PostNL Stock

Good morning, ladies and gentlemen. Welcome to the PostNL Trading Update Q3 2026 Results Call. [Operator Instructions] Now I would like to hand the conference over to Ms. Inge Laudy, Manager, Investor Relations. Please go ahead, madam.

Thank you, operator, and welcome to you all. We have published our Q3 trading update this morning. And with me in the room today are Linde Jansen, our CFO; and also Pim Berendsen, CEO. Linde will guide you through a short presentation, and then both Pim and Linde will take your questions. Please go ahead, Linde.

Thank you, Inge. Let's start with the highlights of the third quarter of 2026. I will then give you more color on the main volume and revenue developments per segment. Please note that like in quarter 1, this is a trading update. So we will explain on strategic progress and the drivers behind volume and revenue. No EBIT or free cash flow will be disclosed. Overall, our revenue came in at EUR 768 million compared to EUR 762 million in the previous quarter last year. So a slight increase despite the challenging market conditions. Although we will not quantify normalized EBIT and free cash flow for this quarter, I can mention you that normalized EBIT developed in line with our expectations and followed the usual seasonal pattern.

For free cash flow, we see a favorable development that is supported by our proactive working capital management. Our disciplined strategy execution supports this performance and free cash flow development in challenging market conditions. With that, we confirm our outlook for 2026 and the free cash flow to come in at 0 for the full year -- at around 0 for the full year. On execution, we successfully implemented the standard mail delivery framework of within 2 business days or how we say it, D+2.

Our other main strategic initiatives are progressing according to plan. We continue to deliver on our cost savings plans and are agile in adapting capacity to the volume developments. These measures continue to support our performance. Let me now take you through the progress in our businesses and the external development that affect us. In the quarter, we again made tangible progress on our strategy while external challenges continued. The geopolitical uncertainty is still there. Furthermore, in July, the new customs regulations for import outside the EU came into force, and that impacts the e-commerce. Large Asian web shops are adjusting their commercial propositions and logistics processes.

This is resulting in shifts in market positions and a strong decline in market volumes. We also see new low-cost entrants in the E-commerce chain. For the E-commerce segment, we continue to execute our volume-to-value strategy. We are sharpening our customer segmentation and differentiating our propositions with a disciplined approach to volume steering. Our targeted yield measures continue to gain traction as demonstrated by the increase in the average price per parcel.

We also see an improving trend in domestic volume development quarter-over-quarter. We will look at these drivers in more detail when I will discuss the segment figures. At Platforms, our strategy remains to accelerate international growth through the asset-light models of Spring and -- MyParcel, which we see materializing in strong growth in our European E-commerce activities. So we continue to make progress on the priorities we set out earlier this year, focusing on that what we can control. Let me now turn to Mail on Slide 5 and our commitment to securing a sustainable postal service.

As we explained before, a long-term viable postal service requires a delivery framework of within 3 business days as well as compensation for the net USO cost in the transitional years. The D+3 framework also means no delivery on Saturday. Clear and timely political decisions to amend the Postal Act remain crucial. As these decisions have been delayed again, this has a direct consequence for the implementation timetable of D+3.

A transition of this scale requires 1 year of careful preparation. We are, therefore, forced to postpone the implementation to 2028. As a consequence, we have filed our application for net cost compensation for 2027, an amount of EUR 80 million. This brings the total amount requested for 2025 to 2027 to EUR 148 million. These are requests for compensation with legal proceedings for 2025 and 2026 still in progress.

The legal proceedings concerning the withdrawal of our current USO designation also continues. But our commitment remains unchanged, securing a sustainable postal service. To achieve that, the necessary regulatory changes and compensation for the transitional years remain essential.

Let's move to Slide 6. This slide provides an overview of the key reported figures per segment. As mentioned in the beginning, volume and revenue are the metrics that we disclose and explain in this trading update.

In short, for the group as a total, we saw a slight increase in revenue in a challenging market environment. But let's have a closer look per segment, and I will start with e-commerce. At e-commerce, we see the transition from volume to value gaining traction.

Domestic volumes are stabilizing and average price per parcel is up around 7% -- the revenue amounted to EUR 478 million compared to EUR 466 million last year, with overall volumes up 2.4%, which includes the transfer of the D+1 letterbox parcels. Excluding these letterbox parcels, we report an overall volume decline of 7.1%. This overall volume impact can be split in domestic and international. Starting with the domestic volumes, we see the good news that domestic volumes were broadly flat compared to last year and are showing an improving trend quarter-over-quarter. This reflects market developments and the limited loss in market share as anticipated following our targeted yield measures. Looking at the international volumes, mainly from Asian web shops, they were down almost 32%, predominantly explained by the new customs regulations that came into force in July.

Higher prices due to targeted yield measures and fuel surcharge, which amounted to around EUR 5 million, resulted in an EUR 18 million step-up in revenue compared to last year. In line with our expectation, the mix effect is negative, and that is almost fully explained by the D+1 letterbox parcels that are now being delivered in our E-commerce infrastructure that are now being delivered in our E-commerce infrastructure instead of via mail.

At the same time, the mix effect between domestic and international was positive due to lower Asian volumes. And that together brings our revenue to EUR 478 million in this quarter.

Let's move to Platforms on Slide 8. Revenue was down to EUR 173 million compared to EUR 188 million in the same quarter last year, with volumes down 13.1%. This 13% volume decline has 2 angles. On the one hand, we see our European volumes up again, growing by over 40%. This is in line with our strategy to expand our intra-European businesses. On the other hand, as already explained at the E-commerce segment, volumes from Asian web shops showed a sharp decline, falling almost 50% in the quarter due to the customs regulation introduced in July.

For price/mix effect, also at Platforms, prices increased and were supported by a small favorable mix effect. The other revenue showed a slight decline.

And then the last segment, Mail on Slide 9. Revenue was broadly in line with last year, mainly explained by the impact from volume development and tariff increases. Adjusted for election mail, the volume decline was 3%, bringing the year-to-date structural decline to minus 6.3%. This was more than offset by a positive price/mix effect, mainly driven by pricing coming from higher stamp prices as well as higher tariffs for our business mail.

Stamp prices were up almost 7% as of the 1st of January of this year. Finally, good to note that we recently announced that we have been granted the largest lot in the government mail tender effective 1 January 2027. With that, we secure over 200 million items annually at improved commercial terms.

Let me now turn to our outlook for the full year 2026, which, as said before, we confirm today. For normalized EBIT, we continue to expect between EUR 40 million and EUR 70 million. For free cash flow, we now expect to come in at around 0. Our proactive working capital management supports this favorable development.

Let me take you briefly through some of the assumptions underlying that outlook, which we published in February of this year, being a revenue growth of between 5% to 7%, and we continue to invest in our strategic focus areas with CapEx expected to be around EUR 125 million. Lease payments remain unchanged at around EUR 100 million.

Organic cost increases remain high at around EUR 140 million, with price increases to expect to be more than offset these cost increases. At the same time, we maintain a strong focus on cost control and further efficiency improvements. The current impact of the customs regulations introduced on the 1st of July does not change our outlook for 2026. However, the scope and timing of these regulations could further evolve over time and potentially affect future performance. It also brings opportunities as we are well positioned to benefit from a recovery as the market adjusts to the new reality. Furthermore, our outlook excludes the risk that prolonged geopolitical uncertainty may increase inflationary pressure and affect consumer spending. So we confirm our full year outlook with a favorable free cash flow development, supported by our continuous focus on working capital.

Let me conclude this presentation on Slide 11. I repeat that we will continue our focus on disciplined execution in a challenging environment. We have shown that we can adapt our operations to volume developments, and we are ready for the upcoming peak season. In E-commerce, our volume-to-value strategy is delivering higher yields, and we see an improving trend in domestic volume development.

At Platforms, we see strong growth in European E-commerce while adapting to the impact of the customs regulations. For Mail, we have successfully implemented D+2 and quality is improving. This is an important first step. Political decisions remain necessary to enable the transition towards a future-proof and financially viable postal service. Against this background, we remain confident in delivering our full year 2026 outlook with a favorable free cash flow development. Thank you very much. And now I'm handing over to Inge.

Thank you, Linde, for the explanation. We now take your questions. Operator, can you please explain the procedure and open the lines, please?

[Operator Instructions] We will take our first question, and your question comes from the line of Michiel Declercq from KBC Securities.

I have 2, please. The first one would be on the political delays and the shift to D+3 from 2028. So now you apply for a compensation of EUR 80 million. If I compare that a bit to 2026, which was EUR 38 million, I believe. That's a step-up of more than EUR 40 million. You will not be able to implement these measures or these cost-saving measures yet. So I would assume there is a big increase in your cost base next year. I'm just wondering how you will be planning to offset these, the additional EUR 40-plus million. So that would be the first question. And the second one would be a bit on the outlook. So -- you reiterated the normalized EBIT outlook and you say that you remain on track.

Now, if I look a bit at the volume impact from the new EU regulations, it seems to be quite a big impact on the volumes. I'm just wondering what is offsetting here the volume pressures or where are the positive pockets offsetting the international decline, especially also given that in November, there will be an additional charge.

And also in your guidance, you mentioned that, okay, in the future, there might be an impact depending on the scope and the timing. Can you be a bit more concrete on what is assumed here? Or how do you expect this situation to evolve in the coming quarters?

Yes. Thank you, Michiel. Let me start with your first question on D+3. It's indeed correct. So last week, we submitted net cost compensation of EUR 80 million. And let me start by explaining a bit on the amount. So you are comparing it with 2025/2026. To start with, the reason that it is higher than the '25 and '26 amounts is, first of all, because underlying, of course, we see the continued USO mail volumes decline.

So your cost base, and we have the fixed cost base with our people is then allocated to even further lower volumes, realizing that our USO volumes decline even faster than the other volumes. So that gets exponentially. And secondly, what you do in a net cost compensation, it's a very decent methodology, what you do to calculate that net cost compensation. So it's a counterfactual calculation.

And in that calculation, it is key that we assumed that we -- otherwise, we would have -- or we could have implemented D+3 in the year 2027, which is now not the case. And therefore, you assume those costs to be the net costs for not having a solution in -- not having a solution for the postal law delays.

As also mentioned in -- during our Capital Markets Day, left or right, we will try to get that compensation. So either via the adjustment of the law, either via requesting this net cost compensation. So that are the factors for that net cost compensation. Then on your second question on the outlook. Well, as you say, so we indeed see the impact from the Asian volumes. However, there are a few things to note. As you have also seen in our half year results where we showed and disclosed our normalized EBIT, we are on track for our cost savings and also adapting our our, let's say, capacity and the costs related to that to the volume development.

We are very agile and disciplined in doing that, and that is also what we have continued in this quarter. In addition, of course, Q4 is our -- as you know, our key quarter where -- which is an important part of our overall performance. And with the developments which we see quarter-over-quarter in domestic, which is the vast majority of our volumes in E-commerce, we see a very positive trend.

And that also contributes to that outlook reconfirm. So it's a combination of the different factors underlying it. And of course, it is not just E-commerce, it are all the different segments with our European E-commerce growth at Platforms. So all is contributing that in combination with a very agile cost adaption in our operation to adapt to the volume fluctuations. And obviously, good to remind a very positive development on free cash flow.

We will take our next question. Your question comes from Marco Limi from Barclays.

I've got a few. So the first one is on the D+3 in 2028. So if I look at the CMD slide back in '25, the plan has always been to switch to D+3 by 2028. So the question is, what has changed now versus your previous expectations? And what do you need in order to switch to D+3? So what are we waiting for in terms of approvals?

That will be the first question. Second question is on your guidance, where you're still guiding for revenues up 5% to 7% per year. But in the first 3 quarters revenues are sort of flattish. Just wondering whether there is anything we're missing there or that bit of guidance doesn't apply anymore.

And then a third question on the mail volume decline in Q3, which was only 3%, much below the historical run rate of, let's say, 8% to 10%. What is driving that? Is there any one-off in Q3 mail volumes? And if I can sneak a fourth one, I apologize for the many questions. But also on fuel, any comment there? Do you think that you have been able to fully pass through the higher fuel costs during Q3? Or there is any profitability headwind from higher fuel?

Yes. Let me start with your first question on -- it's correct indeed that you, that in our Capital Markets Day, we already assumed D+3 to be implemented in 2028. And then after that, our Capital Markets Day, developments came in on the postal law towards implementation of D+2 per the 1st of July this year and with the intention to have it per the 1st of -- the D+3 per the 1st of July in 2027.

However, to really implement it per the 1st of July 2027, the D+3 framework, the postal law really needs to be changed. And we are not yet -- the government has not yet taken the decisions to really -- and the steps to have that on time to really implement that per the 1st of July 2027. And then also, as explained during the presentation, given the size of this transition, we need a year to prepare this change. And as we still don't have that certainty from the government and the changes have not been adjusted, specifically on the Saturday delivery, yes, we cannot implement it per the 1st of July 2027 and are forced to postpone it to 2028. But maybe, Pim, you want to.

Yes, maybe one addition because, let's say, based on also the question from yourself, Marco, we really need to make a clear distinction between what is our breakthrough plan and what is net cost.

And net cost is actually a counterfactual comparison where you compare what is your actual cost related to the distribution, what would have been your network setup if you were not stuck with this obligation and the cost difference between those 2 where you also include positive elements is called the net cost.

So that has nothing to do with actual development of the cost base from '26 to '27, where it's really about the comparison, how would the network look like without the obligation of the universal service as it stands. So then only based on what your customers would demand you to do -- how would you then set up the network? That is your counterfactual and you compare the actual cost to that counterfactual and that drives the net cost. So in this 2027 net cost request, the actual is a D+2 network. The counterfactual is that we -- if not having this obligation, we would already have a D+3 model for 2027, given the fact that we've made the change to D+2 already this year. That drives the delta of net cost from '26 to '27...

Okay. Thanks, Pim. Then moving to your second question on your outlook in relation to the revenues. Indeed, so today, we reconfirm our outlook on normalized EBIT. As we mentioned during our outlook release in February, the elements you mentioned like revenue, CapEx, et cetera, are pointers underlying this guidance.

So the official guidance is for normalized EBIT and free cash flow. But good to note that, of course, as also mentioned to Michiel, we are -- we see the positive development quarter-over-quarter. And we also see that we have our main quarter to come, so the fourth quarter with our development on yield measures, as you have also seen supported by our increase in average price per parcel, which is expected to further increase in the Q4 also given, well, you can think of peak charges, et cetera. That together, combined with our agile adaptation to the volume expectations and volume volatility as we face following this customs regulations and rightfully so, as you say, also with the further 1 November handling fee to come. But that bundling together and our disciplined execution on our strategy makes us comfortable to land in our outlook.

Then on your third question relating to the mail decline of 3.6% in the quarter. Let me start by saying that overall, the Q3 in general is relatively to the other quarters, a very light quarter in light of volumes.

And what we see is that if you adjust for elections, the year-to-date volume decline is minus 6.3% -- so what impacts the relatively moderate decline in this quarter is driven by phasing effects mainly in the direct mail area compared to phasing with last year. And maybe good to remind you also for -- going forward for Q4, of course, last year in Q4, we had a very good volume development or a relatively good volume development given the specific mailings which we had back then.

So you can think of the elections of the specific supported package from the government, pension mailings, et cetera, which were happening in Q4 last year. So overall, for a year -- for the yearly volumes, we expect that to be in line with our known trend in volume decline or familiar trend in volume decline. And then last -- your last question on fuel charges. Well, I can confirm we are able to fully transfer the fuel charges on to our customers in both -- in the segments, which you asked in the E-commerce and Platform segments. So I can confirm that.

If I may, just one quick follow-up. So when you say that you need 1 year of preparation to move to D+3 from, let's say, Jan '28, I mean, we're very close already to, let's say, Jan '27. So if you need the approval and then a year of preparation, are we confident that we can implement D+3 by Jan '28 or there are risk of further delays?

From our side, we are fully prepared to implement this change. So -- well, as you have also successfully seen with our implementation of D+2, where we -- which we fully implemented both in E-commerce and in mail, together with the fact that also there, we are already meeting the statutory quality levels almost straight from the start.

So that's, I think, a very impressive result. And with that same discipline and change management capability, which we have built, we are confident to have that ready in a year time.

We will take our next question -- and the question comes from Marc Zwartsenburg from ING.

Coming back to the impact from the delay in D+3. Can you perhaps give a bit of a qualitative indication what the impact is on 2027? Because I think at the Capital Market Day, you gave this range what the savings will be from D+3.

I guess half of that or something like that is then no longer coming in 2027, but maybe you can give us a bit of a number on that. And maybe linked to that, you also mentioned that the management contract in the USO that you still granted the volumes, well, the main part of the volumes, but also part of the volume, maybe not. Does that have an extra negative impact on the picture that we had from the Capital Markets Day? Will that mean that you have less volumes and therefore, need to cut more cost or you will have less EBIT from that change? Should we take them one by one? Otherwise, it gets a bit complicated.

Yes, I'll take these 2 and then for you to raise follow-up questions that maybe land at Linde’s desk or at mine again, let's see. Let's be clear. The Capital Markets Day breakthrough financials did not assume implementation of D+3 in 2027, to be clear. So it did assume from the get-go implementation of D+3 in 2028.

But that's not to say that without the obligation, the 2027 network wouldn't look differently. So there's 2 different things. What have we assumed in terms of capital market guidance? And what is your net cost methodology saying about the cost of the obligation that we have. So there's 2 distinct things. So this delay of implementation of D+3, not from July 27 towards January 2028 does not impact our breakthrough financials at all.

That's one. I think on the government contract, we did assume that, that tender is going to have various lots, and we did not assume that we would win all of them. So this win in terms of volumes is exactly as we anticipated it would be against conditions that are definitely not worse than what we assumed. So also, this is not a negative development in comparison to your Capital Markets Day financial assumptions.

Okay. That's very clear. Then on the yield per parcel that improved from plus 5, if I'm correct, for Q2 to plus 6% in Q3. But at the same time, you see that the international parcel decline doubled. So I would say there is a positive mix effect from those flows falling out. But then if I would adjust for that, maybe there's no underlying yield improvement anymore. Can you maybe give a bit more color on what -- how I should look at that?

The element that you're missing there, Marc, is that the letterbox parcels are also transferred from mail to parcels, bringing a negative mix effect. So the underlying development of the price per parcel is still very much positive and improving quarter after quarter. And that's why we're confident that we're strategically commercially on the right path from that volume to value strategy.

Okay. So the plus 6% is including letterbox parcels. That's Yes, that would explain it. Then -- the domestic parcel volumes, they improved from a minus 3% to around flattish, correct what I'm saying? And you said that an improving trend is continuing. Did you see then a better exit rate in September? And do you see that going on also in Q4? Because you sound quite confident on that part of the volumes also going into Q4. Can you maybe give a bit more.

Yes. Yes, we can confirm that.

Exit rate in September can you give an indication where we should work from summer months?

I can't give exact numbers, but I can't give the exact numbers, but we see that positive trend, and that's what we can confirm.

Okay. And then maybe on the Asian volumes, on the back of the new regulation, they accelerated downwards. Maybe there's more to come in terms of regulation. What are your expectations there going forward? Should we assume a further deterioration of that trend of minus 32%? Or what are the expectations there?

Yes. Well, of course, that's difficult to assess. We wish we would have a glass ball that would make our lives much easier, as you can imagine. But yes, we will see the new 1 November handling fee still to come.

So I would say it's fair to assume that the Asian volume development will be lower than previous year in Q4. However, the exact pattern -- we also don't know. What we see in reality with what is happening at those Asian platforms is that they are all trying to adapt their business models to this new reality. And you actually see that in different flavors. You see platforms on the one hand, trying to, let's say, swallow those fees on a larger basket size that they try to bundle that more. You also see platforms shifting their focus to the a bit more higher-end products and moving away from the, let's say, real cheap products as those fees have a relatively high proportion on those cheap products.

And we also see platforms fully, I would say, reshaping their business models by rethinking or reassessing their commercial propositions and logistic processes towards really moving from B2C to B2B with warehouses in Europe. So you really see different ways of adapting to those fees, which are being levied to them. And that, of course, takes time. So it's not that it's solved tomorrow.

But obviously, we are very closely monitoring these developments and also see that as an opportunity given the strength we have on our end with all these different models and where we can support them in those transitions. And that is what we -- so we expect it to recover, but the timing thereof is uncertain, but we are there to take on the business as soon as they have reinvented themselves, so to say.

And then maybe the last one on the free cash flow. Guidance now at around 0 at the high end of the range. So very good, Linde. But and it's mainly by net working capital.

That's correct.

Understood. Is that just a structural thing that you improved your collection or that you -- or is there a little bit of one-off in there that is a bit of a phasing from Q4 to Q1? Can you maybe give a bit of color there so we have a bit of a feel where we should start from for 2027?

Yes, sure. No, this is really structural cash flow improvement. So really by our real active management on working capital and as such, no incidentals or something like that.

[Operator Instructions] We will take our next question. The question comes from Henk Slotboom from The IDEA.

First of all, on Slide 7. I'm a bit confused with the price increase, the average price per parcel is up 7% -- that's what the header says. If I look at the price movement in the flow chart underneath it, it's EUR 80 million, of which EUR 5 million is a fuel surcharge. I guess if I take that out, then if I put it into perspective of the EUR 466 million last year, then it's around 3%. So I seem to be missing something here, and there's a disconnect in my view, with the picture underneath it.

Then connected to it, you were referring to the mix effect, Linde, I understand that. If I were to do a very simple calculation, then last year's average revenue per parcel was EUR 4.24 -- if I were to add 7% and make a calculation what the average revenue per parcel is for the letterbox parcels, I arrived at a figure of around EUR 1.80 to EUR 1.90. These are to-door parcels. It's not that they are delivered in APMs or whatever. Is my calculation correct? Or again, what am I missing here? And at the same time, and it's also with reference to the mix effect. If my calculations are correct, you lost around 7 million international parcels instead you get 8 million letterbox parcels.

How can the mix effect be so negative because the international parcels decline that should have had a positive effect. And net-net, there's a EUR 13 million negative effect and mainly because of the transfer of letterbox parcels. So it's a long first question, but maybe you can shed some light on it.

Yes. And a lot of numbers, just kidding. Now let me start with your last point on the mix effect. So looking at the mix effect, there are different elements to that.

As we have mentioned indeed at the beginning of the year as well, the mix effect -- the key mix effect, which you see is the mix effect coming from those letterbox parcels. Those letterbox parcels obviously have a lower yield as such, relatively negative to that extent. We also have like we have seen in the trends in the previous quarters/years, I would say, continued effect from, I would call it, larger customers with lower-priced shipments. So it is -- there are also other negative mix effects, but the primary one is coming from the letterbox parcels, which is partly offset though still a couple of million coming from the fact that international -- that the Asian volumes are lower and therefore, give helping with a positive mix effect.

So the mix effect -- the positive mix effect, which you see is not then taking into account those letterbox parcels. So it's a combination of the 2. And then on your -- and then your question on the price. Well, maybe it's good to check your calculations what we see from an average price per parcel, the increase which we see.

It is a combination of the price increases which we see, the tariff increases, including, as you say, the fuel charges and that being on the other side, the effect of the offset by the mix effect, as you see on the slide. So not sure how your exact calculations are happening on your side, but maybe good to take it separately.

Well, perhaps it's good to take that after. But I separate mix effect from price effect because that's what you do as well. But let's say...

Mix effects, let's say, the different streams have different price points per stream. So we separate price and tariff increases with mix effects. And you have mix effects within domestic, you have mix effects within international and you have mix effects between the streams, between domestic and international.

So if we talk mix effects, it's a mix effect within domestic that is predominantly driven by the letterbox transfer to parcels. If we talk mix within international, it's the composition of the type of customers that we serve that could have mix effects and mix between the streams is the relative split between volume being domestic or international.

If you look at those 3 elements, then the price -- tariff increases is significantly up compared to your last year's average price per item. Then the mix within domestic is negative, as Linde said, because of the transfer of letterbox parcels and the mix between the streams is slightly positive. Those 3 together get you the increase in average price per item.

Okay. Well, I'll do my calculations again. And well, if necessary, I'll reach out to Inge. The next question I have is a lot has been said about D+3. There's also this EUR 75 million savings program.

Since -- well, given the fact that we are right now in terms of postal regulation and that sort of things, the uncertainty you're facing and the probability that we transfer to D+3, well, the program, will be delayed. Does that in any way affect the timing of the EUR 75 million additional cost savings you referred to in the first half year results presentation?

Thanks, Henk. Well, it's good to make -- to be clear that the EUR 75 million, which we announced additional savings, which we announced in half year relates to our cost price per parcel plan on E-commerce. So it is really aimed at the E-commerce side and also the savings are predominantly within E-commerce and also related head office areas like procurement, IT, et cetera. So that is not interfering or in that sense, connected as such to the D+3 mail area.

Okay. Perfect. That's clear. And then the final question, Linde, you said that the changing behavior of the Asian web shops might be an opportunity. But I see several things happening on the side of the Chinese, for example, local warehousing, local fulfillment, but we also see the rise of parties like GOFO. And what I understood is that GOFO Amsterdam is doing already around 100,000 parcels per day.

The Chinese are not known for being, well, generous payers if we talk about tariffs and that sort of things. Do you really think that the change in the business model of the Chinese online platforms will, at the end of the day, bring better tariffs on the last mile? -- or that we are going to see the GOFO, the JoyExpress type of players being more prominently active on the European markets?

Yes. Well, maybe on the -- of course, those market entrants are not new to us. I mean we have seen them already earlier in the year as well. What is key for us is that, of course, that connection between the customs regulation development and those players are, of course, reinforcing or helping each other or not helping each other because, of course, they get more and more cost focus on that.

On the other side, also don't underestimate our area of -- that we are also, let's say, relooking or redefining our -- for instance, our out-of-home strategy in combination with our volume-to-value change to ensure that we -- well, if they go further down, well, that's not necessarily our trajectory, and we focus on our strength and really go for the areas where we can continue our volume-to-value strategy, which is obviously also in that area of, for instance, our out-of-home proposition where later today, we will give more color on how that proposition will look like. So yes, we are monitoring that closely, and we are holding to our volume-to-value strategy.

There seems to be no further questions. I will hand back to Inge Laudy for closing remarks.

Thank you all for participating in this Q3 analyst call and a short reminder for out-of-home deep dive that will start at half past 2. You can register for the audio webcast on the PostNL website at the Investors section. A Q&A session there is available via the chat functionality. I hope to see you all back later today. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, ladies and gentlemen. Welcome to the PostNL Half Year 2026 Results Call. [Operator Instructions]

Now I would like to hand over the conference call to Ms. Inge Laudy, Manager, Investor Relations. Please go ahead, madam.

Thank you, operator, and welcome to you all. We have published our results over the first half of '26 this morning. With me in the room are Pim Berendsen, our CEO; and Linde Jansen, our CFO. I will guide you through a short presentation to explain the results, and we'll then take your questions.

Thank you, Inge, and good morning to all of you. Thanks for joining this half year results update. I'll start with talking you through some key takeaways and then some strategy slides, and Linda will then take over to go in more depth towards the financial performance. So on Slide 5, the highlights, resilient performance in challenging markets, revenue numbers of EUR 1.6 billion, closely and almost in line with last year, slightly improved normalized EBIT, significantly improved free cash flow. And what is important strategically is that we see the volume to value strategy gaining traction and that, for instance, also can be seen in the average price per parcel that is up with 5%.

We consistently see higher growth in European e-commerce activities and obviously declining volumes from Asian web shops predominantly also influenced by the introduction of the custom duties as per January -- July 1 of this year. Crucial step has been the successful implementation of the shift of standard mail to standard mail delivery within 2 days. We obviously prepared for that change for the last 6 to 9 months, a huge effort for all the people involved both in the Mail segment as well in the e-commerce segment, and that implementation has gone very well indeed. So we have confirmed our 2026 outlook. And basically, there's 2 additions to the strategy or attention points that are noteworthy.

We have launched an initiative that will bring us EUR 75 million of additional cost savings, mainly in e-commerce as an answer to the slightly unfavorable market circumstances in the e-commerce domain. And those savings are aimed to reduce the cost price per parcel, which allows us a bit more room on the commercial side of things to optimize the volume to value strategy in the e-commerce segment. And the second point is that we have completely redefined our out-of-home strategy to strengthen the long-term competitive position on the out-of-home domain as well.

On the nonfinancial KPIs, good progress has been made on the share of emission-free last-mile delivery from 32% to 39%. We've maintained our average #1 position in relevant markets in terms of NPS and an improvement of absenteeism that still needs to come down a bit more, but at least it's trending in the right direction. So all in all, a resilient performance in challenging markets. If we then move to Slide 6, 7 or 6 or 8, I should say, just to summarize the key elements of the strategy before we dive into those segments. As you know, we've presented this strategy in September in our Capital Markets Day. At the very top, you find our purpose, connected to deliver all forward. And that is basically what holds everything together.

Just below our strategic intent, we grow our business, create sustainable value, lead through innovation and make impact that matters. And that is basically the lens through which we make our choices. Then one step down, we translate this into ambitions for our 3 business segments. For e-commerce, it's about shifting from value -- volume to value through a differentiated approach and smarter network utilization. For platforms, it's all about capturing international growth asset-light models for mail, it's really transforming towards a future-proof mail service.

We make those transitions by strategic portfolio priorities through which we manage the transition that we're looking for and that leads to 4 concrete objectives on financial KPIs, NPS, carbon efficiency and employee engagement. So that's basically the North Star that guides all our decisions.

If we then go to e-commerce on Slide 8, we clearly have been executing on the volume strategy in intensifying external challenge surroundings. Geopolitical uncertainty has impacted consumer spending, bringing down confidence of consumers down that has also ended up with market growth below our earlier expectations. Furthermore, we see intensifying competition from new market entrants that quite often are tied or somehow related to the Asian platforms. And of course, there's a shift in market dynamics followed by the introduction of the import duty and handling fees for July 1 and still a bit to come by November 1.

At the same time, in terms of execution on our strategy, we're happy with the progress we're making, much more sharper customer segmentation, more differentiated propositions and better and more disciplined volume steering have led to better utilization of networks and margin improvements there. So those yield measures are gaining traction. momentum protects profitability even though we look at lower volumes than last year and also slightly lower than we anticipated in the beginning of the year, but we managed to compensate that by the measures we just discussed. Important from a competitive position is that we keep our high NPS scores as being the #1 for both receiving and sending e-commerce clients. And as said, we have introduced a program that will lead to EUR 75 million of additional cost savings for '27 and '28.

So on Slide 9, we follow up with clear progress monetizing capacity by optimizing customer mix and product mix. Contract renewals have been secured that bring a better balance between volume and margin development. Important negotiations predominantly also in relation to Asian operations have been concluded in the second quarter. And I think you can see in the half year results that kind of capacity management and more operational steering also on best day and network utilization have improved operational efficiency.

The expected cost savings for '26 are according to plan. We aim to get EUR 40 million to EUR 50 million halfway through the year '24. And of course, we want to maintain to be distinctive where it matters. And that's also why we offer smart delivery suggestions in checkout and focus on best day delivery as well. Then on TEN, it's in more detail the kind of the protective measures that strengthen our competitive position going forward, and that will be there to support the path towards our breakthrough 2028 ambitions in a market which is significantly challenging and competitive positions are intensifying. That's why we've launched the cost savings program.

And I think the prerequisites to be able to do so now, we've worked on over the last year or so, and that will allow us now to further simplify the e-commerce organization to even focus more in operational processes to take out costs. A few examples maybe artificial intelligence technology allows us now even a better fill rate of raw cages that, of course, limits the transport capacity that you need, better planning and collection also takes out routes. Those are examples of areas where we can take cost out next to procurement initiatives around big spend categories like IT will contribute to the EUR 75 million of savings, which will bring the total cost savings to EUR 170 million to EUR 180 million for this period.

And of course, in that market space where it is quite challenging, being able to reduce the cost price per parcel is important and creates a bit more flexibility in that market to make the right choices in terms of volume versus value. That's obviously helped by a reduction in the cost price per parcel. And that's why we've launched this additional EUR 75 million of cost savings initiatives. On the other hand, we have fundamentally revisited and redefined our out-of-home strategy. It is increasingly an important differentiator in the e-commerce space.

And we really have changed it completely by taking a different view on the role of out-of-home, having a different proposition in terms of how the network setup should be, how UX/CX needs to be and also will require a step-up in the number of parcel lockers to 7,500 by 2031. So it's really an integrated platform that seamlessly combines merchant checkout, digital customer journeys and high-density network to accelerate the out-of-home adoption against cost price points that are attractive and will push some of the volumes towards the out-of-home network more quickly than with the current proposition.

I think what we've communicated also in the press release is that given the magnitude of messages, we'll have a deep dive on this new strategy around October time to give a bit more insight as to what we're aiming for and how the proposition has been developed going forward. If we then move to platforms, as I said, platforms is all about capturing the international growth through asset-light models. We invest, as you know, in 2026 in improving and expanding the workforce that will allow us in different countries to attract more clients. We have been investing in the IT landscape. The ease of use for asset-light platforms is, of course, crucial, and that gives us competitive edge as well.

We've been expanding the network and predominantly the line haul network, and we've seen double-digit growth of e-commerce volumes in Mainland Europe in the first half year. And of course, we're strengthening our position in Asia beyond our position in China. to further derisk the business and unlock new markets there. That is what we're strategically aiming for. If you talk about progress in 2026, as said, intensifying external challenges, of course, we have seen a shift in market dynamics as Asian web shops redefine their commercial proposition and processes following the introduction of the import duty, and we see them behaving quite differently.

If you compare them that has already in anticipation of July 1 that has impacted volume flows and is continuing to do so quickly after July 1, and we're adjusting the propositions towards that. Of course, we're investing like in other areas in the elements we just discussed to expand our e-commerce base in Europe. And the performance includes those start-up costs as well as start-up costs in fulfillment activities that we also guided in the beginning of the year will be a negative impact for 2026. Then let's move to mail. Although as I just said in the beginning, we're very positive about the implementation to the D+ 2 network. It should be clear for all that urgent political decision is still necessary because the transition to D+2 is by far not enough to get to a sustainable, affordable mail delivery in the Netherlands that is also economically viable, and it would take significantly more than this step to get there.

And that's why we continue to push for the necessary changes in law to be able to move to a within 3-day delivery network later. We're still continuing discussions and legal proceedings around net costs. As you know, the transition up to the point that we have a real full functioning D+3 delivery model are quite substantial, and we believe it's unfair that the company needs to pay for those transitional costs because they really relate to the obligation that is put forth to us in terms of the universal service. So we have the '25 and '26 submissions already done, and we are currently preparing the application for net cost contribution over 2027.

And without quick and decisive action in the political domain, it stays a very, very uncertain period for our employees, our consumers that uses Mail and customers alike. And so it's really crucial that as quickly as possible after recess, discussions in parliament will continue to get to a decision that gets us to an economically viable universal service. On Slide 14, it's the summary of the successful transition to B+ delivery as of July 12 and the implication for the segment performance that we also guided for in the beginning of the year. It's really been a major transformation both in terms of network redesign in the side, but of course, also at the same moment in time, the letter box parcels for D+1 delivery moved from mail to the e-commerce network.

We've introduced a new tariff model to accommodate those changes for our delivery partners. And so far, we are happy with the implementation on both sides. you talk about the cost savings that are in the middle. And in the beginning of the year, we said, of course, there will be cost savings for half year. On the mail side, there will be also additional costs in relation to the implement, but also more importantly, additional costs related to the transfer of the letter box parcels through the e-commerce network.

So the impact in the year of this change will be around EUR 12 million negative for [indiscernible] prerequisite to be able to move to a change later on. On the e-commerce side, full year, we expect EUR 50 million to EUR 60 million extra items, EUR 30 million basically around EUR 30 million for half year. And also within the e-commerce segment, it will be negative -- on that note, it's more detail on the financial performance in total and Linda handle.

Let's move to Slide 16. Let me start with this slide showing an overview of the key reported figures per segment. For Q2, it shows revenue for we also show normalized EBIT. Just to note in the remainder of the presentation, I will focus on the developments on the first half year. For total PostNL, so for the group as a whole, we saw, as Tim just mentioned, stable revenues and a resilient normalized EBIT in challenging markets. But let's have a look at how that looks like per segment, starting with e-commerce on the next slide.

Overall, starting with revenue, we see in e-commerce good progress on our targeted yield measures. This is demonstrated by 5% increase in the average price per parcel despite the challenging external environment, which Tim also just referred to. The revenue amounted to 937 million compared to EUR 961 million last year, a decrease of 2.4% with volumes declining by 6.4%. If you only take the volume-related revenue, the decline was only minus 1.8%. Let's dive a bit deeper into the drivers for this, starting with domestic.

Domestic volumes declined by 4.2% due to weaker market growth, weaker than expected and a limited market share loss, which was in line with our expects following our strategy. Good to see, of course, that the decline in the second quarter was less than in the first quarter. If you then look at our international volumes, those declined by 15%, mainly coming from our Asian web shops. This reflects weaker market conditions our volume to value strategy as well and the new low-cost entrants being mentioned earlier. And very important, we also see first impact especially of the large Asian players to prepare for the introduction of the import duty on the 1st of July.

The volume decline overall was partly offset by a positive price/mix impact of EUR 36 million. I mean, that follows our further progress on our strategic yield measures, so that sticky price increase. The EUR 36 million includes EUR 5 million from fuel surcharges. These kicked in, in the second quarter and we are able to pass through the higher fuel prices, although with a small time left. The yield measures developed in line with plan and were supported by a very limited unfavorable shift in mix. As said, overall, the average price per parcel increased by 5% compared to half year 2025. In the last column, you see the step down in the bucket other, and that is predominantly explained by the sale of PS NO distribution in Q2 last year.

Let's move on to the normalized EBIT bridge for e-commerce on Slide 18. This shows the reconciliation from EUR 15 million in half year 2025 to EUR 12 million in current half year. As just explained on the revenue slide, the decline in volumes driven by weaker market growth, the impact of our volume to value strategy and first effects from the introduction of import duty and handling fees. and a positive price mix effect that was predominantly driven by price increases and including the EUR 5 million fuel charges just mentioned. The organic cost increases amounted to EUR 38 million, including EUR 7 million related to higher fuel costs.

So in the first half year, a EUR 2 million negative gap on fuel exists. But as said before, the surcharges have a time lag, which is a common mechanism in the industry for pass-through of higher fuel prices. Overall, PostNL achieved EUR 24 million in cost saving in the first half year, for example, through a leaner and more efficient operating model in first and middle mile and the shift to out-of-home delivery. These cost savings were partly offset by, for example, higher costs related to sustainability and equipment designed to reduce physical workload. And remember that we expect to overall achieve EUR 40 million to EUR 50 million in cost savings in 2026 for e-commerce.

Let's move on to platforms on Slide 19 with the revenue bridge. And yes, as known, there is some overlap with the e-commerce story I just explained as part of the spring volumes are in our e-commerce network. Overall, revenue was up 1% to EUR 379 million compared to EUR 375 million last half year, with volumes down minus 7.1%. Please note that at constant currencies, the revenue increased by 2.7% instead of 1%. In line with our strategy, European e-commerce volumes continued to grow strongly by 28% in the first half of the year and were offset by declining low-margin traditional mail items, which was predominantly visible in the second quarter due to phasing and the general declining trend in mail. Please note that we already transitioned to become an e-commerce player in the European market with roughly 75% of revenue in Europe currently derived from e-commerce.

Looking at volumes, the split is a bit different. Around 40% of volumes is e-commerce. But in short, so the demand dynamics here are growth in e-commerce and a decline in traditional mail. Looking at the Asian volumes, the Asian volumes, as mentioned earlier, declined and reflect the weaker market conditions. And we see here also the impact from our volume to value strategy and the preparations that were initiated by the Asian web shops for the introduction of the import duty on non-EU parcels for the 1st of July.

Looking at price/mix, we see a very positive delta here. Prices were up in Europe approximately 4%. And obviously, the mix effect is favorable, particularly in Europe, explained by the strong growth in e-commerce volumes versus the declining mail and of course, also the shift in mix between European and Asian volumes play a role. Looking at other revenue that showed a decline and includes My Parcel other services as, for example, fulfillment and some intra-segment eliminations.

Let's move to Slide 20, showing the normalized EBIT bridge for platforms, showing the reconciliation from EUR 3 million in half year 2025 to minus EUR 3 million this half year. And that the root cause, therefore, is mainly related to our strategy to invest in international expansion. The revenue drivers I just explained, so I won't repeat that, but let's look at the cost. The organic costs for platforms increased by EUR 9 million, and that is mainly related to increasing third-party costs for international transport and distribution.

PostNL continues to invest, as mentioned, in the expansion of its intra-European activities, My Parcel and other services. That means more marketing efforts, expansion of staff and investing in IT, as Ping also earlier on referred to. For our fulfillment activities, we have opened a center in Germany this year. So in the bucket other results, you also see the impact of the start-up cost thereof. Good to mention that the overall net FX impact on normalized EBIT was 0.

And then moving to the last and third segment, Mail. Starting with the revenue bridge on Slide 28 -- 21, apologies. Revenue rose by 0.5% to EUR 623 million compared to EUR 620 million last year. This is mainly explained by the combined impact from volume development and tariff increases. The mail volumes were down only 5.3% in the first half year. The main reason for this limited decline are the elections in the first quarter of 2026 of around EUR 90 million items. If you adjust for this election mail, volume decline was 7.9%, evidencing the continuation of the underlying trend of structurally declining mail volumes. The impact from volume decline was more than offset by a positive price/mix effect. Stamp prices were up 6.9% as of the 1st of January of this year and 8.3% as of mid-2025.

In the bucket other, you see an EUR 8 million decline, and that is amongst others, related to international mail. Then moving to the bridge, the normalized EBIT bridge for Mail on Slide 20, 22. The volume decline and price mix effects I just explained. Looking then at the cost, the organic cost increases of EUR 15 million are mainly due to wage increases and other inflationary pressures. And then you see the cost savings of EUR 12 million, of which the majority is related to adjustments in sorting and delivery processes. And we also see that cost for IT, partly related to the transition to D+2, which we just completed and transport costs increased. That's about the segments.

Let's now have a look at the free cash flow. I'm really pleased with the development that we report over the first half year of 2026. We see the free cash flow coming in at EUR 70 million minus, which is a significant improvement compared with last year. The strong improvement reflects our continued focus on proactive working capital management and also partly relates to prior year phasing effects. Thanks to our well-executed cash and balance sheet management, we are on track to deliver full year free cash flow within our outlook range. let's wrap up at Slide 24 and look at our outlook.

We confirm, as said by Pim, we confirm our outlook for the full year 2026 and which was shared with you on the 23rd of February. For normalized EBIT, our outlook is between EUR 40 million and EUR 70 million, and we expect that to translate into a free cash flow of somewhere between 0 and minus EUR 30 million. The outlook is based on an assumed total revenue growth of between 5% and 7%, where it's obviously fair to assume that we will end up closer to the lower end of the range, taking the volume development in the first half of the year into account. As just explained, despite the volume decline, the bottom line result was resilient, where we expect further momentum in operational efficiency going forward.

2, we continue to invest in our strategic focus areas with CapEx expected to be around EUR 125 million while lease payments will be at the same level as in 2025. Expected organic cost increases remain high around EUR 140 million, mainly labor and other inflationary pressures. But price increases are expected to be more than sufficient to mitigate this. Our focus will continue to be on strong cost control and further efficiency improvements, building on our proven efforts to reduce cost. Please note that the outlook 2026 assumes limited impact from changes in treatment of the de minimis threshold in the EU and in the U.S. or in related handling and clear could evolve during the year and could therefore impact performance. In the past half year, we have implemented and working solutions for handling and clearance fees as of 1 July and later on also in November.

Further, the outlook excludes the prolonged geopolitical uncertainty may increase inflation pressure and impact consumer spending. I will now hand back to Linde.

[Operator Instructions] Question comes from the line of Frank Claassen from Banque Degroof.

A question on the e-commerce volumes. If I recall well, you started the year with an assumption of 1% to 3% volume growth, yet we're now at minus 6.4% for the first half. So what is fair to assume for the full year? What is currently reflected in your guidance on volume growth? That is my first question. And a bit related to that on the pricing, the average price per parcel went up 5%. Is it fair to assume that it will go up even further in the second half given the lag in the fuel price surcharges? Any comments on that would be helpful.

Thanks, Frank, for your questions. Regarding your first question on the 1% to 3% e-commerce volume growth, you are correct as the developments in market growth were lower than we anticipated at the beginning of the year. It is fair to assume that the volumes for full year will not meet the 1% to 3% mentioned earlier. At the same time, as you see in our current performance, the drivers underlying price mix, our operational efficiency are gaining traction and are showing also bottom line results, and we expect further momentum there in the second half of the year. And then on your second question on the price per parcel, well, yes, of course, you can also given our seasonal pattern, you can expect with pricing with peak charges, et cetera, that trend will accelerate in the remainder of the year.

And our next question comes from the line of Marco Limite from Barclays Bank.

I got a few. So first question is on your statement that some important contracts have been concluded in Q2. What does that mean for the second half? I think you just mentioned that pricing should further accelerate in the second half. But should we also expect an improvement in volumes on a year-over-year basis versus the first half? I guess that will be the first question. My second question is on the platform business. So in Q2, we have seen a proper slowdown of volumes versus Q1.

Now in the slides, you mentioned there was already some impact from the Din guidance, you don't expect any impact in the second half. So if you can clarify this point, what is the expectation for the volumes in the platform business and why we should expect any impact if -- I mean there are already some data out there showing some slowdown of growth from Asia to Europe.

And the third question is on your business. mentioned before that you're working on submitting a request for the cost of USO '27, but you are still, let's say, fighting for the '25 and -- so at the same time, you received a fine for quality of service a couple of years ago. So the backdrop quite challenging in terms of negotiations. Any color you can give that any progress you've made sort of confidence that...

Okay. Let's go one by one. Yes, I think as part of the volume to value strategy and as you know, not all contracts at the same date, there has been a lot of negotiations concluded within Asian web shops into and throughout Q2. Those contracts have now been secured and we know against which conditions, which rates, which volume we expect to carry for them. will go a long way in continuing the strategy from volume to value.

Of course, overall volume that we get is a function of how they commercially perform themselves. But those contracts in volume. So if they are below a certain threshold, then the price will move up even more than the base volumes that we contracted them on. So I think important keynotisforce our conviction that we're on the right path in terms of volume to value strategy. I think the second question in relation or the follow-up question in relation to, do you expect improvement of volumes in the second part of the year, overall, we do expect an improvement from the minus 6.4% a year based on the answer just gave on the question I'll take question 3 and then I question at the same time, we feel strongly that it cannot be our problem that we need to pay for the transition cost that we pay for that are out there as a function of an obligation that we action the outlook...

Yes. So on your question with the volumes amongst others for platform and Asia, et cetera, we say in our outlook that we assume limited impact. Obviously, that is still the case. So we, of course, face ourselves now, as also mentioned by impact thereof. However, these are the first weeks. Those parties are now also well, trying to organize themselves and make sure how their new logistics model. And well, we assume overall in the long term, no structural impact for the longer term. And therefore, we hold on to our performance. And in addition to that, also good to note, as you also see in our current performance that given our -- this time, volume decline, we are adapting well to that to scale down and adjust our cost accordingly.

Okay. And if I may, just a quick follow-up on this. So you are saying that some of the international clients are adjusting the business model the examples of what has been made so far are we seeing clients building more warehouses or in Europe? And what does that mean for you? So are you...

I think there you need to be very precise. I think [indiscernible] make different choices as how they handle distant market situation. Thus, platforms and basically say we will manage value on a basket size basis and we will own that basket to [indiscernible] the vast majority and then maybe slightly push a bit of the external cost up through the price points of the basket, that one options. So basically [indiscernible that isn't really thinking about a new logistical process because they think they can offset the value of the split between what the consumer will pay and what they will take additional cost on their side.

Others take a different view and want to move to higher value product categories that those and move away from the really, really low and very cheap products where a EUR 3 increase in cost is still material. And you will probably see others that will continue down the road of low-value goods through European warehousing solution. So increasing warehousing capacity in Europe, flying it in or cargo it in bulk, so not at a 2C delivery parcel, but in bulk to circumvent the handling fees and duties and then pick them back from there and distribute it through various carriers towards the final consumer.

So there's different parties taking different the end of the day, yes, it's all about where will the volume go, it will be shifting in competitive landscape between those Asian platforms. There will probably be new entrants taking the lower end of the value chain and there will potentially also be competitive implications for the European web shops where some of the Asian players really intend to move up to higher value products in which they will then subsequently compete with the current existing European platforms in those spaces. there we, of course, follow this closely. It's important that we maintain a good share of wallet in the most important clients that are willing to pay for service. That is what we secured throughout the contracts that I've given you answer on one of your earlier questions. So that's how the market evolves at this point in...

Next question comes from Henk Slotboom from The Idea.

All the degree of disclosure of numbers, which very happy. But I have a couple of questions. First of all, you talk a lot about the business and about the Chinese business. But last week, I listened into the CPT conference call, they said that C suffered because a lot of volume was now flowing to the Belux countries of Madrid, for example, into the Central Eastern Europe [indiscernible] what am I missing in the case because we see a quite clear in the Asian volumes in Spring. Is that pure value over volume? Or is it something else? And what is triggering the European volume so much? Does it have to do with the opening of the fulfillment center in Germany, I believe it's one of the Sanish second question I have is on e-commerce and about domestic volumes in particular.

You've been giving deliberately up some market share by means of the value over volume strategy. And if I look at the average value per parcel, if I look at quite clearly visible that improves your yield. But how far can you go in giving up volume because at the same time, you see doing a lot of work for the Chinese handling for Amazon. We have Express, a new name has 85% nationwide coverage at least that's what they plan traditional players stepping up import has entered the market as well. How do you deal with that?

Is it the cost savings element and reducing the cost per item is, of course, one part of the story, but what can you do to make the volumes grow again? And then the final question I have is on Mail the basically to deal with situation right now develop on that front? Those are my questions.

First question had correct me if not, let's say, answered them. I think there's a couple of elements that I want to single out. I think Spring Europe e-commerce volume is double-digit number that Linde talked about and that is a function of expanding the pan from Italy to Spain, from Spain to Germany by attracting local clients that fill those trade lanes and bring us in a more competitive position, not necessarily always, but there also the fulfillment proposition comes into play and that really not capital intensive fulfillment activities where we also manage warehouses and fulfillment activities for bigger clients that want to ship throughout Europe.

I think there, the growth is as we would like it to be is a function of the growth plan that we launched in September and is going according to plan. The overall spring volumes are depressed by the development in quarter by phasing on the European international mail volumes that don't contribute that much. So in terms of revenue, not that significant, but in terms of volume that makes a very good 8% e-commerce volume growth diluted.

On the Asian side, I don't see more volume coming to Amsterdam or what we do see is that our clearance solution is working working from the get-go, which is, of course, important because that clarifies towards consumers under which conditions they can still buy from other parties and we're able to administer and also fulfill the custom duties in the chain. And I think there, of course, we already saw based on examples that we've had in Romania and Italy that goods in transit has been a big issue. In other words, how do we exactly know that a product that is bought just before July doesn't get any duty if it accesses the country on July 1 or July 2.

So that basically has led a lot of the parties to 3, 4 weeks in advance, stop marketing campaigns, not push more products towards Europe to avoid goods in transit being treated in a different way. And that has impacted Q2 numbers. We've, of course, seen the drops in volume. We also now see the Asian web shops adjusting their business model, adjusting their pricing strategies, reentering the marketing arena to do the marketing campaigns again and that's why we said that we don't expect a longer-term structural impact that is going to be material in terms of EBIT contribution from those changes. That could, in the meantime, still lead to very volatile volume developments.

We quite often have share of wallet arrangements with those parties. So although there are new entrants, they sometimes forced by our volume-to-value strategy, have kicked out other carriers. And now our share is just a function basically on how successful they are to adjust their commercial models after the July 1 implementation. I think that is the answer on the first set of questions. If you then go to the e-commerce domestic volume, yes, it is a delicate balance between volume development, yield and market share. I think the market share loss is within the boundaries of what we find acceptable.

Domestic volume development has obviously also impacted by lower consumer spending. So I think the flywheel of yield improvement could have worked even better with a bit more consumer spending as we also anticipated in the beginning of the year. But to -- well, to alleviate or to compensate or to derisk on this dilemma or these commercial game plans, it's obviously helpful to reduce your cost price per parcel. And that's why we introduced the 75 additional costs. Another point in competitive landscape is our redefined out-of-home strategy will also be significantly better equipped to compete with some of the other players you mentioned. That also strengthens our competitive position and over time, will also strengthen the domestic volume development. So far, not unsatisfied with the domestic performance, but a close monitoring of market share development and yield and volume increases remains crucial, and that's what we do on a daily basis.

And that's also why it's important to look at the answers that Linda gave that we have been able to adjust the network and create efficiencies in the network utilization so that yield isn't suffering that much with lower volume than anticipated. third point, yes, this is sensitive. I don't think that ACM got it right. They said something about the permit on 2018 basis. So it's up to ACM to do their research. Of course, we feel that there is no need at all to amend anything. We've adhered to the conditions of the permit. The permit was there at the day that we acquired and was there when we integrated the business but let's say I don't have clarity right now as to where AM is in their research or their investigation. So I cannot tell you more about it right now.

And our next question comes from the line of Marc Zwartsenburg from ING.

Cost savings in the driver of the...

Thanks Mark. Well, as mentioned, so it is mainly within ecommerce, but also in the related support function, so HR, finance, IT. And, well, we refer to the phasing for the total whole year, so 2027 and 2028. And I would say you can calculate with approximately 50-50 over this both years.

And our final question comes from the line of Marco Limite from Barclays.

I could just go one again on the business model of the platform business because you were mentioning before noncapital-intensive fulfillment activities. You are making the example of Italian volumes into Spain, Germany and so on. So can you just explain to us really what is the activity here? And what -- I mean how you are offering noncapital-intensive fulfillment center activities? And is this the business model doing more of that in the next year?

It is really what it is. So if there's clients that say we're happy with the logistical solution, but can you also help me out with fulfillment activities, we, in conjunction with that client, think about the best way to do so. So quite often, it's, for instance, a lease obligation the client takes and we just operate the location. Sometimes it's us taking the leasehold back-to-back commitments from the client to compensate for that. But given the type of business we're in, given the type of clients the country support, it's not highly a fulfillment activities. It's for the efficiency improvements there and that's why it is less capital intensive than other segments...

Got it. And is the plan to, let's say, build up a fulfillment business, which is related to...

In relation to our European growth business and only in relation to the type of customers that Spring serve that will not lead to big investments in fulfillment centers. So it's an organically developing model only to the extent that it helps us creating more density in the pan-European trade lanes to make even more...

Maybe ask one. When we think about the new 75 million cost savings, should we think about those cost savings as an offset to maybe lower volume decline or a way to protect your margins? Or this is actually in your business plan offers further upside to where you think you are?

As I said, it's really derisking created room to maneuver in slightly more competitive market circumstances. So don't add this just to the ambitions of 2028. It will derisk the plan. If that comes with slightly better volume development, then performance will accelerate beyond the ambition, but let's get first to ambition that all we set for 2028 and this [indiscernible] for the combination of the factors that she has had, so [indiscernible] derisking slightly lower volume development being more precise at to which price points or value points penetrates if you want to entertain, it helps maintain the market share at the level we think to maintain for and it actually derisks the commercial elements of e-commerce plan and gives us more confidence so that we can get through them, through the 2028 objectives.

Okay. And when you say that [indiscernible] EUR 170 to EUR 180 million, you're being this cost to the sort of [indiscernible] I mean, the cost on this group cost savings, so specifically e-commerce or...

It's mainly e-commerce because we do this to derisk for the comp e-commerce. But as Linda said, it also involves some functions that are also working on behalf of e-commerce. So it aims to impact the e-commerce phase.

There are no further questions at this time. So I'll hand the call back to Inge for closing remarks.

Thank you all for joining today. If you have any questions, you know how to reach us. Thank you and speak to you in October.

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please

Good morning, ladies and gentlemen. Welcome to the PostNL trading update Q1 2026 results. [Operator Instructions] Now I would like to hand over the conference call to Ms. Inge Laudy, Manager, Investor Relations. Please go ahead, madam.

Thank you, operator, and to you all. We have published our Q1 '26 trading update this morning. It is the first time that we chat to you in this format and we will explain the highlights of Q1 in this analyst call.

With me in the room is Linde Jansen, our CFO. She will guide you through a short presentation, and we'll then take your questions. Please go ahead, Linde.

Thank you, Inge. Well, let's start this first trading update by giving you a short and factual overview on the first quarter. I will then give more color on relevant developments in a minute.

Revenue came in at EUR 781 million, which is about flat compared to previous quarter last year. Although we will not quantify normalized EBIT and free cash flows in the quarters that we provide a trading update, I can mention that these metrics developed in line with expectations and followed the usual seasonal pattern.

With that, we confirm the outlook for 2026 as we have shared with you on 23rd of February 2026 when presenting our full year 2025 results. I would also like to mention here that for Mail, as of mid-July, we will shift towards a standard delivery framework within 2 business days. a major operational shift that requires careful preparations.

We are on track to go live on 12th of July. Obviously, there is more to tell on the path to a future proof postal surface, which I will do a bit later.

To summarize the first quarter of 2026 for PostNL, I would phrase it as disciplined execution of our new strategy while navigating growing geopolitical uncertainty. The current tension and uncertainty in the Middle East weighs on consumer confidence, domestic consumption and fuel costs.

With regard to fuel, it's good to mention that the direct financial impact of increasing fuel prices is mitigated by fuel surcharges as is usual in the transport sector. Though the current geopolitical situation is certainly an explanation for weaker growth of the e-commerce market, that entails sharper customer segmentation, differentiated propositions and disciplined volume steering.

We see that our targeted measures gained traction and are expected to build further momentum during 2026. [Audio Gap] with temporary pressure on volumes, an effect that will fade out over time and is taken into account in our projections.

At platforms, the strategic aim is to accelerate international growth via our asset-light models, Spring and MyParcel, with European e-commerce driving volume and revenue growth. For our Asian e-commerce activities, we apply the value-focused approach, as just explained.

As you know, an important pillar of our strategy is our commitment to securing a sustainable postal service. We are currently preparing for a major operational transition and are on track to switch to a standard framework for all mail, including USO mail of delivery within 2 business days as of mid-July, an important but intermediate step towards a future-proof postal service.

To reach a long-term viable postal service, there are more conditions that have to be met. First, an extension of the delivery framework to within 3 business days is necessary to allow for further cost savings potential. Furthermore, clear and timely political decisions to amend the Postal Act are crucial to avoid further delays.

But also compensation for net USO costs in traditional years is needed. In this quarter, legal proceedings regarding compensation for the net USO costs and withdrawal of current designation were formally initiated, and last but not least, a timely completion of tender process for government mail under appropriate conditions is really key for the longer-term perspective of the postal market.

Then we move to our key reported figure for the first quarter of 2026 summarized in the table you see on this slide, with volume and revenue shown per segment. It follows the new segments as presented to you at our Capital Markets Day last September.

In the back slides of this presentation, you will find a reconciliation to help you. Again, this is a high-level summary. And on the next slide, I will guide you to more details at segment level.

Bottom line, revenue for the group in the first quarter of this year amounted to EUR 781 million, which is in line with last year.

Let's move to the segments and starting with e-commerce. Overall, we see good progress of the targeted yield measures demonstrated by 4.1% increase in the average price per parcel, however, in a more challenging external environment. Revenue amounted to EUR 451 million compared to last year EUR 473 million, down 4.5% with volumes declining minus 7.1%.

If you would look only at the volume-related revenue, the 7.1% volume decline resulted in 3.3% decline in revenue instead of the 4.5% I just mentioned. Let's dive a bit deeper into the key drivers.

Domestic volumes were down 5.5% primarily reflecting weaker market growth related to lower consumer spending compared with last year. Market share was slightly down and developed as expected following targeted yield measures.

International volumes, mainly from Asian web shops were down 13.2%, reflecting the weaker market growth and temporary pressure related to the deliberate contract negotiations under PostNL's volume-to-value strategy. The volume decline was partly offset by a positive price/mix impact of EUR 14 million, predominantly driven by price, evidencing further progress on our targeted yield measures.

The yield measures came in according to plan and were supported by a minor favorable shift in mix. The average price per parcel was up 4.1% compared to Q1 2025. The step down that you see in the bucket other is predominantly explained by the sale of PS Nachtdistributie in Q2 2025, which means that in Q1 2025, it still contained revenue from the former subsidiary.

Let's move to platforms. Revenue was up 2.6% to EUR 185 million, with volumes up 1.2% [Audio Gap] at constant currencies, reflecting underlying business performance, revenue increased 5.9%.

In line with our strategy to expand our intra-European business, European volumes were growing by 9.6%, while volumes from Asia declined double digits, reflecting weaker market growth and temporary pressure related to the deliberate contract negotiations under PostNL's volume-to-value strategy. Also, at platforms, prices increased and were supported by a favorable mix effect.

Other revenues showed a slight decline. And then the third and last segment, Mill. Revenue rose by 2.1% to EUR 316 million versus EUR 309 million in the quarter last year. mainly explained by the impact from volume development and tariff increases. Adjusted for election mail, volume decline was 8%, showing the continuation of the underlying trend of structurally declining mail volumes.

Overall, mail volumes were down 2.8% this quarter, supported by EUR 90.4 million items related to elections. The impact from the volume decline was more than offset by a positive price/mix effect. Stamp prices were up 6.9% as of the 1st of January of this year. and 8.3% as per mid-2025.

I already told a lot about the preparations towards the standard mail delivery framework of D+2 that involves major adjustments in routes and working schedules. The social plan is applicable, and we have established an implementation organization to safeguard a disciplined execution of the change program.

To wrap up, we confirm our outlook for 2026 as on 2023 of February communicated. For normalized EBIT, our outlook is between EUR 40 million and EUR 70 million, and we expect that to translate into a free cash flow of between 0 and minus EUR 30 million. That outlook is based on the assumption of an expected total revenue growth of between 5% and 7%. And in 2026, we continue to invest in our strategic focus areas, with CapEx expected to be around EUR 125 million, while the lease payments will be at the same level as in 2025.

The expected organic cost increases remain high, around EUR 140 million expected, mainly labor related, and other inflationary pressure. But price increases are expected to be more than sufficient to mitigate this. Our focus will continue to be on strong cost control and further efficiency improvements. building on our proven efforts to reduce costs.

The graph on the left side indicates the assumed development of normalized EBIT on a segment level. Please note that the outlook of 2026 assumes limited impact from changes in the treatment of the de minimis thresholds in the EU and the U.S. or in related customs handling and clearance fee structures.

The scope and timing could evolve during the year and could impact performance. We are ready to implement a valid operational solution for customs handling and clearing fees in the course of the year. Furthermore, the outlook excludes the risk that prolonged geopolitical uncertainty may increase inflationary pressure and impact consumer spending.

So to conclude this presentation, 2026 will be the year to reach the inflection point in the execution of our strategy. With an outlook for normalized EBIT of between EUR 40 million and EUR 70 million and free cash flow of between 0 and minus EUR 30 million.

For e-commerce, the focus is on a continued and disciplined path towards sustainable value creation. At platforms, the focus will be at further investments to capture international growth, and at Mail, 2026 will be really a transitional year towards a future-proof postal network with impact for people and processes. As of mid-July, we will shift to a delivery framework of D+2, an important step forward.

Thank you.

Thank you, Linde. So time to open up for Q&A. Right now, operator, can you please explain?

[Operator Instructions] And our first question today comes from the line of Michiel Declercq from KBC Securities.

I understand, of course, that you don't give any numbers more on the EBIT in the trading updates. But I was just wondering, you mentioned that you remain on track with the typical seasonality, of course, in mind. But if you look at the top line updates, both in e-commerce and platform, it looks like you're trending a bit -- well below the guidance for the full year. So minus 7% domestic -- or minus 7% e-commerce volumes versus a guidance of plus 1% to 3% for the full year. At platforms, you are also a bit trading below the top line.

So I'm just trying to understand how the EBIT can be in line, whereas the top line is clearly lagging a bit. And then also I understand, of course, the geopolitical situation might play an impact. Can you give some color on the phasing here, the difference that you've seen between the January and February months versus March and then also exiting in the month of April, to help us understand a bit? So that would be my first question.

And then secondly, also, we have seen in Belgium that there has been a prolonged strike at one of your key competitors there. Should we expect any positive volumes from that in the second quarter at your end? And then maybe because you are also in, let's say, negotiations with the unions following the shift to D+2, how are negotiations going there? And how are the suggested changes being perceived by the unions. Those will be my questions, please.

Yes. Thank you, Michiel. Well, let's start with your first question on the top line development versus our -- versus the statement that normalized EBIT is expected to develop in line with expectations and follows the usual pattern.

Yes, indeed, I can imagine this is a new setup of our trading update and the way we present it. But to comment on your question, it's, of course, to start with our revenue, that's what we see. We see proof coming from our yield measures. And that is what we see in -- also what you see in the performance as reflected in the press release, where you see that our revenue impact is significantly better than the impact on the volumes.

So that is, of course, a driving element. It's not just volumes, what you see in revenues, but also yields and mix, which have an overall impact. And of course, overall, we are very disciplined and continue to be disciplined on our strong and a decent cost savings measures, which are fully on track. And as such, we can confirm that the normalized EBIT development is in line with our expectations and the usual seasonal pattern.

And maybe lastly, of course, you know that the first quarter is overall, in the end, not the biggest contributor to the full year performance. And that all together brings us that we can confirm our normalized EBIT development in line with our expectations.

Then on your second question on the geopolitical implications. Well, we cannot detail out on the exact January, February, March, but of course, what you do see is, if you look at, for instance, the figures and the steps from CBS, you that there is a -- if you look at the domestic consumption of goods, you see in -- for January and February, you see the months over time deteriorating. So that is the implications for the weaker market growth, which we also observed from these external sources.

And of course, yes, we don't have that glass ball for the future, and that's why we also -- we monitor the uncertainty, we monitor what's out there, and we adapt to whatever we can control and make sure that we are prepared to the best we know.

Then your question on Belgium. Well, to start with Belgium, as you know, the strikes only started near the end of March. So of course, only a minor part of this quarter. And secondly, overall, Belgium volumes are rather limited or small part of our total volumes. Of course, we monitor and closely follow the developments. And of course, the strikes over there are helpful to us.

And then regarding your last question. Well, overall, we do not have any discussions on D+2 with the unions or the CLA postal deliverers. We have clearly been in close contact with them with the transition to D+2. We have involved them in all our steps which we have taken very close collaboration with them to take them on board when the first signs of these [Audio Gap] them to be able to make these transitions.

And overall, so the preparations are fully on track and as said, what is very important is that we constantly are in alignment with the unions and also the people itself, the people involved to take them along this transition because, well, you can imagine this is really changing for approximately 50,000 deliverers.

The daily routes, their daily ways to work. So it's very important that we put the right attention and effort, but also financial safety for them with the social plan to have that covered up. So I hope that answered your 4 questions.

The next question comes from the line of Marco Limite from Barclays.

I've got a follow-up question on the parcel volume growth. Clearly, Q1 was a slow start of the year. Now I understand the price/mix was positive, but you still have got a guidance out there of volume growth within 1% to 3%. So are you still committed to that guidance? And if so, does that mean that we should see volume growth stepping up to a larger number in Q2 already?

And then when you mentioned temporary headwinds to volume growth, what kind of visibility do you have that these are temporary and therefore, you will be able to, let's say, gain these volumes back?

And then maybe a final question on your statement that you're waiting for a tender process for government mail. So can you just clarify what this tender process means and the timing of it?

Yes. Thank you, Marco. On your first question on the volume growth assumptions. Well, let me start that looking at our outlook, it's good to make a clear distinction between assumptions and the real outlook. And 1% to 3% volume growth is our assumptions next to a few others.

And I said also in my reply to Michiel, overall, when looking at revenue development, there are many, many drivers to revenue development. And of course, well, as said, we cannot look into the future and determine how market growth will develop.

But overall, we see that what we are -- we see that with the fact that we have such a disciplined execution of our volume to value strategy and that we see the proof points thereof, we are confident in our strategy and also confirm the outlook which we provide. And that's also why we confirm that today in our press release.

If you then look at the -- your second question on the temporary negotiations. Well, of course, these are very careful contract negotiations with several customers. And well, why are we confident that it is or consider it temporary because we are really in the middle of those negotiations.

And we really believe in our strategy as such and also in the way that we deliver and continue to deliver strong NPS, which also for these parties is a very valid element, and as such, given where we are, we believe that we will bring that to the end and that this is part of the game we and they are playing.

Of course, I cannot comment now because we don't have fixed conclusion dates and they all have different start and end dates. But of course, that's relating to those temporary pressures. And as said, the temporary pressure is not just the only one driving the volume decline. As just also mentioned, the market -- the weaker market growth is also -- the general market conditions are also playing here.

And then the last question, let me remind that this was on the tender process. Yes, let me give some color to you on that. So how that normally works. So the tender has been set out. There was already an earlier tender set out by the government, though that tender was canceled eventually or not called official and was as such had to be renewed.

And the current tender is out there to have start for the 1st of July and refereeing to under appropriate conditions is the fact that in the former tender one of the elements which was contradicting in the tender was relating to the surface quality loans.

So in the former tender, you still had the old quality levels or old -- the service levels of 95% while we are now moving officially to service level requirements of 90% when we transition to D+2. So actually, they were not communicating with each other. So if you have a tender for 95%, but our network will be set up for 90%, we cannot help it.

But we expect to have the new tender being finalized in the coming months and then to be ready by the 1st of -- or we aim to have it ready by the 1st of January 2027. And that, of course, depends not just on us, but it's really the government who controls it, and we really urge for that timely completion.

If I may, a quick follow-up question. So on your contract negotiation, especially with international volumes, I mean, correct me if I'm wrong, but you're basically trying to push through higher prices. So I mean, these clients are generally very price sensitive. So let's say, can you give just some color why you think these international volumes or clients will be willing to set higher prices and not, let's say, go with a competitor? I guess, at the moment, if they're not using PostNL as volumes are dropping, they are using someone else. So how do you win them back with higher prices as well?

Well, let me start by saying that yield measures are not just price increases. So yield measures contain also measures in the area of efficiency and equal flow agreements. So it's not just pricing, but it's a combination of pricing and the efficiency elements I just referred to.

And in addition to that, what is important is also the factor of quality. So we are strong in our NPS, and that is also well noted by these type of clients. So it is a combination of those factors, which makes us the move and have the negotiation discussions with them.

Your next question today comes from the line of Marc Zwartsenburg from ING.

A follow-up on the temporariness of the impact of the negotiations. Can you give us a bit of a time line when you think these contracts are renewed or renegotiated because we have 1 quarter, if you say you're halfway, basically means that also Q2 will see the impact and maybe even a bit worse. How should I look at the volume development going into Q2 from this temporary weakness?

Yes. Thanks, Marc, for your question. Yes, on that temporariness of those negotiations. Well, I cannot really give fixed dates or conclusion dates for that as it's, of course, a combination of more clients and they have different dates and also different negotiation paths. So I cannot give you that specific answer as such.

But how can you then guide for your full year on volumes and the outcome of yield plus volume because that's a bit what you tried to say on Marco's question, yes, maybe it's a combination of the both. But how do you then know what the impact will be?

Well, I should say it's a combination of both. And of course, we have -- as I said, it's not just one client or one customer, right? This is at hand. So it's a combination of many. And of course, well, that's the balance of when a few of them are close to finalization and the ones to start. So that mix is obviously what we take into account into our forward-looking statement, and that's what we confirm in our outlook as still applicable.

And if you then look at your volume, your volume decline of minus 7.1%. You also mentioned that consumer spending data as deteriorating in Q1. Well, we now have the full impact from energy prices on probably consumer spending, so things might get worse.

How should I look then to that trend of minus 7%? Was that starting January with a small minus and ending with a double-digit decline now in April? Because you gave this outlook somewhere mid, end Feb. So you basically didn't see a minus 7% already in January to give such an outlook. So can you give me a bit of feel how that works and how you see that trend going into Q2?

Well, so when we provided the outlook in mid Feb, of course, we introduced that one month but also, it is you have several assumptions underlying that. And secondly, with that geopolitical uncertainty, we also don't know how that will develop and that's also why we explicitly refer to that in our outlook and refer to that as a comment to our outlook.

And last but not least, of course, it's not for nothing that we always include the range in our outlook. And that is something which is connecting to that because you cannot -- well, we also don't know precisely how that will -- I wish it was true, we could determine it like that.

But necessarily saying, yes, it was mid of Feb, we saw January and then you draw a conclusion for the rest of the year. Well, that's quite too soon to tell, I would say. So it is not something static as such.

Just looking at actuals over a monthly basis, you have almost 4 months in the back. Could you give us a bit more color on how that trend is -- what the trend is looking like? Is it rather stable? Or is it something starting high and now at almost double-digit decline or any color on that, that gives us a bit more feel on how we should model it?

Yes. Well, of course, for P4 it's not locked. So I cannot comment on that. The only thing I can confirm is the fact that we confirm our outlook and also that we stick to that. So more color on that, I cannot give to you. Sorry.

All right. Basically, if the volumes are a bit behind, then there must be something more positive in your expectations. That is a bit what I'm looking for maybe on the cost side or the yield side or a combination of those, that would be...

Yes, but as I said, so revenues and EBIT development are not just driven by volume. And as I said before also in the comment to Michiel, we are very capable and strong in our disciplined cost management and efficiency measures. As such, that's a combination together with the yield measures which are also part of that performance. So it's not just volume.

Got it. That is something I was looking for. And then lastly, with the Mail going to D+2 negotiation with the unions, is there any social plan, will that have a big impact on the cash flow? Can you give us any feel for that?

Yes. Well, indeed, there is a social plan, but it is limited impact.

And that's already included and anticipated in the outlook...

Yes, of course, yes.

[Operator Instructions] The next question comes from the line of Henk Slotboom from The Idea.

I hope you don't mind me telling you a little bit more on the volume decrease we see in international parcels, both in platforms and in e-commerce. If I look at what happened in the first quarter, then France has already introduced the EUR 2 per parcel or per product line surcharge on parcels that were not coming from the EU.

And the result was that a lot of the traffic was diverted to Liege and to Amsterdam Schiphol Airport. What I'm struggling with is it shows that the Chinese are very much oriented on price. If they can avoid euro, then they bring their stuff elsewhere.

Is that part of the reason why Europe has done so well in the case of Spring? Intra-Europe traffic was up by 9.6%. It has to come from somewhere, but there appears to be a mismatch with the double-digit decline from Asia. So perhaps you can shed some light on it. And then I have some follow-up questions as well. But perhaps let's take this one first, I would suppose.

Yes. Well, regarding your comment on the France situation, yes, of course, we also know that those movements are happening. However, there are more parties and brokers over there. And what we see is that the brokers over there and sure it still ends up again in France. As such, we don't see that movement you are describing as such in the market.

And then on the question of -- or on your note, so how does it -- is it also impacting those, let's say, the France situation specifically the inter-European volumes. I think what is driving the intra-European growth is actually our execution of the strategy.

So we have really been investing a lot in that international expansion and in that intra-European expansion also already last year and also with the required investments in marketing and new line walls, and that is what you see now is that we see traction on that -- those volumes. And that is not necessarily driven by the France situation you are referring to.

Well, in connection with my previous question, you've already said that it's not only about price negotiations that are taking place now with the Asian web shops. It's also about equal flow. If I refer back to the EUR 2 in France, doesn't that show that there's more opportunity for you in creating more equal flow from the Chinese.

I know that in the old situation, you were stuck to certain arrangements and that was not automatically -- that did not automatically mean that you could deliver the Chinese goods on the days that you prefer on the low days, let me put it in those phases. Is there more for you to gain in the equal flow element and in the pricing elements when it comes to Asian volumes?

Yes. Well, maybe specifically on that question with equal flow. That is equal flow really where we still applies to our own network. And here, it is specifically not necessarily only our own network.

And secondly on that, where we can -- where we have an opportunity, let's put it like that, is, of course, we have a lot of experience with customs and all that situation in the way we have built up that knowledge over years. And that's also why with all these changes in handling fees and in de minimis thresholds, for us, it is key to make sure and we are sure that we are ready for the right operational solution to cater for those complex regulations and that we are already there to serve our customers as they are used to from us.

Then 2 further questions, if I may. One is on MyParcel. It says MyParcel and other services, and then I see a revenue figure. How is MyParcel doing? They are about to open a franchise in Italy, I understood. But the underlying trend there in the case of Spring, we see a clear growth. How is MyParcel doing?

Yes. Well, overall, underlying for MyParcel, of course, well, they are progressing well also in their strategy. Of course, they are like what we see in the other e-commerce streams. Also noting, of course, the market developments or at least that is what they are also facing. So that on the MyParcel, yes.

And then my final question, you already referred to the Mail and what is necessary to make Mail mill yes, let's say, healthy again. Any progress in the discussions you have with SGM. SGM announced their intention to do an investigation on the back of complaints they had from the. Has there been any progress in -- can imagine that there's still a lot going on with economic affairs to change things. Are there any developments in that respect? .

No. Well, the ACM announced that investigation and the investigation started, and we are cooperating but no further developments there. It's too soon to tell.

Okay. And with these economic affairs, no news.

No, not on the ACM. What we can confirmed or didn't have any objections or comments on the D+2 and D+3 change. So that was confirmed and published this morning at them. So that is at least now formally done.

Thank you. There are currently no further questions. I will hand the call back for closing remarks.

Thanks for listening in. Thanks for your questions. If you have any more questions, please reach out. And for now, have a nice day.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, ladies and gentlemen. Welcome to the PostNL Q4 Full Year 2025 Results Call. [Operator Instructions] And after presentation, there will be an opportunity to ask questions.

Now I would like to hand over the conference call to Ms. Inge Laudy Manager, investor Relations. Please go ahead, madam.

Thank you, operator, and welcome to you all in today's conference call. We have published our Q4 and Full Year '25 results and the annual report earlier this morning, and we'll explain the set of results to you in this analyst call. With me in the room are Pim Berendsen, our CEO; and Linde Jansen, our CFO. After that presentation, Pim and Linde will take your questions. Pim, over to you.

Thank you, Inge, and good morning to you all. I would like to start with a summary of the new strategy that we've presented to you on our Capital Markets Day last September. That's on Page 5. And at the top, you see our purpose, connected to deliver what drives us all forward. That is what holds everything together. Just below the purpose, you see our strategic intent. We grow our business, create sustainable value, lead through innovation and make impact that matters. Then moving from the cascade one step down again, you see the strategic objectives and ambitions of the 3 business segments.

For E-commerce, it's all about shifting from volume to value through differentiated approach and smarter network utilization. For platforms, capturing international growth with asset-light models and for Mail transforming towards a future-proof postal service. We'll make these changes and those ambitions through 10 strategic priorities, ranging from compliance and workforce to network efficiency and international growth.

And this should all lead to the required outcomes on 4 goals that we've set, being financial KPIs, Net Promoter Score, carbon efficiency and employee engagement. And for 2025, we've reached the objectives for all 4. Then if you look at the key takeaways for 2025, it's all about progress towards our Breakthrough 2028 ambitions that we shared with you in September too. So we're positive to be able to say that our financial and nonfinancial targets are achieved. We've reset the organizational structure and made changes in the teams. We've now reporting segments aligned with the strategy. Of course, we have secured the refinancing required to bring us to 2028, and we see early telltale that the targeted yield measures are contributing to performance and that momentum will further build into 2026.

Furthermore, crucial progress has been made in the political process towards future-proof mail service. Thursday, 2 weeks ago, in Parliament, the changes are approved to get us to a D+2 by mid-2026 and a D+3 delivery for Universal Service by July 2027 at quality levels that we now deem to be feasible. So far, there's no solution for the net cost during the transition period up to the point that we are beyond the D+3 delivery, and that's why we will continue with the legal proceedings on net costs.

Targeted yield measures have more than offset the organic cost increases in 2025. And overall, given performance and leverage based on dividend policy, we're able to propose a dividend per share of EUR 0.04 per share and to be proposed to the AGM in April. If we then zoom into the segments and the fourth quarter, in particular, we've seen at Parcels a very well-executed peak period underpinned by very good NPS scores, both on the consumer and on the sending customer side. Revenues up by 3.2% at flat volume development with a positive price/mix impact. And we see that the propositions that we're looking for in contract renewals are progressing as we've planned. In other words, the differentiating commercial approach is helping us to create a better value over volume, and that's what we obviously seek.

We've said that it will take some time to materialize fully, but we're on the trajectory of the path that we sketched for you when we've communicated our Capital Markets Day objectives. If we then look at Mail in the Netherlands in the fourth quarter, we've seen some exceptional volume in the last part of the year, driven by pension communication as part of the pension transition in the Netherlands and some special safety kit communication from the [indiscernible] and that has led to a very robust December performance that altogether with a very successful Christmas card campaign offset the year-to-date November negative result that at that point was close to EUR 35 million and changed it to a slight positive number of EUR 2 million at full year 2025.

Of course, the underlying trend of volume decline and organic cost increases is continuing. The cost savings, we have achieved what we expected to achieve. Of course, due to adjustments in the business model, the business mail is already moved to within 2 days delivery window, and that helped us save costs. There are no further options for future cost savings within the current regulatory framework, and that's why it's so important that we're now allowed to go to within 2 and later on within 3 days delivery for the universal service against reasonable quality levels later this year. Then I hand over to Linde for now. I'll be back later, and then Linde takes you through the more detailed financial performance of each segment.

Yes. Thank you, Pim. As mentioned already by Pim, the fourth quarter was a good quarter with our revenues up to EUR 973 million and normalized EBIT of EUR 79 million, which is 27% compared to the quarter last year. This means that we have delivered on our full year 2025 outlook for normalized EBIT of EUR 53 million, exactly in line with 2024. Free cash flow came in at minus EUR 25 million, also midpoint of our outlook.

Also, good to mention that normalized comprehensive income for the year was EUR 21 million, a base for the determination of the proposed dividend per share. Our adjusted debt is up to EUR 501 million. Not on this slide, but good to mention that the leverage ratio at year-end was 1.99x, properly financed so we can propose to the AGM the EUR 0.04 dividends per share, as mentioned.

We also delivered on the targets for the key nonfinancial KPIs and made good progress on further reducing on our environmental footprint. The 50% improvement in carbon efficiency and the share of emission-free last mile delivery increased to 33% from 28% in 2024. Looking at NPS, we maintained our average #1 position in relevant markets, an important achievement in a competitive marketplace. And also employee engagement was up compared to last year.

Let's move to the financial details of Parcels in the fourth quarter. Revenue amounted to EUR 691 million, which is 3.2% above last year, following volume development, price increases and mix effects. Overall, volumes were flat with a slow start of the quarter followed by increasing volumes in the peak period. Market share was slightly down as anticipated following our yield measures. With that in mind, it's good to see that the total price/mix impact was positive this quarter.

Of course, this is also visible in the average price per parcel, up by EUR 0.11, supported by targeted yield measures and regular price increases. Price increases have been implemented according to plan and were only slightly offset by negative mix effects. Furthermore, it's also positive that our cross-border activities continued the trend we have been seeing for several quarters with revenues at Spring up this quarter most strongly in our intra-European activities, a promising development as international expansion is one of our strategic initiatives. In this part of our business, we see a less favorable mix.

When looking at costs, it should not be a surprise that in this quarter we saw significant organic cost increases, which is mainly labor related. However, we also see EUR 14 million in cost savings in the fourth quarter, and these were delivered according to plan. To be more specific, these came from ongoing adaptive measures like, for example, rationalization of services because we stopped parcel delivery on Sunday.

Next to that, our flexible operational setup proved our agility and made us achieve additional efficiency improvements in our network, so in depots, supply chain and transport to mitigate the adverse mix effects. In Spring, planned investments to capture intra-European growth put pressure on the margin. This brings us to the Parcels bridge, which shows the reconciliation of the EBIT from EUR 36 million in the fourth quarter last year to EUR 41 million in this year. Asset volumes were flat. So the revenue growth in the volume-related part of this segment is fully attributable to price and mix. To be more precise, EUR 15 million from pricing and yields, offset by only EUR 4 million due to a less favorable product and customer mix.

Organic cost increases amounted to EUR 14 million following wage increases according to PostNL and sector collective labor agreements and indexation for delivery partners. Other costs were EUR 8 million better, mainly as a result of the combination of cost savings and additional efficiency improvements in depots, supply chain and transport, partly offset by higher costs related to investments in reduction of physical workforce and sustainability.

In other results, I want to highlight that this is mainly applicable to Spring, where we see revenue growth being offset by mix effects. Furthermore, we again invested in international expansion, one of our strategic initiatives of the intra-European activities in Spring. We also continue to focus on further growth in Belgium.

Let's move over to the results of our segment, Mail, in the Netherlands. Revenue amounted to EUR 406 million, which is EUR 18 million above last year's quarter. Volume development was almost flat, supported by election mail and other partly nonrecurring non-24-hour mail from, for example, the pension funds and governments, which Pim just mentioned. I would also like to mention the successful campaign for our December stamps and, at the same time, the underlying trend of structural volume decline continues.

Also, part of revenue are price increases, and these were partly offset by an unfavorable shift in mix. Obviously, the share of non-24-hour business within the total of Mail volume increased due to the extra volumes from government and pension funds. And the shift of business mail to D+2 delivery is also part of the explanation.

Looking at costs. Labor costs were up following the CLA for PostNL and the mail deliverers. When looking at illness rates, we see again an improvement compared to previous year. These cost increases were mitigated by cost savings of EUR 10 million according to plan, coming from further adjustments in our current business model such as the transition of business mail towards a standard service framework of delivery within 2 days.

Altogether, this resulted in normalized EBIT of EUR 45 million. The robust December performance more than offset a deeply negative year-to-date November results. Remember that the year-to-date Q3 normalized EBIT was minus EUR 43 million, and the last quarter brought us at the full year result of just EUR 2 million, which equals a margin of 0.2%.

The elements of Mail in the Netherlands I just discussed are reflected in the EBIT bridge on this slide. As said, almost flat volumes, also, of course, reflected in flat volume-dependent costs. Price increase partly offsets the less favorable mix, as just explained. Organic cost increases of EUR 10 million were due to wage increases and other inflationary pressures. And then we have the cost savings of EUR 10 million and a bit lower labor costs related to sick leave. They were more than offset by lower bilateral results, staff-related costs and one-off cost to prepare for the future Mail structure. We will tell a bit more on that in a minute.

Then over to our free cash flow. Free cash flow was EUR 73 million in the fourth quarter, down compared to Q4 2025, while normalized EBIT was up. This is mainly explained by working capital development where, as expected, we see phasing with the previous year. Furthermore, interest paid is up following the changes in our debt structure. Thanks to well-executed cash and balance sheet management, full year free cash flow came in, in line with our outlook.

This altogether winds up the 2025 financials. I now hand back to Pim for our strategic story going forward.

Thank you, Linde. By now, we're on Slide 16. And this slide brings together the strategic objectives of each of our business segments as well as the enablers that support them. So for E-commerce, the ambition is to shift from volume to value through a differentiated approach and smart network utilization; for platforms to capture international growth through asset-light models; and for Mail to transform towards a future-proof postal service.

Around them are enablers that cut across the businesses, for instance, ESG, where we take care of our people, our environment and our society; data and tech to simplify and to accelerate by embracing data and AI; and innovation beyond delivery, where we explore new opportunities by stretching our core businesses. Together, this framework connects our ambitions to the actions that will deliver Breakthrough 2028 results.

If we then look at the E-commerce story, then you all know it's all about moving from volume to value. And we do that through 4 levers on our margin engine. First, we are strengthening our commercial engine. That means a more differentiated customer approach, tiered propositions and moving slightly away from next day only to also best day delivery options to smooth flows and to reduce costs. That doesn't take huge changes, but just gradual moving a bit of the volume towards best day helps to create better network utilization and, through leverage, creates material impact on margin.

Secondly, we aim to be distinctive where it matters most, giving consumers control, improving the critical I receive journeys and deploying digital tools to enhance their experience. And that's also why we're very happy about the fact that Net Promoter Scores on the consumer side have been increased also during the peak period last year.

Thirdly, we stay comparative on cost. Smarter depot operations, better alignment of resources and targeted investments in technology will help us to run the network even more efficiently and will reduce the cost price per item, which strengthens our competitive position as well.

And finally, we do take a step-up in steering and teaming, active revenue capacity management in new departments that we've introduced, supported by a strong organizational foundation, for which we've made changes in the beginning of this year, gives us even better control about customer value, yields and margins. And this is how we build a more balanced, more profitable, more value-enhancing e-commerce business.

If we then look at the actions that we've planned for 2026. It's really about monetizing capacity by optimizing customer and product mix better. Contract renewals that have been agreed bring a better balance between margin and volume already. Focus on cost control, so we plan to take out EUR 40 million to EUR 50 million of costs in the e-commerce space, partially because of the benefit from implementation of our out-of-home strategy, but also lean on more efficient operating model in our first and middle-mile operations.

Further optimization and digitalization, robotics and planning optimization tools helped by AI developments will help realize those savings as part of a program that we've launched to reduce the cost price per item. And as said, that will help to strengthen our competitive position even more. Clearly, to be distinctive where it matters, we just discussed why that's so important.

Then maybe to our assumptions for 2026. We do assume continuous growth of Dutch households consumption of around 2.2% to 2.4%. And with an online penetration of 0.5% increase, we still assume because of our push for value, that we'll continue to lose a little bit of market share. And that's why, at the end of the day, we expect volume growth to be 1% to 3% for 2026.

If we then move over to platforms. And Linde already talked about the investments that we are making there impacting the 2025 results and will continue to impact 2026 results too. There, we invest in the acceleration of international flows, and the asset-light models will allow us to expand routes quickly and capture new customer portfolios without heavy investments. Secondly, we strengthened our Dutch domestic leadership by keeping export flows and international volume in PostNL's network and by improving customer stickiness and to protect our own market.

Thirdly, we build a smarter, leaner network, a shared platform infrastructure, strong partner models, and automation through APIs drive efficiency and scalability in that platform space. In short, these asset models give us the flexibility, the option to scale and to gradually, over time, improve profitability on the back of that revenue growth that we seek.

If we then look at the actions for platforms in 2026, then it's really about empowering that European sales function. We have been investing in expanding that sales function, including the intelligence tools that it needs. We are growing the network. So we've added many different trade lanes and line haul expansion to the European business. And we're gradually filling that network capacity that will, over time, then will result in an increase in marginality on the platform side of things.

Of course, we have for quite a while already a very strong market position in Hong Kong, China. And we're expanding that base to also other areas within Asia that can also fuel the import flows to Europe.

If we then go to the Mail side. There's, of course, been very relevant developments over the last couple of weeks. So the adjustments of the universal service are approved by the House of Representatives 2 weeks ago, which is a crucial step towards future-proof postal service. So we'll go to a within 2 days delivery model for the USO for July 2026 and to within 3 days for July 2027, which is a deviation from the trajectory that we've painted on the Capital Markets Day because there only D+3 was expected to be there for January 1, 2028.

The quality requirements have also come down to 90% for 2026, D+2 and 92% for a within 3-day delivery. So far, there's no solution yet for the remaining substantial net costs on universal service. And that's also why we'll continue with the legal steps to go after that net cost compensation. Because as we estimated in the beginning of the year, we did expect roughly EUR 30 million of net cost related to the USO obligations. I think it will be slightly more than EUR 30 million.

And of course, also in '26 and '27, we will still be looking at material net costs that impact the profitability of the company that does impact the competitiveness of the group and limits our ability to invest in innovation, in new propositions, in labor conditions and labor circumstances. And that's why we'll continue to push for compensation or to be relieved from the obligations that drive those net costs.

What you cannot underestimate is the impact these changes will have on our organization. And that's why we're really committed and busy with the preparation of those changes for July, which basically means that on the delivery and preparation side, a lot of the schedules need to change. All the delivery routes will be redefined. And we're taking those changes step by step. That also means that we'll deliver the letterbox parcels that are required to be delivered next day through the e-commerce infrastructure. That also impacts Mail's result in 2026 quite significantly, but also impacts the Parcels bridge. And Linde will talk you through those elements a little bit later on.

So yes, I think great progress on Mail for 2025. But still a lot to do to make it happen operationally and a lot to continue to discuss with the new Minister of Economic Affairs as to how we want to organize mail delivery in the Netherlands going forward and also in relation to the question, who should pick up the bill for the net costs related to the universal service obligation.

Slide 22 basically paints the picture as to why we believe that, over time, we're able to manage the Mail business within a bandwidth of results to give you a bit of predictability as to how we can do this. These lines are, with the exception of 2025, the lines that we've presented also at Capital Markets Day. So later on, you'll see that the 2026 expectations for Mail will not be as low as the orange line, but it indicates roughly the phasing of those steps over time. And the blue line also includes potential upsides on financial contribution that, of course, so far, we've not been taking into account in our outlook.

But it's still reinforcing the message that we expect to be able to manage the Mail business with those changes within this bandwidth of results. And of course, there are some sensitivities around it that relate to the volume decline expectations and the timeliness of the execution of the steps that we plan to make in this road map. That is the Mail side of things.

Then if we go to our enablers. The first one is ESG. That is clearly not a separate track but a foundation for everything we do, taking care of our people, environment and society. Further reductions of emissions to improve our footprint is high on our agenda. That's also why we expand our own fleet of electric vans by 50% last year, and we'll continue to stimulate delivery partners to switch to electric vans as well. As shared, emission-free kilometers was up and is now at 33%. With that, we also had a positive impact on urban liveability.

On the right-hand side, you see our efforts to invest in engaged and healthy workforce because that will also drive employee engagement, will also drive Net Promoter Scores. We've introduced programs to reduce the absenteeism and invested quite materially in innovation to reduce the physical workload in our depots.

And the examples that you see there is the implementation of tilters to reduce manual lifting in the depots, the use of smart electronic tugs for internal transport of roll cages, but also adjusted customer requirements for how they fill the roll cages before they're dropped off at our depots. So serious investments are being undertaken to improve the workplace safety to unlock cost efficiency and to create a better environment for our staff.

Then if we talk to the other enablers, data tech and innovation beyond delivery. We're simplifying and accelerating by embracing data and AI, both in our meta channel contact strategies of our digital and human interactions, but as well on our supply chain and commercial engines, where we do apply AI as much as we can to drive NPS and improve efficiency and will contribute to the execution of our strategy.

We keep on exploring new opportunities by stretching our core and are investigating the development of charging hubs for truck transport, where we aim to develop charging hubs initially for our own trucks, but over time, also make these hubs accessible for other carriers.

Then let's go to the financial paragraph of 2026 and look at the outlook that we've set for this year. Linde, back to you.

Yes. Thank you, Pim. So then we are on Slide 26, and let me start with a recap of our capital allocation. First and foremost, we will invest in our organic growth, including investments in our network, our out-of-home ambition and IT capabilities.

Next, we will invest in inorganic growth opportunities in line with our strategic criteria. The focus for this will be on partnerships in our growth areas rather than acquisitions to limit the size of the required capital. The remaining cash flow should be sufficient to pay dividend in line with our business performance and dividend policy and to optimize our financing structure.

For 2025, as said, we will propose a dividend of EUR 0.04 per share to the AGM -- at the AGM to be held in April. To be clear, this is based on the old dividend policy that was applicable for book year 2025. The payout ratio is 80% of normalized comprehensive income. As communicated during the Capital Markets Day in September 2025, as of 2026, we will slightly adjust this policy. Dividends will be based on normalized profit instead of normalized comprehensive income, and we will no longer have interim dividend. So the full dividend is to be paid in one payment in May.

Let's move to Slide 27. This slide is in the deck to help you to reconcile the 2025 actuals to the new reporting structure that is aligned with this new strategy and as explained by Pim. As of January 1, 2026, we will report along the segments E-commerce, Platforms and Mail. In short, in E-commerce, we will report all parcel activities in, from and to the Netherlands and Belgium, including internal revenue from platforms and a transfer from PostNL Other being the digital activities. Platform comprises Spring and MyParcel and other international activities. Mail does not need further explanation.

Let's have a look forward to our full year expectations for 2026, which will be the year of inflection in the execution of our strategy. I will start with sharing our outlook for the main financial KPIs and will then dive a bit deeper to the drivers and assume development per segment. For normalized EBIT, our outlook is between EUR 40 million and EUR 70 million, and we expect that to translate into a free cash flow of between 0 and minus EUR 30 million. That outlook is based on an expected total revenue growth of between 5% and 7%. And I will come back to that on the next slide.

In 2026, we continue to invest in our strategic focus areas with CapEx expected to be up to around EUR 125 million while lease payments will be at the same level as in 2025. Organic cost increases remain high. We expect around EUR 140 million cost increases, mainly labor-related, following wage inflation and other inflationary pressure. Price increase will be more than sufficient to mitigate this. And our focus will continue to be on strong cost control and further efficiency improvements, building on our proven efforts to reduce costs.

Please note that the outlook of 2026 assumes limited impact from changes in treatment of de minimis thresholds in the EU and U.S. or in related customs handling and clearance fee structures. The scope and timing could evolve during the year and could impact performance.

The graph on the left side indicates the assumed development of normalized EBIT per segment, but let me explain a bit more on that. This Slide 29 shows the assumptions for the drivers of the expected 5% to 7% revenue growth. At the segment E-commerce, revenue will grow on the back of 1% to 3% volume growth compared to the number of parcels as shown in the segment Parcels for full year 2025, which is EUR 376 million.

As targeted yield measures will come into effect gradually, these will also contribute to revenue growth. And then in the E-commerce segment, you see the impact of the transfer of letterbox parcels of D+1 to the network of e-commerce. Pim already touched on this. And on the next slide, I will show you more background. Good to keep in mind that this letterbox parcel revenue in E-commerce is internal revenue and, as such, will be eliminated at group level.

Looking at Platforms. For Platforms, it's expected to show double-digit revenue, accelerating its speed of growth following our strategic initiatives to expand our intra-European growth at Spring and MyParcel and growth from the Asian platforms. For Mail, the main drivers are the continuation of the structural decline in volumes between 8% and 10% assumed for 2026 and price increases. Altogether, that brings us to the assumed revenue growth of between 5% and 7%.

As said, let me provide a bit more background on the letterbox parcels. So as of mid-2026, we will start delivering the letterbox parcels D+1 through our e-commerce network, so no longer through the Mail network. As Pim explained, this is a necessary step to enable the transition to D+3 for all mail in 2027 and results in a step-up in costs for 2026, in line with the road map towards a future-proof postal service. Apart from the extensive impact on processes and people, it will also bring some financial consequences for segment reporting.

These are summarized on this slide to help you understand the development in performance. Let me start with E-commerce. The transfer will bring between 50 million and 60 million items in the network, so around 30 million in 2026. As shown on the previous slide, this adds revenue for the E-commerce segment. Again, this is internal revenue. Good to understand that the price of letterbox parcels is below the current average price per parcel, which is visible in the price/mix development in the e-commerce performance.

Extra volumes, of course, bring extra volume-dependent costs and, for 2026, limited one-off transition costs. Overall, the impact from the transfer on normalized EBIT for e-commerce is limited and then expected to become margin accretive as of 2027.

Then moving to the Mail side. At Mail, you see some additional revenue as delivery of the letterbox parcels via the E-commerce network comes with better service and quality. It also brings cost savings as we can adjust the prices in Mail. Around EUR 20 million of the cost savings for 2026 relates to the transfer. On the other side, the transfer comes with additional cost as, in the end, the infrastructure of e-commerce is more expensive than the Mail structure. Combined, this leads for the Mail segment an expected net negative impact of around EUR 12 million, fully in line with the road map towards a future-proof postal service.

Let's move over to the e-commerce bridge. On this slide, you see the main drivers and its contribution to the assumed step-up in e-commerce performance in 2026, a step-up in revenue from a 1% to 3% underlying volume growth and the impact from the transfer of letterbox parcels. For price/mix, I want to emphasize that regular price increases and the targeted yield measures are more than offsetting organic cost increases. And yes, in the bridge, we will see negative mix effects, but these are almost fully related to the transfer of letterbox parcels.

As explained on the previous slide, the price for letterbox parcels is below the average price for parcel, and that is driving the majority of the negative mix effect. Remaining mix effects within and between channels and countries is expected to be in line with Q4 2025 performance. Then you see indicatively an increase in volume-dependent costs as we have more volume and organic cost increases. We expect to achieve the EUR 40 million to EUR 50 million in cost savings, investments in our out-of-home sustainability and reduction of physical workload and the earlier mentioned one-off costs to enable the transfer of letterbox parcels to e-commerce.

Then moving on to Platforms. The bridge clearly shows the impact from the assumed double-digit revenue growth, predominantly attributable to the expansion of activities. Positive pricing sufficient to cover organic cost increases, though offset by negative mix effects coming from a less favorable mix of destination and weight. Again, additional volumes come with additional costs, and that's also shown in the volume-dependent costs. And of course, specifically in this asset-light segment, on the cost side, you see the impact of investments in international expansion, for example, due to a step-up in costs related to sales and marketing and IT. So really investing in future growth.

And then moving over to the last segment, the Mail segment. The impact from organic cost increases and an assumed 8% to 10% volume decline is mitigated by price increases and a favorable mix effect and the decline in volume-dependent costs. And then we expect to achieve EUR 30 million to EUR 40 million in cost savings, largely related to the transfer of letterbox parcels to e-commerce, offset by higher costs as explained and cost increase mainly related to preparations for the future-proof postal networks.

Please take in mind that this bridge represents the full segment Mail, which is more than the USO. As mentioned by Pim, without any doubt, also in 2026, there will be net cost for the USO. In that regard, let me reiterate that we will continue our legal proceedings.

That being said, let me hand over back to Pim to close the presentation with the concluding.

Thank you, Linde. Well, if we look at 2026, that will be the year in which we expect to reach the inflection point in the execution of our strategy towards our Breakthrough 2028 ambitions. The outlook that we've said of normalized EBIT between EUR 40 million and EUR 70 million and free cash flow between 0 and minus EUR 30 million is in line with the trajectory that we need to get to the 2028 results.

For E-commerce, we'll focus on a continued and disciplined path towards sustainable value creation. At Platforms, we'll focus at further investments to capture and to facilitate to accelerate international growth. And in Mail, it will be a very heavy transitional year in which we need to make the changes for a D+2 USO delivery network and to continue to work on the future-proof postal network that we need as well.

So all in all, satisfied with the 2025 results, particularly in the fourth quarter. We're on track towards our Breakthrough 2028 ambitions. And we're connected to deliver what drives us all forward.

So thank you for now, and let's open up for questions.

Operator, could you please explain the procedure to ask questions, please.

[Operator Instructions] We will take our first question. Your question comes from Michiel Declercq from KBCS.

My first question would be on Mail, where you reported very nice results. Could you maybe remind me on the fourth quarter what the impact was of the nonrecurring elements? And then if I adjust for that, I would assume that the Mail volumes, they were also quite strong. You mentioned the positive impact from the holiday cards. Is that what has mainly been driving the strong margin?

And then also looking a bit into 2026, the revenue bridge that you show on Slide 29. You basically expect the full volume to be offset by price increases and mix effect. Can you maybe elaborate a bit more on this, I mean, the price increases for USO have been announced? But yes, maybe diving a bit deeper into these mix effects as well. Is that maybe the absence of the government and the election mail? So that would be my first question.

And then secondly -- second, on the CapEx, you guide for EUR 125 million this year, which is a bit lower than what you shared during the Capital Markets Day. Is this mainly a timing effect? Or is this the new run rate also for 2027? Or how should we look at this?

Yes. Thanks, Michiel, for your questions. Let me start with the first question on the volume development of Mail in the last quarter. Yes. So indeed, the volume in the last quarter has been impacted or positively impacted by those nonrecurring volumes coming from governmental side. So the pension funds, which had a special communication on changes in pension funds, but also the emergency kit, which was distributed in the last quarter. And of course, you had the election mail. Those -- that volume is not recurring because we will not have that every year.

And looking at the campaign, the campaign for the Christmas stamps, which this year we did together with the Efteling cooperation and that was successfully perceived by the consumers as such, that was contributing to the positive volume development as well. Then the revenue bridge mix effect, you were referring to the revenue bridge you were referring to the Mail specifically, right?

Yes. Yes, correct, the Mail only.

Yes. What you see there is that the underlying volume trend, which we actually also have this year, the 8% to 10%, that is on the volume side. And on the other side, you will see also that from a price increases point of view, we will increase our prices also to ensure that we outweigh or more than outweigh our organic cost increases. And that is contributing to the overall performance in the revenue side.

Then on your last question on CapEx of EUR 125 million. Well, I'm not saying is it timing, yes or no. I think over time, yes, we will expand our CapEx to further invest in the growth areas. For now, we have targeted at EUR 125 million. It's mostly important that we continue our trajectory on the growth initiatives, which is obviously out-of-home, but also investments in ESG and in our IT capabilities. And that is with EUR 125 million on trajectory towards our 2028 ambition as well.

One addition, Michiel, from my side, just to clarify a point. In the volume development of the fourth quarter, where kind of the total volumes for Mail were roughly flat, you still have double-digit volume decline in single items and Christmas cards compared to last year, but then made up by slightly more bulk Mail volume than the same quarter last year, driven by the elements that Linde just explained.

Okay. That's clear. If I could maybe ask a small follow-up about the margins in Mail in the fourth quarter. Is it possible to quantify roughly what the EBIT impact was of these nonrecurring items? I know it's low margin, but is it -- can you give us some degree of what the margin impact was from this?

Not per line item. What I've indicated in my story is that as of -- well, you know the year-to-date performance at the end of Q3, I've kind of given you a marker where we were at the end of [ P 11 ] being still significantly down roughly around the EUR 35 million loss, and it turned into a EUR 2 million positive for the full year. So then you have the contribution of the combination of the additional volume in December as well as the contribution of the Christmas card campaign that has, let's say, in those last weeks of the year, turned a significant loss into a slightly positive profit for the entire year.

Your next question comes from the line of Frank Claassen from Degroof Petercam.

Two questions, please. First of all, on your growth assumption for the parcels or e-commerce, roughly 1% to 3% for '26. Could you roughly indicate how much you think it will be from the domestic side and how much from international? So will international still be growing much faster in your assumption? That's my first question.

And then secondly, you're targeting quite a few cost savings in '26. Do you also expect to see restructuring charges related to these cost savings?

Yes. Thanks, Frank. Regarding your first questions on the 1% to 3%, no, we cannot comment on the specific division between domestic versus international. What is important that we will -- that this growth is, of course, continued and based on our targeted yield measures and change from volume to value strategy. So as said, the pattern which we were on for 2025 is also what we will continue for 2026. Though, of course, for the international growth, there, we had a different base to grow from.

On the cost savings side and the potential redundancies, what you're referring to, no, this is really a cost savings program where we want to significantly reduce the cost price per parcel. We do not, at forehand, have predefined or planned layoffs. It's really an integral part to make sure that the commercial initiatives, the elements we take into commercial initiatives, we also derisk on the side on the competitiveness of our cost price per parcel so that we ensure that on both angles, we steer for the next.

[Operator Instructions] Your next question comes from the line of Marco Limite from Barclays.

I've got three questions. So the first one is on the recent news flow we have heard last week on Sandd, where again, ACM looks to be -- well, the court seems to be against the Sandd acquisition. So yes, if you could clarify what's your view there, what's happening? It feels like, yes, quite a few years have passed now.

Second question is on your Slide 31, where you are showing the expected margin evolution throughout the years until 2028. And I mean, in 2027, according to your chart, we should expect a big step-up in margins. In my view, looks a bit -- the step-up in '27 looks a bit higher compared to what you showed the CMD in September. So can you just remind us what is going to drive this fairly big jump in margins in '27 in the E-commerce division?

And then maybe my third question, just a clarification on the letterbox parcels slide, so Slide 30. Just a clarification there. So you're saying that in '26, you don't expect any impact on your E-commerce EBIT. But then in Mail, you're saying minus EUR 12 million. So can you just confirm that this is going to be net negative at group level? -- between Mail and E-commerce? Or I'm getting that wrong? And if you could also clarify, you're mentioning EUR 50 million to EUR 60 million extra volumes on a full run rate. Can you quantify that also in terms of revenues? So it's easier for us to model that?

Thank you, Marco. I'll take the first and third question and leave the second one for Linde to clarify. I think you're referring on point one to the conclusion of what the -- say we felt about the acquisition of Sandd. Clearly, our view there is that we've done that acquisition on the back of a permit that was given. And since that time, we've adhered to the conditions of that permit. So we really believe there's no legal obligation nor a necessity at the level of PostNL to mitigate anything here. So that is our position. Of course, we've seen that ACM plans or intends to start an investigation. We're uncertain about the scope, the approach or the legal grounds for that investigation. So we'll just wait and see there.

The more general point that we make there is that over the last couple of years, there have been numerous investigations and research done also by external parties on how the mail market should develop. All of those led to the same conclusion being it's a market in structural decline and the current set of regulatory constraints are not fit for purpose anymore. So we'll wait and see, but I don't expect material outcome from those elements. And as I said, it's now 6 years, 7 years after the integration of Sandd that cannot be revoked, although we continue to adhere to the conditions of the permit. So that is point one.

And three, I think there's a couple of elements to your question. So if you talk about EUR 50 million to EUR 60 million, that's a full year number, not a half year number because we only migrate those parcels, letterbox parcels halfway through the year. And yes, net for the group, this is a negative. Linde said that it will not have a material impact within the E-commerce space, but it will have an impact of a couple of million negative for 2026 within E-commerce being a function of the transition cost, the implementation cost to make this work and will be accretive as of 2027.

And within Mail, we indeed expect a net of minus EUR 12 million. So in excess of the minus EUR 12 million, you've got a couple of million more that makes it the net consequence of this change in 2026. And then you could argue why doing this, in the first place with this negative impact on 2026. And that's because it's necessary to be able to make the move towards delivery within 3 days to take out the letterbox parcels within the mail network. So it's a fundamental step that we have to take to be able to make the changes halfway 2027 to go to a D+3 model.

Linde, can you take the second question of Marco?

Yes. Well, as you refer to the Slide 31 and your question on the margin. So actually, the 2026 margin development and also towards 2027 margin development is in line with what we have said during the Capital Markets Day, also starting with current year with our 2025 story year. We will see a step-up in margin versus 2025 performance, and that further increases over time to 2027. And in that sense, it's not different from the story which we explained during the Capital Markets Day.

But as also explained by Pim, we -- clearly the plan for 2025 and 2026, you see now also investments being made or, for instance, this step-up or change of the letterbox parcels. Those elements are all contributing and ensuring future growth, and that is why you see those effects as expected in 2025 and 2026, not only in E-commerce, but also in Mail, and that is on the trajectory towards our ambition of 2028.

Okay. And if you could help us quantifying the revenues shipped from Mail into Parcels coming from...

No, we can't give you that specification.

[Operator Instructions] We will take our next question, and the question comes from the line of Henk Slotboom from The Idea.

I've got three questions equally divided on the Mail, E-commerce and on Platforms. First one is an easy one. On your guidance with regard to mail volumes, 8% to 10% expected drop in volumes in this year. It seems a little bit conservative in my view. If I look at the first 3 quarters of this year, it was minus 6.9%, minus 8.3%, minus 5.0%. And then in the last quarter, there was, of course, the elections. We had the government bill, the emergency package, which is maybe 8 million or so, the number of households in the Netherlands. And the pensions reform is still taking place. So I expect that you will have extra mailings on pensions again by the end of this year. As far as the election is concerned, we have municipal elections in the first quarter. So there's a bit of a timing difference. What exactly makes you so, call it, conservative when it comes to Mail volumes?

Do you want to take them one by one, Henk, or do you want to share your other questions already?

No, no. Can we do it one by one?

Yes, that's fine. That's fine. Look, here, we've just taken the longer-term view that we've consistently seen in the market. Those volume expectations are also clearly a function of the conversations that we've had with our bigger customers, including [ SDN ] [Foreign Language] and the renewal of a few bigger customers as well. So on the back of those insights, we have set the expectation around that 8% to 10% mark. Well, let's wait and see. It could be on the conservative side. But that's based on the insights that we've gotten from the conversations around those bigger senders of mail, whilst renegotiating the terms for 2026.

Okay. And the second one is on Platforms. If I look at the pro forma divisional breakdown you gave at the Capital Markets Day, I see revenue of EUR 724 million in 2024 with a profit normalized EBIT of EUR 19 million, EUR 19 million. '25, we see a nice growth in the revenue line to EUR 786 million, but a steep fall in the normalized EBIT. Can you explain what exactly is this? It's an asset-light model. I understand that if you want to grow in this business, you need to invest upfront.

And if I look at the chart at Slide 32, your main goal in E-commerce is from volume to value. If I look at Platforms, then I see volume, but the volume in terms of price/mix is 0. How can I connect this? Is this the way to get into this market? Or maybe you can give some more -- shed some more light on this, please?

Yes. Of course. Clearly, we've set different strategic objectives for the business segments. So here, particularly in '25, '26, you see materially investments in the Platforms space in terms of building line haul capacity That is not fully utilized at day 1. It is expanding our sales capability throughout Europe. It's investing in some IT functionalities that will allow you to be competitive on that asset-light playing field. Those elements together -- also, if you were to look at 2026, really are already clarifying, I would say, around EUR 5 million to EUR 10 million of additional costs in the P&L that over time will turn into a contribution.

Second part is that, as said -- so also, if you look at the last quarter of 2025, we did have more volume than we originally expected in Europe, which caused us to take additional line haul carriers in. And we've decided to prioritize customer experience over short-term margins here, because we truly believe it will help our competitive position and will accelerate the flywheel going forward. Next to that, this is also the domain. where you will see the consequences of tariffs, particularly also from the U.S. trade lane side also in 2025. And also the uncertainty about the implications on what handling fees will do with consumer spending and choices consumers will make in 2026 is in part, an explanation also for the 2026 development because -- although Linde has said that we've taken into limited sensitivities that still millions and millions of lower profits based on the assumed scenarios that we've taken as the baseline for the handling fee situation. So those 3 elements explain the temporary step down in margin profile within Platforms.

Okay. And then my final question is that, well, bridges basically a little bit Platforms with the E-commerce division. We've seen quite a lot of noise from the Chinese CRO is active in -- on the intercontinental routes from China to, for example, the EU, they have a close cooperation with GOFO, which has become active in the Netherlands. Earlier last week, we saw reports about JD.com, which is becoming active in the last mile as well, and they do it in a slightly different way with [ Chinese ] [ Winkler.org ] guarantees and selling real products like Apple and that sort of things. How do you look at this development? Because it looks as if the Chinese logistics companies are piggybacking on what we see from the side of the Chinese platforms, which are coming to Europe. What's your view on that?

Well, as you know, I've said before, it was already quite a competitive marketplace to begin with. And we certainly see those new models and new businesses coming up. It's not that difficult to sort 100,000 parcels or sort a couple of million. But this is, of course, can you do this at a convenience level, at a quality level structurally throughout the year so that you can accommodate your clients to facilitate their growth ambitions. And I think there, our view on strategy is exactly the same as prior to those. We need to be best in the customer journeys that matter most. We need to be best in terms of Net Promoter Score, and we need to stick to a model where we strive to get value from volume and not volume per se.

And we see the right telltales there. We also see slight indications that other marketplaces are at least following suit in terms of trying to get value distribution more equally divided within the chain. And that's what we'll continue to push for. And we'll follow and monitor these parties closely. They have different operating models. They have so far not agreed any working conditions or collective labor agreements. So the question is also going to be how will they develop their business model to make it sustainable going forward. We talk with them, but we stick to the strategy that I've just explained.

Is labor a constraint for them? We heard you in the past mentioning before, there's a high churn amongst parcel deliveries and that sort of thing. It's difficult to get enough people there. Would it hypothetically mean an additional push towards out-of-home? And if so, could you benefit from it because you already have how many 1,200, 1,300 of these locations?

Yes, and accelerating. So that's kind of more the general development there where we truly believe that a bigger portion of parcels will go to out-of-home delivery towards lockers and still the vast majority will go at home. I will definitely expect those other players to also -- it will kind of -- the labor market is the labor market in the Netherlands. It stands anyway. Their model is much more focused on pay per item, where also different parties might have their own view on. I would say all regulatory elements that relate to safe working conditions apply to all in the Netherlands, so also to them.

So yes, there are some limitations to, I would say, their ability to scale this existing model. In the meantime, of course, they can make choices against price points that could lead to some volume going their way. But as I said, we will stick to the plan to create value from volume. And that's also still why we do expect a little bit of market share loss in 2026. We're happy with the progress that we're making on the rollout of our out-of-home network. We're accelerating there, not only in the number of locations, but also on the number of lockers per location. Of course, we truly believe that, that acceleration can help us on both sides to create competitive edge, to create best possible consumer experiences and will make the network more efficient.

Thank you. This concludes today's question-and-answer session. I will now hand back for closing remarks.

Thank you all for joining this call, and speak to you on April 28. Thanks.

Thank you.

Thank you all.

This concludes today's conference call. Thank you for participating. You may now disconnect.

"

"

"

" KBC Securities NV, Research Division

" Barclays Bank PLC, Research Division

" ING Groep N.V., Research Division

"

Good morning, ladies and gentlemen. Welcome to the PostNL Q3 2025 results. [Operator Instructions]. [Audio Gap]. 

[Break]

Good morning, and welcome to you all. We have published our Q3 '25 results earlier this morning. Unfortunately, CEO, Pim Berendsen, cannot join in this meeting due to personal circumstances today. So Linde will do the presentation. And after that, we will open up for Q&A.

With that, Linde, I hand over to you.

Thank you, Inge, and welcome to you all. Let me start with what highlights for this quarter.

Let me start with our Capital Markets Day, which we held on 17th of September. There, we presented our new strategy and transition program, Breakthrough 2028, with the related ambitions. We launched our new purpose, connected to deliver what drives us all forward. And we launched our new strategic intent, being to grow our business, create sustainable value, lead through innovation, and make impact that matters. This is based on 4 pillars: Growth, Value, Innovation, And Impact. 

I will repeat our 2028 ambitions on the next slide, but let me first share the key takeaways for this quarter. The Q3 results came in as anticipated and landed below last year's results. At Parcels, volumes were up 1%. And this quarter, again, volume growth from international customers outpaced domestic growth. The Mail volumes declined by almost 5%, mainly due to ongoing regular substitution, but this quarter was supported by the first batch of the election mail and some other one-off names. 

The decline in normalized EBIT at Mail led to a year-to-date normalized EBIT of minus EUR 43 million, and this reinforces the urgent need for adjustments in the postal regulation. Good to mention that our cost savings are well executed and bring savings according to plan, both at Parcels and for Mail in the Netherlands. 

Furthermore, additional efficiency improvements at Parcels contributed to our performance. And emission-free last-mile delivery increased to 33%, which is 5 percentage points better than last year. The last thing to mention on this slide is the reiteration of our outlook for 2025. 

Before moving on to more details on this Q3 performance, let's do a quick recap of our Breakthrough 2028 program. 

Our strategy aims at delivering sustainable returns for our shareholders and value for customers, employees, and society as a whole. We truly launched a strategic turning point with our new transformation program, Breakthrough 2028, that drives our financial ambition. 

A short summary of the strategic objectives of our 3 business segments, which we will create as of 2026:

First, E-commerce, where we will grow from volume to value through a differentiated approach and smart network utilization;

secondly, platforms, where we capture international growth through asset-light models;

and lastly, our Mail segment, where we want to transform to a future-proof postal service. 

Driven by the e-commerce market growth and our commercial initiatives, we aim to achieve GDP plus revenue growth, targeting at over EUR 4 billion in 2028 with a step-up in normalized EBIT to over EUR 175 million in 2028. 

A disciplined investment approach will drive incremental return on invested capital with an increase in Return On Invested Capital (ROIC) from 3.4% in 2024 towards our ambition of over 12% by 2028. And our approach towards dividends remains the same, in line with business performance, with 70% to 90% payout ratio while holding on to our aim to be properly financed.

That's about a short recap of our Breakthrough 2028 program. Let's now move to the strategic attention points for Mail and Parcels, before I will explain the detailed Q3 financial results. 

Let me start with Mail. Early October, a next step towards a viable and future-proof postal service in the Netherlands was proposed by the minister. The following adjustments for the USO were proposed:

D+2 at 90% quality as of 1 July 2026

D+3 at 92% quality as of July 2027

The consultation period closed last Friday. Without doubt, these adjustments are much appreciated. But at the same time, this proposal is still insufficient to cover the net cost. And therefore, it remains necessary to find a solution, therefore. And we have to keep in mind that the uncertainty in the timelines of the political process persists. 

In the coming weeks, we are expecting a decision on our appeal on the rejection of our request for financial contribution for 2025 and 2026, and also a reaction of the minister on our request for withdrawal of the USO designation. 

Together, these will determine our next steps towards a sustainable future of postal service on its path to reach the ambition as set out in our Breakthrough 2028 program. We will continue to make every possible effort to maintain reliable service and remain committed to accessible and financially viable postal service.

Then to Parcels.

As announced during the Capital Markets Day, that segment will be split in e-commerce and platforms as of 2026. And we will focus on the respective strategies as announced on the Capital Markets Day. The strategic initiatives already started and are progressing according to plan. 

In Q3, we see for Parcels a continuation of the trends as we have seen in the first half of this year. The price/mix effect was positive. Strong price increases were delivered according to plan. These are largely offset by less favorable mix effects that are more negative than we had anticipated. And that is mainly explained by the increased client concentration within our domestic volumes.

With regard to the targeted yield measures, it is important to emphasize that these will come into effect gradually and confirm the strategic validity of our focus on consumer value, while also resulting in a slight loss in market share as anticipated. 

What is also important to mention that to date, we have been able to mitigate the adverse development in mix effect by own actions. Our flexible operational setup proved our agility and enabled additional efficiency improvements in our network and supply chain that contributes to our performance, on top of the ongoing planned cost savings program.

Another focus area is our international expansion, especially in intra-European activities, where we are investing to capture future growth. In Q3, this resulted in the continuation of revenue growth at Spring, with some impact on the performance following our strategic investments. We are ready for the ramp-up in our operations for the peak season that is about to come.  Together with our customers, we are putting all efforts in striking the optimal balance between volume, value and capacity utilization.

Over to our key metrics. Let's start with the financial KPIs.

Revenue in the quarter amounted to EUR 762 million, which is slightly above last year. And we see normalized EBIT at minus EUR 21 million, in line with our expectations.

Looking at free cash flow, we see minus EUR 18 million in this quarter, bringing the year-to-date at EUR 98 million comparable with last year.

And normalized comprehensive income that includes, for example, tax effects amounted to EUR 23 million minus. I will discuss these results of Parcels and Mail in a bit more detail in a bit. 

Then the nonfinancial highlights for this quarter. The share of emission-free last mile delivery improved by 5 percentage points to 33%. We have recently started the rollout of over 40 electrical vans in our transport services, so in the first and middle mile.

Looking at NPS, we keep our average #1 position in relevant markets and see an improving NPS for the important ‘I receive journey’. And to evidence our innovative power, we have recently concluded successful experiments to explore how robotics can contribute to future parcel delivery, building on the knowledge and experience about the way we have implemented robotics in our sorting centers. 

Then our out-of-home strategy. That is continuing to gain momentum and the utilization rate being defined as the total amount of parcels, both to consumers and returns, during the week as a function of locker capacity is increasing and is now at 50%, while NPS scores for APL services remain high.

Let's move to the financial details of Parcels. Revenue amounted to EUR 581 million, which is EUR 6 million above last year, following volume growth, price increases and mix effects. Overall, our volumes grew by 1%. Volumes from international customers continued its growth and were up 5% compared to last year and domestic volumes were flat. 

Overall, market share was slightly down as anticipated following our yield measures. We do see further client concentration with increasing share of volume from large players, domestic as well as international, but also platforms and marketplaces. In this quarter, the top 20 accounted for 57% of volume.

With that in mind, it's good to see that the total price/mix impact was positive this quarter. Average price per parcel was up by $0.02, supported by targeted yield measures and regular price increases. Price increases have been implemented according to plan. But definitely, the mix effects are more negative than anticipated, driven by client concentration, predominantly within our domestic customer base. 

Furthermore, it is positive that our cross-border activities continued the trend. We have been seeing for several quarters with revenues at Spring up this quarter, most strongly in our intra-European activities, a promising development as international expansion is one of our strategic initiatives.

When looking at costs, it should not be a surprise that in this quarter, we saw a significant organic cost increase. This is mainly labor related. However, we also see EUR 9 million in cost savings in Q3, and they were delivered according to plan. To be more specific, they came from ongoing adaptive measures like, for example, rationalization of services because we stopped parcel delivery on Sunday. 

Next to that, our flexible operational setup proved our agility and made us achieve additional efficiency improvements in our network, so in depots, supply chain and transport, to mitigate the adverse mix effects.

In Spring, revenue growth was more than offset by the mix effects and the planned investments in international expansion. In the quarter, the financial impact from the implementation of U.S. trade barriers was limited, though we do expect some adverse effects in Q4. This brings us to the Parcels bridge, showing the reconciliation of the normalized EBIT from EUR 6 million in Q3 last year to EUR 4 million in Q3 this year. 

The volume growth contributed to our results, though was more than fully offset by the less favorable product customer mix effects, mainly within domestic. Organic cost increases amounted to EUR 70 million, following wage increases according to PostNL and sector collective labor agreements and indexation for delivery partners. As you can see, the impact from our price increases was EUR 30 million and came in according to plan. 

Other costs were EUR 11 million better, mainly as a result of the combination of cost savings and additional efficiency improvements in depots, supply chain, and transport, which we managed to deliver to mitigate the negative mix effects. In other results, I want to highlight that this is mainly applicable to Spring, where we see revenue growth being offset by mix effects. 

Furthermore, we again invested in international expansion, one of our strategic initiatives, which was approximately EUR 1 million this quarter for the expansion of the intra-European activities in Spring. Also good to note is that we continue to focus on further growth in Belgium. There, we also invested further. We invested in our distribution network, also amounting to EUR 1 million this quarter. 

Moving over to the results of our segment Mail in the Netherlands. There, the revenue amounted to EUR 289 million, exactly the same as last year. The volume decline of 5% this quarter was mainly related to substitution, a structural trend which you are seeing for a long time now but supported by the first batch of election mail and other one-off mailings. Furthermore, revenue was supported by 2 stamp price increases in January and in July of this year. 

Looking at costs, labor costs were up following the CLAs for PostNL and mail deliverers. However, when looking at sick leave rates, we see a first improvement compared to last year. These cost increases were mitigated by cost savings of EUR 10 million according to plan, coming from further adjustments in our current business model, such as the transition of business mail towards a standard service framework of delivery within 2 days. 

Altogether, this resulted in normalized EBIT of minus EUR 23 million and year-to-date minus EUR 43 million, as mentioned earlier, evidencing that the current business model for Mail is not sustainable. That brings me to the bridge of Mail in the Netherlands. 

Here, you see the elements of Mail I just discussed. Starting at the top, you see the stamp prices I referred to added EUR 9 million to revenue. The organic cost increases of EUR 10 million due to wage increases and other inflationary pressures are also visible. And finally, the cost savings of EUR 10 million and a bit lower labor costs related to sick leave were partly offset by lower bilateral results. 

Let's move over to the free cash flow. Free cash flow was minus EUR 18 million in this quarter compared to minus EUR 68 million in the same quarter last year and in line with our expectations. The delta versus last year is mainly explained by the working capital development coming from anticipated phasing effects and a nonrecurring tax settlement for prior years, including interest, which we paid in the third quarter of previous year. 

This brings us to the next slide, where you find our balance sheet and development of the adjusted net debt position. 

Of course, here you see the impact from the impairment in Q2 on our financial position, which in the end is impacting our equity. In the short and long-term debt, you see the EUR 100 million from the Schuldschein placed in June. So that was already the case in Q2, but obviously, you still see there. Movements in Q3 were limited. We ended the quarter at an adjusted net debt position of EUR 572 million. 

Recently, we launched a new bond with face value of EUR 300 million, a term of 5 years, and an annual coupon of 4%, and we tendered on the outstanding 0.625 percentage notes due September 26. EUR 195 million was accepted for repurchase. Please note that these related recordings and cash flows will materialize in Q4. 

We continue to manage our cash flow, balance sheet, and net position carefully following our aim to be properly financed. And as a reminder, we reclassified in Q2 part of cash and cash equivalents to short-term investments and adjusted comparatives. It has no impact on adjusted net debt or any other key metric.

Then over to the split of normalized EBIT over the quarters. 

As mentioned before, in 2025, normalized EBIT has to be earned in Q4 even more than in 2024. We are ready for our peak season. Please keep in mind that the impact of pricing will be larger in Q4 than in the other quarters, which also implies that in Q4, pricing will exceed the impact from organic cost increases. 

When looking at year-to-date results, overall results came in, in line with expectation. For the remainder of the year, for Parcels, you should take into account that announced yield measures are expected to come into effect gradually. And for Mail in the Netherlands, we will see the majority of the election mail coming in, in Q4. 

In the right graph, you can see the indicative phasing for the savings is not fully divided evenly over the year, with a larger part of savings expected in Q4. Obviously, that is related to timing of some of the underlying measures. Please note that some of the savings are a bit more tied to the absolute volumes, which also explains why the amount of savings is, as usual, expected to be slightly higher in Q4. 

Then over to the outlook. Of course, we have to acknowledge that the external environment remains challenging and volatile. And as said before, the pace of client concentration due to changing consumer behavior is difficult to predict. 

We reiterate our outlook for 2025. We expect normalized EBIT to be in line with 2024 performance. Free cash flow is expected to be negative as, for example, CapEx will be above the level of 2024, including around EUR 15 million cash outflows related to the strategic initiatives.

I repeat our intention to pay a dividend over 2025. We hold on to our aim to be properly financed, taking into consideration the anticipated improvement in the performance going forward and the progress towards a future-proof postal service. And good to add that normalized comprehensive income, which is, of course, the base for the amount of dividend is expected to follow a pattern that is more or less in line with 2023. In 2024, this includes some incidental positive effects.

Well, this concludes my explanation of the Q3 results, and I would now like to hand back to Inge.

Thank you, Linde, for your presentation. We will now open up for Q&A, and I ask you to limit your questions to two questions per person to set. So, operator, could you please explain the procedure for questions via the lines.

[Operator Instructions] Your first question comes from the line of Michiel Declercq from KBC Securities.

I have two, please. The first one would be on the impact of the trade barriers. You mentioned that you expect a bit more impact of that in Q4. Can you give some color on this? Or can, is there some quantification that you can give to this?

And the second question would be on Parcels on the price/mix effect. How I understood it at the beginning of the year was that the impact from the yield measures should gradually step in. Now if we look at the first three quarters, we actually see that the average pricing has actually come down. You're quite confident in the fourth quarter that you will see the biggest impact from the pricing.

Can you maybe elaborate a bit on why the impact here should be the largest? Is there a big difference compared to last year in terms of surcharges or maybe penalties to your customers if their predicted volumes don't match with the actual volumes? Just why the impact of the pricing should be that much higher in Q4? And if you can quantify what you're looking at?

Sure. And thanks, Michiel, for your questions. Let me take them one by one. Starting with trade barriers. Well, as I mentioned, so this quarter, we had limited impact. Of course, we do see more uncertainty and increasing volatility in the context of the U.S. trade policy and the responses from the counterparties. Well, it's not a surprise that tariff changes increase volatility and could slow down GDP growth, but could also generate opportunities on the other side, looking, for instance, at our knowledge with regard to customs.

But it's, of course, too soon to tell and to say what is the exact impact for Q4. But what we see is that from a materiality point of view, we do not expect the impact to be material. It will be limited also in Q4.

And to give some context on it, the direct exposure will be less than, is expected to be less than 1% of our revenue.

Then that's on the first question. Then on your second question with regards to pricing for Parcels. I would not say the pricing, what you mentioned, pricing has come down year-to-date. That's actually not the case. What we see is that we, that our pricing has passed as we anticipated. What you see overall is that with the yield measures which we are taking, so we say, and we see that, that's gradually coming in. Obviously, that depends also on when new contracts are being renewed. Not every contract has the same starting date or duration of the contract where we can change that.

But clearly, looking at the fourth quarter, also, of course, depending on volumes, when you see when you have made price increases, that obviously has a larger effect in the Q4 with peak periods. And there, wherever we have been introducing higher prices, yes, that obviously then also will have a higher effect, larger effect in Q4 than we have seen in the past quarters, because we have started with that gradually as of Q2.

So that is why we expect the Q4 price increases for PostNL to be larger than the organic cost increases for the year. I hope that provides an answer to both your questions.

Your next question comes from the line of Marco Limite from Barclays.

My first question is on the USO. Clearly, you set some scenarios back at the CMD in September, but we have had some more news in October. So, you're increasing prices by a lot as of 1st of Jan '26 on a year-over-year basis. And you're now implementing D+2 from early Jan '26. So my question to you is, do we think that this is enough for you to be breakeven in 2026?

Yes, to start with, first of all, on the start day of D+2, that's not the 1st of January 2026, but 1 July 2026. And on your question on the developments of the breakeven point, what we highlighted in during the Capital Markets Day is that we had, we would lead to breakeven as of 2028 because that is the point where we move to D+3.

At that time, the proposal from the minister was the 1st of January 2028 if a certain quality measure was achieved. That was the point of breakeven, so not 2026. So to respond to your question, we still will not be breakeven in 2026 for the Mail division given the developments, which we've had in the beginning of October because the main change over there was regarding the timing of the move to D+3, which was from 1st of January '28, he moved it more to the front 1 July 2027.

And secondly, there were, he proposed reliefs on the quality levels, which were in the earlier proposal 95%. However, it's good to mention that this are just proposals from the minister and really uncertainty around the time lines and the political process really persists. Well, as you know, we've had the recent elections last week. So as I said, these are just proposals from the minister and not yet law, so to say.

Okay. And what is the time line for a possible response on the cash compensation?

For the cash compensation, well, as you know, is that this proposal from the minister, it is a solution on the, it is a move or a first step towards a more future-proof situation. However, it does not serve or a solution yet for our net cost compensation. And as you may know or remember, we are, of course, still in proceedings on our financial contribution for 2025 and 2026. And there, we have appealed.

And yes, we are waiting for the outcome of that. And as I said, on top of that, in the proposal from the minister, we also are looking still for a solution of our net costs in general. Yes. That is now not in our control, but we are awaiting a response on that from our appeal as well as the next steps from the minister.

Okay. And second question very quickly. So, once you achieve breakeven first half '27, sorry, 1st July '27 or '28. But then I mean, if we think about more longer term, once you achieve the breakeven, you raised the bar to the breakeven situation, but then we are once again in a situation where we will be, we have cost inflation, let the volume decline. So on the long-term, let's say, over the next 10 years, once you move to D+3, how can you make sure that the USO is, let's say, forever breakeven at least?

Well, I think that is, of course, ongoing, what we are doing in Mail is trying to get an optimal network to ensure we are, well, let's say, organized as efficient as possible. I mean we don't have a glass ball, but we will make sure that we will do everything, put all our efforts to make it a future-proof situation. And as I said before, the, let's say, regulation or a solution for net costs is in the end, fundamental for a future viable situation. And that's why these first steps are welcome, but it's not yet enough to cover the full problem.

We will take our next question. Your next question comes from the line of Marc Zwartsenburg from ING.

First question is just a check because I think can you remind us on when the D+3 would kick in? Was it on the 1st of July '27? Or is it 1st of January '27?

Yes. The proposal from the minister, which was done in the beginning of October was for the 1st of July 2027. So that is six months earlier than in the previous proposal from the minister.

Yes. And then the quality has moved from 95% to 92%. That’s correct?

Yes, correct. Yes.

Then your Mail volumes, the minus 5% in Q3, there was a little bit of election in there. But as I remind from the earnings call, it was only a few days and not so much volumes. Most of it would be in Q4. So, if you exclude, let's say, the slight tailwind from the election in Q3, but what would have been then the underlying mail volume decline in Q3 would have been something like minus 5%, or minus 6% something like that?

5.6%, Marc.

Sorry, I didn't get that.

5.6%, it would have been. So, looking at the impact from election mail, you see that in quarter three, the impact was EUR 2 million of pieces for this quarter and the remainder of it for the fourth quarter.

And why is it only minus 5.6%? Is that just seasonality? Or is it just quite different from the normal trend of minus 8% to minus 10%?

Yes. I think it's indeed seasonality phasing that is playing part.

Okay. So in Q4, we should just assume the normalized, let's say, minus 8%, minus 10% and then add the support from the election. Is that correct? Or is there something seasonal there as well?

Yes, more or less, yes, that's correct.

Okay. And a question on the Amazon news last week for the investments in the Netherlands. Can you share your view on what they're saying because they want to tie their volumes in with what they have when this world wake ups. I know it's sizable client, but the other ones are bigger clients for you. So if volume shifts from your biggest client to your smaller clients and they also have a bit of a policy to do it themselves for a part. Can you show us your view what will be the impact on your Parcel volumes?

Well, obviously, we are closely monitoring these developments in the market. And well, at this point in time, it's too soon to give some color on the exact implications. But what we see more and more increasingly is we see online stores expanding and getting more and more, which is also happening now with Amazon or they are testing new services and investing in the e-commerce market. And that's obviously also what we are doing.

We continue to innovate in e-commerce and expanding our delivery preferences and really carefully look at consumer preferences, for instance, what we do with our out-of-home network. And with that, yes, okay, this is, of course, an event and a news which we closely monitor. And on the other side, it is still volume in the market, and we are just making sure that we continue our strategic intent and moves, which we mentioned during the Capital Markets Day to also reflect on any new or extended customers and platforms. But too soon to tell, too soon to give exact implications for that.

Maybe a bit more detail on Amazon, how big is that client for you at the moment in terms of volumes?

Well, I cannot give their exact color, but it's, as you say, not the largest client.

It's a top 5 client, I believe.

No, no, no. No.

Okay. Okay. And then my last question, if I may. You mentioned that there will be more positive impact from price in Q4. You have taken some additional efficiency measures. Is it correct that the efficiency measures, the extra, if I take the flow chart, the now from the original plan and then the bridge to the EUR 11 million, which is showing there as other cost as a positive then the EUR 2 million is then from the efficiency improvements? Is that the additional ones you mentioned? Is that the correct one?

Well, of course, it consists of pluses and minus. So that's not the, you cannot simply subtract the 11% from the 9% because there are, of course, pluses and minus in there. But what we see is that we have been or are able to put additional efficiency measures in our depots, transport.

And there, we see that to counter our mix effects. And that is also something which we will obviously continue for our fourth quarter, which will come on top of the ongoing adaptive measures.

Because if I compare the mix effect and the price effect, basically, they are a bit similar to what we've seen in Q2. Yes, shift yet feeding through while it was supposed to yield higher price and a better price/mix on balance, and that's not showing. So I'm just curious how you see that for Q4 because if it only, if the mix effect becomes bigger and the price becomes a little bit bigger, then you still have only a very mild positive price/mix effect, then you should have quite some additional efficiency improvements in Q4 to make your outlook. That's a bit where I'm puzzled. Yes.

No. Well, yes. Maybe to explain is, as said, so our price increases and yield measures, they are, we are delivering them according to plan. So that is basically what we have, let's say, in control. Looking at the mix effect, where you see that's really depending on consumer behavior, that effect, that mix effect is bigger than we, more negative than we anticipated and to counter that and mitigate that. And obviously, also inherently in yield measures is also part of moving to efficient operations. There, we see the counter effect where we can control or can mitigate that negative mix effect.

So yes, correct, the mix effect we anticipated is more. So larger clients getting faster big, so to say, than we had anticipated. And to counter that, we are ensuring that we put additional efficiency measures in place to mitigate that.

And to your point on the yield measures coming in, that's really gradually. It's not that from one day to the other, it all hits in. That takes a bit of time. And clearly, also this quarter is, let's say, a mild quarter in the sense that not a lot is happening. So that also is, therefore, the effect of yield measures is gradually coming in and then also, of course, more heavily as such in Q4.

[Operator Instructions] We will take our next question, and the question comes from the line of, please stand by, [Indiscernible]

I have a couple of questions. And I'm afraid the first one is a bit of a long one because I think it's important to understand the right context.

Last year, around this time last year, you warned us for the fact that Black Friday and Cyber Monday were so close to Sinterklaas . I think you've learned a lot from last year or you got to mention it, but I'm sure that this year it plays as well because Black Friday is on the 28th of November. Cyber Monday is on the 1st of December. Sinterklaas is on the 5th of December. With the improving consumer confidence data we've seen in recent months, this could really be a challenge.

How are you dealing with it? Do you see any prebuying that as we saw last year that people try to avoid Black Friday and Cyber Monday and that sort of thing. So my key question is, how do you manage it? And are you seeing prebuying already? For example, what can you share with us in relation to the volumes in Parcels you've seen in October?

Well, of course, on October, I cannot comment. That's too soon to tell. But on your question with the, let's say, the density of those Black Friday and Sinterklaas , et cetera. Well, I think that's not something new. We have been, we have had this for more years where we experienced this type of density in the holiday or in the peak season, sorry.

And so, what you see is that overall, those peaks get more peaky, so to say. So that is not just something for PostNL but is a general market trend. 

And we are in very close contact with our customers to ensure that we really optimize knowing that these days will be in the way these days will be; that we optimize volume, value and capacity utilization for this peak period, and also take into account, of course, our experiences, which we've had previous year to ensure that we streamline that peak period as good as we can. 

And clearly, we are very well on time with preparing for that and are really in close contact because with our customers because it's not just PostNL who needs to have that optimal utilization in the peak period, but it's actually for the whole ecosystem. So, all players in the ecosystem benefit from that. 

And that's why we are in close contact with them and also clearly communicate also to consumers around this. So yes, I can't say anything different that we are fully prepared for it and ready to have this organized in the most optimal way.

Have you seen any prebuying activity? Anything noteworthy that the trend was different at the end of the third quarter, for example?

No, no, I haven't seen that. No.

My second question is around international volumes. If I look at the first quarter of this year, then we saw plus 15%, second quarter, plus 10% year-on-year. Now we see plus 5% I can interpret it in 2 different ways. One is that indeed, the value over volume strategy is beginning to show. 

But I've also heard that new parties have come to the market like Cainiao and Dragonfly, which are especially aiming cheap Chinese volumes as long as well, they are a party in the market. One of your competitors even described them as gold diggers. What is happening there? What is it exactly? Are you indeed more cautious taking on more volume from China? Or is it the competitive environment that is changing?

Well, I would say, first of all, it's good to note that I think comparing by heart versus the growth of previous year, we already had a higher base. So, the first 2 quarters are not your starting point is different. Secondly, yes, our volume value strategy is clearly something which is what we aim for, and that is also for both domestic and international playing out there. So yes, that is, I think, the combination.

Okay. And then connected to that, there have been talks about implementing handling fees on Chinese Parcels. France was the first to announce that they were considering imposing a EUR 2 per item handling fee. And I recently read something that the Dutch are intending to do the same thing, if the French do it as of the 1st of January. Any news there? And how could it impact your business because [Schiphol] is one of the main hubs?

Yes. Well, let me start. It's too early to provide you with a concrete statement on the impact. But in general, PostNL is supportive of a level playing field in the different European countries. However, well, as you already mentioned, the 1st of January, such a potential additional tax would really result for us in an operational challenge. 

It's not feasible to implement this well, we are talking about already the busiest period in the year, and it's a very short time frame to implement such a system. And it also can be, of course, disruptive, I should say. So, like with the U.S. trade barriers, where also international postal traffic to the U.S. was on hold for a bit. So that's why we are in conversations with the government on that as well. 

And so, we would really plea, if it's being implemented for a careful implementation, so to involve all parties and with equal timing for all the EU countries and not to diversify between the different European countries. So that being said, too soon to give a statement on that, and we are actively in conversation to align on the best approach to make this work.

And then my final question, that's an easy one, sorry for making your life so hard, nothing personal. But on the APMs, I understood that you're currently at around 1,250 APMs, APLs, you call.

Yes, that's correct.

You were at around 1,100 at year-end last year. When I look back in the annual report, the intention was to increase that number by 500 to 600 a year. I can't imagine that during the peak period, all of a sudden, you're placing 400, 500 or so of the APLs. You have better things to do, I guess. 

What is the time path going forward? Because at the Capital Markets Day, also you highlighted the importance of APLs just the background of efficiency and that sort of things. Why am I not seeing a stronger pickup? The DHL, for example, is north of 2,000 already. It will be more and more difficult to find the right locations at the longer you wait.

Yes. Well, we indeed clearly have our ambition towards over 3,000 in 2028. And what we see is that it's also about the size of the lockers which you place. So, amount of lockers is one thing, but size, how many of these lockers are in one APL is we are placing bigger sizes than initially planned. 

And yes, we are progressing on that. And clearly, you have to deal as well with all the governmental regulations with that, and we are clearly on top of it to deliver towards our ambition for the long term. And as said, we see positive developments in the utilization of the lockers which we place and as said, which are bigger lockers than we initially placed. So yes, that is basically where we stand.

So basically, what you're saying is there will be a catch-up in the years ahead.

Yes. Yes.

Okay. Then we have one last one, a follow-up from Mark, if I'm correct. So that will be then the last one for today.

Yes, that's correct. 

A quick one. You issued a press release on the 5th of September that is asking the minister to withdraw the obligation of the USO. That's 2 days away that the 2 months are done. Should we expect some news flow in the next few days? Or can you help me with the timelines?

Well, indeed, correct, we asked for within 2 months. But obviously, that is not in our control. So yes, I would say expecting it this month, but depending obviously on the time lines on the side of the government, and that is not something we can control.

So could be any 6 months basically or without a date that's how.

Yes, exactly, exactly. they don't confirm by then and then you get the answer. That's not how it works.

And on the appeal of the cost compensation, is there.

It's the same. It's also depending on there. So yes, you are just basically depending on their side and also on the legal system. So yes.

Yes, I thought it was more like a court case thing that at some point, you need an outcome or is it not the case?

No, no, we haven't received any guidance on when we can expect it. No, not at this point in time.

Well, then we conclude our Q3 '25 results for now. Thank you all for participating and speak to you soon. Thank you all.