PostNL to revamp parcels business strategy to cope with sluggish growth (updated)
24/02/2025 13:37
(Adds CEO comment in paragraphs 6, 13, analyst comment in
paragraph 8-9)
Feb 24 (Reuters) - Dutch postal group PostNL PTNL.AS
is to refocus plans for its parcels business which is facing
sluggish growth this year, including the expansion of its locker
services and road network.
PostNL and other traditional postal services in Europe are
struggling to keep up with competition from other parcel locker
companies such as Poland's InPost INPST.AS as well as Amazon
AMZN.O .
The group, which delivers parcels and letters across the
Netherlands, Belgium and Luxembourg, said it expected a volume
decline of 8% to 10% at its Dutch mail business in 2025, after a
10.5% decrease in the quarter ended December.
It said it expects growth of between 1% and 3% at its parcel
division this year, lower than the assumed growth of 4% to 5% in
the Dutch e-commerce market on which PostNL's parcel service
relies heavily.
It expects annual operating income for 2025 to be in line
with 2024.
"The financial performance strongly underlines that the
current business model is no longer sustainable," CEO Herna
Verhagen said in a statement, pointing to the need for a new
business strategy.
PostNL had already warned on its 2024 profit in January.
"Another unsatisfactory year coming up," analysts at
brokerage Degroof Petercam Degroof said in a note on Monday.
The analysts also said in the note they expect market share
losses at PostNL due to price increases mainly caused by rising
wages.
Its shares, which are trading near record lows, were up
about 4% by 1325 GMT.
The company is discussing financial support with the Dutch
government after calling for help on Friday to meet its
universal service obligation costs which it estimated at 30
million euros ($31.41 million) in 2025 and 38 million in 2026.
"It's a cost coverage of loss-making activities", Verhagen
told analysts, adding that the government agrees that delivering
a public task cannot be loss-making.
The group aims to achieve cost savings of between 40 million
and 45 million euros in 2025, with total savings of 160 to 200
million by 2029.
For 2024, it reported EBIT of 53 million euros, confirming
the preliminary reading it gave in January, and proposed a
dividend of 0.07 euros per share.
($1 = 0.9551 euros)
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PostNL's market cap shrunk to a quarter of its 2021 levels https://reut.rs/3ERgdF2
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(Reporting by Johan Bodinier, Alessandro Parodi and Olivier
Cherfan in Gdansk; editing by Milla Nissi and Jane Merriman)
((Johangeorgesroger.Bodinier@thomsonreuters.com;
alessandroparodi@thomsonreuters.com;
olivier.cherfan@thomsonreuters.com))