PostNL Q1: We have seen pressure on parcel volumes and higher than anticipated costs
PostNL reports normalised EBIT of €33 million and free cash flow of €52 million for Q1 2022 and says the more challenging macroeconomic environment has impacted e-commerce development.
Developments Q1 2022
- Performance in first two months in line with expectations, with additional pressure on e-commerce volumes and costs since start of the war in Ukraine
- Volumes at Parcels increased by 3.9% excluding non-recurring impact related to Covid-19; overall, volumes -19.5% due to less non-recurring volume as assumed and expected development in cross-border activities
- Volumes at Mail in the Netherlands -7.4%, with ongoing substitution in line with expectations
- Strong cash flow performance
- 15% increase in carbon efficiency versus FY 2021, further improving PostNL’s environmental footprint
Herna Verhagen, CEO of PostNL, said: “The war in Ukraine remains very concerning, severely impacting millions of people. This is bringing additional uncertainty for the overall economic environment, where we also see new lockdowns in China related to Covid-19. This results in further inflationary pressures, visible in rising fuel and labour costs, and ongoing global supply chain constraints. The composition of consumer spending might temporarily rebalance towards services, also due to rising prices for some goods, impacting the development in e-commerce.
“Performance in the first two months of the year developed in line with our expectations. Coinciding with the start of the war in Ukraine we have seen pressure on parcel volumes and higher than anticipated costs. This resulted in a lower performance at Parcels than anticipated, with a stable market share. The result at Mail in the Netherlands was solid with ongoing substitution in line with expectations. As anticipated, the contribution from cross-border activities declined compared with last year. In the first quarter of 2022, cash flow performance was again strong, further strengthening our financial position. Meanwhile, we are committed to continuing on the execution of our strategy by focusing on providing our customers an excellent experience through the acceleration of our digital transformation and by improving our environmental footprint, building on our strong financial position. As always, we aim to be a socially responsible employer and partner for our delivery companies, working with highly satisfied people in a compliant and sustainable way.
“We now expect 2022 to be more challenging with costs rising more than anticipated and less visibility on volumes. As a consequence, we are adjusting our FY 2022 outlook for normalised EBIT to €170 million – €210 million. At the same time, we are continuing our strict approach to working capital management while adjusting capex to align with lower volume projections. As a result, we confirm our FY 2022 outlook for free cash flow at €110 million – €140 million.”