PostNL

PostNL

13 March 2018Reading time: 3 minutes

The recently published fourth quarter and annual results of 2017 show that PostNL is at an important turning point. Mainly due to the successful performance within the European parcel market, PostNL could end 2017 with positive results. However, the declining volumes and revenue within the postal market did suppressed the overall operating results. As a result PostNL shares strongly plummeted early March this year at the Amsterdam stock market. In a week’s time the (period from 23-02 till 05-03) the stock price dropped with 20%.

The volumes of PostNL within the Dutch postal market declined throughout 2017 with 9.9%, whereas the revenue within the same market decreased with 5% to EUR 1.7 billion. Also, the already processed cost reductions of EUR 56 million in 2017 could not improve the operating results of PostNL. The declining postal market is mainly caused by the digitization of documentation and communication. Because of this, less physical mail and letters are send. Also the competition within the postal market has grown rapidly in short time, due to new Dutch legislation. The Dutch ACM (Autoriteit Consumenten Markt) obliged PostNL to give other postal companies access to their sorting and delivery network.

It became clear to PostNL that the current national mail delivery, as well as managing and maintaining all the mailboxes and post offices, has to change drastically in order to keep up the costs. Soon the postal company will therefore consult with the Dutch government, unions and other stakeholders about the future of the national mail delivery. PostNL especially demands more freedom to consolidate with other partners. The need for this solution grows even larger when global companies such as DHL, FedEx and UPS can operate freely within Europe.

Thanks to the rapid development of e-commerce, PostNL is able to take advantage of the fast growing parcel market. Throughout 2017 the volumes of the postal company within this market grew with 17% and the revenue also increased with 14.8% to EUR 1.1 billion. Within Belgium the volume even grew with 35% annually compared to 2016. By now e-commerce contributes already 38% to the total revenue of PostNL. This percentage could continue to grow in 2018. Besides the Benelux, PostNL also wants to grow within Germany and Italy. It remains to be seen how these markets will develop itself within the next period.

The total revenue of PostNL throughout 2017 increased with 2.4% to EUR 3.49 billion on an annual basis. The underlying operational results declined during the same period with 8.16% to EUR 255 million. It remains to be seen if PostNL can maintain the revenue growth within the parcel market and if there will be a cost efficiency solution for the declining postal market. To be cautious, PostNL has scaled back their goals for the upcoming years, which caused a drop of the stock price. A majority of the analysts has given a buy rating for PostNL. The future price of the share is subject to several political, industrial and sector specific as well as economic factors. Investors should consider such risk when making their investment decisions. Developments can be different at any time than investors expect, which can result in capital losses.

Vontobel products on PostNL are tradable at DEGIRO.


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17/06/2019 15:02:03