Release Date: February 24, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• PostNL NV (TNTFF) achieved significant cost savings of 41 million in the mail division and 35 million in parcels for 2024.
• The company reported a strong free cash flow performance, ending the year with a positive cash flow of 12 million.
• PostNL NV (TNTFF) saw a 10.5% volume growth in parcels, contributing to revenue growth.
• The company improved its carbon efficiency and expanded its emission-free last-mile delivery network.
• PostNL NV (TNTFF) plans to accelerate the rollout of parcel lockers, with a CapEx budget of 10 million for 2025, enhancing delivery efficiency.

Negative Points

• Normalized EBIT for 2024 was 53 million, which was considered unsatisfactory due to margin pressures.
• The company faced challenges with client concentration, with the top 20 customers accounting for 60% of volume, impacting margins negatively.
• There was a decline in mail volumes in the Netherlands, with an 8% decrease over the year.
• PostNL NV (TNTFF) experienced high sickness leave rates and difficulties in filling vacancies, affecting operational efficiency.
• The company anticipates a slight loss in market share due to strategic yield measures aimed at improving customer value.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Signs with TNTFF.

Q: Can you explain the expected revenue loss related to the strategic measures for 2025 and how the benefits will phase in by 2028? A: The revenue loss is anticipated due to yield measures aimed at our largest clients, which may result in some volume loss. We expect a slight market share loss as we aim for a better balance between volume and value. The benefits from these initiatives will mature gradually, and more detailed guidance will be provided during the Capital Markets Day in September. (Unidentified_4)

Q: What is the timeline for the amendment of postal regulation, and when do you expect the shift to D+2 for USO mail? A: The discussion in Parliament is ongoing, with a review expected in spring. Changes in postal regulation could take 1.5 to 2 years, potentially effective by January 2027. The shift to D+2 for USO mail depends on these regulatory changes. (Unidentified_3)

Q: Regarding the cost savings related to USO changes, are the figures cumulative, and what is the annual expectation? A: Yes, the figures are cumulative, totaling 160 to 200 million over the period. This translates to roughly 40 to 50 million in annual savings, depending on the phasing and timing of regulatory changes. (Unidentified_4)

Q: How does the guidance for 2025 account for potential financial contributions from the Dutch state? A: The guidance excludes any potential financial contributions. Any cash inflow from such contributions would occur after the 2025 book year, based on actual net costs. (Unidentified_4)

Q: Can you clarify the reallocation of real estate and its impact on segment reporting? A: The reallocation involves both rental revenues and book profits. The aim is to present the meal segment results more accurately by excluding real estate activities, which will now be reported under the parcel segment. (Unidentified_4)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.