PostNL

PostNL

27 November 2018Reading time: 3 minutes

The postal market is shrinking for many years now, because of the upcoming digital communication. The German consultancy firm WIK-consult anticipates that the postal market will shrink with at least another 30 percent between now and 2020. To compensate this decrease, PostNL has increased their prices step by step. The mail company will increase the stamp price per 2019 with approximately 5 percent to 0,87 euro and for international stamps with 3,6 percent to 1,45 euro. PostNL also has adjusted their infrastructure by closing postal offices and by drastically reducing the amount of mailboxes.

Despite the decrease of the postal market, the third quarter revenue of PostNL increased on an annual basis with 1,3 percent to 638 million euro. The mail company benefited from an increase of the parcel volume, which has increased on an annual basis with 20 percent over the past three months. Consumers are ordering more and more products online. Due to the increasing parcel volume, 49 percent of the total revenue is now related to e-commerce according to PostNL. However, over the same period the profit from continued activities has plummeted with 24 percent to 19 million euro, while the underlying cash operating result decreased with 34 percent to 23 million euro.

Recently PostNL fought a fierce battle with its staff. In September many mail sorters and mail deliverers went on a strike against the implementation of the new work method, while in October the package deliverers threatened with strikes during the busy holidays. Eventually the package deliverers cancelled this action, but it remains to be seen if PostNL can satisfy all the involved parties. New strikes cannot be excluded.

PostNL has also put a claim on the Dutch State because of the taken measurements for the postal market by the Autoriteit Consument en Markt (ACM). The mail company claims to have suffered 40-45 million of damage because of this and wants to recover the financial damage from the Dutch State. It remains to be seen who will be right in this dispute.

For years PostNL claims that due to the shrinking postal market, consolidation is inevitable. Therefore the mail company received an approval of the Tweede Kamer earlier this year to takeover Sandd. PostNL expects to be able to say more about the financial consequences of the acquisition next summer.

A few years earlier PostNL itself was a takeover target. The Belgian mail company Bpost wanted to take over PostNL but their attempts failed. By now Bpost is under pressure from investors after the publication of disappointing third quarter results. The share of Bpost has since then lost almost a quarter of its stock market value.

At this moment (19.11.2018) the stock price of PostNL is more than 31 percent lower at 2,40 euro. The future price of the stock 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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10/12/2018 05:45:18