Postnl Nv · EURONEXT:PNL
Postnl Nv — Q2 2020 Earnings Presentation
34 slides from Postnl Nv's earnings presentation, Aug 3, 2020
Slide 1: Q2 & HY 2020 Results
Q2 & HY 2020 Results The Hague, 3 August 2020
Slide 2: Published by PostNL NV; additional information and forward-looking statements
Published by: PostNL NV Prinses Beatrixlaan 23 2595 AK The Hague The Netherlands Additional information Additional information is available at www.postnl.nl. This presentation contains inside information within the meaning of article 7(1) of the EU Market Abuse Regulation. Note that the numbers pres
Slide 3: Q2 & HY 2020 Results agenda
Q2 & HY 2020 Results Key takeaways Q2 & HY 2020 Business review Financial overview Q2 & HY 2020 Outlook 2020 Q&A 3
Slide 4: Our mail and parcel deliverers provide a vital service to society
Our mail and parcel deliverers provide a vital service to society Health and safety for our people and consumers come first • Proud of our people who made it possible to demonstrate strength of business model under challenging circumstances • Comprehensive set of measures taken across our business t
Slide 5: Key takeaways Q2 & HY 2020
Key takeaways Q2 & HY 2020 • Strong performance, driven by volume growth at Parcels • FY 2020 normalised EBIT expected to be strongly above initially guided €110m - €130m, strong improvement free cash flow • Normalised EBIT up 38% to €54m in Q2 • Free cash flow Q2 up €86m to €93m • Scaled up capacit
Slide 6: Key financials and highlights Q2 2020
Key financials and highlights Q2 2020 PostNL reports strong performance Revenue Normalised EBIT Free cash flow Outlook normalised EBIT FY 2020 Q2 2020 €789m €54m €93m strongly above Q2 2019 €681m €39m €7m €110m - €130m* Highlights Q2 2020 • Strong volume growth at Parcels boosted result • Almost opt
Slide 7: Growing importance of digitalisation
Growing importance of digitalisation Acceleration of transition to online contacts due to Covid-19 HY 2019 HY 2020 online visitors 199m (47% via PostNL app) 274m (57% via PostNL app) +38% PostNL accounts 4.5m 5.5m +22% stamp codes 308k 520k +69% talks with chatbot Daan 340k 770k +126% Extra investme
Slide 8: E-fact: Extra investments in digitalisation
E-fact: Extra investments in digitalisation Serve customer needs and improve efficiency Improve customer journey • Pilot standard retail location as delivery address • Meet consumer demand • More efficient delivery process 8
Slide 9: Q2 & HY 2020 Results agenda
Q2 & HY 2020 Results Key takeaways Q2 & HY 2020 Business review Financial overview Q2 & HY 2020 Outlook 2020 Q&A 9
Slide 10: Parcels: Volume growth boosted normalised EBIT in extraordinary quarter
Parcels: Volume growth boosted normalised EBIT in extraordinary quarter Revenue Normalised EBIT Volume growth Revenue mix Spring Parcels Benelux Q2 2020 €516m €60m 24.8% Logistics & other Q2 2020 €516m Q2 2019 €402m €29m Strong revenue growth • Covid-19 crisis resulted in pick-up in e-commerce growt
Slide 11: Parcels: Better balance between volume and capacity
Parcels: Better balance between volume and capacity Investments in capacity around €150m 2020-2022 Significant improvement in yield management and Further investments in infrastructure operational efficiency • Scaled up capacity by 40% through March and April • Yield management measures including im
Slide 12: Mail in the Netherlands: Result impacted by additional volume decline
Mail in the Netherlands: Result impacted by additional volume decline related to Covid-19 Revenue Normalised EBIT Net contribution of Sandd Addressed mail in normalised EBIT volume decline Q2 2020 €393m €5m €15m 16.2%* Q2 2019 €380m €17m Covid-19 crisis resulted in additional volume decline • Volume
Slide 13: Combination of mail networks
Combination of mail networks Keeping mail delivery accessible, reliable and affordable in increasingly digitalising environment Integrated networks of PostNL and Sandd Secure sustainable and more stable mail business • Consolidation on 22 October 2019 • Networks fully integrated as of 1 February • P
Slide 14: Further implementation cost savings projects in 2020-2021
Further implementation cost savings projects in 2020-2021 New mail route Former business model • Optimising sorting and automation processes and delivery routes for 30% step-up in volume New mail route • Expansion of routes • Larger contracts for mail deliverers 24h delivery • More e-bikes and other
Slide 15: E-fact: Towards emission-free last-mile delivery in Benelux
E-fact: Towards emission-free last-mile delivery in Benelux Fully implemented by mid-2021 • 600 professional electric three-wheel scooters to replace all 1,000 petrol scooters by 2021 • Direct contribution to sustainability targets: save 657 tonnes of CO2 annually • Essential part of next phase ‘New
Slide 16: Outlook FY 2020
Outlook FY 2020 Volume development 2020 HY1 HY2 • Volume growth at Parcels expected to continue at more moderate 14.1% pace than in Q2 • Our capacity will be scaled up further to accommodate higher volumes towards the second half of the year • Higher pace of substitution mail volumes due to Covid-19
Slide 17: Q2 & HY 2020 Results agenda
Q2 & HY 2020 Results Key takeaways Q2 & HY 2020 Business review Financial overview Q2 & HY 2020 Outlook 2020 Q&A 17
Slide 18: Parcels: Normalised EBIT up €31m
Parcels: Normalised EBIT up €31m (in € million) Normalised EBIT Q2 2019 29 Parcels Benelux Revenue - volume 72 24.8% volume growth in Q2 2020 Revenue - price/mix 8 Yield measures supported by positive mix effects CLA increase, indexation subcontractors and impact of new labour Organic costs (5) regu
Slide 19: Mail in the Netherlands: Normalised EBIT development impacted by Covid-19
Mail in the Netherlands: Normalised EBIT development impacted by Covid-19 (in € million) Normalised EBIT Q2 2019 17 Mail activities Volume decline 16.2%*, revenue includes €34m related to Revenue - volume 4 consolidation Moderate pricing policy supported by favourable development Revenue - price/mix
Slide 20: Generation of free cash flow in Q2 2020
Generation of free cash flow in Q2 2020 €86m improvement compared to Q2 2019 (in € million) Q2 2019 Q2 2020 Normalised EBIT 39 54 Reversal normalisations (2) 0 Depreciation & amortisation 36 41 Capex (15) (11) Lease payments (14) (17) Temporary effect, mainly related to Sandd Continuing strong Q4 20
Slide 21: Pension developments
Pension developments Coverage ratio (12-month average) pension fund at 105.7% as at 30 June 2020 (in € million) 2019 YE 2020 HY 2020 Based on final agreement with pension fund Provision for pension liabilities 283 278 • Final payment transitional plans capped at €290m (was: €300m) Pension expense (P
Slide 22: Consolidated statement of financial position
Consolidated statement of financial position Adjusted net debt position end of Q2 2020: €614m (in € million) 27 Jun 2020 27 Jun 2020 Intangible fixed assets 353 Consolidated equity 28 Property, plant and equipment 398 Non-controlling interests 2 Right-of-use assets 239 Total equity 31 Other non-curr
Slide 23: Q2 & HY 2020 Results agenda
Q2 & HY 2020 Results Key takeaways Q2 & HY 2020 Business review Financial overview Q2 & HY 2020 Outlook 2020 Q&A 23
Slide 24: Attention points development normalised EBIT for HY2 2020
Attention points development normalised EBIT for HY2 2020 Covid-19 impact % of normalised EBIT not evenly spread over the quarters • Volume growth Parcels to continue at more moderate pace than in Q2; indicative only more fluctuation in flow during week • Higher pace of substitution mail volumes due
Slide 25: Outlook for 2020
Outlook for 2020 Visibility for second half of the year remains limited Outlook FY 2020 Initial outlook FY 2020 Outlook FY 2020 trading Outlook FY 2020 (in € million) agreement transitional (24 Feb 2020) update (17 June 2020) (3 August 2020) plans (2 June 2020) Normalised EBIT 110 – 130 110 – 130 st
Slide 26: Q2 & HY 2020 Results agenda
Q2 & HY 2020 Results Key takeaways Q2 & HY 2020 Business review Financial overview Q2 & HY 2020 Outlook 2020 Q&A 26
Slide 27: Appendix
Q2 & HY 2020 Results Appendix • Generation free cash flow HY 2020 • Results by segment Q2 2020 • Results by segment YTD 2020 • Breakdown pension cash contribution and expenses • Adjusted net debt 27
Slide 28: Generation of free cash flow in HY 2020
Generation of free cash flow in HY 2020 (in € million) HY 2019 HY 2020 Normalised EBIT 69 69 Reversal normalisations (10) (17) Depreciation & amortisation 71 89 Increase mainly related to Sandd Capex (25) (19) Lease payments (27) (35) Temporary effect, mainly related to Sandd Continuing strong Q4 20
Slide 29: Results by segment Q2 2020
Results by segment Q2 2020 (in € million) Revenue Normalised EBIT Q2 2019 Q2 2020 Q2 2019 Q2 2020 Parcels 402 516 29 60 Mail in the Netherlands 380 393 17 5 PostNL Other 19 26 (7) (11) Intercompany (120) (146) PostNL 681 789 39 54 Normalised EBIT in Q2 2020 includes €(9) million impact, as indicated
Slide 30: Results by segment YTD 2020
Results by segment YTD 2020 (in € million) Revenue Normalised EBIT HY 2019 HY 2020 HY 2019 HY 2020 Parcels 800 930 52 85 Mail in the Netherlands 772 788 33 9 PostNL Other 40 51 (16) (26) Intercompany (247) (279) PostNL 1,365 1,490 69 69 Normalised EBIT in HY 2020 includes €(17) million impact, as in
Slide 31: Parcels: normalised EBIT up €33 million
Parcels: normalised EBIT up €33 million (in € million) Normalised EBIT HY 2019 52 Parcels Benelux Revenue - volume 78 14.1% volume growth HY 2020 Revenue - price/mix 14 Yield measures supported by positive mix effects CLA increase, indexation subcontractors and impact of new labour Organic costs (10
Slide 32: Mail in the Netherlands: normalised EBIT development impacted by Covid-19
Mail in the Netherlands: normalised EBIT development impacted by Covid-19 (in € million) Normalised EBIT HY 2019 33 Mail activities Volume decline 14.4%*, revenue includes €71m related to Revenue - volume 17 consolidation Moderate pricing policy supported by favourable development Revenue - price/mi
Slide 33: Breakdown pension cash contribution and expenses
Breakdown pension cash contribution and expenses (in € million) Q2 2019 Q2 2020 Expenses Cash Expenses Cash Business segments 25 27 25 24 IFRS difference 5 12 PostNL 30 27 37 24 Interest 2 0 Total 32 38 33
Slide 34: Adjusted net debt
Adjusted net debt (in € million) 31 Dec 2019 27 Jun 2020 Short- and long-term debt 696 695 Long-term interest-bearing assets (6) (6) Cash and cash equivalents (480) (573) Net debt 210 116 Pension liabilities 283 278 Lease liabilities (on balance) 264 249 Lease liabilities (off balance) 51 45 Deferre