PostNL : Analyst presentation

Q4 & FY 2019 Results Focus on our potential

The Hague, 24 February 2020

Warning about forward-looking statements:

Some statements in this presentation 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 presentation 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 presentation 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 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 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 outflow. As of 2020, 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. Aside from adjustments for restructuring-related costs, all currently adjusted non-recurring and exceptional items within underlying cash operating income are also normalisations within normalised EBIT.

Published by: PostNL NV

Prinses Beatrixlaan 23 2595 AK The Hague The Netherlands

Additional information is available at postnl.nl

2

Q4 & FY 2019 Results

2019

1. Key takeaways

1. Strategy and main strategic steps III. Business performance Q4

2020

I. Focus on our potential

II. Outlook 2020

Financials

1. Performance Q4 & FY 2019

II. Development key metrics 2020

Concluding remarks

3

2019	I	Key takeaways 2019

• Strong business performance in Q4 boosts revenue and cash for the year
• E-commercenow represents more than 50% of revenues, ahead of schedule
• Underlying cash operating income FY 2019 at €176m, at high end of outlook range of €150m - €180m
• FY net cash from operating and investing activities up €188m to €169m*
• €48m cost savings, within guidance range of €45m - €65m
• Acquisition of Sandd completed; networks fully integrated since 1 February 2020
• Divestment of non-core activities (ao Postcon and Nexive) underpins increasing focus on home markets
• Ranked in top-three sustainable companies worldwide in the sector by Dow Jones Sustainability Index
• 19% of parcels and mail delivered emission-free in the last mile
• • Before acquisitions

The preferred logistics and postal solutions provider in the Benelux region

4

2019	I	Summary financials 2019

(in € million)

Revenue

1,672 Parcels

Mail in the

1,606 Netherlands

UCOI

121 Parcels

Mail in the

76 Netherlands

Net cash from operating and investing activities

Before acquisitions

2,844 PostNL

Proposed dividend

Per share, fully €0.08 paid as interim dividend

176 PostNL

UCOI margin

7.2% Parcels

Mail in the 4.7% Netherlands

6.2% PostNL

169 PostNL

Cash conversion

135 Normalised EBIT

107 Free cash flow

79%

5

2019	II	Confidence in our strategy

Our ambition is to be your favourite deliverer

Accelerate digitalisation & innovation

collect sort

deliver

Ambitious ESG targets

Help customers grow their business

Secure accessible and reliable postal services

Attract and retain motivated employees

Reduce environmental impact

Deliver profitable growth and generate sustainable cash flow

The preferred logistics and postal solutions provider in the Benelux region

6

2019	II	Be the leading e-commerce logistics company in Benelux

7 May 2019: Capital Markets Day

Milestones 2019

3 new depots in 2019

25 depots

Operational in total

Improved network utilisation:	•	Expansion of electrical and green-gas fleet
•	extra shutes	•	Further roll-out city logistics program
•	opening cross-dock

Design SPS finalised

FY 2019

12%

volume growth

Growth rate e-commerce market slowing down

Implementation direct to retail after one delivery attempt results in efficiency and is more sustainable

• Contract renewals
• Price increase single parcels 2020
• Indexation
• Price adjustment for parcels >23 kg

Executing on our aim to better balance volume and value

7

2019 II	Integration of PostNL and Sandd postal networks
	completed on 1 February 2020

22 October 2019: Transaction closed	1 February: One strong nationwide postal network

Over	20,000
4,300	mail deliverers
new colleagues
joined PostNL	11,000
	mail boxes

			An average of
		30%	7 million
		letters per day,
		additional mail volume
		5 days per week
	8,500
Close to	calls with		3,400
Sandd customers
4,000
		PostNL locations
new customers		2,000
		extra clients for collect
		and/or delivery service

Secure accessible and reliable postal services

2019	III	Parcels: Result improved

	Revenue	Underlying cash	Volume growth	Revenue mix
		operating income
				Spring		Parcels
Q4 2019	€471m	€42m	10.0%	Logistics & other	€1,672m	Benelux
					FY 2019
Q4 2018	€439m	€36m
FY 2019	€1,672m (+7.5%)	€121m (margin 7.2%)	12.4%

Further revenue growth Parcels Benelux

• Resulting in volume effect of €37m and negative price/mix effect of €7m, mainly due to a shift in international parcels

Result Parcels improved

• Performance Parcels Benelux up €1m
• • Volume/price/mix resulted in performance improvement of €4m
  • Organic cost increases (collective labour agreements and indexation) of €5m
  • Better operational efficiency from improved drop duplication and hit rate of €2m
• Improving performance Logistics and Spring
• Cash flow up €10m despite higher capex, supported by positive development working capital

9

2019	III	Mail in the Netherlands: Good business performance

FY 2019 cost savings €48m within indicated range of €45m - €65m

Revenue	Underlying cash	Total cost savings	Addressed mail volume
	operating income		decline (excluding Sandd)

Q4 2019	€492m	€48m
Q4 2018	€483m	€71m
FY 2019	€1,606m (-4.3%)	€76m (margin 4.7%)

€15m 9.6%*

of which €10m at Mail in the Netherlands

€48m

9.7%*

Business developments

• Strong sales in peak season
• Volume declined by 9.6%, mainly driven by ongoing substitution
• Delivery quality at 94% for FY 2019
• • Last months of 2019 challenging with capacity issues linked to preparations for the integration of Sandd

Result impacted by acquisition of Sandd

• Impact from volume/price/mix effect of €(19)m and autonomous cost increases of €6m
• €10m cost savings
• Less cash out for pensions and provisions (€4m)
• Other effects impacted result by €(12)m, mainly related to the acquisition of Sandd and unaddressed mail activities
• Cash flow up €13m mainly due to positive development working capital and less cash out for pensions and provisions

10	* Adjusted volume decline Q4 2019 10.3%, corrected for one extra working day; FY 2019 9.9%

Q4 & FY 2019 Results

2019

1. Key takeaways

II. Strategy and main strategic steps III. Business performance Q4

2020

1. Focus on our potential

II. Outlook 2020

Financials

1. Performance Q4 & FY 2019

II. Development key metrics 2020

Concluding remarks

11

2020	I	Parcels: Improving balance between volume and value

Assumed volume growth 7% - 9% in 2020

• Mainly explained by slow-down in e-commerce market growth
• • Mixed growth pattern - less growth in more mature segments
  • Lower consumer confidence
• Multivendorship and increasing # of parcels via platforms impacting volume growth temporarily

Yield development

Smart yield management

• Improved pricing
• • Implementation peak season pricing in Q4 2020
  • Price increase single parcels
  • Adjusted prices for parcels > 23 kg
  • Indexation

								+21.3%	+12.4% +7% - 9%
							+16.9%
					+9.8%	+13.5%
			+9.2%	+8.4%
		+13.2%
	+6.0%
100m
2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020

Main drivers for revenue growth in Parcels

12

2020	I	Parcels: Better balance between volume and capacity

Focus on innovative investments and efficiency

Expansion of network in line with volume development and future market growth

• More flexible network structure allows different phasing of new depots
• Positive effect on cash conversion in Parcels
• Test phase for small parcel sorting centre

Measures to improve efficiency

• Improvement drop duplication and hit rate
• Better peak balancing (daily, weekly, seasonal) of volume in networks
• Investments in digitalisation to serve customer needs and further develop smart logistics processes
• • Digital supply chain programme to better align order management, planning and collection/transport
• Improve utilisation of current depots
• • Smarter use of sorters
  • Adding new time slots for operation of sorters

Depots in the Netherlands

Flexible network and operational measures to support business performance

13

2020	I	E-fact Networks

Development small parcels sorting centre on track

Operational in 2021

• More efficient utilisation of sorting capacity resulting in reduction costs per parcel:

• Highly automated process in SPS, facilitates 24/7 sorting

• Only one sorting shift needed (instead of a sorting and a distribution shift)

• # of sorters in SPS to be gradually build up

• ~40% of processed parcels fit the definition "small"(shoebox size)

• Central location close to depot in Nieuwegein

14

2020	I	Mail in the Netherlands: Sandd acquisition adds back around 4 years

of volume decline and creates stable base for economies of scale

Assumed volume decline 8% - 10% in 2020

• Substitution remains main factor in volume decline: continued strong digitalisation in all segments and all customers
• No elections scheduled in 2020 (~0.9% impact)

2,400 m	-7.8%
	-9.9%				-8%-10%
		-10.7%
				-9.7%
2015	2016	2017	2018	2019	2019*	2020	2021	2022

PostNLSandd

* 2019 pro forma, including full year of Sandd volumes, adding around 30% to volume

Moderate pricing policy

• Single mail: 4.6% increase in stamp prices per 1 January 2020
• Bulk mail: pricing in general well above inflation
• Sandd products gradually integrated in PostNL portfolio, respecting existing client contracts

Volume decline and moderate pricing policy to continue

15

2020 I	Mail in the Netherlands: Further implementation cost
	savings projects

Volume+30%

Workforce+4,300

People from Sandd joined PostNL

Customers	close to
4,000 new customers
	Existing client contracts are respected

Network

New mail route

• Optimising sorting and automation processed and delivery routes for 30% step-up in volume
• Expansion of routes
• Larger contracts for mail deliverers
• More e-bikes and other electrical transport resources
• Overhead reduction

• Centralisation locations

16

On track to deliver anticipated synergies Sandd: Run-rate of €50m - €60m normalised EBIT as of 2022

2020 I

Accelerate digitalisation and innovation with extra investments

Enhancing customer interaction by developing data and digital solutions, capitalising on value of our growth platform

Digitalise customer journey

Improving services and solutions

Digitalise logistical supply chain

Receiver preferences

• Individual delivery preference as default setting
• Consumer in control - better customer experience
• Improving hit rate
• Successful pilot in 2019 - further testing in 2020

Track your deliverer in app

• Provide customers with more precise delivery information
• Track # of stops before deliverer arrives
• Reduction in time-at-door
• Pilot for evening delivery tracking in app

Platform integration

• Collaboration with C2C platforms
• Direct arrangement of shipment and label, clear shipping costs and simple process
• Improving customer satisfaction and migration of consumers to online
• Connecting more platforms in 2020

Help customers grow their business

17

2020	I	Environmental, Social and Governance roadmap

Take responsibility for environmental impact of our operations, engage people and act as responsible employer

2019

Focus on …

Long-term objectives

Environment

Social

Customers

19%

Parcels and mail delivered emission-free in last mile

Stable employee engagement and loyalty

27%

Highly satisfied customers

• Green kilometres
• Sustainable buildings
• Innovation
• Managing capacity
• Strengthening employee engagement
• Staying healthy
• Realising change
• Provide our customers with services and solutions that enhance their business

Deliver emission-free in 25 Dutch cities by 2025; emission-free last- mile delivery in Benelux area in 2030

Realise full potential of our people and make a difference to our customers while acting as responsible employer

Be your favourite deliverer

18

Reduce our environmental footprint and attract and retain motivated employees

2020	I	E-fact improving our environmental footprint

Further roll-out of city logistics programme

Deliver emission-free in 25 cities by 2025

• Ambition to change cities' logistics by opening urban consolidation centres together with local business:

• Nijmegen in December 2019

• The Hague in January 2020

• Collaboration with government, municipalities, private parties

• 1st large public tender won by consortium of local entrepeneur and PostNL

19

2020	II	2020

In € million

Normalised EBIT	2019	2020 like-for-like		2020 indication
Parcels	120	125	- 145	new labour regulation ~(10)	115	- 135
Mail in the Netherlands	52	50	- 70		50	- 70
PostNL Other	(37)	~(40)	pension expense ~(25), no impact pension cash-out	~(65)
PostNL	135	145	- 165	impact new labour regulation and pensions ~(35)	110	- 130
Free cash flow*
PostNL	107	(15) - 15	final payment transitional plans of ~max (300)	(315) - (285)**

Outlook for 2020

• Cash flow before dividend, acquisitions, redemption bonds/other financing activities; after repayment of leases
• Payments could be lowered and/or phased differently, In case interest rates develop beneficially. This is currently being discussed with the pension fund, to be finalised in Q1.

20

Q4 & FY 2019 Results

2019

1. Key takeaways

II. Strategy and main strategic steps III. Business performance Q4

2020

1. Focus on our potential

II. Outlook 2020

Financials

1. Performance Q4 & FY 2019

II. Development key metrics 2020

Concluding remarks

21

Financials	I	Key financial takeaways

• Net cash from operating and investing activities in Q4 up €32m to €89m*
• Q4 Revenue €843m, up €49m
• Underlying cash operating income in Q4 at €79m, €21m below last year, impacted by Sandd
• Normalised EBIT and free cash flow new key financial metrics going forward
• Proposed 2019 dividend €0.08 per share, fully paid as interim dividend
• Transaction Sandd completed in Q4 2019, on track to deliver anticipated benefits and synergies
• Divestment of non-core activities: Postcon, PostNL Communicatie Services, Spotta and Nexive

• Issuance Green Bond €300m

* Before acquisitions

Deliver profitable growth and generate sustainable cash flow

22

Financials	I	Key financial metrics 2019 in line with outlook
		All numbers include impact of Sandd acquisition

		Revenue		UCOI / (margin)	Normalised EBIT/
			(margin)*
(in € million)	2018	2019	outlook 2019	2018	2019	outlook 2019	2019
Parcels	1,555	1,672	+ high single digit	117	121	~ 7%	120
7.5%	7.2%	7.2%
Mail in the Netherlands	1,678	1,606		93	76		52
	5.5%	4.7%		3.2%
PostNL Other / eliminations	(461)	(434)		(22)	(21)		(37)
PostNL	2,772	2,844	+ low single digit		176	150 - 180	135

• • Normalised EBIT is new key metric for profitability as of 2020
  • • One-offand significant non-business-related items are excluded and explained
    • Normalisations in EBIT equal to underlying items in UCOI for 2019 except for restructuring-related costs
• difference between UCOI and normalised EBIT 2019 visible in Mail in the Netherlands (restructuring-related costs in 2019, mainly Sandd) and PostNL Other (mainly due to pensions)

23

Financials	I	Free cash flow for 2019: €107m

Working capital improved strongly on the back of disciplined approach towards collection of receivables

(in € million)

UCOI FY 2019

Reversal one-offs

Depreciation & amortisation

Capex

Change in working capital

Interest and tax paid

Disposals and other

Net cash from operating and investing activities*

Lease payments

Free cash flow FY 2019**

176

(52)

(48)

169

(62)

107

Accelerated writedown assets Sandd, last payments unconditional funding obligation, other costs

180 Up €97m, mainly IFRS 16 and Sandd (€25m)

(66) Down €29m, mainly in Parcels (2 new depots in 2018 via capex)

(35)	Strong improvement due to strict working capital
management

14 Sale of buildings, partial sell-down stake in Whistl and other

*Before acquisitions

24	**Cash flow before dividend, acquisitions, redemption bonds/other financing activities; after repayment of leases

Financials	I	Decline in interest rates impacts pension position
		Coverage ratio (12-months average) pension fund at 110.6% per 31 December 2019

(in €million)	2018	2019	2020
Unconditional funding obligation	33	-
Transitional plans	263	283
Provision for pension liabilities	296	283
Pension expense (P&L)	126	119	~145
Regular pension cash	115	111	~120
contribution

• Pension expense up ~€25m in 2020, visible in (normalised) EBIT
• Impact on equity mitigated by positive effect in OCI
• Expected impact of interest on cash contributions is limited

• Expected cash-out of ~€300m end of 2020 for final payment transitional plans
• Set on parameters as of Q3 2019, when interest rates were at multi-year low, negatively impacting the amount
• PostNL initiated discussion with pension fund to determine whether, given the development of interest rates, payment could be reduced and/or phased differently without negatively impacting existing employee entitlements
• The final payment is capped at €300 million
• Discussions expected to be finalised in Q1

25

Financials	II	2020

Impact Sandd will still be negative in Q1 and Q2, normalised EBIT to be largely achieved in the second half of year

In € million

Normalised EBIT	2019	2020 like-for-like		2020 indication
Parcels	120	125	- 145	new labour regulation ~(10)	115	- 135
Mail in the Netherlands	52	50	- 70		50	- 70
PostNL Other	(37)	~(40)	pension expense ~(25), no impact pension cash-out	~(65)
PostNL	135	145	- 165	impact new labour regulation and pensions ~(35)	110	- 130
Free cash flow*
PostNL	107	(15) - 15	final payment transitional plans of ~max (300)	(315) - (285)**

Outlook for 2020

• Cash flow before dividend, acquisitions, redemption bonds/other financing activities; after payment of leases
• Payments could be lowered and/or phased differently, In case interest rates develop beneficially. This is currently being discussed with the pension fund, to be finalised in Q1.

26

Financials II

Parcels - like-for-like normalised EBIT 2020 expected to improve despite lower volume growth

(in € million)

Normalised EBIT 2019

Revenue - volume

Revenue - price/mix

Organic costs

Volume dependent costs

Other costs

Other results

Indication of normalised EBIT 2020

New labour regulation

Normalised EBIT 2020 like-for-like

120

75 - 95

5 - 15

~(25)

(80) - (60)

0 - 5

0 - 5

115 - 135

~10

125 - 145

Parcels Benelux

~7%-9% volume growth in 2020

Positive price effect due to yield measures partly offset by negative mix effects

CLA increase, indexation subcontractors and impact of new labour regulation

Combination of higher efficiency and other costs

Improving performance Logistics and Spring

New labour regulation impacts flexible workforce, which is mainly required during peaks and night shifts in sorting

27

Financials	II	Mail in the Netherlands to benefit from synergies Sandd

(in € million)

Normalised EBIT 2019

Revenue - volume

Revenue - price/mix

Organic costs

Volume dependent costs

Other costs

Other results

Indication of normalised EBIT 2020

52

Mail activities

35 - 55	Volume decline 8% - 10%*, revenue includes impact consolidation
Sandd
25 - 45	Moderate pricing policy
~(20)	Mainly CLA related

(50) - (30)

Cost savings and other efficiency related results (€35m, including

0 - 10 delay related to Sandd), restructuring charges, Sandd and other costs

~(15)	Impact sale PCS and Spotta and result other services (including
	termination unaddressed activities in 2019 and export)

50 - 70

28	* See slide 15

Financials	II	Development cash flow in 2020 and further

(in € million)	2019	2020 (indicative)	Remarks
Normalised EBIT	135	110 - 130	improving business performance, higher pension expense and
impact new labour market regulation (only 2020)
Reversal one-offs	(16)	(20)
Depreciation & amortisation	180	170
Capex	(66)	(120) - (100)	step-up in Parcels in 2020, among others related to SPS;
phasing depot to 2021; investments New mail route
Lease payments	(62)	~(80)
Change in working capital	(35)	(75) - (65)	above average settlement of terminal dues in 2020, no change in
underlying development
Change in pensions	(25)	20	2019 included final payment unconditional funding obligation
contribution; as of 2021 larger positive impact (only main pension plan)
Change in provisions	30	(30)	related to integration of Sandd (2020) and cost savings plans
Other	15	~15	sale of buildings and other divestments
Interest paid and income tax	(48)	(15)	interest paid stable; tax impact transitional plans in 2020
Adjusted free cash flow	10	(15) - 15	adjusted free cash flow slightly down (capex and working capital) in
2020; improvement expected thereafter
Final payment transitional plans	-	(300)

29	Free cash flow	107	(315) - (285)

Financials II	Cash conversion at Parcels
	(excluding final payment transitional plans)

(in € million)
Indication normalised EBIT 2020
				115 - 135
Reversal one-offs
Depreciation & amortisation
Capex
Lease payments
Change in working capital
Change in pensions and provisions
Interest paid and income tax (proxy)
Adjusted free cash flow
			40 - 60
Final payment transitional plans	~(90)
Free cash flow	(50) - (30)

Related to final payment transitional plans

Slightly up compared to 2019

Capex up ~€25m, amongst others related to SPS

Slightly up related to financial (mainly depots) and operational leases

Growing business and strict working capital management

30

Financials II	Cash generation at Mail in the Netherlands
	Impacted by Sandd integration and final payment transitional plans

(in € million)
Indication normalised EBIT 2020
					50 - 70
Reversal one-offs
Depreciation & amortisation
Capex
Lease payments
Change in working capital
Change in pensions
Change in provisions
Disposals and other
Interest paid and income tax (proxy)
Adjusted free cash flow	(75) - (55)
Final payment transitional plans	(175)
Free cash flow	(250) - (230)

Final payment transitional plans, Spotta and Sandd

Down related to closure Sandd network Capex up ~20m

Mainly settlement of terminal dues

Mainly related to Sandd

Sale of buildings

31

Financials	II	Dividend policy adjusted to align with normalised EBIT
		Financial framework secures solid financial position

Financial framework

• Steering for a solid balance sheet with a positive consolidated equity
• Aiming at a leverage ratio (adjusted net debt/EBITBA) not exceeding 2.0x
• Strict cash flow management

Dividend policy 2020

• Being properly financed in accordance with PostNL's financial framework is the condition for distribution of dividend
• Aim to pay dividend that develops substantially in line with operational performance
• Pay-outratio around 70% - 90% of normalised comprehensive income*
• Shareholders are offered a choice of cash or shares
• Interim dividend set at ~1/3 of dividend over prior year

• Normalised comprehensive income is defined as profit attributable to equity holders of the parent, adjusted for significant one-offs and special items (including fair value adjustments), net of tax

Expect to restore dividend payment, temporarily suspended due to the impact of the Sandd transaction, within 12 to 24 months after closing

32

Q4 & FY 2019 Results

2019

1. Key takeaways

II. Strategy and main strategic steps III. Business performance Q4

2020

1. Focus on our potential

II. Outlook 2020

Financials

1. Performance Q4 & FY 2019

II. Development key metrics 2020

Concluding remarks

33

Concluding remarks

Management priorities: focus on our potential

• Capturing the growth potential of e-commerce development by improving operational leverage
• Focus on securing a sustainable mail business with a higher volume base to create synergies and to safeguard continuity
• Growing profitability and sustainable cash flow conversion after 2020
• Aiming to resume dividend payments within 12 - 24 months after closing of Sandd transaction
• Increasing # highly satisfied customers by focus on quality, digitalisation and innovation
• Being a good employer: increasing employee engagement and loyalty
• Zero carbon emission in last-mile delivery by 2025 in 25 Dutch cities in the Netherlands
• Zero carbon emission in last-mile delivery for PostNL by 2030

The preferred logistics and postal solutions provider in the Benelux region

34

Q4 & FY 2019 Results

Q&A

35

Q4 & FY 2019 Results

Appendix

• Results by segment Q4 & FY 2019
• Underlying (cash) operating income Q4 & FY 2019
• Underlying cash operating income Parcels FY 2019
• Condensed P&L
• Consolidated statement of financial position
• Breakdown pension cash contribution and expenses
• IFRS 16 impact Q4 & FY 2019

36

Results by segment Q4 2019

Revenue	Normalised EBIT	Underlying	Underlying cash
operating income	operating income

(in € millions)	Q4 2018	Q4 2019	Q4 2018	Q4 2019	Q4 2018	Q4 2019	Q4 2018	Q4 2019
Parcels	439	471	36	41	36	41	36	42
Mail in the Netherlands	483	492	75	15	79	40	71	48
PostNL Other	20	22	(15)	(16)	(16)	(15)	(7)	(11)
Intercompany	(148)	(142)
Total PostNL	794	843	96	40	99	66	100	79

37

Results by segment FY 2019

Revenue	Normalised EBIT	Underlying	Underlying cash
operating income	operating income

(in € millions)	FY 2018	FY 2019	FY 2018	FY 2019	FY 2018	FY 2019	FY 2018	FY 2019
Parcels	1,555	1,672	121	120	121	122	117	121
Mail in the Netherlands	1,678	1,606	130	52	133	77	93	76
PostNL Other	74	81	(45)	(37)	(45)	(37)	(22)	(21)
Intercompany	(535)	(515)
Total PostNL	2,772	2,844	206	135	209	162	188	176

38

Underlying cash operating income Q4 2019 at €79m

(in € million)

UCOI Q4 2018

Changes in pension liabilities

Changes in provisions

Underlying operating income Q4 2018

Parcels

Mail in the Netherlands

PostNL Other

Underlying operating income Q4 2019

Changes in provisions

Changes in pension liabilities

UCOI Q4 2019

100

(2)

1

99

5

(39)

1

66

12

1

79

39

Underlying (cash) operating income FY 2019

(in € million)

UCOI FY 2018

Changes in pension liabilities

Changes in provisions

Underlying operating income FY 2018

Parcels

Mail in the Netherlands

PostNL Other

Underlying operating income FY 2019

Changes in provisions

Changes in pension liabilities

UCOI FY 2019

188

(11)

32

209

1

(56)

8

162

6

8

176

40

Underlying cash operating income Parcels Q4 2019

(in € million)

UCOI Q4 2018

Revenue Parcels Benelux - volume

Revenue Parcels Benelux - price/mix

Organic cost Parcels Benelux

Volume-dependent cost Parcels Benelux

Other costs Parcels Benelux

Other result

UCOI Q4 2019

36

37 Driven by 10% volume growth

(7)	Negative price/mix effect mainly related to
international parcels

(5)	Related to CLA and inflation

(26)

2 Operational efficiencies and some incidentals

5 Improvement Logistics and Spring

42

41

Underlying cash operating income Parcels FY 2019

(in € million)

UCOI FY 2018

Revenue Parcels Benelux - volume

Revenue Parcels Benelux - price/mix

Organic cost Parcels Benelux

Volume-dependent cost Parcels Benelux

117

153 Driven by 12.4% volume growth

(19)	Negative price/mix effect due to customer and
product mix

(17)	Related to CLA and inflation

(109)

Other costs Parcels Benelux

Other result

UCOI FY 2019

(6)

2

121

Improving operational efficiency and some positive incidentals more than offset by implementation costs related to expansion infrastructure

Mainly explained by better performance Logistics

42

Condensed P&L

(in € million)	Q4 2018	Q4 2019	FY 2018	FY 2019
Revenue	794	843	2,772	2,844
Operating income	93	37	185	119
Net financial expenses	(3)	(5)	(24)	(16)
Income taxes	(14)	(13)	(34)	(31)
Profit from continuing operations	76	19	127	72
Loss from discontinued operations	(26)	(23)	(94)	(68)
Profit for the period	50	(4)	33	4

• Discontinued operations in Q4 2019 includes Nexive; transaction sale of Postcon to Quantum finalised in Q4 2019
• Result from discontinued operations: €(23)m in Q4 2019, mainly explained by a fair value adjustment and a negative operational result

43

Consolidated statement of financial position

Adjusted net debt position end of 2019 at €736m

(in € million)	31 Dec 2019		31 Dec 2019
Intangible fixed assets	364	Consolidated equity		(21)
Property, plant and equipment	414	Non-controlling interests		3
Right-of-use assets	259	Total equity		(18)
Other non-current assets	89	Pension liabilities		283
Other current assets	441	Long-term debt		695
Cash	480	Long-term lease liabilities		201
Assets classified as held for sale	91	Other non-current liabilities		26
		Short-term lease liabilities		63
		Other current liabilities		788
		Liabilities related to assets classified as held for sale	100
Total assets	2,138	Total equity & liabilities		2,138

• Adjusted net debt is €736m; gross debt (Eurobonds, other debt/receivables), pension liabilities (adjusted for tax impact), lease liabilities (on-balance sheet and off-balance sheet commitments, adjusted for tax impact) and cash position
• Adoption of IFRS 16 Leases per 1 January 2019
• • Recording of right-of-use assets and increased lease liabilities for operating leases, mainly related to rent and lease of buildings and transport fleet
  • Right-of-useassets include transferred finance leases and capitalised leasehold rights and ground rent contracts (from PP&E)

44

Breakdown pension cash contribution and expenses

(in € million)	Q4 2018		Q4 2019
	Expenses	Cash	Expenses	Cash
Business segments	23	29	24	28
IFRS difference	8		5
PostNL	31	29	29	28
Interest	2		2
Total	33		31

45

IFRS 16 impact Q4 2019

Impact of previously reported off-balance sheet operational leases (continuing operations)

(in € million)	Parcels	Mail in the	PostNL	PostNL
	Netherlands	Other
Right-of-use assets (new)	17	-16	-3	-2
Lease liabilities	16	-1	-3	12
Depreciation & Amortisation	8	20	4	32
Operating income	-0.2		0.1	-0.1
Net financial expenses	0.2		-0.1	0.1
Net cash from operating activities	7	4	4	15
Net cash from financing activities	-7	-4	-4	-15

46

IFRS 16 impact FY 2019

Impact of previously reported off-balance sheet operational leases (continuing operations)

(in € million)	Parcels	Mail in the	PostNL	PostNL
	Netherlands	Other
Right-of-use assets (new)	104	14	21	138
Lease liabilities	104	30	21	155
Depreciation & Amortisation	28	29	14	72
Operating income	-1.4	-0.4	-0.3	-2.0
Net financial expenses	1.4	0.4	0.3	2.0
Net cash from operating activities	27	14	14	55
Net cash from financing activities	-27	-14	-14	-55

47