Postnl Nv · EURONEXT:PNL
Postnl Nv — Investor Day (November 2015)
62 slides from Postnl Nv's investor day presentation, Nov 3, 2015
Slide 1: PostNL 2020: Committed to sustainable delivery, the next phase
PostNL 2020 Committed to sustainable delivery the next phase Strategy update 3 NOVEMBER 2015 THE HAGUE
Slide 2: Agenda
Agenda Strategy update 2015 Delivered on promises Securing our future Delivering growth Financials 2
Slide 3: Delivered on our promises
Delivered on our promises Strengthening PostNL Successful restart reorganisation Sustainable delivery model Bond redemption Strategic review: MBO UK Additional price increase Pension agreement Sale 50% of stake TNTE Bond buy back Strategic review: Continue to invest in Italy Stop reorganisation Firs
Slide 4: Delivered on our promises: improving financial results
Delivered on our promises Improving our financial results … UCOI 130 280-320 Net cash (212) 124 2012 2015E from operating and 2012 2014 investing activities Pension cash Gross debt 1,615 935 contribution 265 169 2012 -680M Q3 2015 2012 -96M 2014 4 Delivered on promises
Slide 5: Delivered on our promises: customer driven solutions
Delivered on our promises ... offering customer driven solutions ... • Sunday delivery for parcels • Evening delivery for parcels • Order your parcel till midnight, delivery next day • >3,500 locations in the Benelux, offering mail and parcel services • Roll-out PostNL app and digital platforms with
Slide 6: Delivered on our promises: continuous cost savings
Delivered on our promises … realising continuous cost savings … • From 280 to around 80 mail depots resulting in improved efficiency • New sorting machines mail enabling more efficient sorting • Overhead reduction of around 35% • From 6 to 5 mail delivery days • Synergies between mail and parcels •
Slide 7: Delivered on our promises: social indicator scores
Delivered on our promises … and improving our social indicator scores Customer Employee Satisfaction 79% 86% engagement 56% 64% 2012 2015 2012 2015 Quality addressed mail 93.9% 96.7% Mobility 3,650 employees 2012 2014 2012 – Q3 2015 CO2 index 62% 58% Reputation 59.7 67.8 2012 2014 2012 Q3 2015 7 Del
Slide 8: Agenda
Agenda Strategy update 2015 Delivered on promises Securing our future Delivering growth Financials PostNL Core competences Overall market trends Ambition 2020 Delivering growth 8
Slide 9: Core competences PostNL
Core competences PostNL Dedicated people 56,221 employees People Strong HR capabilities Expertise in stakeholder management 6 mail sorting centres and around 80 depots 18 parcel sorting and delivery centres Flexible and efficient supply chain 2,900 post offices and parcel points in NL Networks Relia
Slide 10: Overall market trends
Overall market trends Shaping our day-to-day life as well as PostNL’s business Accelerating e-commerce Technological developments Sustainable society • Omni-channel • Robotisation • Urbanisation • Worldwide shopping • Transforming data into knowledge • Ageing population • Globalisation of e-commerce
Slide 11: Ambition 2020
Ambition 2020 Be the postal & logistic solution provider in chosen markets Build on our core Committed to our Tap opportunities that Strengthen competences stakeholders market trends offer financial health Excelling in what we do to Focus on the interests of Create growth by offering Through solid c
Slide 12: Outlook 2016 and ambition 2020
The postal & logistic solution provider in chosen markets Outlook 2016 and ambition 2020* Outlook 2016 revenue + low single digit Outlook 2016 underlying cash operating income €220M - €260M Ambition 2020 underlying cash operating income €265M - €335M • Outlook 2016 reflecting the effects of: • Signi
Slide 13: Delivering growth
Delivering growth Substantial growth domains with potential to further strengthen results after 2020 Connected community Convenient shopping Network Logistics 13 Delivering growth
Slide 14: Agenda
Agenda Strategy update 2015 Delivered on promises Securing our future Delivering growth Financials Mail in the Netherlands Market development and competition Regulation Ambition 2020 Market volume, pricing and cost savings Innovation Customer satisfaction and quality 14
Slide 15: Market development and competition
Market development and competition Market development Competition • Continued digitisation in all segments and all • PostNL market leader in addressed mail types of customers • Substitution affects all market players • Customers in control of what to receive from • Ongoing competition low price prop
Slide 16: Regulation
Regulation USO Non-USO • Proud to be USO provider • Reliability and accessibility of Dutch postal services • Cost savings compensate for large part of volume under pressure by effects of regulatory measures in decline, but also tariff increases necessary declining mail market • Approved cost allocat
Slide 17: Ambition 2020: Deliver a sustainable cash flow
Ambition 2020 Deliver a sustainable cash flow Connecting senders and receivers by our people and innovative postal networks Balance volume decline and Continuously saving Innovative solutions to Continued focus on price development in context costs in total value enhance portfolio and meet customer
Slide 18: Market volume developments
Market volume developments Volume decline in total addressed mail market expected to slow down after 2017 Future expectations based on Reasons for expected slow down volume decline • Client surveys taking portfolio mix into • Significant part of large bulk volume senders already digitised account •
Slide 19: Pricing strategy
Pricing strategy Market • Volumes are critical in a declining market • Ongoing competition low price propositions Approach • Targeted discounts to protect volumes – media mix • Implementing new services and innovations to meet customer demand • High quality is key differentiator Pricing • Single ite
Slide 20: Cost savings increased with €200M to €345M over 2015-2020
Cost savings increased with €200M to €345M over 2015-2020 Over-performance on running plans and new cost saving plans Cost savings ambition (€ million) 2015 2016 2017 2018 2019 2020 Previous ambition 2015-2017 145 New ambition 2015-2020 75-95 345 20 Securing our future / Mail in the Netherlands / Co
Slide 21: Cost savings increased with €200M to €345M over 2015-2020
Cost savings increased with €200M to €345M over 2015-2020 Over performance running plans New plans • New sorting machines with coding capabilities Efficiency sorting process • Using new sorting machines • Enabling flexible sorting rules to optimise routes • Automated sorting to a deeper level • Simp
Slide 22: Innovative solutions to enhance portfolio and add value for customer
Innovative solutions to enhance portfolio and add value for customer Consumers in control with app and PostNL website • Online tool for letters and parcels to all destinations • Verified online account enable identity and age check facilitating reliable online business • Create stamps on own phone a
Slide 23: Innovative solutions to enhance portfolio and add value for customer
Innovative solutions to enhance portfolio and add value for customer MyMail: smart combination of attention value physical mail and convenience of email • Notifications • Extra contact moments • Personal preferences • Archiving documents and email • Read confirmation with option to send physical mai
Slide 24: Continued focus on customer satisfaction and quality
Continued focus on customer satisfaction and quality Connecting with customers Initiatives to improve 96.7% (2014) • One customer experience, e.g. integrated call Quality addressed mail centres; single PostNL ID for all services High quality day after day • Increased use of online applications both
Slide 25: Agenda
Agenda Strategy update 2015 Delivered on promises Securing our future Delivering growth Financials Parcels Market development and competition Ambition 2020 2C, 2B, Logistic solutions Networks 25
Slide 26: Market development and competition
Market development and competition Revenue breakdown Other Market development 2014 International Market development • Dynamic and evolving market • Fragmented, lower margin market • Growth driven by e-commerce growth • 6-8% market revenue growth in 2C Parcels Benelux 2C €854M Logistic Solutions • An
Slide 27: Ambition 2020: Create further profitable growth
Ambition 2020 Create further profitable growth The logistic solutions provider: making your life easier Leading e-commerce Innovative and market Continuously logistics company in driven solutions adding enhancing best in the Benelux value for customers class networks 27 Securing our future / Parcels
Slide 28: Parcels Benelux 2C
Parcels Benelux 2C Leading e-commerce logistics company in the Benelux Ambition Continuously improve delivery options • Evening delivery 5 days/week, same day delivery Grow revenue in line with • Late collection at retail (to service SME) underlying markets to • MyTime: time slotted delivery maintai
Slide 29: Parcels Benelux 2C: evening and same day delivery
Parcels Benelux 2C Innovative and market driven solutions adding value for customers Customer in control: offer convenience with evening and same day delivery services Starting 15 November 2015 • Evening delivery 5 days/week • Same day delivery 29 Securing our future / Parcels / 2C
Slide 30: Parcels Benelux 2C: food services
Parcels Benelux 2C Innovative and market driven solutions adding value for customers Food services: development of network to serve food market • Networks in place • Networks for foodbox (groceries), pre-cooked meals, meal packages • Evening delivery • High on-time service levels • Full track & trac
Slide 31: Parcels Benelux 2B
Parcels Benelux 2B Leading (e-)commerce logistics company in the Benelux Ambition Continuously improve delivery options Grow revenue faster than • Guaranteed delivery before 10 AM / noon / 5 PM • Combined collection and delivery of pallets and parcels GDP to gain market share Exceeding customer Expa
Slide 32: Parcels Benelux 2B: growing market segments
Parcels Benelux 2B Innovative and market driven solutions adding value for customers Development of 2B solutions in growing market segments • Guaranteed delivery before 10 AM / noon / 5 PM • Ensure full supply chain control 32 Securing our future / Parcels / 2B
Slide 33: Logistic Solutions
Logistic Solutions Enhance synergies with Benelux Parcels 2C/2B Ambition Continuously improve delivery options • Return services Strong revenue growth by • Installation and assembly services strengthening our position in certain niche Expand services offerings markets, partially by small • Pharma ‘G
Slide 34: Logistic Solutions: health care / personal care
Logistic Solutions Innovative and market driven solutions adding value for customers Health care / personal care: Development of 2B solutions in growing market • Benelux network for GDP distribution: Temperature controlled 2-8 and 15-25 degrees Celsius • Express and in-house delivery to hospitals, h
Slide 35: Unique and best in class networks
Unique and best in class networks Ahead of competition TOWARDS 2012 2015 2020 1 parcel network Multiple networks Add more niche networks Including niches Expanding 2B and 2C 3 sorting & delivery centres NL: 18 sorting & delivery centres Easy to expand Sufficient to handle expected growth for Parcel
Slide 36: Expanding customer oriented services at sustainable margin
Expanding customer oriented services at sustainable margin Supported by best in class networks Technology driven parcel sorting and delivery centres • Enhance and combine network capabilities across all segments • Operational excellence focused on structurally improving quality, reliability, robustn
Slide 37: Agenda
Agenda Strategy update 2015 Delivered on promises Securing our future Delivering growth Financials International Ambition 2020 Italy Cross border Spring 37
Slide 38: Ambition 2020: Enhance cash profitability
Ambition 2020 Enhance cash profitability Capture opportunities of accelerating global e-commerce Postcon: finalise Nexive: the smart Expand cross border Spring: strong player in strategic review challenger in Italy business international e-commerce solutions 38 Securing our future / International /
Slide 39: Nexive: The smart challenger in Italy
Nexive The smart challenger in Italy Market development Nexive competences • Mail: mid single digit volume decline, double digit • Mail: nationwide (covering ~ 80% of all Italian households), growth in digital services fully integrated high quality mail network, full track & trace • Parcels: 2C mark
Slide 40: Nexive: Enhance cash profitability
Nexive Enhance cash profitability • Mail: increase market share by leveraging on successful Formula Certa network and adding new customers • Parcels: increase market share in B2C market on backbone of existing mail network and customer base and by investing in network and service offering to targete
Slide 41: Cross border is important part of PostNL's revenue
Cross border is important part of PostNL’s revenue Globalisation of e-commerce offers growth potential PostNL revenue split cross border Competition in cross border e-commerce market • Fragmented market • Local postal operators, consolidators and parcel companies/ Mail in the integrators for high en
Slide 42: Spring – strong player in international e-commerce solutions
Spring – strong player in international e-commerce solutions Leveraging on global e-commerce growth Worldwide solutions in traditional mail Strong player in international and e-commerce e-commerce solutions • Sales networks in countries with largest e-commerce • Smart gateway solutions from main opp
Slide 43: Innovation – International return solutions
Innovation – International return solutions Flexible and comprehensive international return solution • 10% of ordered goods returned, in growing global e-commerce market • Unique proposition across Europe • Removing boundaries for global e-commerce companies 43 Securing our future / International /
Slide 44: Agenda
Agenda Strategy update 2015 Delivered on promises Securing our future Delivering growth Financials 44
Slide 45: Delivering growth
Delivering growth Extension of portfolio is vital to maintain sustainable business model and cash flow after 2020 Look for value creating growth opportunities driven by market and technological trends to stay ahead of market Connected to our competences Three substantial growth domains identified wi
Slide 46: Delivering growth: three growth domains
Delivering growth Connected community Creating smart, social and easy living Convenient shopping Making shopping easy and personal Network Logistics Sector and client specific solutions based on efficient and effective logistics 46 Delivering growth
Slide 47: Agenda
Agenda Strategy update 2015 Delivered on promises Securing our future Delivering growth Financials 47
Slide 48: Outlook 2016 and ambition 2020 - gradual improvement after 2016
The postal & logistic solution provider in chosen markets Outlook 2016* and ambition 2020* - gradual improvement after 2016 Securing our future • Mail in the Netherlands: deliver sustainable cash flow • Parcels: create further profitable growth • International: enhance cash profitability Outlook 201
Slide 49: Agenda
Agenda Strategy update 2015 Delivered on promises Securing our future Delivering growth Financials 49
Slide 50: Financial strategy
Financial strategy Committed to sustainable delivery Supporting business Strict cash flow improvement & management Strong financial position Reduce debt Priorities for capital allocation Restore dividend Invest in growth 50 Financials
Slide 51: UCOI development 2015-2020
UCOI development 2015-2020 Ambition 2020 underlying cash operating income of €265M - €335M* 280-320 280-320 265-335 220-260 UCOI 2015 Volume/Price Autonomous Cost savings Parcels & Other UCOI 2016* 2016 RCO and UCOI 2016* Mail in NL Parcels & UCOI 2020* /Mix cost increases International like-for-lik
Slide 52: Outlook 2016
Outlook 2016 Reflecting effects of SMP, volume protection, sustainable delivery model Revenue Underlying cash operating income / margin (€ million) 2014 2015 outlook 2016 outlook* 2014 2015 outlook 2016 outlook* Mail in the Netherlands 2,044 - mid single digit - mid single digit 230 10% - 12% 8% - 1
Slide 53: Cost savings 2015 - 2020: €345 million
Cost savings 2015 - 2020: €345 million Higher savings with less cash out Cost savings Related cash out (€ million) (€ million) 574 Total cash out related to cost savings expected to be lower than in period 390-450 2011-2014: • More flexible workforce leading to 330 345 Initial costs lower restructur
Slide 54: Focus on cash - capex and working capital
Focus on cash - capex and working capital Strict cash management 2015 - Working capital 2014 Contribution to group (€ million) 2011 2012 2013 2014 2020 as % of revenue revenue after 2015 < 2% Base capex as Mail in the Around 1.5% on average per -16% % of revenue Netherlands annum Related to cost Par
Slide 55: Pensions
Pensions Reduced pension cash contribution and lower risk top-up payments Regular pension cash contribution Interest rate sensitivity on equity • Discount rate below ~3.7%: limited impact on equity position due to application of asset and liability ceiling Other • Limited impact partly explained by
Slide 56: PostNL is well-financed
PostNL is well-financed Current financial ratios in line with solid investment grade Current debt maturity profile Expected development adjusted net debt / (€ million) EBITDA ratio Eurobonds Undrawn RCF 508 2.5 @ 396 5.375% @ 7.5% 400 2014 2015 2016 2017 2016 2017 2018* 2019 2020 *GBP Eurobond expre
Slide 57: Financial strategy: key take aways
Financial strategy Key take aways Supporting business Strict cash flow improvement & management Strong financial position Reduce debt Restore dividend and Priorities for Restore dividend create long term value capital allocation for our shareholders Invest in growth 57 Financials
Slide 58: Agenda
Agenda Strategy update 2015 Key take aways Q&A Tour & lunch 58
Slide 59: The postal & logistic solution provider in chosen markets: key take aways
The postal & logistic solution provider in chosen markets 2012 – 2015: delivered on promises Securing our future • Improved operational excellence • Mail in the Netherlands: deliver sustainable cash • Strengthened financial position flow • Increased customer intimacy • Parcels: create further profit
Slide 60: Agenda
Agenda Strategy update 2015 Key take aways Q&A Tour & lunch 60
Slide 61: Agenda
Agenda Strategy update 2015 Key take aways Q&A Tour & lunch 61
Slide 62: Warning about forward-looking statements
Warning about forward-looking statements Some statements in this presentation are ’forward-looking statements‘. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may occur in the future. These forward-looking state