Slide 1: Staying resilient in volatile times
Staying resilient in volatile times Q4 & FY 2023 results The Hague – 26 February 2024 1
Slide 2: Additional information and forward-looking statements
Additional information factors that are outside of our control and Use of non-GAAP information impossible to predict and may cause actual Additional information is available at In presenting and discussing the PostNL Group results to differ materially from any future results www.postnl.nl. Elements
Slide 3: Content
Content 1. Key messages FY 2023 2. Business and financial performance Q4 & FY 2023 3. Strategic actions 2024 4. Outlook 2024 and beyond 5. Q&A 6. Appendix
Slide 4: Key messages FY 2023
Key messages FY 2023
Slide 5: Operating in a challenging environment in 2023
Operating in a challenging environment in 2023 Main external developments Own initiatives Revenue Economic conditions remain uncertain Smart yield management including price increases Competitive dynamics Costs and cash • Further cost savings at Mail in the Netherlands Evolving customer demands • Fo
Slide 6: Staying resilient in volatile times
Staying resilient in volatile times FY 2023 performance with solid fundamentals -0.2% volume decline at Parcels €52m free cash flow 2022: -10.2% 2022: €40m -7.4% volume decline at Mail in the Netherlands €462m adjusted net debt 2022: -8.0% 2022: €467m €3,165m revenue 1.7x leverage ratio +1% compared
Slide 7: Business and financial performance Q4 & FY 2023
Business and financial performance Q4 & FY 2023
Slide 8: Q4 & FY 2023 performance
Q4 & FY 2023 performance Normalised EBIT of €77m in Q4 2023 Key financial metrics Q4 Q4 FY FY (in € million) 2022 2023 change 2022 2023 change Revenue 883 889 1% 3,144 3,165 1% Normalised EBIT 60 77 28% 84 92 10% Free cash flow 79 143 40 52 Normalised comprehensive income 41 43 4% 90 52 -42% Perform
Slide 9: Continued significant inflationary pressure on costs
Continued significant inflationary pressure on costs Not fully mitigated by price adjustments (in € million) Organic costs increase 138 FY 2022 Organic costs increase ~70% related to labour (CLAs and minimum wage 178 FY 2023 increases, temporary workers and delivery partners) Total organic costs inc
Slide 10: Volume composition changing
Volume composition changing Dilutive effect on average revenue per item, putting pressure on margin Parcels Indicative volume split Parcels • Shift from domestic to international customers, with strong growth from 14% 18% large Asian customers, partly explained by downtrading in uncertain economic c
Slide 11: Parcels Q4 2023: Operationally successful peak period
Parcels Q4 2023: Operationally successful peak period Less volume growth than anticipated with capacity and costs locked in Revenue Normalised Volumes Revenue mix EBIT in € million Q4 2022 Q4 2023 Q4 2023 €608m €23m 95m +0.9% Parcels Netherlands 392 402 Spring 113 125 Q4 2022 €587m €24m 94m Logistic
Slide 12: Parcels Q4 2023 normalised EBIT bridge
Parcels Q4 2023 normalised EBIT bridge (in € million) Normalised EBIT Q4 2022 24 Parcels Netherlands Revenue - volume 9 0.9% volume growth Revenue - price/mix 0 Price increases (€13m) more than offset by unfavourable shift in mix Wage increases PostNL CLA, sector CLA, indexation for delivery Organic
Slide 13: Mail in the Netherlands Q4 2023: Pressure on costs
Mail in the Netherlands Q4 2023: Pressure on costs Limited volume decline and unfavourable shift in product mix Revenue Normalised Volumes EBIT Q4 2023 €401m €54m 524m -1.9% Q4 2022 €429m €60m* 534m FY 2023 €1,373m €50m 1,745m Volume Revenue Costs • Volume decline of 1.9%, supported by 19m • Moderat
Slide 14: Mail in the Netherlands Q4 2023 normalised EBIT bridge
Mail in the Netherlands Q4 2023 normalised EBIT bridge (in € million) Normalised EBIT Q4 2022 60 Mail activities Revenue - volume (6) 1.9% volume decline Moderate pricing policy (€16m), partly offset by unfavourable shift in Revenue - price/mix 3 mix Organic costs (7) Wage increases and other inflat
Slide 15: FY 2023 cash flow at €52m
FY 2023 cash flow at €52m Well above outlook of between €10m and €40m FY 2022 FY 2023 Q4 2022 Q4 2023 (in € million) Normalised EBIT 84 92 60 77 Reversal normalisations* (17) (7) (12) (5) Depreciation & amortisation 156 177 41 47 Capex (138) (126) (38) (37) Lease payments and related cash flow (78)
Slide 16: Financial position provides solid base for dividend
Financial position provides solid base for dividend Leverage ratio at 1.7x and adjusted net debt at €462m Balance sheet (in € million) 31 Dec 2023 31 Dec 2023 Intangible fixed assets 407 Consolidated equity 198 Property, plant and equipment 491 Non-controlling interests 2 Right-of-use assets 293 Tot
Slide 17: Proposing €0.09 dividend per share to AGM
Proposing €0.09 dividend per share 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 • Leverage ratio FY 2023 at 1.7x (FY 2022: 1.9x) 0.28 0.24 •
Slide 18: Strategic actions in 2024
Strategic actions in 2024
Slide 19: Our strategy
Our strategy Delivering distinctive customer and consumer experience to be the leading logistics and postal service provider in, to and from the Benelux region Strategic foundation Strategic objectives Be your favourite deliverer Parcels: Manage for Customer value sustainable growth • Help customers
Slide 20: Parcels: Strategic actions 2024
Parcels Strategic actions 2024 • Aim to structurally deliver a return that exceeds cost of capital • Commercial and operational measures to gradually improve profitability towards average margin over 2019-23 • First contribution of around €35m in 2024 20 PostNL Q4 & FY 2023 results
Slide 21: Confidence in growth potential of e-commerce market
Confidence in growth potential of e-commerce market Driven by online penetration and retail spend Two fundamental drivers of e-commerce growth Online penetration Online penetration Online penetration in the (% of total retail spend) Netherlands • Potential for further online penetration in Netherlan
Slide 22: Balancing volume and value
Balancing volume and value Yield initiatives to gradually improve profitability • Targeted approach for SME segment by scaling new digital services and insights • Further develop cross-border initiatives to attract volume from Asia and Europe • Tailored pricing policy to balance portfolio and attrac
Slide 23: Strict cost control and network rationalisation
Strict cost control and network rationalisation Direct and indirect cost savings gradually contribute to better margin over time • Simplify products and services by redesign and rationalisation of delivery options (e.g., same day and Sunday delivery) • Reduce direct and indirect costs in first- and
Slide 24: Mail in the Netherlands
Mail in the Netherlands Clear direction set to keep postal service in the Netherlands sustainable • Aim to consistently achieve rate of return that exceeds the cost of capital • Transition towards adjusted service level necessary 24 PostNL Q4 & FY 2023 results
Slide 25: Time has come to change business model
Time has come to change business model External developments have increased urgency Strong volume decline Volume development addressed mail Current situation not sustainable • 35% decline due to ongoing substitution Cost of capital can no longer be covered without change of business model 2014 2023
Slide 26: We managed to stay financially healthy so far
We managed to stay financially healthy so far Consolidation Sandd helped to operate current business model as long as possible Continuously adapting processes to align with volume development 1.7 bln Mail volumes 2.7 bln + 2.2 bln 1.7 bln 0.5 bln Reduce # preparation 260 99 20 locations Optimise del
Slide 27: Neighbouring countries already changed USO
Neighbouring countries already changed USO Levers to explore: delivery speed and delivery frequency From To Standard mail delivery within Standard mail delivery within 1 day 2 days 3 days 1 day 2 days 3 days or more Changed USO discussions underway to change USO requirements Not changed • All countr
Slide 28: Gradually adapting service level the best way forward
Gradually adapting service level the best way forward Meets demand of customers and takes account of our stakeholders’ interests Decision criteria Options explored Evidence based on Standard mail delivery People People • Solution for labour shortage • Short term: within 2 days • Analysis of potentia
Slide 29: Clear direction set to keep postal service sustainable
Clear direction set to keep postal service sustainable Adjusted postal regulation necessary What will remain What will change What is necessary • Keep mail accessible, reliable and • Standard mail service level to delivery • Relief in USO requirements to fit with affordable within 2 days, over time
Slide 30: Outlook 2024 and beyond
Outlook 2024 and beyond
Slide 31: Transition from 2023 to 2024
Transition from 2023 to 2024 Continued pressure from organic cost increases Indicative only Main assumptions for 2024: (in € million) • Significant organic cost increases of ~€155m, mostly absorbed by price adjustments of ~€135m Normalised EBIT FY 2023 92 • €25m annualised run-rate cost savings (202
Slide 32: Assumed development at business segments
Assumed development at business segments Indicative only Parcels Mail in the Netherlands (in € million) Normalised EBIT FY 2023 47 50 Revenue - volume Parcels: volume growth 2%-4% in domestic and double-digit growth from international customers Revenue - mix effects offset by mix effect and volume d
Slide 33: Outlook 2024
Outlook 2024 Quarterly split Outlook FY 2024 • Clear focus on strategy whilst staying disciplined on cash (in € million) 2023 2024 outlook flow management Normalised EBIT 92 80 – 110 • Capex is expected ~€110m Normalised comprehensive income 52 40 – 70 • Aim to pay dividend that develops substantial
Slide 34: Beyond 2024
Beyond 2024 Remain leading e-commerce and postal services provider in, to, and from Benelux area Parcels - Structurally delivering a return that exceeds Mail in the Netherlands - clear direction to keep postal cost of capital service in the Netherlands sustainable • Growth in e-commerce drives volum
Slide 35: Q&A
Q&A
Slide 36: Appendix
Appendix 1. Cumulative organic cost increases and price adjustments 2022-24 2. Results per segment Q4 2023 & FY 2023 3. Revenue mix Parcels 4. Full reconciliation of income statement and EBITDA per segment 5. Free cash flow per segment FY 2023 6. Result development (bridge) per segment 7. Profit and
Slide 37: Continued significant inflationary pressure on costs
Continued significant inflationary pressure on costs Not fully mitigated by price adjustments (in € million) Organic cost increases 138 FY 2022 Organic cost increases FY 2023 178 Organic cost increases FY 2024 ~155 Total organic cost increases ~470 Total price adjusments ~345 Cumulative price adjust
Slide 38: Results per segment Q4 2023 & FY 2023
Results per segment Q4 2023 & FY 2023 (in € million) Revenue Normalised EBIT Margin Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Parcels 587 608 24 23 4.1% 3.9% Mail in the Netherlands 429 401 60 54 14.0% 13.5% PostNL Other 49 64 (23) 0 Intercompany (182) (184) PostNL 883 889 60 77 6.8% 8.7% FY 2
Slide 39: Revenue mix Parcels
Revenue mix Parcels As of 2023 (in € million) Q1 2022 Q1 2023 Q2 2022 Q2 2023 Q3 2022 Q3 2023 Q4 2022 Q4 2023 FY 2022 FY 2023 Parcels Netherlands 361 355 345 366 332 342 392 402 1,431 1,464 Spring 105 116 91 119 95 116 113 125 404 475 Logistics solutions and other 77 72 74 72 68 67 77 72 297 283 Oth
Slide 40: Full reconciliation of income statement and EBITDA FY 2023
Full reconciliation of income statement and EBITDA FY 2023 Income statement PostNL Parcels Mail in NL PostNL Other Eliminations (in € million) FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 Total operating revenue 3,144 3,165 2,165 2,260 1,495 1,373 215 245 (731) (71
Slide 41: Free cash flow per segment FY 2023
Free cash flow per segment FY 2023 (in € million) PostNL Parcels Mail in NL PostNL Other & Eliminations FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 EBITDA* 222 261 127 126 127 73 (32) 62 Change in pensions* ** 75 0 0 0 - - 75 (0) Change in provisions* (3) 14 4 5 (5) 8 (2) 2 Chang
Slide 42: Parcels FY 2023 normalised EBIT bridge
Parcels FY 2023 normalised EBIT bridge (in € million) Normalised EBIT FY 2022 56 Parcels Netherlands Revenue - volume 10 -0.2% volume development Price increases (€54m) more than offset by less favourable mix Revenue - price/mix 23 development Wage increases PostNL CLA, sector CLA, indexation for de
Slide 43: Mail in the Netherlands FY 2023 normalised EBIT bridge
Mail in the Netherlands FY 2023 normalised EBIT bridge (in € million) Normalised EBIT FY 2022 107 Mail activities Revenue - volume (67) 7.4% volume decline Revenue - price/mix 36 Moderate pricing policy partly offset by unfavourable shift in mix Organic costs (44) Wage increases and other inflationa
Slide 44: Profit and normalised comprehensive income PostNL
Profit and normalised comprehensive income* PostNL (in € million) FY 2022* FY 2023 Operating income / EBIT 66 84 Net financial expenses (19) (2) Results from investments in JVs/associates (1) (4) Income taxes (21) (24) Profit/(loss) from discontinued operations (11) 1 Profit 14 56 Other comprehensiv
Slide 45: Assumed non-recurring impact related to Covid-19 in 2022
Assumed non-recurring impact related to Covid-19 in 2022 Volumes (around, in million) Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Parcels 2 - - - 2 Mail in the Netherlands 15 3 7 6 30 Revenue (around, in € million) Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Parcels 2 - - - 2 Mail in the Netherlands 9 1 2 1
Slide 46: Financial calendar and company information
Financial calendar and company information Financial events calendar Company information • 16 April 2024 Annual General Meeting of Shareholders 1. Annual Report site • 6 May 2024 Publication of Q1 2024 results 2. Annual and quarterly results • 5 August 2024 Publication of Q2 & HY 2024 results • 4 No