Postnl Nv · EURONEXT:PNL
Postnl Nv — Q4 2022 Earnings Presentation
42 slides from Postnl Nv's earnings presentation, Feb 27, 2023
Slide 1: Navigating a turbulent environment: Q4 & FY 2022 Results
Navigating a turbulent environment Q4 & FY 2022 Results The Hague － 27 February 2023
Slide 2: Additional information and forward-looking statements
Additional information uncertainties and other factors that are outside of our control and Use of non-GAAP information impossible to predict and may cause actual results to differ Additional information is available at www.postnl.nl. Elements of In presenting and discussing the PostNL Group operatin
Slide 3: Navigating a turbulent environment
Navigating a turbulent environment → Key takeaways → Executing on our strategy → Business and financial performance 2022 → 2023 and beyond Q4 & FY 2022 Results 2
Slide 4: Key takeaways 2022
Key takeaways 2022 3
Slide 5: 2022: Navigating a turbulent environment
2022: Navigating a turbulent environment Inflation and pressure on consumer spending impacted costs and development of e-commerce volumes, partly mitigated by swiftly taking adaptive measures -10.2% -8.0% volumes Parcels volumes Mail in the Netherlands €3,144m €84m €40m revenue normalised EBIT free
Slide 6: Executing on our strategy
Executing on our strategy 5
Slide 7: Challenging macroeconomic environment and industry dynamics
Challenging macroeconomic environment and industry dynamics Global risk Competitive dynamics • Ongoing geopolitical tensions • Temporary overcapacity in parcels • Supply chain bottlenecks, mainly to market due to capacity expansion in and from Asia period of e-commerce slowdown • Multi-vendorship an
Slide 8: Fundamental drivers of e-commerce growth unchanged
Fundamental drivers of e-commerce growth unchanged Online penetration and retail spend and main drivers Development e-commerce market • Online penetration main contributor Online penetration • non-mature market (in % of retail spend, the Netherlands) • upward long-term trend assumed to continue • Al
Slide 9: Our strategy
Our strategy The leading logistics and postal service provider in, to and from the Benelux region Strategic foundation Parcels Mail Manage for sustainable growth Manage for value Support business performance and increase customer satisfaction Strategic objectives Customer value Social value Environm
Slide 10: Executing on our strategy
Executing on our strategy Well-positioned to resume growth trajectory at Parcels and maintain solid performance at Mail in the Netherlands Strategic foundation Parcels Mail Manage for sustainable growth Manage for value Support business performance and customer satisfaction 2023: normalised EBIT of
Slide 11: Business and financial performance 2022
Business and financial performance 2022 10
Slide 12: Results in 2022
Results in 2022 A different year than expected FY 2022 assumptions Main drivers Actual development Impact on performance (28 February 2022) Organic costs ~€70m inflationary cost pressure • Inflation significantly higher than assumed • ~€65m additional impact • CLA agreements (PostNL, mail deliverers
Slide 13: Key financial results Q4 2022
Key financial results Q4 2022 Solid peak season Key takeaways Key financial metrics • Domestic volumes at Parcels -3.8%, excluding non-recurring impact related to Covid-19; reported volumes -5.4% (in € million) Q4 2021 Q4 2022 change • Volumes at Mail in the Netherlands -8.1%; underlying mail develo
Slide 14: Strong operational performance at Parcels Q4 2022
strictly confidential – for internal discussion only Strong operational performance at Parcels Q4 2022 Well-managed execution of peak season Revenue Normalised EBIT Volumes Revenue mix in € million Q4 2021 Q4 2022 Q4 2022 €587m €24m* 94m -5.4% Parcels Netherlands Spring 409 104 392 113 Q4 2021 €604m
Slide 15: Parcels Q4 2022 normalised EBIT bridge
Parcels Q4 2022 normalised EBIT bridge Margin suppressed by organic cost increases (in € million) Normalised EBIT Q4 2021 55 Parcels Netherlands Revenue - volume (21) 5.4% volume decline Revenue - price/mix 6 Price increases in combination with favourable mix effect Organic costs (27) Includes wage
Slide 16: Strong performance at Mail in the Netherlands Q4 2022
Strong performance at Mail in the Netherlands Q4 2022 Mitigating volume decline through moderate pricing policy and cost savings initiatives Revenue Normalised EBIT Volumes Q4 2022 €429m €60m* 534m -8.1% Q4 2021 €482m €66m 581m FY 2022 €1,495m €107m (margin 7.2%) 1,884m -8.0% * Down €7m; or flat whe
Slide 17: Mail in the Netherlands Q4 2022 normalised EBIT bridge
Mail in the Netherlands Q4 2022 normalised EBIT bridge Cost savings partially offset higher organic costs (in € million) Normalised EBIT Q4 2021 66 Mail activities Revenue - volume (25) 8.1% volume decline Revenue - price/mix (2) Moderate pricing policy offset by less favourable overall mix Organic
Slide 18: Cash flow in Q4
Cash flow in Q4 (in € million) Q4 2021 Q4 2022 Normalised EBIT 93 60 Reversal normalisations* (3) (12) Mainly advisory and project costs Depreciation & amortisation 41 41 Capex (50) (38) Lower capex to align with volume development Lease payments and related cash flow (27) (26) Change in working cap
Slide 19: Full-year cash flow
Full-year cash flow (in € million) FY 2021 FY 2022 Normalised EBIT 308 84 Reversal normalisations* 15 (17) Book gain on sale of Cendris Q1 2021, advisory and project costs in 2022 Depreciation & amortisation 149 156 Capex (140) (138) Lease payments and related cash flow (73) (78) (3) Strict working
Slide 20: Accounting classification pensions
Accounting classification pensions From defined benefit to defined contribution (in € million) Reported Technical accounting Unconditional funding FY 2022 FY 2022 adjustment IAS19 (non-cash) obligation adjustment excluding adjustments Reported EBIT (operating income) (1,291) 1,377 (20) 66 Profit fro
Slide 21: Balance sheet
Balance sheet Adjusted net debt at €467m Balance sheet (in € million) 31 Dec 2022 31 Dec 2022 Intangible fixed assets 389 Consolidated equity 177 Property, plant and equipment 457 Non-controlling interests 2 Right-of-use assets 295 Total equity 179 Other non-current assets 53 Pension liabilities 2 O
Slide 22: €0.16 dividend per share proposed to AGM
€0.16 dividend per share proposed to AGM Financial framework Dividend (in €, per share) • Steering for a solid balance sheet with positive consolidated equity €0.42 • Aiming at a leverage ratio (adjusted net debt/EBITDA) not exceeding 2.0x (FY 2022: 1.9) • Strict cash flow management €0.28 Proposed
Slide 23: Clear allocation of capital and sound financial framework
Clear allocation of capital and sound financial framework Aim for leverage ratio (adjusted net debt/EBITDA) below 2.0 Organic growth is main focus for value creation 1. Invest in business 3. Dividend 5. Excess cash • Capacity growth • Develop in line with business • Compensate for dilution due to •
Slide 24: 2023 and beyond
2023 and beyond 23
Slide 25: Confident in being well-positioned to resume growth path
Confident in being well-positioned to resume growth path Further executing on our strategy with improving performance as of 2024 Uncertain economic environment in short term E-commerce growth potential going forward • Challenging conditions assumed to continue into 2023 • Fundamental growth drivers
Slide 26: Additional plans to reduce costs
Additional plans to reduce costs Further solidify fundamentals 2023 Benefits in 2024 and beyond Reduction of 200-300 FTEs in overhead €20m • ~€25m cost savings* in 2024 and other indirect cost measures, mainly costs • full run rate of ~€30m* to be at Parcels mainly restructuring provision reached as
Slide 27: Outlook 2023
Outlook 2023 Fundamental drivers e-commerce market remain unchanged (in € million) 2022 2023 outlook Normalised EBIT 84 70 – 100 Normalised comprehensive income 90 40 – 70 Free cash flow 40 10 – 40 Well-positioned to improve performance as of 2024 • ≥ 200 bps margin improvement PostNL, mainly at Par
Slide 28: Transition from 2022 to 2023
Transition from 2022 to 2023 (indicative only, in € million) Normalised EBIT 2022 84 Assumptions business performance • Macro-economic uncertainty assumed to continue into 2023 Assumed business performance Parcels • Inflation key variable to watch Assumed business performance • significant increase
Slide 29: Significant organic cost pressure from inflation to continue
Significant organic cost pressure from inflation to continue Majority of cost increases will be allocated to Parcels (in € million) Labour ~90 Reflecting new CLA agreements, sector CLA, and indexation for delivery partners ~90 Includes higher (international) transportation costs, Other electricity,
Slide 30: Quarterly split of normalised EBIT
Quarterly split of normalised EBIT As of Q2, gradually improving business performance assumed compared with last year Normalised EBIT (indicative only, in € million) • Q1 2023 assumed to be below last year • Significant volume decline in Parcels • Some additional negative volume development Mail in
Slide 31: Further executing on our strategy
Further executing on our strategy Confident in being well-positioned to resume growth path Uncertain economic E-commerce growth Additional measures environment in short term potential going forward to strengthen foundation Improving performance as of 2024 30
Slide 32: Q&A Q4 & FY 2022 Results
Q&A Q4 & FY 2022 Results 31
Slide 33: Appendix
Appendix → Results per segment Q4 2022 and FY 2022 Q4 & FY 2022 Results → Full reconciliation of income statement and EBITDA per segment → Free cash flow per segment → Revenue mix Parcels per quarter → Assumed non-recurring impact related to Covid-19 per quarter → Result development (bridge) per seg
Slide 34: Results per segment Q4 2022 and FY 2022
Results per segment Q4 2022 and FY 2022 (in € million) Revenue Normalised EBIT Margin Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Parcels 604 587 55 24 9.1% 4.1% Mail in the Netherlands 482 429 66 60 13.8% 14.0% PostNL Other 50 49 (29) (23) Intercompany (200) (182) PostNL 936 883 93 60 9.9% 6.8%
Slide 35: Full reconciliation of income statement and EBITDA per segment
Full reconciliation of income statement and EBITDA per segment Income statement PostNL Parcels Mail in NL PostNL Other Eliminations in € million FY 2021 FY 2022 FY 2021 FY 2022 FY 2021 FY 2022 FY 2021 FY 2022 FY 2021 FY 2022 Total operating revenue 3,466 3,144 2,361 2,165 1,683 1,495 200 215 (777) (
Slide 36: Free cash flow per segment
Free cash flow per segment (in € million) PostNL Other & PostNL Parcels Mail in NL eliminations 2021 2022 2021 2022 2021 2022 2021 2022 EBITDA* 473 222 305 127 215 127 (47) (32) Change in pensions* ** 69 75 0 0 (0) - 69 75 Change in provisions* (2) (3) 1 4 (3) (5) (0) (2) Change in working capital*
Slide 37: Revenue mix Parcels per quarter
Revenue mix Parcels per quarter (in € million) Q1 2021 Q1 2022 Q2 2021 Q2 2022 Q3 2021 Q3 2022 Q4 2021 Q4 2022 FY 2021 FY 2022 Parcels Netherlands 444 361 383 345 329 332 409 392 1,566 1,431 Spring 145 105 131 91 95 95 104 113 475 404 Logistics solutions and other 102 105 100 98 95 93 111 101 409 39
Slide 38: Assumed non-recurring impact related to Covid-19
Assumed non-recurring impact related to Covid-19 Volumes (around, in million) Q1 2021 Q1 2022 Q2 2021 Q2 2022 Q3 2021 Q3 2022 Q4 2021 Q4 2022 FY 2021 FY 2022 Parcels 26 2 11 - - - 2 - 38 2 Mail in the Netherlands 12 15 23 3 16 7 16 6 67 30 Revenue (around, in € million) Q1 2021 Q1 2022 Q2 2021 Q2 20
Slide 39: Parcels normalised EBIT bridge
Parcels normalised EBIT bridge (in € million) Normalised EBIT FY 2021 230 Parcels Netherlands 10.2% volume decline; -0.7% corrected for non-recurring Covid-19 Revenue - volume (162) items, driven by decline in cross-border activities and slower e-commerce development due to deteriorating macroeconom
Slide 40: Mail in the Netherlands normalised EBIT bridge
Mail in the Netherlands normalised EBIT bridge (in € million) Normalised EBIT FY 2021 160 Mail activities Revenue - volume (83) 8.0% volume decline Moderate pricing policy offset by less favourable mix, reflecting Revenue - price/mix (2) fewer Covid-19-related items (35) Inflationary pressure mainly
Slide 41: PostNL profit and normalised comprehensive income
PostNL profit and normalised comprehensive income (in € million) FY 2021 FY 2022 Operating income / EBIT* 324 66 Net financial expenses (21) (19) Results from investments in JVs/associates (0) (1) Income taxes* (74) (21) Profit/(loss) from discontinued operations 29 (11) Profit* 258 14 Other compreh
Slide 42: Reconciliation pension expense and cash contribution
Reconciliation pension expense and cash contribution (in € million) PostNL Parcels Mail in NL PostNL Other FY 2021 FY 2022 FY 2021 FY 2022 FY 2021 FY 2022 FY 2021 FY 2022 Cash contribution* (92) (97) (29) (34) (45) (47) (18) (17) IFRS non-cash pension expense* (69) (75) (0) - (69) (75) Total pension