PostNL (PNL) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 5% year-over-year to €756 million, but normalised EBIT declined to €(18) million, mainly due to losses in Mail in the Netherlands, while Parcels showed strong volume growth and improvement.

• CEO Herna Verhagen announced her decision to step down after 12.5 years, with CFO Pim Berendsen named as successor, ensuring strategic continuity.

• Persistent cost inflation, especially labor-related, was only partly offset by price increases and efficiency gains.

• The business model for Mail in the Netherlands is deemed unsustainable, with a €19 million loss YTD and urgent changes required.

• Free cash flow in Q3 was €(68) million, reflecting higher tax and interest payments.

Financial highlights

• Q3 2024 revenue: €756 million (Q3 2023: €722 million), up 5% year-over-year; YTD 2024: €2,316 million (YTD 2023: €2,276 million).

• Q3 2024 normalised EBIT: €(18) million (Q3 2023: €(11) million); YTD 2024: €(9) million (YTD 2023: €14 million).

• Q3 2024 free cash flow: €(68) million (Q3 2023: €(26) million); YTD 2024: €(87) million (YTD 2023: €(91) million).

• Adjusted net debt increased to €592 million from €462 million at year-end 2023, mainly due to negative free cash flow.

• Parcels Q3 revenue: €569 million (+6% YoY), volume growth 7.4%; Mail in the Netherlands Q3 revenue: €295 million, volume down 6.3%.

Outlook and guidance

• FY 2024 normalised EBIT expected to be around €80 million, with the majority generated in Q4 due to peak seasonality.

• Parcels volume growth for FY 2024 projected at 7–10%; Mail in the Netherlands volume decline expected at 7–9%.

• Organic cost increases for FY 2024 to be below €155 million, with a gap of ~€15 million not fully mitigated by price increases.

• Capex for FY 2024 expected slightly below €110 million; dividend payout remains aligned with business performance.

• Leverage ratio anticipated to remain below 2x.