PostNL - Solid Q2 results, outlook full year 2016 reconfirmed

Financial highlights Q2 2016

  1. Revenue stable at €824 million (Q2 2015: €824 million)
  2. Underlying cash operating income decreased to €47 million (Q2 2015: €65 million)
  3. Net cash from operating and investing activities of €668 million (Q2 2015: €(57) million), including proceeds from sale of stake in TNT Express (€643 million)
  4. Consolidated equity position improved to €(177) million (Q1 2016: €(194) million)
  5. Pensions: net equity impact limited to €(8) million, discount rate at 1.5% (Q1 2016: 1.7%)

Operational highlights Q2 2016

  1. Addressed mail volume declined by 7.6% (adjusted for working days: 8.3%)
  2. €15 million cost savings realised as anticipated
  3. Parcels volume grew by 16% (adjusted for working days: 14%)

Outlook 2016 and 2017

  1. Full year underlying cash operating income
  2. 2016 outlook: reconfirmed as at €220 million - €260 million
  3. 2017 outlook: to be in the range of €230 million - €270 million
  4. Expectation of and commitment to resuming our dividend in 2017

CEO statement

Herna Verhagen, CEO of PostNL: “Our second quarter results are in line with expectations. The trend in Parcels continues to be very solid, recording another period of strong volume growth and improving results. Mail in the Netherlands delivered results according to plan, taking into account the anticipated impact from our adjusted market approach and the measures on tariffs and conditions announced by the regulator (ACM) in 2015. Our restructuring projects continue to generate cost savings as expected. The performance in International is below last year’s results and we expect improvement during the second half of this year. Based on the overall performance for the first half of 2016, we are confident on delivering our previously indicated full year outlook for 2016.

Following the completion of the sale of our stake in TNT Express, our financial position further improved. The proceeds are earmarked for debt reduction. The rating agencies acknowledged this positive development: both S&P and Moody’s upgraded our credit rating by one notch. The global and European macro-economic and political developments resulted in a further reduction in interest rates. The impact on our pension position, however, was marginal in the second quarter. The current low level of interest rates triggered further analysis of the financial implications for our equity position. This analysis shows a comfortable headroom, if interest rates were to reduce further.

We are committed to successfully implement our strategy and to realise our ambition to be the postal & logistic solution provider in our chosen markets. We confirm our expectation to gradually improve our underlying cash operating income, starting in 2017, to between €285 million and €355 million by 2020. This, together with the sale of the stake in TNT Express, and the comfortable headroom if interest rates were to decline further, support our expectation of and commitment to resuming our dividend in 2017.”

Source: PostNL

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