PostNL to adjust conditions and tariffs for network access for postal operators

Expected financial impact adjusted to between €40 million and €45 million (from €50 million to €70 million previously)

The Hague – As a result of the annulment of the Significant Market Power (SMP) decision of the Authority for Consumers and Markets (ACM) by the Dutch Trade and Industry Appeals Tribunal in September 2018, the obligations which the ACM imposed on PostNL regarding network access for postal operators no longer apply.

Following this judgement, we have carefully assessed the situation, taking the interests of our stakeholders, the postal operators and the postal sector as a whole into account. As a result, we have decided that as of 1 January 2019, all postal operators will be granted network access based on PostNL conditions and tariffs. We will invoice postal operators for the difference between the SMP tariffs and the PostNL tariffs for the period between August 2017 and January 2019, while ensuring a smooth transition towards the new situation for postal operators.

In total, the retroactive invoices are expected to add approximately €7,5 million to PostNL’s underlying cash operating income (UCOI) in the fourth quarter of 2018.

PostNL expected the financial impact of the ACM measures to be between €50 million and €70 million on an annualised basis, with the full effect visible in FY 2020. Supported by the ACM measures, postal operators have been able to substantially grow market shares. This resulted in additional volume loss for PostNL, on top of the structural volume decline in the market. Part of the financial impact incurred by PostNL is, therefore, irreversible.

Taking the above into account, PostNL now adjusts the expected financial impact of the ACM measures to between €40 million and €45 million on an annualised basis, with the full effect visible in FY 2020. This expectation is based on the current situation and the September judgement by the Tribunal.

Additional information

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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 standardized 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 underlying cash operating income. The underlying cash operating performance focuses on the underlying cash earnings performance, which is the basis for the dividend policy. In the analysis of the underlying cash operating performance, adjustments are made for non-recurring and exceptional items as well as adjustments for non-cash costs for pensions and provisions. For pensions, the IFRS-based defined benefit plan pension expenses are replaced by the non-IFRS measure of the actual cash contributions for such plans. For the other provisions, the IFRS-based net charges are replaced by the related cash outflows.