Good morning, everyone. Thank you for joining us today for this call. We have prepared a short presentation about the transaction, and we will go through the slides quickly in order to leave more space for the Q&As. On the call today, we have, Rafał Brzoska, CEO, Michael Rouse, CEO International, and Javier van Engelen , Group CFO. Rafał, over to you.
Good morning. Thank you, Gabi. So, guys, I'm really thrilled to share some exciting news with you. We received many questions from investors regarding Menzies, our plans, and I'm happy to confirm that as of today, our existing partnership with Menzies has evolved into full ownership. This, of course, marks a significant milestone for both our U.K. business and the entire InPost group as well, placing us in a very, very strong position in the U.K. market. We now fully control the logistics operations in the U.K., so we can accelerate our investments and design a process that we feel is best, which will definitely lead us to the launch of a premium, fully next day B2C delivery offer. Also, as you are aware, we started a strategic partnership with Menzies in May of last year.
Later in July, we acquired a 30% stake in that company, and following that successful collaboration, visible progress, taking into account the dynamic development of our U.K. business, we decided to fully insource the logistics part of Menzies. We have just acquired the remaining 70% for around GBP 60 million, paid fully in cash. I will now let Javier say a few words about the structure of the transaction. Handing over to you, Javier. Thank you.
Thank you, Rafał, and good morning, everyone. On slide four, I can take you through the structure of the transaction. As you are probably aware, Menzies today is comprised of, or was comprised of three segments: the News Trade business, the Express business, and MDS, and InPost owned 30% of the totality of that business. Now, shortly before our transaction, MDS was de-merged from the rest of Menzies, and then we bought basically the remaining 70% stake of the News Trade and the Express businesses. This means that as of today, we own 100% from, let's call it between inverted commas, the new Menzies, which comprises of News Trade and Express, and we continue to hold 30% of MDS, which is for us, a non-core business, for InPost.
On the next slide, let me explain in slightly more detail what we are actually buying. First, the News Trade division handles the distribution of newspapers and magazines to around 26,000 delivery points across the U.K. and Ireland. This service operates year-round, providing daily deliveries to major supermarket chains and independent retailers. In the first half of 2024 alone, the News Trade division generated a net revenue of GBP 73 million . Second, the Express business specializes in national last-mile parcel deliveries dedicated to serve the InPost lockers. In the first half of 2024, this division generated a revenue of about GBP 40 million . Also, for the first half of 2024, the News Trade and Express businesses together delivered an EBITDA of GBP 14.2 million .
For perspective, in the third division, MDS is a warehousing and line haul transport logistics business, and we still own 30% of this as of now. As mentioned before, MDS is not part of our transaction as it's not core to our InPost business. Now, let me give the floor to Michael to tell you more about the transaction rationale. Michael?
Yeah. Thank you, Javier. Thank you, Rafał, and good morning, everyone, and good afternoon if you're in mainland Europe. I'd like to take a moment on this slide to show you how unique the Menzies business is, especially when combined with InPost U.K. This partnership is creating a powerful synergy that does set us apart in the market, and Menzies has provided us, as we've seen since May of last year, full nationwide coverage, reaching every postcode in the U.K. and Ireland, and supports our ability today to service the InPost 8,000 APMs and even more clearly as we continue to grow. With over 40 depot locations, one central hub, and several regional hubs, Menzies has clearly given us an operational backbone that we feel very strongly is gonna continue to support our rapid growth.
On the next slide, you can see from the data, our partnership with Menzies has been instrumental in driving significant growth and efficiency in our U.K. operations since we first started it, around, before summer last year. On the left-hand side, the graph illustrates the steady acceleration of our U.K. volume and the increased utilization of our lockers. Notice the clear upward trend in both the volume, represented by the yellow bars, and the utilization percentage, represented by the blue line. The key point here is that the growth truly took off as we, after we started collaborating with Menzies and unlocking that significant bottleneck we had in the business at that time, marked clearly at the midpoint in the chart.
We've also improved the quality of our KPIs, and that's a key component really for us, not just about unlocking the growth, but ensuring the service that we're bringing to the market is really at the ambition levels we want to achieve. And so, for example, our on-time delivery metric has really increased now to an impressive 99% on a consistent basis. So now shifting to the right-hand side of this slide, you can see how this growth has translated into financial success. InPost top line has tripled year on year, and so in the first half of 2023, we generated PLN 140 million , while in the first half of 2024, our revenue jumped to PLN 412 , reflecting the strong momentum we've been able to build with this partnership.
The data clearly shows that the collaboration has accelerated both the volume, the operational efficiency, and the financial performance, leading to a more robust and scalable U.K. business. On this last slide, I've already talked about how unique Menzies is as a company and the great results that we've been able to work together in this cooperation and why it's been such a perfect fit in previous calls, but now let me explain some of the transactional rationale behind the deal. First of all, having full control over the logistics process is key to us. We see that in the other markets that we've continued to roll out and be successful, and clearly, this was an important part of this transaction back last summer and continues to be an important building block as we continue to evolve the product offer.
This allows us to manage everything end to end without relying on a third party. It also gives us direct oversight of quality KPIs, which means we can make sure the service meets the high standards we're setting and want to continue to set for the market. Another important reason is the ability to take ownership of the investment projects. With full control, we can start to modernize the logistics backbone right away, making it even more efficient and scalable for the future. And we can continue to invest in new sites when and where we feel it is most effective. You know, our U.K. business has been built on the backbone of returns and C2C, but this is essential now for us to grow our B2C operations, which is a critical part of increasing our market share in the U.K. going forward.
Finally, this acquisition allows us to launch a premium next-day delivery service, something we're really excited about because it will enhance the market go-to-market offering and set us apart significantly in the market. Thank you for that time, and thank you, Rafał and Javier, for your words. This now concludes our presentation and suggests we swiftly move on to the Q&A session. Thank you.
Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. That is star one for your questions. And our first question today comes from Roman Reshetnev from Goldman Sachs. Please go ahead.
Yeah, hi. Thanks for the call. Just a couple of questions. The first one is on the implied valuation of 100 Menzies stake, which is significantly lower versus your first deal last year. So could you, you know, please elaborate on how you approached the valuation this time and what drives such a difference? Does it mostly come from MDS stake being not part of the new deal? And also, do you have any contingent payments subject to Menzies performance going forward?
I'll take that question, Roman. Looking at the valuation, look, the enterprise value that we look at versus what we did last year versus this year is about equal. The difference you see now in the payment or the transaction value is obviously there's a couple of adjustments between the enterprise value and equity value, which are different last year versus this year. But fundamentally, the key difference is that last year looked at the perimeter, which was the three businesses together, including MDS, and now you look also at the perimeter, which is excluding MDS. So there's a couple of differences in how we go from enterprise value to equity value, but fundamentally, the valuation of the both businesses has been roughly stable versus last year. No significant difference.
Yeah, and just a small follow-up here. Given that you highlight that MDS is non-core business for you, so just wondering, why was it initially part of the first deal perimeter last year?
Yeah, I mean, maybe I can comment on that. I think clearly an important part of completing this transaction and an important part of one of the conditions of the investment is that there was more integration of those businesses within the Menzies group at that time, and therefore, when we made the investment, it, you know, was difficult to separate. And clearly, what we've been able to do with Menzies during that period is create the right structure that allows us to enable the separation. Javier touched on it. As of this morning, the MDS business has diverged, and there's certain elements on the back office that now can be independent rather than intertwined, that allows us to move forward.
Okay. Thank you. And, yeah, that's my last question. Yeah, given the ownership of Menzies provides you with some ownership of, like, investment projects, how should we think about your locker rollout plans and CapEx program in the U.K. next year? And, separately, does it now make sense for you to expand into Ireland, where Menzies already has some operations?
Yeah, I'll take, I'll take both questions. Look, I think the main reason for really triggering the call option now is our conviction around the U.K. to the continued acceleration of our locker rollout. So, you know, what you've seen in the last few quarters will maintain. It's our ambition to continue to accelerate our locker plans going into twenty, the balance of 2024 and the rest of 2025 and beyond. So really, this gives us even further conviction to continue to want to accelerate. I think the actual partnership with Menzies continues to bear fruit because of the news trade relationship with that independent sector in particular. So there's a real strong network overlap on that. And then finally, on Ireland, you know, yeah, they do have a footprint.
I think clearly our priority is mainland U.K. today, and will continue to be, but it does provide an opportunity to evaluate that market, 'cause we clearly have logistics footprint, but you know, we're not launching Ireland today or tomorrow, but we'll evaluate it and see if there's potential benefit in doing that for the future.
That's clear. Thank you very much.
Thank you.
Thank you. And we move on to a question from Sathish Sivakumar from Citigroup. Please go ahead.
Thanks again for taking my questions, and congratulations on getting this deal done. I've got three questions, actually. So first of all, if I look at the existing Menzies distribution that you've taken under personal control, do they do any other, like, logistics players volumes in the U.K.? If they do, what is the exposure and what are those terms, given now you've actually become a, like, fully owned sub-entity for you? And then the second one, what does it mean now, obviously, there is CapEx investment has gone into this M&A, which implies what does it mean for your APM rollout trajectory in the U.K.? Any color that you see, like, in the medium term, because obviously this does give you the slack.
You had to actually invest anything within the existing Menzies to further help you to get to that D+1 capability. If so, what, what does the CapEx would look like on that? And then the third one, would you like continue to operate the newspapers, those kind of deliveries, or would you see to unwind at some point? Thank you.
Yeah, I can take those questions, and Javi, if there's anything you want to add on the CapEx, feel free. But I think firstly, Sathish, good morning. One, there is no other volumes as part of the Menzies parcel business today that there's any risk to. I think that's an important part, again, of the transition that Menzies has gone under, since we went into partnership over the last sort of 16 months. And really the, if I call it, the cleaning up of the business. InPost owns 100% pretty much of their parcel business today, so there is no risk. Two, again, I think I answered this in the previous question to Roman.
You know, our view is this will accelerate our APM conviction, and we've already started that acceleration, so we'd want to maintain that current pace, if not further accelerate. And sort of in the medium term, we still see, you know, 20,000 lockers being our core objective, and we're well on our way to doing that at 8,000 . But we see even the potential longer term in the market to probably be maybe more near 30 to 35. So really, the one clear benefit that Menzies does have today as a logistics backbone is full nationwide coverage, unlike some other carriers, and two, a seven-day-a-week operation. So really an important cornerstone for really allowing us to accelerate our offer across the market, coupled with acceleration of our locker network.
When it comes to CapEx, and you link to D+1, we're going through that evaluation, but you know, clearly there are certain elements we do need to invest in. Hence, taking full ownership and control of that now is quite important as we make these investments. I think, one, I don't think it's really about depot coverage at this point. We really have enough. It's sortation, capability, and locations of that. So, you know, there'll be more to come in further calls, but you know, probably, we will need to probably invest at least into one new modernized sortation capacity, in the near term in order to, to solve for that. And then when it comes to the newspaper business, there is no plan.
And I think we said this at the time, actually, when we made the investment. You know, the newspaper business, actually, we see an incredible amount of value of what it's enabling. You know, one, we have, you know, all those 27,000 daily deliveries going on, and in some locations twice. So the overlap with our locker development network is quite significant. Two, we're able to get operating leverage already out of that operation because of, you know, those routes already running on a daily basis, and so we can unlock that with further coverage. And three, you know, an important part of Menzies is the heritage of this newspaper business, albeit it is in market-wise and structural decline.
But, you know, it's our commitment to continue to support that newspaper distribution, and certainly do not see any element where we want to divest it in the near medium term, because frankly, it's providing an asset today that allows us to create nationwide coverage, which we want to offer.
How do those contracts work, actually? Are those like yearly contracts? Would you now go and renegotiate some of them, or?
No, they're all long-term, locked-in contracts of, like, five to seven years.
Okay, got it. Maybe, Michael, just a quick follow-up on that 20,000 APM rollout. Given now, yeah, obviously, Menzies does give you scale across the U.K. If I had to think about, say, the 20,000 split between the four urban centers in the U.K. versus the rest of the U.K., how does the split would look like?
It would be a 50/50. It'd be a way to think about it. So, you know, we did start the known. I call it the known urban, but, you know, it's really known Manchester, London and Birmingham.
Good.
You're really looking... Like, I mean, that's a medium-term view, just to be clear. It's not like immediate and near term, next 12 months. But it's a medium-term view, where you would probably want 50% urban and 50% non-urban. And when I define urban here, I'm defining Manchester, London and Birmingham. The U.K. has cities like Newcastle, Leeds, Cardiff, Brighton, Edinburgh, Glasgow, that actually we already started that deployment, but clearly there's now room for further coverage, and the market growth is highlighting that.
Okay, got it. Thank you. Yeah.
... Thank you. From Barclays, we have Alexia Dogani with our next question. Please go ahead.
Yeah, thank you for taking my question. Just firstly, one clarification: you mentioned on the press release that there's no significant impact on leverage. Can you kind of give us indication of whether there's any net debt coming with this transaction? Then secondly, you mentioned very helpfully in the slide that, you know, the utilization of the APMs already is very high. Over the next two years, what is really the constraint in kind of rolling out faster to get to the 20,000 lockers? And what controlling Menzies allows you to deliver that faster? And then finally, can you give us an update on retailer uptake for your B2C proposition? Thank you.
I'll start. Good morning, Alexia. I'll quickly give you an update on the net leverage, and I guess I'll pass it back on to Michael for the utilization and retailer B2C. On the leverage side, I think we've mentioned that it's got very little impact. Yes, there's a bit of debt coming with this net debt, but from a total leverage point of view, at the group level, it's gonna have, if anything, it's gonna be about 10 basis points impact on our total company leverage. So fundamentally, it's quite very low in terms of what we take on. So at the group level, no real issue and no significant change in our net leverage profile. Then on the business side, I'll let Michael take the utilization and the B2C question.
Yeah, sure. You know, I think what I think is quite important now is clearly coverage, and accessibility to that coverage linked to B2C. We've clearly developed the business very well from a returns and C2C business, and this pivot is quite critical. Clearly, there's a number of different operational processes we feel that need to be instilled, and we need to have end-to-end controllership of that around the B2C that we've seen from Poland and France as we've made those pivots. And when it comes to actual, you know, B2C deployment, today, you know, we have just under 30 clients working with us today. It's still very much in beta. It's not like we're offering a D + 1 service.
It's a D+2 , but you know, there's work that needs to work through on cutoff times, actually in terms of injection points for those cutoff times, and then obviously the turnaround in terms of delivery that we want to bring on a nationwide basis, so that work is currently ongoing, and it will continue to ongoing as we continue to optimize the Menzies network to do that, and direct ownership will only accelerate that. The actual utilization you know is running at super high rates, which is great, but that also just emphasizes we need to increase coverage and increase deployment pace. You know, two things that sort of we think is important to do that: One is actually development of the independent channel for deployment.
We have really high penetration of our chains today across supermarkets and forecourts, and really, the white space as we look at it today is really the independent areas, and really we need to invest both in OPEX component to accelerate that, which we've started to do, and also leverage the connectivity of Menzies that we have been starting to do, but now actually having direct ownership will only further accelerate that leverage into the independent channel in order to facilitate it, so those things together will sort of work harmoniously to really improve the acceleration and coupled with already what we've done on the chain side from a locker deployment perspective.
Thank you.
Thank you. And our next question now comes from Henk Slotboom, from The Idea. Please go ahead.
Good afternoon, and thanks for taking my questions. I got a few. First of all, you already said during the call that MDS is not a core business, and I fully understand that. Has a scenario come to the table that MDS, the 30% stake you now own in MDS, could be used as a currency for acquiring the 70% in the other two businesses? And have, in respect of MDS, have there been made any arrangements with the sellers, like a right of first refusal or something like that, or a lockup or anything like it? My second question is, with regard to Express and News Trade.
You recently disclosed that the combined EBITDA is 14.2 million in the first half year of 2024. I respect that you don't provide a further breakdown, but just as a matter of curiosity, are both activities profitable? My third question would be, obviously, the Menzies deal can mean quite a lot in terms of your acceleration of your out-of-home business. But next to that, you have a, yeah, not voluntary, but necessary, door-to-door business you have to offer to some clients. You left that at this moment at Royal Mail.
Is it at any point in the future thinkable that Menzies will play a role in that as well, or will the focus continue to be on out of home? And last, my final question would be: In the Menzies 2023 report, I read that they expected the News Trade contracts, the newspaper contracts, all at least 90% of those to be renewed until 2029, so guaranteeing revenue until 2029 by the end of this year, and you already said the contracts expire in about, they have a life of about five to seven years. Where are you in the process of this 90%? Is that still valid? Those were my questions. Thank you.
Okay. Thanks, Henk. Good morning, or good afternoon for you. Let me try and take them, and then maybe, Javi, if you want to comment on the, on the deal structure, but I can comment on that as well. I think just starting in reverse, Henk, I think I made the comment earlier, yes, you know, the 90% of the deals, if not more, are locked up and secured. That's also an important part of the trigger of the call option in terms of criteria, so it gives us continuity for that period of time. Which we think is important because obviously the structural decline nature of the news trade business, then obviously, you know, that takes that risk element away and allows us to continue to concentrate on the development of the parcel business.
Two, you know, the door-to-door offering today is principally because we, you know, yes, there is some customer demand for it, but it's also principally because we don't have an out-of-home network in some of those locations today. So again, this just further complements how we think about accelerating the continued APM deployment and put our network where we need it. You know, does it provide an opportunity in the future for us to do door-to-door? It could do, but that's not our priority right now. And really, it's just about ensuring we've continued growth and expansion of our out-of-home network, principally APMs, to provide that alternative to door-to-door. The second point, I think I just, can I just, can you repeat what the second one was before I get into the deal structure?
Uh, yeah.
I think the second question-
That was on the profit question.
Okay.
On the profitability.
Do you want to take that, Javi, or?
Yeah, I think quickly give a perspective, would be the reason why we don't split it off, basically, because there's a lot of intertwined between the businesses, and therefore, we like to look at the totality of the Express plus the News Trade. If you look from a profit margin point of view, it's not dilutive to the U.K. business. So that's the good news. There's a couple of allocation factors on how you distribute the joint costs between Express and News Trade that we're gonna have to look into, to then see, okay, if we have a better definition of the individual profitability for those different levels. But at this point in time, it's less relevant because they have a common base, and it's more about allocation factors. So overall, non-dilutive to our U.K. business.
At the global level, just because of the size of the U.K. becoming bigger, it's got a bit of a dilution effect on the total InPost profit margin at the global level, but that's just a mix effect and size of the business-wise. On the first question, which was MDS, but then again, Michael, you can add to that. Of course, we have our governance in place still with MDS. MDS will have at least one board member. We've got a 30% stake. Yes, we've looked at options in the deal structure, but we believe at this point in time, having that 30% stake with still a board member in there, allows us to see what's going on.
Of course, it's not our decision what's going to happen next with MDS, but of course, we have a vote there in terms of how to make sure that the 30% that we still own has the right value.
Yeah, and then I think the important structural part was we have maintained a third-party arm's length agreement for supply of middle mile on a long-term basis. So we still maintain that commercial advantage ongoing, even though we're separated.
Okay, that's very clear. Thank you.
Thank you.
Thank you. And as a brief reminder, ladies and gentlemen, that is star one for your questions via the telephone today. And we now take a follow-up question from Sathish Sivakumar. Please, go ahead.
Michael, just sorry, a quick follow-up question here. In terms of the assets that they own, like, say, do they own any, like, station facilities or depots? Is that completely owned or leased? And then the second one related to that, in terms of the trucks that they own. Are all the trucks that they own, and what is the average age of the fleet today, and what's your plan around, like, modernizing that?
Yeah, I mean... Yeah, no problem. It's a majority of it's leased, Sathish, not, not the majority is owned, so majority is in long-term leases. Of the trucks today, there is, a total combination of last mile fleet today of approximately over 1200 , just to give you an indication. And of that, there's about 35% is owned, and the rest is leased or subcontracted at this point in time.
Okay, got it. Thank you. And any color on the average age of the fleet?
I need to come back to you on that, off the top of my head.
Yeah, no worries. Yeah, thanks.
Thank you.
Thank you. And with that, I'd like to hand over to Danielle for any questions via the webcast.
Thanks, Sathish. So our first couple of questions come from John at Heidemark Limited. How do you view the timetable for launching a widespread B2C delivery offering post this deal?
Yeah.
Do you want to take that one, Michael?
Yeah, sure, I can take this. I mean, I think I've highlighted, we started beta phase, so we really are testing different customer flows, integrations, et cetera. 'Cause it's not just about launching the service product of B2C. There's different elements that are required, both technically and such as just integration with the merchants and what's the right path to do that, to ensure out-of-home is presented in the right way versus what's in the U.K., as well as just what the different cutoff points and injection points for different retailers need to be linked to collection, et cetera, et cetera. So that's currently in development. We've learned. We're learning quite rapidly with that. And our view is really going into the first half of next year, more Q2, we will start a more aggressive push.
'Cause we just still working through some of the sortation procedures that are linked to now having control, that we want to make sure. And then on top of that, I think Rafał highlighted, by the second half of 2025, we also want to bring to market a D+1 offering, which for us is actually the North Star in terms of replicating how we have evolved the business model in Poland. So those things are well underway and, you know, I still think the business will very much be C2C and returns driven in terms of mix, but we'll start to see a shift in the B2C growth for the sort of mid- to first half of 2024-2025, and significantly in the second half of 2025.
Thank you. And next from John: The MDS warehouse assets, could they provide a foundation for developing a fulfillment capability in combination with the broad delivery backbone you now have?
Yeah, yeah, potentially, but today that is not the core business of MDS. You know, for them, it's more heavy, heavy line haul and pallet-driven transport. And for us, you know, today, that really wasn't deemed a near-term requirement or focus and won't be where, whereas B2C is. So, you know, to an extent, that's something we ruled out at this point.
Thank you. Our next question comes from Wojtek at Generali OFE: What about MDS? You still have 30%. What are you going to do with this stake?
We're gonna hold. I think Javier touched on it. We've got a board seat observer. We do feel it's important to have a still have some form of touch in that business, but we are not the main shareholder. So, clearly, it, it's probably best to have that conversation with them. And but we'll hold until the right time. We think it either is to exit or dispose in, in, in the right structure, but at the minute, there's no need to do that.
Thank you. We have a question from Mark Watts at Citi: Are you targeting a certain market share on B2C side in the U.K.? And who do you consider main competitors in the U.K. delivery market?
I wouldn't say we're targeting a market share because at the minute, you know, we're zero. I think the way we've always looked at the U.K. business, you know, our first milestone for the U.K. business is building a 500 million parcel business. That's our first milestone. It's not our ambition, but even at a 500 million parcel business, that would probably put us where Poland was about 18 months ago to two years, and that's our first objective. Today, you know, that would clearly mean that growing our C2C and returns and B2C is a significant ambition. And now if you take the estimates, that would put us probably in the 70-80% market share again in order to deliver that. So if you do the mathematics, that's what it'll compute to.
But you know, that's really first milestone, but not ambition. So our view is, we see an opportunity to disrupt an in-store to door market with really the same value proposition we've taken to other markets. And we see the headwinds in the market that exists in terms of merchant cost efficiency, no capacity for others to grow, and we're bringing new capacity. And thirdly, sort of a strong consumer proposition, which really you see already today from you know, the 100 million or so parcels that we're running at a year already. So you know, it's really about building that consumer franchise, building a winning service proposition, and really disrupting and changing the market over time, not immediately.
Thanks, Michael. We have a question from Monika Zduńska: What is the net debt level of New Menzies under IFRS 16? And does the acquisition of Menzies change anything in your guidance for the U.K.?
Yeah, I'll, I'll take that. Look, the... We still have to go back through the IFRS 16 exact definitions. What we can basically say is that at the current accounting basis, they have a debt, an external debt, which is more than offset by the cash availability, and they also have an intercompany credit, basically, and that compensates. So in fact, they're on their current basis in a net positive position when it comes down to the debt. As I said, at a total company level, when we consolidate everything, we expect there's gonna be a slight ten basis point adjustment at a global level, in terms of leverage position. That's what we believe under our own IFRS 16 numbers will be the case.
And then when it comes down to the guidance, look, the acquisition, as I said before, if I look at our outlook items or the guidance we've given, obviously, from a top-line point of view, we've always said we will continue basically doing better than the market. As Michael has expressed a couple of times, Menzies will help us securing that and making sure that we keep on growing fast and accelerating in the U.K. So that, of course, stays the same for the short term and for the midterm. From a profitability point of view, for 2024, as I said, this is the combination of Menzies and news trade.
When you consolidate, it's not dilutive, so it means also that in terms of our projections for the year, that the specific acquisition of Menzies does not have an impact on where we believe we'll end up the year versus our outlook. We'll provide an update at the end of Q3 how we see the year going on, but that will be just part of the basic business and will not be having an effect of what Menzies does to dilute or not to dilute profit margin. And then for the midterm, we've always talked about the markets like the U.K., that they would go high 20s in terms of profit margin by outgrowing the market. Again, Michael has said this is a plan to accelerate growth in the U.K., which is clearly our intention, to significantly outgrow the margin and... Sorry, outgrow the market.
And from a margin point of view, again, there's no reason to change our ambition level to get to the high 20s in terms of profit margin midterm in the U.K.. So fundamentally, no real change on the outlook, just a reinforcement of being successful at what we're doing.
Thanks, Javier. Those are all the questions we have today. So Rafał, I'll hand back to you for closing remarks.
Thank you. Thank you, guys. Just a quick summary. In conclusion, today really marks a pivotal movement in our InPost journey as we transition from a partnership to full ownership of Menzies, and also this strategic acquisition definitely empowers us to enhance our logistics operations in the U.K., ensuring much greater control over our services and also the ability to launch a premium next-day delivery offering for literally every customer, and that impressive growth we've experienced in the U.K. recently is literally the testament to the synergy we created through our collaboration with Menzies, and by the way we are excited to build on this foundation further.
As we move forward, our focus will remain on optimizing our operations and expanding our market presence, as Michael said, and together we'll definitely harness this opportunity to redefine the standards of e-commerce logistics in the U.K., literally, like, paving the way to our future success. So thank you very much for your attention, and we look forward to addressing your questions, if needed, as well offline. Feel free to contact Gabi or us directly. Thank you very much.