Earnings Release • Nov 7, 2016
Earnings Release
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| in € miljoenen, tenzij anders aangegeven | Q3 2016 | Q3 2015 % Change | 9 mnd 2016 9 mnd 2015 % Change | |||
|---|---|---|---|---|---|---|
| Omzet | 770 | 780 | -1% | 2.458 | 2.454 | 0 % |
| Bedrijfsresultaat | 42 | 4 4 |
-5% | 162 | 190 | -15% |
| Onderliggend bedrijfsresultaat | 44 | 4 0 |
10% | 186 | 202 | -8% |
| Wijzigingen in pensioenverplichtingen | (10) | (3) | -233% | (22) | (12) | -83% |
| Wijzigingen in voorzieningen | (7) | (14) | 50% | (29) | (34) | 15% |
| Onderliggend cash bedrijfsresultaat | 27 | 2 3 |
17% | 135 | 156 | -13% |
| Periodewinst | (9) | 1 8 |
-150% | 196 | 4 8 |
308% |
| Excl. terugkoop obligaties en TNT Express* | 20 | 1 8 |
11% | 80 | 4 6 |
74% |
| Nettokasstroom uit operationele en investeringsactiviteiten | (105) | 1 8 |
-683% | 537 | (14) | 3936% |
| Excl. terugkoop obligaties en verkoop van TNT Express* | (62) | 1 8 |
(4) | (63) | (14) | -350% |
Noot: de onderliggende cijfers zijn exclusief eenmalige posten in Q3 2016 (€2 miljoen kosten gerelateerd aan reorganisatie) en €(4) miljoen in Q3 2015. * Alleen 9-mnds cijfers
Herna Verhagen, CEO van PostNL: "Onze resultaten over het derde kwartaal zijn conform verwachting. De resultaten over 2016 tot nu toe bieden ons het vertrouwen dat we de verwachte resultaten voor het gehele jaar gaan halen. We bevestigen de eerder gegeven bandbreedte voor het verwachte onderliggend cash bedrijfsresultaat in 2016 van tussen €220 miljoen tot €260 miljoen.
Bij Pakketten zette de zeer solide trend zich door. We kenden opnieuw een periode met sterke volumegroei en betere resultaten, hoewel de volumes melkpoeder afnamen. In Mail in Nederland waren de resultaten weer zoals gepland, rekening houdend met de volumedaling, de impact van onze aangepaste marktbenadering en de maatregelen aangekondigd door de toezichthouder (ACM). Onze reorganisatieplannen blijven de geplande kostenbesparingen opleveren. Het resultaat van International verbeterde zoals verwacht.
In het derde kwartaal boekten we verdere voortgang met onze innovaties, een van de pijlers van onze strategie. Onze Return on Demand service, het thuis ophalen van retourpakketten, is nu landelijk beschikbaar en we zien een groeiende vraag naar onze 'same-day'- bezorgoptie voor pakketten. De overname van Yourzine en Searchresult stelt ons in staat onze capaciteiten op het gebied van data-gedreven marketingdiensten verder uit te bouwen. Daarmee verstevigen we onze direct marketing propositie. Dit zijn allemaal stappen die ons helpen in de realisatie van ons doel om dé aanbieder van post- en logistieke oplossingen in specifieke markten te zijn.
Verder verbeterden we onze financiële positie door een deel van de opbrengst van de verkoop van ons belang in TNT Express te gebruiken voor verlaging van onze schuld. We herhalen onze verwachting en commitment om dividend uit te keren in 2017."
Bij verschillen tussen de Nederlandse en de Engelse versie van deze tekst is het Engels leidend.
PostNL Resultaten derde kwartaal 2016 | Pagina 1
| 0 | Revenue | Underlying operating income |
Underlying cash operating income |
|||
|---|---|---|---|---|---|---|
| in € million | Q3 2016 | Q3 2015 | Q3 2016 | Q3 2015 | Q3 2016 | Q3 2015 |
| Mail in the Netherlands | 412 | 426 | 1 6 |
3 0 |
5 | 1 4 |
| Parcels | 227 | 218 | 2 3 |
1 7 |
2 2 |
1 6 |
| International | 239 | 229 | 4 | 2 | 4 | (1) |
| PostNL Other | 4 3 |
4 5 |
1 | (9) | (4) | (6) |
| Intercompany | (151) | (138) | - | - | - | - |
| PostNL | 770 | 780 | 44 | 40 | 27 | 23 |
Note: underlying figures exclude one-offs
Mail in the Netherlands performed according to plan. Revenue was €412 million, slightly below last year (Q3 2015: €426 million). This is mainly explained by the volume decline and a negative price/mix effect, partly compensated by an increase in internal revenue related to cross border mail. Underlying cash operating income amounted to €5 million (Q3 2015: €14 million). Cost savings (€10 million) and other (€5 million) were more than offset by the negative volume/price/mix effect in addressed mail (€20 million), autonomous cost increases (€3 million) and higher cash out from pensions and provisions (€1 million). Other effects include, amongst others, higher bilaterals, a gain on the sale of real estate, the impact of competitive pricing in unaddressed and lower other costs.
Mail in the Netherlands' addressed mail volume decreased by 5.9% in the quarter; with the decline in the Dutch mail market being around 10% year-to-date.
With a quality level of 97.1% in Q3 2016, we continue to perform well above the statutory minimum level of 95%.
| Subject | Q3 2016 |
|---|---|
| Efficiency sorting process | • Four sorting machines with coding capabilities tested and now operational |
| • Preparation to adjust process started |
|
| Efficiency delivery process | • 10 depots migrated and 8 locations optimised |
| • Implementation of operational processes evaluated; personnel restructuring completed |
|
| Optimise retail network | • Reduction in postal offices and growth in parcel points well underway |
| • Roll-out of reduction in post boxes on schedule, implemented in two provinces in Q3 |
|
| Staff and management | • Further reduction of staff |
On 9 June 2016, ACM published a new draft decision on significant market power for consultation. The day before, the Ministry of Economic Affairs published a draft policy guideline for consultation about the interpretation of significant market power as laid down in the Postal Act. PostNL has submitted its view on both documents. Since the previous quarter the status is unchanged.
As earlier indicated (October 2015) we expect the financial impact of the ACM measures to be between €30 million and €50 million annualised, with the full effect expected to be visible over a 3-4 year period (2016-2019).
Volume increased by 12%. Strong growth in our domestic 2C volume followed the continuing positive trend experienced in relation to e-commerce development. We further strengthened our market position in 2B. Revenue in Parcels comprises 2B, 2C and international parcels (all volume related) and logistics & other (non-volume related). Revenue increased by 4% to €227 million. In the volume-related business, volume growth was strong and came with a negative product/customer mix effect (mainly due to an expected decline in milk powder volumes). Revenue in the non-volume related part of our business was lower.
Increased volume and revenue translated into an improvement in business performance and operational efficiency and was supported by the non-recurring costs related to the actions of subcontractors in the prior year. Underlying cash operating income was €22 million (Q3 2015: €16 million). We are on track with the implementation of the sustainable delivery model to reach a targeted goal of more own personnel.
We continue to focus on sustainable innovation to deliver profitable growth and see increasing demand for valueadded services, such as same-day delivery and return solutions.
International revenue increased by 4% to €239 million (Q3 2015: €229 million). Adjusted for FX effects, revenue was up 5%. Underlying cash operating income was €4 million (Q3 2015: €(1) million).
In Germany, revenue amounted to €112 million, slightly below prior year(Q3 2015: €115 million), while performance improved, supported by incidentals. We continue to focus on further cost savings and business optimisation.
In Italy, revenue was €51 million (Q3 2015: €55 million). Revenue growth in parcels was more than offset by a decline in Formula Certa. The performance improved, mainly due to the effect of an incidental in the prior year's result. The roll-out of the parcels network shows good progress and start-up losses are declining. Commercial and cost savings initiatives will improve business performance.
Revenue for Spring and other increased by 29% to €76 million (Q3 2015: €59 million). Adjusted for FX effects, revenue growth was 31%. The performance was driven by increasing cross border e-commerce volumes, both from Asia and within Europe.
Revenue in PostNL Other was €43 million (Q3 2015: €45 million). Underlying cash operating income increased to €(4) million (Q3 2015: €(6) million), mainly explained by cost savings.
The pension expense in Q3 2016 amounted to €25 million (Q3 2015: €33 million). The total cash contributions were €35 million (Q3 2015: €36 million). In Q3 2016, the net actuarial loss on pensions amounted to €5 million.
In line with IAS 19 guidelines, any limitation on cash payments should be included in the determination of the ultimate cost of the benefits. According to the financing agreement with the main pension fund, the cash exposure for PostNL is maximised. Application of a liability ceiling aligns the accounting obligation with the funding arrangements. Analysis shows that, with regard to the main pension plan, the pension liability is expected to be capped at the unconditional funding obligation of €129 million plus estimated top-up payments.
On 30 September 2016, the main pension fund's 12 months average coverage ratio was 103.5%, below the minimum required funding level of 104.0%. This triggered the start of a 5-year recovery period, in which top-up payments might apply. Projections show no expected top-up payment obligation per Q3 2016, resulting in a pension liability for the main pension plan equal to the unconditional funding obligation of €129 million.
Total equity attributable to equity holders of the parent declined to €(189) million on 1 October 2016 from €(177) million at the end of Q2 2016. The decline is explained by the profit for the period adjusted for the bond buyback of €20 million, the equity impact from the bond buyback of €(26) million, the impact from pensions of €(5) million and other items of €(1) million.
In Q3 2016, net cash from operating and investing activities was €(105) million, in line with our expectations, and is almost fully explained by the impact from the bond buyback (€43 million), the acquisition of Yourzine and Searchresult(€21 million) and working capital, which is expected to improve in the fourth quarter due to phasing and the seasonal pattern.
| Revenue | Underlying cash operating income / margin | ||||
|---|---|---|---|---|---|
| (in € millions) | 2015 | 2016 outlook | 2015 | 2016 outlook | |
| Mail in the Netherlands | 1,961 | - mid single digit | 204 | (10.4%) | 8% to 10% |
| Parcels | 917 | + mid single digit | 101 | (11.0%) | 9% to 11% |
| International | 983 | + mid single digit | 19 | (1.9%) | 2% to 4% |
| PostNL Other / eliminations | (400) | (21) | |||
| Total | 3,461 | stable | 303 | 220 to 260 | |
| Working days by quarter | |||||
| Q1 | Q2 | Q3 | Q4 | Total | |
| 2015 | 61 | 60 | 65 | 68 | 254 |
| 2016 | 64 | 62 | 65 | 64 | 255 |
| Financial calendar | |||||
| 27 February 2017 | Publication of Q4 & FY 2016 results |
|---|---|
| 8 May 2017 | Publication of Q1 2017 results |
| 7 August 2017 | Publication of Q2 & HY 2017 results |
| 6 November 2017 | Publication of Q3 2017 results |
| Published by | PostNL N.V. Prinses Beatrixlaan 23 2595 AK The Hague The Netherlands T: +31 88 86 86 161 |
|
|---|---|---|
| Investor Relations | Karen Berg Director Investor Relations & Treasury M: +31 653 44 91 99 E: [email protected] |
Inge Steenvoorden Manager Investor Relations M: +31 610 51 96 70 E: [email protected] |
| Media Relations | Dick Kors Manager Media Relations & Public Relations T: +31 610 12 14 76 E: [email protected] |
On 7 November 2016, at 11.00 CET, the conference call for analysts and investors will start. The conference call can be followed live via an audio webcast on postnl.nl.
Additional information is available at postnl.nl.
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 speak 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.
The interim financial statements are reported on a year-to-date basis ending 1 October 2016. The information should be read in conjunction with the consolidated 2015 Annual Report of PostNL N.V. as published on 29 February 2016.
The measure of profit and loss and assets and liabilities is based on the Group Accounting Policies, which are compliant with IFRS as endorsed by the European Union. All significant accounting policies applied in these consolidated interim financial statements are consistent with those applied in PostNL's consolidated 2015 Annual Report for the year ended 31 December 2015.
On 25 May 2016, PostNL completed the sale of its 14.6% stake in TNT Express to FedEx at a price of €8.00 per share, resulting in gross cash proceeds of €643 million and a profit of €145 million. The profit includes the positive effect of €136 million from the recycling through the income statement of the fair value adjustments previously recognised in other comprehensive income. In accordance with IAS 39, the 14.6% stake in TNT Express was considered an available-for-sale financial asset measured at fair value with gains and losses arising from changes in the fair value recognised in other comprehensive income. In the income statement, the profit of €145 million has been included in the interest and similar income.
On 30 September 2016, PostNL has acquired online marketing agencies Yourzine and Searchresult. The acquired business will be reported within the segment Mail in the Netherlands. The purchase price amounted to €22 million. The purchase price allocation resulted in goodwill of €14 million. The goodwill will be included in the CGU Mail in the Netherlands.
In line with IAS 19 guidelines, any limitation on cash payments should be included in the determination of the ultimate cost of the benefits. According to the financing agreement with the main pension fund the cash exposure for PostNL is maximised. Application of a liability ceiling aligns the accounting obligation with the funding arrangements. Analysis shows that, with regard to the main pension plan, the pension liability is expected to be capped at the unconditional funding obligation of €129 million plus estimated top-up payments.
On 30 September 2016, the main pension fund's 12 months average coverage ratio was 103.5%, below the minimum required funding level of 104.0%. This triggered the start of a 5-year recovery period, in which top-up payments might apply. Projections show no expected top-up payment obligation per Q3 2016, resulting in a pension liability for the main pension plan equal to the unconditional funding obligation of €129 million.
The content of this interim financial report has not been audited or reviewed by an external auditor.
| in € millions | Q3 2016 | Q3 2015 | YTD 2016 | YTD 2015 |
|---|---|---|---|---|
| Net sales | 768 | 777 | 2,451 | 2,446 |
| Other operating revenue | 2 | 3 | 7 | 8 |
| Total operating revenue | 770 | 780 | 2,458 | 2,454 |
| Other income | 2 | 0 | 2 | 3 |
| Cost of materials | (14) | (15) | (47) | (46) |
| Work contracted out and other external expenses | (393) | (393) | (1,240) | (1,173) |
| Salaries, pensions and social security contributions | (260) | (272) | (829) | (872) |
| Depreciation, amortisation and impairments | (23) | (23) | (68) | (68) |
| Other operating expenses | (40) | (33) | (114) | (108) |
| Total operating expenses | (730) | (736) | (2,298) | (2,267) |
| Operating income | 42 | 44 | 162 | 190 |
| Interest and similar income | 1 | 2 | 147 | 1 0 |
| Interest and similar expenses | (56) | (20) | (92) | (68) |
| Net financial expenses | (55) | (18) | 55 | (58) |
| Results from investments in jv's/associates | 1 | 0 | 2 | (1) |
| Profit/(loss) before income taxes | (12) | 26 | 219 | 131 |
| Income taxes | 3 | (7) | (23) | (38) |
| Profit/(loss) from continuing operations | (9) | 19 | 196 | 93 |
| Profit/(loss) from discontinued operations | - | (1) | - | (45) |
| Profit for the period | (9) | 18 | 196 | 48 |
| Attributable to: | ||||
| Non-controlling interests | - | - | 1 | - |
| Equity holders of the parent | (9) | 1 8 |
195 | 4 8 |
| Earnings per (diluted) ordinary share (in € cents) 1 | (2.1) | 4.1 | 44.1 | 10.9 |
| Earnings from continuing operations per (diluted) ordinary share (in € cents) 1 | (2.1) | 4.3 | 44.1 | 21.1 |
| Earnings from discontinued operations per (diluted) ordinary share (in € cents) 1 | 0.0 | (0.2) | 0.0 | (10.2) |
1 Based on an average of 442,221,537 outstanding ordinary shares (2015: 441,266,138).
| in € millions | Q3 2016 | Q3 2015 | YTD 2016 | YTD 2015 |
|---|---|---|---|---|
| Profit for the period | (9) | 18 | 196 | 48 |
| Other comprehensive income that will not be reclassified | ||||
| to the income statement | ||||
| Impact pensions, net of tax | (5) | (43) | (32) | (12) |
| Share other comprehensive income jv's/associates | 0 | 0 | 0 | 1 |
| Other comprehensive income that may be reclassified | ||||
| to the income statement | ||||
| Currency translation adjustment, net of tax from continuing operations | 0 | 0 | (2) | 1 |
| Currency translation adjustment, net of tax from discontinued operations | 0 | 1 | 0 | 2 |
| Gains/(losses) on cashflow hedges, net of tax | 2 | (4) | 4 | 1 |
| Change in value of available-for-sale financial assets | - | (56) | 8 | 113 |
| Recycling of change in value of available-for-sale financial assets | 0 | 0 | (136) | |
| Total other comprehensive income for the period | (3) | (102) | (158) | 106 |
| Total comprehensive income for the period | (12) | (84) | 38 | 154 |
| Attributable to: | ||||
| Non-controlling interests | - | - | 1 | 0 |
| Equity holders of the parent | (12) | (84) | 3 7 |
154 |
| Total comprehensive income attributable to the | ||||
| equity holders of the parent arising from: | ||||
| Continuing operations | (12) | (84) | 3 8 |
197 |
| Discontinued operations | 0 | - | (43) |
The line interest and similar income includes results related to the stake in TNT Express. In YTD 2016, profit for the period excluding the results from the stake in TNT Express was €51 million (YTD 2015: €46 million). The loss from discontinued operations in Q3 2015 / YTD 2015 related to Whistl, our former UK business entity, which was sold in Q4 2015.
| in € millions | Q3 2016 | Q3 2015 | YTD 2016 | YTD 2015 |
|---|---|---|---|---|
| Profit/(loss) before income taxes | (12) | 26 | 219 | 131 |
| Adjustments for: | ||||
| Depreciation, amortisation and impairments | 2 3 |
2 3 |
6 8 |
6 8 |
| Share-based payments | 1 | - | 3 | 2 |
| (Profit)/loss on assets held for sale | (2) | - | (2) | (2) |
| Interest and similar income | (1) | (2) | (147) | (10) |
| Interest and similar expenses | 5 6 |
2 0 |
9 2 |
6 8 |
| Results from investments in jv's/associates | (1) | - | (2) | 1 |
| Investment income | 52 | 18 | (59) | 57 |
| Pension liabilities | (10) | (3) | (22) | (12) |
| Other provisions | (8) | (21) | (27) | (39) |
| Changes in provisions | (18) | (24) | (49) | (51) |
| Inventory | 1 | - | (1) | (1) |
| Trade accounts receivable | 2 0 |
8 | 2 3 |
1 6 |
| Other accounts receivable | 3 | (14) | 7 | (15) |
| Other current assets | 8 | 6 | (5) | 5 |
| Trade accounts payable | (37) | (24) | (12) | (19) |
| Other current liabilities excluding short-term financing and taxes | (26) | 4 1 |
(93) | (5) |
| Changes in working capital | (31) | 17 | (81) | (19) |
| Cash generated from operations | 15 | 60 | 101 | 188 |
| Interest paid | (71) | (29) | (73) | (44) |
| Income taxes received/(paid) | (1) | (1) | (68) | (107) |
| Net cash (used in)/from operating activities | (57) | 30 | (40) | 37 |
| Interest received | - | - | 2 | 2 |
| Dividends received | - | - | - | 2 |
| Acquisition of subsidiairies (net of cash) | (22) | - | (22) | (5) |
| Disposal of subsidiaires | - | - | (4) | - |
| Capital expenditure on intangible assets | (7) | (5) | (20) | (20) |
| Capital expenditure on property, plant and equipment | (23) | (11) | (37) | (37) |
| Proceeds from sale of property, plant and equipment | 4 | 3 | 1 4 |
6 |
| Proceeds from sale of available-for-sale financial assets | - | - | 643 | |
| Other changes in (financial) fixed assets | - | 1 | 1 | 1 |
| Net cash (used in)/from investing activities | (48) | (12) | 577 | (51) |
| Changes related to non-controlling interests | 1 | - | (10) | - |
| Repayments of long term borrowings | (357) | - | (357) | (2) |
| Proceeds from short term borrowings | (2) | (3) | - | - |
| Repayments of short term borrowings | (1) | - | (1) | (363) |
| Repayments of finance leases | - | (1) | (1) | (1) |
| Net cash (used in)/from financing activities | (359) | (4) | (369) | (366) |
| Total change in cash from continuing operations | (464) | 14 | 168 | (380) |
| Cash at the beginning of the period | 987 | 191 | 355 | 585 |
| Total change in cash from continuing operations | (464) | 1 4 |
168 | (380) |
| Cash at the end of the period | 523 | 205 | 523 | 205 |
| Total change in cash from discontinued operations | 8 | - | (9) |
| Consolidated statement of financial position | ||
|---|---|---|
| in € millions ASSETS |
1 October 2016 | 31 December 2015 |
| Non-current assets | ||
| Intangible assets | ||
| Goodwill | 105 | 9 0 |
| Other intangible assets | 6 5 |
5 6 |
| Total | 170 | 146 |
| Property, plant and equipment | ||
| Land and buildings | 324 | 343 |
| Plant and equipment | 128 | 134 |
| Other | 1 8 |
2 3 |
| Construction in progress | 2 0 |
8 |
| Total | 490 | 508 |
| Financial fixed assets | ||
| Investments in joint ventures/associates | 3 4 |
3 3 |
| Other financial fixed assets | 6 | 2 8 |
| Deferred tax assets | 4 7 |
3 7 |
| Available-for-sale financial assets | 1 | 626 |
| Total | 88 | 724 |
| Total non-current assets | 748 | 1,378 |
| Current assets | ||
| Inventory | 6 | 5 |
| Trade accounts receivable | 316 | 337 |
| Accounts receivable | 2 8 |
3 4 |
| Income tax receivable | 2 2 |
3 |
| Prepayments and accrued income | 129 | 126 |
| Cash and cash equivalents | 523 | 355 |
| Total current assets | 1,024 | 860 |
| Assets classified as held for sale | 1 1 |
1 3 |
| Total assets | 1,783 | 2,251 |
| LIABILITIES AND EQUITY | ||
| Equity | ||
| Equity attributable to the equity holders of the parent | (189) | (223) |
| Non-controlling interests | 3 | 7 |
| Total | (186) | (216) |
| Non-current liabilities | ||
| Deferred tax liabilities | 3 6 |
3 5 |
| Provisions for pension liabilities | 478 | 449 |
| Other provisions | 4 6 |
6 1 |
| Long-term debt | 557 | 934 |
| Accrued liabilities | 0 | 2 |
| Total | 1,117 | 1,481 |
| Current liabilities | ||
| Trade accounts payable | 150 | 159 |
| Other provisions | 3 8 |
5 0 |
| Short-term debt | 1 | 1 |
| Other current liabilities | 132 | 169 |
| Income tax payable | 6 | 3 0 |
| Accrued current liabilities | 525 | 577 |
| Total | 852 | 986 |
| Total equity and liabilities | 1,783 | 2,251 |
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