PostNL adjusts FY 2020 outlook upwards
Resumption of dividend over FY 2020 expected
- Strong operational performance continues in Q3 2020
- FY 2020 normalised EBIT expected to be at least €175 million
- Leverage ratio as aimed for in financial framework expected to be reached by year-end 2020 due to strong financial performance and the announced sale-and-lease-back transaction
- Resumption of dividend over 2020 expected
- Improved financial position allows for accelerate digitalisation
- Extra employee payment of €250 net in recognition of hard work and commitment
PostNL today provides an update on its outlook for full year performance in 2020. Strong operational performance continued during the third quarter of 2020. PostNL now expects its full-year 2020 normalised EBIT to be at least €175 million. The increase in normalised EBIT will translate into an improvement in free cash flow.
Herna Verhagen, CEO of PostNL commented: “Our financial position is improving significantly as a result of our continued strong operational performance and the sale-and-lease back transaction announced today. I am pleased to announce that we expect to resume dividend payments over full-year 2020. Being able to resume dividend earlier than expected is a reflection of the good progress we are making and our strategy of transforming into an e-commerce logistics and postal company.
“The strong performance means that this is the right time to reward the extraordinary efforts of our people since the start of the pandemic. In appreciation and recognition of their commitment and hard work, we will pay an extra amount of €250 net to our people working full time. We will discuss with parcel delivery partners and the sheltered workplace companies we work with how we can show our appreciation for the efforts of their people.
“With the Covid-19 pandemic numbers on the rise again in the Netherlands and Belgium, we remain vigilant in respecting all hygiene and safety measures within our operations and offices. The health and safety of our people remains our key priority.
“Our improved financial position also allows us to accelerate the digitalisation of our company in a number of key areas as part of the transformation of PostNL. With this acceleration, we aim to strengthen our competitive position and contribute to customer satisfaction, reducing our cost base and attracting new customers. Together with a loyal workforce, the acceleration of digitalisation underpins our ambition to be the favourite deliverer in the Benelux region.”
Outlook 2020 and expected dividend resumption over FY 2020
PostNL now expects FY 2020 normalised EBIT to be at least €175 million. The increase in normalised EBIT will translate into an improvement in free cash flow. In addition, more export volumes support a further improvement in working capital development. Combined with the sale-and-lease back transaction (that does not impact normalised EBIT and normalised comprehensive income), we assume a leverage ratio below 2.0x by the end of the year, which means that PostNL is properly financed in line with its financial framework. As a result, PostNL anticipates being able to resume dividend payments over FY 2020, to be approved by shareholders at the AGM in April 2021.
Increasing uncertainties going forward
As a consequence of the second wave of the pandemic, uncertainties seem to be increasing going forward. Visibility for Q4, our peak season, and for 2021 remains limited and depends on renewed social distancing measures, potentially higher sick leave numbers, as well as macro-economic developments and consumer confidence. This may impact spending during the festive season, but also in 2021.
PostNL’s Q3 2020 results will be published as scheduled on 2 November 2020.
Additional information is available at www.postnl.nl. This press release contains inside information within the meaning of article 7(1) of the EU Market Abuse Regulation.
Caution on forward-looking statements
Some statements in this press release 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 statements involve known and unknown risks, uncertainties and other factors that are outside of our control and impossible to predict, and may cause actual results to differ materially from any future results expressed or implied. These forward-looking statements are based on current expectations, estimates, forecasts, analyses and projections about the industries in which we operate and management's beliefs and assumptions about possible future events. You are cautioned not to put undue reliance on these forward-looking statements, which only apply as of the date of this press release and are neither predictions nor guarantees of possible future events or circumstances. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as may be required under applicable securities law.
Use of non-GAAP information
In presenting and discussing the PostNL Group operating results, management uses certain non-GAAP financial measures. These non-GAAP financial measures should not be viewed in isolation as alternatives to the equivalent IFRS measures and should be used in conjunction with the most directly comparable IFRS measures. Non-GAAP financial measures do not have a standardised meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The main non-GAAP key financial performance indicator is normalised EBIT. Normalised EBIT is derived from the IFRS-based performance measure operating income adjusted for the impact of project costs and incidentals.
We are PostNL, the mail and logistics solutions provider for all. With our mail and parcel deliverers who get everywhere, our 5,500 PostNL locations, 11.000 mail boxes and 517 automated parcel lockers, we are always nearby. We aim to be our customers’ favourite deliverer by making it as easy as possible for them to send and receive parcels and letters. Our over 35,000 people are right at the heart of society. On weekdays, we deliver an average 1.1 million parcels and 7.4 million letters across the Benelux region. Our focus is on quality for our customers, creating opportunities for our people and adding value for our stakeholders through growth, digitalisation and sustainability initiatives.
We optimise and support our physical networks by using smart digital solutions and launching new propositions that create value for our customers. We build long-lasting working relationships by acting as a good employer and client for everyone who works for and with us. To make our deliveries as sustainable as possible, we cover a lot of kilometres on foot or by bicycle or e-bike, provide innovative city logistics, use cleaner fuels, and use electric vans and light electric trucks. PostNL NV is a listed company with revenues of €3.1 billion in 2022, 61% of this derived from e-commerce. We provide deliveries of mail and parcels, logistics solutions for e-commerce, and cross-border solutions.