Last Mile Brief 28/02/2022: PostNL records revenue drop in 2022, expects volume decline in 2023

Today’s headline story: PostNL records losses in 2022, expects volume decline in 2023

Commenting on the results, Herna Verhagen, CEO of PostNL, said:

“2022 turned out to be a year in which we were navigating rapidly changing and turbulent circumstances. The global macroeconomic and geopolitical environment was extremely challenging, with record-high inflation and consumer confidence at an all-time low. This impacted our performance, as we saw a sharp increase in labour and fuel costs. At the same time, parcel volumes were under pressure as the economic developments impacted consumer spending, but also due to overcapacity in the market. 

We took firm and swift actions to improve operational efficiency and preserve our financial position, which supported our 2022 performance. As well as taking these efficiency measures, such as reducing storage capacity and route optimisation, we also adjusted our prices, to the extent possible, to reflect the higher cost base. 

As the challenging conditions are expected to continue into 2023, it is critical to invest in further strengthening of our fundamentals and to secure our position in a dynamic and very competitive market. In 2023, we will further innovate our services, and improve customer value. And in addition to a number of initiatives to improve efficiency, mainly at Parcels, we are today announcing a reduction of 200-300 FTEs in overhead and other measures to reduce indirect costs. 

Based on a longer-term upward trend in e-commerce, underpinned by fundamental growth drivers, we have full confidence in our strategy. Our pro-active approach ensures that PostNL is well-positioned to resume its growth trajectory in e-commerce, while maintaining solid performance at Mail in the Netherlands. Taking into account the benefits from all measures, including the additional plans presented today, a step-up in performance will be visible as of 2024, that should be further supported once the economic environment starts to improve.”

As for 2023, the company issued the following forecast:

“2023 is expected to be a challenging year with continued macro-economic uncertainty. Parcel volume projections remain uncertain for the short term. PostNL now assumes a low single digit volume decline for the year, also taking into account some potential loss in market share. Organic costs will increase again, and will not be fully offset by price adjustments in a competitive market characterised by overcapacity. In this operating environment, PostNL today announced a reduction of 200-300 FTEs in overhead and other measures to further reduce indirect costs and improve efficiency, mainly at Parcels. This results in €20 million restructuring provision and related costs in 2023. At Mail in the Netherlands, volume decline is expected to continue at between 8% and 10%.”

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