View Annual Report

Introduction 1 PostNL at a glance 1 2 Message from Herna Verhagen 4 3 Our identity 7 4 Our operating context 9 Business Report 5 Value creation and strategy 15 With clever logistics, 6 Customer value 22 healthcare will come to you 7 Operational value 28 Read more in chapter 6 8 Social value 33 9 Environmental value 40 10 Financial value 45 Governance 11 Statement of the Board of Management 53 12 Report of the Supervisory Board 54 13 Corporate governance 59 14 Risk management 70 15 Remuneration report 78 Mail deliverer becomes 16 Our tax policy and principles 83 parcel deliverer 17 PostNL on the capital markets 85 Read more in chapter 8 Performance Statements 18 Financial statements 90 19 Non-financial statements 172 Appendices Appendix 1: Other non-financial performance indicators 201 Appendix 2: Data coverage table 202 Appendix 3: Glossary and definitions 203 Appendix 4: GRI Content Index 207 City hub paves the way Appendix 5: UN Global Compact reference table 211 for sustainable delivery Appendix 6: Summary of key figures 212 Read more in chapter 9 How to read this report Management summary Report of the Board of Management Forward-looking statements Readers looking for the highlights of 2018 The sections Introduction, Business report and This Annual Report contains forward-looking are advised to read chapter 1 until 5, and Governance together make up the report of the statements. Readers should not put undue reliance the first pages of chapter 6 until 10. Board of Management. on these statements. These provide a snapshot on the publication date of this report. In addition, future actual events, results and outcomes likely differ from these statements made. Chapter 19: Non-financial statements, section 1.3 provides more information on forward-looking statements. Introduction 1 PostNL at a glance PostNL Driving transition | 1 PostNL at a glance 1 PostNL Driving transition | 1 PostNL at a glance 2 The Benelux's number one service Customer focus provider in parcels and mail The consumer and our business customers are our starting Our purpose is to deliver special moments to everyone. We are point in everything we do. We believe that it is vital to keep mail the deliverers who know you and who are there for you when accessible and reliable for everyone, everywhere, whether it is you need them. Who deliver for everyone, to everyone. This delivering a bank statement or a Christmas card. The means that on an average weekday we deliver 800,000 parcels unstoppable growth of e-commerce is an important driver in and 7 million letters throughout the Netherlands. For our our parcel delivery and logistic activities, where we make online customers we are the indispensible link between senders and shopping easier. We connect with e-tailers through their receivers, and the connection between the physical and their webshops and platforms, continuing to offer them a growing digital world. range of delivery options. And we provide consumers with greater control over when and where we deliver their parcels. Large employer And PostNL is always nearby; whether it is through the PostNL For 220 years we have ensured that mail and parcel services are app, a retail location in the local neighbourhood or our reliable and accessible in the Netherlands. And with almost deliverers in every street, seven days a week. 38,000 employees, we are one of the largest employers in the country. PostNL has the biggest logistics mail and parcel A people company network in the Benelux and we are active throughout the world We are a people company. We focus on creating a work with our cross-border activities under the brand Spring. environment in which everyone can be themselves and believe that diversity in background, mindset and abilities is crucial to More than delivering parcels and mail succeed as a company. We work to offer learning and PostNL is transforming from a traditional mail business into a development opportunities for employees at all levels of the logistics service provider. Today, we are already doing much organisation, and for all skill sets, ensuring that everyone can more than only delivering mail and parcels. For example, we work to reach their true potential. Only by working together can help our business customers to be successful by providing we truly become the favourite deliverer. direct and online marketing support, automated order processing or temperature-controlled medical transport. And we develop services that make consumers' lives easier, such as collecting parcels that consumers want to return, delivering flowers and food, or delivering and fitting kitchens and white goods. PostNL Driving transition | 1 PostNL at a glance 3 2 Message from Herna Verhagen Driving transition right balance between adjusting our mail operations in the We are steadily realising our strategy to be the postal and challenging Dutch postal market and expanding our footprint logistics solution provider in the Benelux. Our target of having as an e-commerce solutions provider, creating long-term value 50 percent of revenues coming from e-commerce is within for our shareholders and other stakeholders. reach, ahead of time. Our Parcels business progressed to the next growth phase by investing in infrastructure, innovation As a company in transformation, we believe that focus is key to and an efficient, value-creating delivery model. We continued achieving our goal. In line with our strategy to be the postal and to adapt the business model of our Mail operations, which will logistics solution provider in the Benelux, we have decided to help us save costs and further manage volume decline. We also divest Nexive, our mail and parcels business in Italy, and took several steps towards consolidation of mail networks in Postcon, our mail business in Germany. We are making good the Netherlands. And by growing our presence and expanding progress with the divestment process and we expect to make our retail network, we can ensure that we are always close to further announcements before the summer. our customers and consumers, creating one customer experience across PostNL. Parcels: striking the right balance Driven by strong volume growth, revenue at our Parcels busi- At the same time, we dealt with a number of challenges during ness increased by 19.8%. Price increases above inflation for all the year. Our customer satisfaction and employee engagement customer categories were more than offset by a shift in custo- in 2018 were not where we want or need them to be. mer mix, as large e-tailers gain market share and grow faster Sometimes for reasons within our control, and in those cases than smaller players. Business performance improved on the we have started working on improvements. And sometimes back of increasing volumes, leading to higher efficiency. At the external circumstances, such as a tight labour market and the same time, we faced additional capacity costs, partly explained regulatory environment, tested us. While these things will not by a tight labour and transport market and increasing IT costs go away, we are confident that the steps we are taking will related to the ongoing development of our digital services. create a platform for further growth and sustainable value. During the year, we opened three new parcel sorting centres in Value for our shareholders the Netherlands, which is the pace we plan to maintain in 2019. Value creation for our shareholders remains a key priority for We are very pleased with the development of our parcels us. Our share price in 2018 did not develop as we had hoped, business in Belgium, where we plan to further expand our which was disappointing. However, it is important to focus on parcel sorting and delivery capabilities. our long-term prospects for value creation. Next to the strategic We keep pace with e-commerce growth by expanding our developments mentioned above, we have delivered an underly- network, hiring more people and constantly innovating our ing cash operating income at the top-end of our guidance for parcel collection, sorting and delivery models. In 2018, parcel the year. Our aim continues to be to offer shareholders a sust- volumes increased by more than 20%. On an average day, we ainable, progressive dividend based on the performance of our now deliver over 800,000 parcels. On peak days, such as Black business. We are confident that we will continue to find the PostNL Driving transition | 2 Message from Herna Verhagen 4 Friday and Sinterklaas, the daily volume increased to 1.4 is important in any scenario, but it will also leave us in a better million parcels per day. position to add additional volumes that result from potential consolidation of networks, if and when it happens. While the enormous success and growth of e-tailers creates opportunities, there are also challenges. The high pressure on Postal dialogue and consolidation peak days requires us to accelerate our investments. This is an For a number of years, we have consistently argued that industry issue, which we will have to tackle together with our consolidation of mail networks is the best solution for customers. Increased awareness among stakeholders of the affordable postal delivery, available for all age groups, including positive and negative impact of a growing e-commerce market the elderly, and accessible in cities and rural areas. is vital to create a sustainable model for the future. Through a Furthermore, it is the best way to manage volume decline in a number of commercial initiatives, we will continue to ensure socially responsible manner. In the first half of 2018, a that volume and revenue growth translate into bottom-line commission led by Ms Oudeman researched the postal market growth. and held a dialogue with all relevant postal stakeholders.

Load more