and the end of the year. Also, important to note is that we will be onboarding customers nearly close to the peak, which is -- which shows how flexible this solution is to onboard new customers. Historically, it was taking roughly 12 months to onboard new customers at Radial because of the high level of customization in the processes and also in the IT systems. In terms of trends, we are optimistic about the product that we have launched because we see it's picking up. There is traction on the market. On the other hand, we need to be realistic. When we are losing customers average size between EUR 50 million and EUR 70 million, while the ACV of the Fast Track typical customers is around 5. You can do the math as well as me. It takes time to be able to compensate this churn. We are also not aware of any new customers who have announced their departure in the near future. That's for Radial. For Staci, it's going according to plan. Yes, it's going according to plan. The EBIT margin is a bit on the low end of the range this quarter, which is mostly explained by the fact that, as I said it, and again, we already announced that there is no news in that one that we want to operate on a geographical platform as one entity, one go-to-market. We have several territories, like Belgium, the Netherlands, U.K., Germany, Italy, where we're really operating as one. The local managers there, they look at their portfolio of customers, what is their needs, what is the solution, the operational solution available to serve those customers and also the footprint. Some movement has been already initiated to relocate customers where they better fit with the requirement of the customer and also optimizing the footprint. It's also the case in the U.S. where one warehouse has been shut down and customers have been transferred to a new site. In Germany, the former site of Staci Germany in Boston has been shut down and customers has been transferred to a former Radial site in Halle. In the Netherlands, in the Active Ants portfolio, we have decided to close 1 of the 2 warehousing in Nieuwegein and those customers have been transferred to Roosendaal. This cost -- these transfers demonstrate that we really want to operate at a local level as one, but it has, unfortunately, on the short term, some cost. There is cost attached to shutting down warehouses and to move customers. It's all for the better. It's to serve the customer in the best possible way and the most efficient way on those territories.
Operator: [Operator Instructions] The next question comes from Henk Slotboom from The Idea.
Henk Slotboom: One question from my side. We've been hearing a lot about levies on Chinese goods. The French want to do it unilaterally. The Dutch have already said, they might follow the French maybe already as soon as the 1st of January of next year. Now personally, I don't think that EUR 2 per parcel will stop the avalanche of parcels to Europe. It will simply be relocated. What does the situation look like in Belgium? I don't know, if they have similar ideas to do things unilaterally. Well, could it be the case that you benefit from it if stuff is not flown at Schiphol Amsterdam Airport, but at Liège or Brussels instead provided, of course, there are no drugs over there.
Philippe Dartienne: Thank you for your question, Henk. Indeed, the situation in Belgium is that the government is thinking of putting EUR 2 per parcel levy. Now it leads to a lot of questions. There is also who's going to collect this EUR 2, which is a very practical problem, and there is no answer to that. Of course, we are not -- we are there to carry the parcels. We are not there to collect this kind of surcharge or taxes levies, whatever you name it. There will definitely be a question of implementation. Interestingly enough, we had a discussion yesterday with one of our Board members who is coming from the Nordic, who faced a bit the same situation, and it took more than 12 months to find a technical solution to implement it. It's still an intent at this stage. There is no implementation date decided. Indeed, it will be difficult to implement. Your comment about, of course, if other countries are deciding for the levies, let's say, in the Netherlands, France, Germany, it could lead to additional volumes in Belgium, but anyway, it would only be a temporary solution. At this stage, it's a very good question, but it's a big question mark when it comes to the implementation date and also the practicalities behind it.
Henk Slotboom: Can I ask an add-on to that, Philippe?
Philippe Dartienne: Sure.
Henk Slotboom: If I look at, for example, Austria Post or Polish Post and that sort of things, they've been entering alliances with, for example, Temu and Shein, who want to move part of their logistics and then I'm talking about warehousing and that sort of things to Europe. You have a fantastic network of fulfillment centers with Radial Europe, with Active Ants, with Staci. Is anything there being discussed with the large Chinese platforms?
Philippe Dartienne: Again, a very good question from Henk, as usual. There are movements indeed, we see the Chinese are coming closer to Europe. They are also thinking of implementing themselves in Turkey, which is also close to Europe. Indeed, it's a movement that we see in the market, but I will not comment any further at this stage.
Operator: The next question comes from Marco Limite from Barclays.
Marco Limite: I've got 2 follow-up questions. One is on Radial U.S. Do we have to think about Q4 as the last quarter of year-over-year decline in revenues, and therefore, we should expect growth from next year? It’s the first question. Second question, on Staci Europe, I mean, if I look at the Q3 numbers, it feels like that most of the decline year-over-year is coming from Radial U.S. At the same time, you've got 1 month more of Radial Europe in the base now. We basically have got 3PL Europe being flat despite growth and despite an additional month. On top of that, you are also talking about synergies being ahead. Just the math doesn't work for me why year-over-year, things are flat despite tailwinds from synergies and an additional month. If you can clarify.
Philippe Dartienne: Good. I'll start with Radial. No, in 2026, there still might be some decline in top line because there will be the full-year impact of the customer churn that we observed in 2025. Of course, the one announced in '24 will be over in '25, but there are some of them that will have an impact in 2026. This being said, what is really important for us to look at is the profitability and the cash generation profile and the quality of the portfolio. I really want to remind what we said at the Capital Market Day, not only we want to go for the mid-market, not to have big customers dependent on 2 big customers are requiring huge investment in terms of customization of system, high automation. We want to move out of that one, and they will be gradually phased out. We want to reinforce ourselves our presence in other type of customers. ACV of Radial Fast Track is in the range of 5 million, so totally different, but also and equally important in my eyes is also the portfolio itself in terms of the number of verticals where we want to operate in. In the past, it was focused on only 2. We really want to broaden that one, and we see first signs of result -- positive result going into that direction. Again, as I said, and again, I'm also repeating what we said at the time of the Capital Market Day, it's a long journey. It's not a 1- or 2-quarter journey. It's a long journey to move from big anchor customer focused or very capital intensive and focused on 2 verticals to something which is more nimble and flexible going forward. Again, the math plays against us when it comes in terms of timing. There will be a delay between the moment we could see growth again to be totally honest, transparent, but also totally aligned with what our forecasts are. There is nothing -- no news on that one. There is no change of strategy. There is no acceleration or degradation of the situation. It's happening as we had planned to do it.
Marco Limite: Can I just follow up on this one? Is there a risk that more or other large customers are going to, let's say, leave Radial U.S. in the future because you are moving type of strategy and type of service?
Philippe Dartienne: The risk is always there, Marco. This being said, interestingly enough, very interestingly, in our Radial Fast Track customers, we have 16 of them that we have new ones, but there is also 2 of them that were former old solution type of customers moved to Radial Fast Track. This also demonstrates that we have now with this solution, capabilities to address their demand.
Marco Limite: Europe or 3PL Europe?
Philippe Dartienne: Yes, I didn't forget. Don't worry. On Staci, the math add up, but there were maybe -- we need to remind all the elements of the equations. First one and is the vast majority, it's all about the costs relating to the optimization of the operations in different geographies in the U.S., in the Netherlands, in Germany, that explains the chunk of the fact that indeed, when you do the math, you don't see a growth when you come to Staci. There is also, but to a lesser extent, some softness in certain territories, and I'm mostly thinking about France, where the same-store sales has been negative in the quarter. On the other hand, as a positive note, in France, we are not seeing the departure of any customers.
Operator: The next question comes from Marc Zwartsenburg from ING.
Marc Zwartsenburg: I also have a bit of a follow-up on Radial U,S., because I think you mentioned you will also see a significant decline still in Q4, and that fits also with the story with the mentioning of the churn of the larger accounts. I think originally, there was a sort of a guidance of minus 10% to 20% a bit on the full-year top line, which would indicate still, say, mid-single-digit double digit, let's say, 15% maximum year-on-year decline if you plug in, say, minus 20%. Is that still an applicable guidance that we're looking at still a double-digit decline of around 15% for Q4? Just to get a bit of more feel on the movement of Radial because it's quite big numbers we're talking. That's my first question.
Philippe Dartienne: You want me to take it immediately. It's more in the range of 15% to 20%.
Marc Zwartsenburg: Q4, we're talking about?
Philippe Dartienne: Yes.
Marc Zwartsenburg: Then on the parcel volumes, so the working day adjusted number is plus 4.4%. That's a slight improvement from Q2, but how do you -- was that stable through the quarter? How are you looking to the big season? Do you already have a bit of an indication on the big events for Q4, what you expect there? Because I think also here, the guidance was more like a mid-single-digit to high single-digit growth. It looks now more like on the low end of the mid-single digits. What are your thoughts there? What kind of trends do you see?
Philippe Dartienne: In fact, there is one very important element. It's not that it's totally new this year, but we see -- and typically in Belgium, we see more-and-more before the peak was very -- excuse me, very focused on 1 or 2 days. By the way, in Belgium, we have the peak, but with also Christmas and Sinterklaas. In fact, it's the month end of November and the month of December, which are, in fact, higher months. Unlike what we see in the U.S., when you see the peak, it's a couple of days. It's more spread all over that period, combined with the fact that we see more-and-more our customers, the one selling directly to the customers or through platform, offering throughout the year, promotion, discount and this kind of stuff. It's very difficult to predict how it will look like. But for sure, we see it's become that higher activity is spread over more days or weeks than it was in the past.
Marc Zwartsenburg: Do you see September, October trending higher than the 4.4%?
Philippe Dartienne: In that range.
Marc Zwartsenburg: It's rather stable. That's currently the trend.
Philippe Dartienne: Yes.
Marc Zwartsenburg: Then lastly, I know you're not disclosing it, but could you give a bit of an indication of the EBIT contribution of Staci, because it's still important to model that properly also through the quarters because we saw quite a miss on the consensus on particularly the 3PL division and whether that's Staci or whether that's Radial U.S. or whether that's the extra cost, it would be helpful to have a bit more granularity. Can you help us there?
Philippe Dartienne: I can help you in repeating what I told you is that the big chunk of the fact that it doesn't grow is linked to this optimization, cost optimization, operational optimization, which is the majority of the variance and the rest coming from same sourcing. You could count on.
Marc Zwartsenburg: Staci have no growth on the revenue side and a bit of impact from the fine-tuning of the optimization of the warehouses. Is that how we should see it?
Philippe Dartienne: Yes.
Marc Zwartsenburg: How long will that take that optimization of the warehouses till when should we pencil that in that the margins may be a bit more at the low end?
Philippe Dartienne: I would say -- in fact, the more the people will start working together and depending on the customer need, it might lead to additional ones. This one were the obvious one. I would say, in the next 2 quarters, I'm not expecting any site closures or major site closures now, but It's an ongoing process.
Marc Zwartsenburg: For 2 quarters -- yes, exactly. We will see a little bit of double running costs in the meantime. Then after that, we should see the efficiencies coming through.
Philippe Dartienne: I hope it will come faster, but it's not to be excluded that we might decide here or there to restructure on another warehouse. There is one that was already planned in the U.S. By the way, it was a journey, nearly 3 years journey at the time of the acquisition of Amware by Staci, they looked at the portfolio, and we were totally aware of that because it was an element that was shared with us at the time of the acquisition. They knew that they had a plan to restructure 3 warehouses. They have done 1 in '24. There is a second one in '25, and there will be the third one in '26.
Marc Zwartsenburg: Then thinking about '26, we should see a higher EBIT than what we probably will see in 2025. Is that?
Philippe Dartienne: Yes.
Marc Zwartsenburg: The path towards your long-term outlook to see a higher EBITDA?
Philippe Dartienne: Don't drag me into a budget discussion and a guidance for '26. We will come to you on that one when we publish the Q4, but I give you some element. I have the impression of painting an impressionist painting with dots of colors, some quantities. I'm doing some quantities on the U.S., but don't drag me where I don't want to be dragged.
Marc Zwartsenburg: It's the time of the year budget.
Operator: The next question comes from Marc Zeck from Kepler Cheuvreux.
Marc Zeck: Two, if I may. First one on -- again, Radial U.S. Could you give us a bit of more color or feeling about, let's say, the top 5 customers at Radial U.S., how much of sales is that broadly speaking? For these customers, is there kind of a contract renegotiation period upcoming end of '25 or early in '26? Or is these contracts mostly locked in for a longer period of time? That would be my first question. Second question also on, let's say, the broader U.S. business. I believe we've seen quite a bit of pull forward buying into the U.S. imports for the first 9 months of the year were pretty good, I believe, into the U.S., but we see container imports or container arrivals at U.S. ports dropping quite sharply now in Q4. Is your business in the U.S. mostly related to ocean freight? Should we expect a bit of a negative business development on same-store sales as well for Radial U.S.? Or are you kind of air freight exposed from a product category where we still see quite good numbers, I would say, in the overall market? That's my 2 questions.
Philippe Dartienne: Okay. Let me start with the second one. It's a bit of both. Of course, all your comments are valid. We are exposed to air freight and ocean freight. I give you a very practical example. In one of the customers that we have onboarded with Radial Fast Track is a fashion brand coming from Australia, who wanted to be implemented in the U.S. They wanted to have fulfillment there. We are hearing from customers, some other customers that they want to be in the U.S. rather than systematically air freighting stuff. By the way, it's no different than what we are seeing with the Chinese platform now. Let's refer to the comment or the question earlier on the Chinese who want to be implemented -- to implement themselves in Europe to avoid tariffs is the same that we are seeing in U.S. We have a very practical example, as I said, of one who really has decided to come physically in the U.S., and there, we have definitely a role to play and a good service offering. When it comes to Radial, I also want to -- do we have big renewal in the pipe for the coming quarters? The answer is no. We already have renewed some of them in the course of 2025. There, I want to reiterate something which is extremely, extremely important. In the past, what we saw at Radial, especially with the big customers, the situation was the following. They were asking for a lot of customization, a lot of automation that typically are passed on to the customer over a period of 6 to 8 years, while we were having contracts of roughly 4 years. At the same time, we had also our warehouses locked for a period of 7 to 8 years. In many instances, what we saw is the customer left or didn't renew the contract, and we were there even if there was some provision in the contract with unamortized portion of own developments and the liability linked with these warehouses. Since the last 18 months, all renewal or all new contracts signed are [indiscernible] with the lease of the warehouses. It's also important to look at what could be the impact of the customers. In fact, the Radial situation we are in right now is absolutely not the same as the one we saw years ago.
Operator: Ladies and gentlemen, there are no further questions. I will hand it back to Philippe to conclude today's conference. Thank you.
Philippe Dartienne: Thank you very much, guys, for your intense question session. Antoine is always there to do the follow-up with you in the coming days and weeks. Let's stay in touch. Next time, we'll see, we'll be able to demonstrate that we have executed the peak in a qualitative and efficient way. Thank you very much. Have a good day.
Operator: Thank you for joining today's call. You may now disconnect.