Strong 2014 performance creates solid base for 2015

23 February 2015

Financial highlights Q4 2014

Revenue increased by 4% to €1,214 million (Q4 2013: €1,167 million)
Underlying cash operating income increased by 45% to €122 million (Q4 2013: €84 million)
Net cash from operating and investing activities of €172 million (Q4 2013: €96 million, adjusted for proceeds partial sale of TNT Express and impact of bond buy back)

Good progress in full year 2014

Underlying cash operating income increased to €293 million
Cost savings and price increases more than offset volume decline in Mail in the Netherlands
Delivery quality increased to 96.7% from 95.8%
Continued growth in Parcels with results in line with expectations
New pension agreement resulted in reduced cash contributions
Improving net cash from operating and investing activities to €124 million
Net debt reduced to €683 million

Outlook 2015*

Expected full year underlying cash operating income between €280 million and €320 million
* Outlook for 2015 excludes the contribution of our UK operations as we assume a successful closure of the joint venture agreement with LDC.

CEO statement

Herna Verhagen, CEO of PostNL: “Our performance over 2014 underscores the ability of our organisation to adapt to the changing environment. Our underlying cash operating income significantly improved compared to last year. This contributed to the increase of our net cash from operating and investing activities and the improvement of our net debt position. These results form a firm base to deliver on our 2015 targets.

The ongoing improvement of our mail operations resulted in €127 million of cost savings. This, together with the impact of price increases, more than compensated for the 10.7% decline in addressed mail volume in the Netherlands in 2014. At the same time, our delivery quality and customer satisfaction improved, as did our employee engagement.

Parcels delivered good growth with a volume increase of 8.8%. This growth is the main driver for the improved performance, which also benefits from the strengthening operational efficiency. Subcontractor costs increased in line with our expectations. We continued to invest in the expansion of our service offerings, such as evening and Sunday delivery and rolling out parcel lockers. International volumes and revenues grew and the segment contributed positively to PostNL’s results, however underlying cash operating income was below last year.

For 2015 our focus remains on maintaining profitability for Mail in the Netherlands, where the pending regulatory files are a point of management attention given the potential impact beyond 2015. Being well-positioned to further benefit from the growing e commerce market, we expect Parcels to continue its growth and strengthen its market position. In International we will focus on improving our cash profitability. We will monitor the progress and take further actions if necessary. We aim to achieve underlying cash operating income of €280 – 320 million in 2015, thus delivering on our promises.”