PostNL presents poor results Q3 2022

Since the publication of PostNL’s Q2 2022 results in August 2022, the global macroeconomic environment has further deteriorated, impacting many industries. Inflation has increased, with The Netherlands reaching a record-high level of almost 15% in September, while consumer confidence has dropped to an all-time low. This is negatively impacting consumer spending and is expected to continue in the quarters to come.

Slow growth in Parcels

These unprecedented circumstances translate into slower volume development of the parcel market than anticipated, while PostNL’s market share remains stable. The expected return to volume growth in volumes at Parcels did not materialize in Q3, and PostNL expects volumes in Q4 2022 to be in line with 2021.

Nonetheless, Q4 will be the strongest quarter of the year and the main driver for full-year performance. On peak days, twice as many parcels will be delivered than on average.

Rising costs

Ongoing inflationary pressure results in rising fuel, labor, and other costs. In light of the current CLA negotiations, labor costs will increase more than anticipated. Overall, costs are increasingly high relative to volumes. PostNL is adjusting its network capacity with volumes within the limits of a tight labor market. The necessary flexibility for peak season will be maintained to safeguard customer and consumer service levels.

Mitigating actions

PostNL is taking initiatives to mitigate the impact of cost increases and less-than-anticipated volume development. The company is accelerating and intensifying its adaptive measures to improve efficiency and productivity. These include:

  • Active yield management and price adjustments
  • Reduction of indirect costs at Parcels
  • Consolidation of collection routes and routes between sorting locations
  • Adjusting investments (capex and leases) to align with volumes and strict working capital management
  • Tight control of overhead costs: limiting and postponing project costs and a prudent approach to filling staff vacancies

The benefits of these measures are lagging, given the speed at which the operating environment is changing, putting pressure on margins.

Preliminary Q3 results

As a result of the headwinds, Q3 performance, predominantly at Parcels, is below PostNL’s expectations:

  • Revenue is expected to come in at €709 million (Q3 2021: €729 million).
  • Normalized EBIT is expected to come in at minus €20 million (Q3 2021: €23 million, of which €5 million is assumed to be related to Covid-19).
  • Free cash flow at minus €49 million (Q3 2021: €10 million), reflecting the step-down in normalized EBIT and phasing in working capital.

Parcel volumes are down

Volumes were down 1.1% in Q3 2022. Revenue is expected to come in at €506 million (Q3 2021: €505 million) with normalized EBIT at €(1) million (Q3 2021: €27 million).

For mail volumes were down 9.3% in Q3 2022. Revenue is expected to come in at €328 million (Q3 2021: €345 million) with normalized EBIT at €(1) million (Q3 2021: €12 million, of which €5 million is assumed to be Covid-19 related).

Outlook FY 2022

As a consequence of the further deteriorating macroeconomic environment and prolonged uncertainty, it is no longer realistic to assume that the current FY 2022 outlook for normalized EBIT and free cash flow will materialize. PostNL is taking all necessary initiatives to safeguard its service level and the robustness of its financial position.


Last month, PostNL announced it is shifting its commercial and operational focus towards e-commerce. The responsibility for e-commerce will be split with the executive committee members for commerce and operations. The e-commerce market is also becoming increasingly important internationally, which is why there will be an Executive Committee representative for PostNL’s international operations.

The news, incidentally, raises more questions than it answers. What specifically will PostNL do now, with which partners, why, with what intended commercial and operational results, and what will they no longer do? Will PostNL stop urban logistics activities, will e-commerce include the growing local-for-local and B2B market, what will the company do with e-fulfillment, and what will happen to the familiar mail department? Earlier this year, PostNL already stopped doing food deliveries.

In one year, PostNL lost more than half its value on the stock market. The company has been losing market share for several years in a highly competitive parcel market, showing signs of declining growth and even contraction. Hopefully, the Executive Committee will soon present a strategy that convinces.

Source: PostNL

Leave a Reply

Your email address will not be published. Required fields are marked *