Postnl Nv · EURONEXT:PNL
Postnl Nv — Q3 2022 Earnings Presentation
30 slides from Postnl Nv's earnings presentation, Nov 7, 2022
Slide 1: Q3 2022 Results
Q3 2022 Results The Hague － 7 November 2022
Slide 2: Additional information and forward-looking statements
Additional information looking statements involve known and unknown risks, Use of non-GAAP information uncertainties and other factors that are outside of our control and Additional information is available at www.postnl.nl. Elements of In presenting and discussing the PostNL Group operating results
Slide 3: Key takeaways
Key takeaways Q3 2022 normalised EBIT at €(20)m and free cash flow of €(49)m Record-high inflation (CPI)* Q3 2022 results (%, year-on-year change of consumer price index, the Netherlands) 14.5% • High inflation and low consumer confidence put pressure on consumer spending and growth expectations for
Slide 4: Less spending on products
Less spending on products Uncertain impact on volume development Parcels FT - 8 October 2022 Financieel Dagblad - 24 October 2022 South China Morning Post - 1 November 2022 RTL Nieuws - 12 October 2022 Econsultancy.com - 12 October 2022 Financieel Dagblad - 30 September 2022 3
Slide 5: Unprecedented inflation not absorbed by regular price increases
Unprecedented inflation not absorbed by regular price increases (in € million) Historic FY organic Mainly CLA increases and indexation for delivery partners, based ~ 45 on moderate inflation cost increase Actual impact of CLA for mail deliverers and indexation for Labour delivery partners, assumptio
Slide 6: External headwinds depress YTD performance at Parcels
External headwinds depress YTD performance at Parcels (in € million) Normalised EBIT YTD 2021 174 Parcels Netherlands (141) Slower e-commerce development due to deteriorating macroeconomic Revenue - volume environment with no recovery in cross-border volumes Partly mix; positive price effect not suf
Slide 7: Accelerating and intensifying mitigating actions
Accelerating and intensifying mitigating actions Secure financial position in this challenging environment Operational measures • Continuous scaling of operations and network capacity with volumes: to adapt organisation to volumes • within limits of tight labour market • ensuring flexibility for pea
Slide 8: Q4 strongest quarter of year and key driver for FY performance
Q4 strongest quarter of year and key driver for FY performance Margin improvement in Q4 due to better balance between volumes and costs Normalised EBIT (in € million) 130 93 Q4 2022 drivers • Prepared for peak days with 2x regular parcel volume; overall 63 volume expected to be in line with last yea
Slide 9: Executing on our strategy
Executing on our strategy To be your favourite deliverer Strategic objectives Value creation proposition Progress Q3 Help customers grow their business Parcels Manage for profitable • recruitment of extra parcel deliverers on own payroll, aiming for at least 50% of parcels delivered by PostNL growth
Slide 10: Q3 2022 performance
Q3 2022 performance Results depressed by deteriorating macroeconomic environment Key financial metrics (in € million) Q3 2021 Q3 2022 change YTD 2021 YTD 2022 change Revenue 729 709 -3% 2,530 2,261 -11% Normalised EBIT 23 (20) 216 23 -89% Assumed to be non-recurring and 5 1 74 2 related to Covid-19
Slide 11: Parcels: Volumes lower than anticipated with rising costs
Parcels: Volumes lower than anticipated with rising costs Costs increasingly high relative to volume Revenue Normalised EBIT Volumes Revenue mix in € million Q3 2021 Q3 2022 Q3 2022 €506m €(1)m 80m -1.1% Parcels Netherlands 329 332 Spring 95 95 Q3 2021 €505m €27m 81m Logistics solutions and other 95
Slide 12: Parcels Q3 2022 normalised EBIT bridge
Parcels Q3 2022 normalised EBIT bridge Price increases not sufficient to mitigate organic costs increase (in € million) Normalised EBIT Q3 2021 27 Parcels Netherlands Revenue - volume (4) 1.1% volume decline Revenue - price/mix 7 Overall higher prices in combination with favourable mix effect PostNL
Slide 13: Mail in the Netherlands: Solid performance
Mail in the Netherlands: Solid performance Mitigating volume decline through moderate pricing policy and cost savings initiatives Revenue Normalised EBIT* Volumes Q3 2022 €328m €(1)m 390m -9.3% Q3 2021 €345m €12m 430m * €1m Covid-19 impact in Q3 2022 versus €5m in Q3 2021 Volume • Overall volume dec
Slide 14: Mail in the Netherlands Q3 2022 normalised EBIT bridge
Mail in the Netherlands Q3 2022 normalised EBIT bridge Impacted by organic costs increase, cross-border mail and phasing in cost savings (in € million) Normalised EBIT Q3 2021 12 Mail activities Revenue - volume (19) 9.3% volume decline Revenue - price/mix 10 Moderate pricing policy and favourable p
Slide 15: Cash flow
Cash flow (in € million) Q3 2021 Q3 2022 Normalised EBIT 23 (20) Reversal normalisations 0 (1) Depreciation & amortisation 37 37 Capex (41) (36) Lower capex to align with volume development Lease payments and related cash flow (12) (18) Investments in working capital, partly phasing Change in workin
Slide 16: Balance sheet
Balance sheet Adjusted net debt at €594m Balance sheet (in € million) 1 October 2022 1 October 2022 Intangible fixed assets 380 Consolidated equity 131 Property, plant and equipment 446 Non-controlling interests 3 Right-of-use assets 277 Total equity 134 Other non-current assets 64 Pension liabiliti
Slide 17: Necessary measures to secure robust financial position
Necessary measures to secure robust financial position In challenging macroeconomic environment Deteriorating macroeconomic environment and Taking all necessary measures while continuing to prolonged uncertainty execute on longer-term strategy • Record-high level of inflation in September, while con
Slide 18: Q&A
Q&A Q3 2022 Results 17
Slide 19: Appendix
Appendix → Results by segment → Full reconciliation income statement and EBITDA → Free cash flow per segment → Revenue mix for Parcels → Assumed non-recurring impact related to Covid-19 → Result development (bridge) per segment YTD 2022 → Profit and normalised comprehensive income Q3 & YTD 2022 Resu
Slide 20: Results by segment for Q3 2022 and YTD 2022
Results by segment for Q3 2022 and YTD 2022 Revenue Normalised EBIT Margin (in € million) Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Parcels 505 506 27 (1) 5.3% (0.2)% Mail in the Netherlands 345 328 12 (1) 3.5% (0.4)% PostNL Other 52 56 (16) (18) Intercompany (172) (181) PostNL 729 709 23 (20)
Slide 21: Full reconciliation of income statement and EBITDA Q3 2022
Full reconciliation of income statement and EBITDA Q3 2022 Income statement PostNL Parcels Mail in NL PostNL Other Eliminations (in € million) Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Total operating revenue 729 709 505 506 345 328 52 56 (172) (181) Other incom
Slide 22: Full reconciliation of income statement and EBITDA YTD 2022
Full reconciliation of income statement and EBITDA YTD 2022 Income statement PostNL Parcels Mail in NL PostNL Other Eliminations (in € million) YTD 2021 YTD 2022 YTD 2021 YTD 2022 YTD 2021 YTD 2022 YTD 2021 YTD 2022 YTD 2021 YTD 2022 Total operating revenue 2,530 2,261 1,756 1,579 1,201 1,066 150 16
Slide 23: Free cash flow per segment Q3 2022
Free cash flow per segment Q3 2022 (in € million) PostNL Other & PostNL Parcels Mail in NL Eliminations Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 EBITDA 60 16 46 15 22 5 (8) (4) Change in pensions 18 19 0 - 0 - 18 19 Change in provisions (5) 1 0 1 (5) 0 (0) (0) Change in workin
Slide 24: Cash flow YTD
Cash flow YTD (in € million) YTD 2021 YTD 2022 Normalised EBIT 216 23 Reversal normalisations 18 (5) Mainly related to book gain on sale of Cendris Q1 2021 Depreciation & amortisation 108 115 Capex (90) (100) Lease payments and related cash flow (46) (52) Investments in working capital, mainly phasi
Slide 25: Revenue mix for Parcels by quarter
Revenue mix for Parcels by quarter (in € million) Q1 2021 Q1 2022 Q2 2021 Q2 2022 Q3 2021 Q3 2022 YTD 2021 YTD 2022 Parcels Netherlands 444 361 383 345 329 332 1,157 1,038 Spring 145 105 131 91 95 95 372 291 Logistics solutions and other 102 105 100 98 95 93 298 296 Eliminations (30) (17) (26) (15)
Slide 26: 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 YTD 2021 YTD 2022 Parcels 26 2 11 - - - 37 2 Mail in the Netherlands 12 15 23 3 16 7 51 25 Revenue (around, in € million) Q1 2021 Q1 2022 Q2 2021 Q2 2022 Q3 2021 Q3 2022 YTD
Slide 27: Parcels YTD 2022 normalised EBIT bridge
Parcels YTD 2022 normalised EBIT bridge (in € million) Normalised EBIT YTD 2021 174 Parcels Netherlands 11.9% volume decline, due to fewer Covid-19 related items, Revenue - volume (141) decline in cross-border activities and slower e-commerce development due to deteriorating macroeconomic environmen
Slide 28: Mail in the Netherlands YTD 2022 normalised EBIT bridge
Mail in the Netherlands YTD 2022 normalised EBIT bridge (in € million) Normalised EBIT YTD 2021 94 Mail activities Revenue - volume (58) 8.0% volume decline Revenue - price/mix 0 Moderate pricing policy offset by less favourable mix Inflationary pressure mainly due to new CLA, including a 4% pay Org
Slide 29: Profit and normalised comprehensive income
Profit and normalised comprehensive income* PostNL (around, in € million) Q1 2021 Q1 2022 Q2 2021 Q2 2022 Q3 2021 Q3 2022 YTD 2021 YTD 2022 Operating income / EBIT 148 30 63 9 23 (21) 234 18 Net financial expenses (5) (6) (4) (5) (5) (4) (15) (16) Results from investments in JVs/associates 0 0 (1) (
Slide 30: Reconciliation of pension expense and cash contribution
Reconciliation of pension expense and cash contribution (in € million) PostNL Parcels Mail in NL PostNL Other Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Q3 2021 Q3 2022 Cash contribution (22) (24) (7) (8) (11) (11) (4) (4) IFRS non-cash pension expense (18) (19) (0) (0) (0) - (18) (19) Total pe