In December 2013, the Netherlands based, PostN sold half its stake in troubled TNT, this may have helped. However they have said that results were driven by cost-savings and reduced pension contributions, which more than offset declines in letter volumes.
Higher revenue from the parcels unit in the quarter offset a 9.3 percent decline in Dutch addressed mail volume, as online shopping at home and abroad continued to grow. There was a strong increase in international parcel volumes, particularly for milk powder in China.
Excluding its UK mail business Whistl, revenue grew to EUR 4.25BN in the year. PostNL Chief Executive Herna Verhagen said the results showed they can adapt to a changing environment. She said: “The ongoing improvement of our mail operations resulted in EUR 127m of cost savings. This, together with the impact of price increases, more than compensated for the 10.7% decline in addressed mail volume in the Netherlands in 2014. At the same time, our delivery quality and customer satisfaction improved, as did our employee engagement. “Parcels delivered good growth with a volume increase of 8.8%. This growth is the main driver for the improved performance, which also benefits from the strengthening operational efficiency. Subcontractor costs increased in line with our expectations. We continued to invest in the expansion of our service offerings, such as evening and Sunday delivery and rolling out parcel lockers. International volumes and revenues grew and the segment contributed positively to PostNL’s results, however underlying cash operating income was below last year.
PostNL’s domestic mail business saw its revenue slip by 2% to EUR 2.01bn for the year as a whole, but underlying cash operating income nearly tripled to EUR 231m thanks to cost-cutting, new labor agreements and price increases.
In July with legislation further measures to help cut costs may be implemented allowing a cut in the number of letterboxes and post offices. PostNL are trying to force moves to allow regional postal players and reseller’s access to its network for business mail, under competition rules being reviewed by the postal regulator, ACM.
In 2014 PostNL’s parcels business saw its revenue up 6% year-on-year to EUR 854m, with underlying cash operating income up 10% to EUR 98m.Compared to the year before volume grew by 8.8%, thanks largely to e-commerce. There are many reasons for PostNL improvement in results one of which is completing its investment in its new parcel depot network. PostNL have redesigned their delivery vehicles so that they can deliver both parcels and domestic delivery this is another key point in cost improvements within the company.
PostNl international side of business revenue has grown 6% to EUR 1.71bn, with underlying cash operating income falling by 75% to EUR 8m, with results impacted by the roll-out of end-to-end delivery services in the UK by joint venture Whistl.
Looking ahead, Verhagen said: “Being well-positioned to further benefit from the growing e-commerce market, we expect parcels to continue its growth and strengthen its market position,”