PostNL – Q2 results and divestment of Nexive and Postcon

While announcing its Q2 results, PostNL has announced plans to divest its subsidiaries Nexive and Postcon.

Q2 revenues were up slightly to €851 million as against €836 million last year.

Common to many postal operators around the world PostNL has been focusing on improving parcel revenues, in the face of declining mail volumes. In this case it seems to be working as “e-commerce related revenue” for the quarter was 44% up on last year.

Cash operating income at PostNL fell considerably to €25 million from €46 million in the same period last year.

Commenting on the both the divestment and the Q2 results, Herna Verhagen, CEO of PostNL, said: ‘‘In line with our strategy to be the postal and logistic solutions provider and the focus on our core markets in the Benelux, we have decided to divest Nexive and Postcon. We have full confidence that the management teams in both countries will be able to realise their strategic ambitions, develop their activities and strengthen their position in Italy and Germany respectively. The preparations for the divestment processes have been started and we will update the market when appropriate.

“Our Q2 results are in line with the development in the first quarter with no material changes in the underlying drivers, as we indicated when publishing our Q1 results. Year-to-date, 44% of our revenue is e-commerce related, evidencing our accelerating transformation. In Parcels, we again saw impressive volume growth translating into double-digit revenue increase. This confirms our solid position in the Benelux e commerce logistics market. As we guided earlier, the investments in growth continue to impact results. The construction of our new sorting centres is proceeding as planned. Three of these are expected to become operational and to contribute to efficiency improvement towards the end of the year.

“Volume decline in Mail in the Netherlands develops in line with expectations, caused by the same drivers as we have seen before: particularly substitution, and increased competition, supported by regulation. We realised €10m of cost savings, which is lower than anticipated, due to delays in the roll-out of the sorting code and other adjustments in our operational process. We are confident that these developments will improve. However, we expect to end up slightly below our indication of between €50m and €70m for 2018. The anticipated step-up in cost savings after 2018 is well supported by several projects, including further savings in overhead and the next phase of efficiency improvements in our sorting and delivery model.”