Highlights Q4 2013
- Underlying revenue flat year on year at €1,214 million
- Underlying cash operating income up 21% year on year to €81 million
Good progress in 2013
- Underlying cash operating income up 9% year on year to €141 million
- Cost savings and price increases more than offset volume decline
- Quality increased to 95.9% from 93.9%
- Continued growth in Parcels and International
- New pension agreement to reduce cash contributions and cap top-up payments
- Net debt reduced by €426 million to €798 million; mainly due to the partial sale of the stake in TNT Express
- 2015 outlook underlying cash operating income includes €20 million impact from changes in joint venture accounting/UK and €20 million from business developments in Parcels
Herna Verhagen, CEO of PostNL: "In 2013 we accomplished significant steps for the future of our company. Our underlying cash operating income of €141 million was in line with our outlook. A solid result in a year in which the environment was challenging.
The restart of the roll out of the restructuring in Mail in the Netherlands as announced in February 2013 worked out very well and delivered more savings and earlier than expected. At the same time, we achieved a delivery quality of 95.9% which compares to 93.9% in 2012. The improved quality resulted in an increased customer satisfaction. The €95 million of cost savings and the impact of price increases more than offset the higher than expected decline in addressed mail volume (underlying 11.6% in 2013).
Parcels delivered good growth with underlying volume increasing by 6.7%. We made further progress in the implementation of the New Logistics Infrastructure (NLI). 14 of the targeted 18 depots are now operational and handle close to 80% of our volume. In International, volumes and revenues grew and the segment contributed positively to PostNL’s results.
We also strengthened our financial position through the execution of the cost savings programme, price increases and the new pension agreement. The solid performance was also visible in the development of our net cash from operating and investing activities (€32 million compared to €(212)million in 2012), that together with the partial sale of TNT Express contributed to the reduction of our net debt.
2013 was a successful year which we ended with a more solid financial foundation, more engaged employees and proof of our ability to adapt to the challenging market conditions.
Our focus remains on further adjustment of our mail operations to maintain profitability. This is necessary as we expect mail volume to decline by between 9% and 12% in the coming years. The decline in mail volume will be offset by a combination of price increases and cost savings. We increased our cost saving target for 2017 by €75 million. We expect to achieve this without any additional personnel impact beyond the bandwidth communicated in February last year of between 2,700 and 3,500 FTE in total.
We will continue to focus on growth in Parcels and fully benefit from the growing ecommerce market. This requires further extension of our services, like evening delivery, in order to meet the growing consumer demand. Changes in subcontracting mix and operational conditions are expected to have an impact on margins of Parcels.
In 2014 we aim to achieve underlying cash operating income of €180-220 million, which is another important step towards our updated 2015 targets and a clear step up from the reported €141 million in 2013. We are committed to achieve profitable growth of Parcels and International and manage Mail in the Netherlands for sustainable delivery of cash with the aim to restore cash dividend in 2016."
We are PostNL. We are an essential link between the physical and the online world. We have the largest network for letters, parcels and e-commerce in the Benelux countries. Our combinations of smart networks and digital applications enable us to provide our clients with valuable solutions. We live in a world where digital applications play an increasingly large role in our daily lives. These services develop very rapidly. We put our resourcefulness to good use to constantly think up new ways to connect senders and receivers.
As the first listed postal company, we are an example to the rest of the world in automatic letter sorting. And our innovative parcels network is completely adapted to the wishes of web retailers. Outside the Netherlands, we are active in Germany, the United Kingdom, Italy, Belgium and Luxembourg. PostNL employs a total of approximately 59,000 people. In 2013 our revenues reached almost € 4.3 billion.