For its Q3 2022 reporting period, PostNL announced an EBIT loss of €20m, reflecting the challenges brought about by high inflation and low consumer confidence. These macroeconomic conditions have put pressure on consumer spending and growth expectations for e-commerce, and have significantly impacted cost levels.
Domestic volume growth at Parcels was around 1%, with overall volumes down by -1.1%, driven by a decline in cross-border activities. Parcel volumes in Q3 were 80m, compared to 81m in Q3 2021. Volumes at Mail in the Netherlands were -9.3%, in line with expectations.
Herna Verhagen, the CEO of PostNL, commented on the difficult operating environment and the headwinds facing the company. She stated, “The macroeconomic environment has deteriorated and is causing further headwinds. The unprecedentedly high level of inflation puts further pressure on labour costs. In combination with low consumer confidence it has clearly impacted consumer spending. Retail shops as well as webshops are now signalling that their stocks are growing. We expect these headwinds to continue in the quarters to come, causing prolonged uncertainty.”
In light of these challenges, PostNL is focused on taking all necessary initiatives while continuing to execute on its longer-term strategy. The company is accelerating and intensifying its adaptive measures to improve efficiency and productivity and is applying active yield management with price adjustments. However, the benefits of these initiatives are lagging given the speed at which the operating environment is changing, putting pressure on margins.
Some of the specific actions that the company is taking include active yield management and price adjustments going forward, reduction of indirect costs at Parcels, routes, staffing and fleet optimization, adjusting investments to align with volumes and strict working capital management, and tight control of overhead costs such as limiting and postponing project costs and a prudent approach to filling staff vacancies.
In terms of ESG, the company continues to make progress by increasing the usage of renewable fuels and further electrification of its fleet, as well as continued focus on sustainable solutions and smart digital journeys.
Overall, while Q3 2022 presented a difficult operating environment for PostNL, the company is taking necessary actions to mitigate the impact of these challenges while maintaining a focus on executing its strategy and adhering to its financial policy.