Postnl Nv · EURONEXT:PNL
Postnl Nv — Shareholder Meeting (April 2019)
73 slides from Postnl Nv's shareholder meeting presentation, Apr 16, 2019
Slide 1: Annual General Meeting of Shareholders 2019
Annual General Meeting of Shareholders 2019 Algemene Vergadering van Aandeelhouders 2019 The Hague, 16 April 2019
Slide 2: Agenda item 1: Opening and announcements
Agenda item 1 Opening and announcements Opening en mededelingen
Slide 3: Agenda item 2: Developments in financial year 2018
Agenda item 2 Discussion of the developments in the financial year 2018 Bespreking van de ontwikkelingen in het boekjaar 2018
Slide 4: Announcement 25 February 2019 on consolidation
Announcement 25 February 2019 on consolidation Herna Verhagen 4
Slide 5: One strong nationwide postal network for the Netherlands
One strong nationwide postal network for the Netherlands Strong foundation for a sustainable and solid postal sector Inevitable step to maintain reliable, accessible and affordable mail today and in the future Sustainable value for all stakeholders: customers, consumers, employees, postal sector and
Slide 6: The postal sector in the Netherlands
The postal sector in the Netherlands High quality, moderate rates, many jobs Service Quality USO Stamp Price D+1 (2017) Employment Rank 1 Country Switzerland 65,000 people 2 Netherlands Employed in the postal sector in the Netherlands 3 Japan (PostNL, Sandd, postal operators and sheltered employment
Slide 7: Reliable, accessible, affordable
Reliable, accessible, affordable Average household receives circa 300 letters per year Despite digitalisation and other means of communication, mail continues to be appreciated and relevant in society Desire in society to maintain 24-hrs service, 5 days per week with a minimum delivery quality of 95
Slide 8: Broad support for consolidation
Broad support for consolidation Change inevitable due to continued volume decline 2017 Start postal dialogue initiated by Ministry of Economic Affairs June Report Commission Oudeman 2018 Letter State Secretary Economic Affairs September 2018 Broad political support for consolidation February Announc
Slide 9: Request for approval filed with the ACM
Request for approval filed with the ACM Outcome and timing of the process remain uncertain at this stage Initial ACM approval process Conditions consisting of a 4 week Approved are met Check other Transaction notification phase and a 13+ week permitting phase with conditions completed a ‘stop the cl
Slide 10: PostNL and Sandd
PostNL and Sandd • 38,000 employees • 19,000 employees • Including 18,000 postal deliverers • Including 16,000 postal deliverers • Mail volume 2018: 1.781 billion • Mail volume 2018: 720 million • Revenues Mail in the Netherlands • Revenues 2018: € 201 million 2018: € 1,678 million 10
Slide 11: Transaction highlights
Transaction highlights Accretive to UCOI in first year after closing Price and funding • Total transaction value of €130m (Enterprise Value) • Funded through cash on hand and new debt arrangements Financial impact • Annual UCOI contribution of €50m - €60m, reaching run-rate 3 years post closing • In
Slide 12: Transaction impact on leverage and dividend
Transaction impact on leverage and dividend • Acquisition consideration to be funded through cash on hand and new Adjusted Net Debt / EBITDA debt arrangements (to be defined later) • As a result of the transaction consideration paid, subsequent integration 2.0 costs and the delay in cost saving plan
Slide 13: Consolidation is important for all stakeholders of PostNL
Consolidation is important for all stakeholders of Post NL Customers • Solid basis for quality and continuity • Availability of mail service across the Netherlands • Affordability Employees • Enhanced job security for thousands of postal deliverers • Manage decline in a socially responsible manner •
Slide 14: Business review
Business review Herna Verhagen 14
Slide 15: Key takeaways
Key takeaways • Strong performance in Q4 brings UCOI FY 2018 to higher end of guided range • Improved run-rate cost savings in HY2 • Intention to pay progressive dividend over 2018 delivered • Strive for certainty and stability for all stakeholders in declining postal market; closer to consolidation
Slide 16: Confidence in our strategy
Confidence in our strategy Our ambition is to be your favourite deliverer Strategic objectives to become leading postal and logistics solutions provider in Benelux Help customers grow their business collect sort Enhance sustainable employability Secure accessible and reliable postal services deliver
Slide 17: FY 2018 UCOI of €188m, in upper-part of guided range
FY 2018 UCOI of €188m, in upper-part of guided range Good progress to become leading postal, e-commerce logistics company of choice Revenue Underlying cash Consolidated equity Proposed dividend operating income FY 2018 €2,772m €188m €46m €0.24 FY 2017 €2,725m €241m €34m €0.23 % of revenue related to
Slide 18: Parcels
Parcels Revenue Underlying cash Volume growth Revenue mix operating income Logistic Solutions & other 2018 €1,555m €117m 21.5% (non-volume related) FY 2018 Spring €1,555m Benelux (+12.5%) (margin 7.5%) (non-volume related) €1,382m International 2017 €140m Key takeaways 2018 • Ongoing strong volume g
Slide 19: Capital Markets Day on 7 May
Capital Markets Day on 7 May Focus on our growth potential Capital Markets Day Key topics Insights and future perspectives Parcels • Explain how PostNL will be able to • Market developments, competitive market improve the balance between position, commercial strategy and plans to Improve sustainable
Slide 20: Parcels in 2019
Parcels in 2019 Key drivers performance in 2019 • Focus on the growth potential of our business • Improving balance between volume, profitability and cash flow • Expanding our network in the Benelux by three new sorting centers • Impact tight labour and transport market • Further develop our service
Slide 21: E-commerce drives further volume growth Parcels
E-commerce drives further volume growth Parcels Towards the next growth phase Accelerating volume growth # parcels PostNL (in million) Market developments • Online share retail increases External • Growth online spending 251 • Extensive growth of heavy users 207 Customer interaction 177 • Increased
Slide 22: Investments in infrastructure and innovation
Investments in infrastructure and innovation Solidify our position as leading e-commerce logistics solutions provider in Benelux Innovations in our network Parcel infrastructure Sorting flexibility 4,250 Increased sorting capacity by adding two 4,000 3,400 shoots per depot at 17 depots, increasing #
Slide 23: Mail in the Netherlands
Mail in the Netherlands Revenue Underlying cash Total cost savings Addressed mail volume decline operating income 2018 €1,678m €93m €48m 10.7% of which €26m in Mail in the (-5.9%) (margin 5.5%) Netherlands 2017 €1,783m €125m Key takeaways 2018 • Result back-end loaded in line with our initial guidan
Slide 24: Mail in the Netherlands in 2019
Mail in the Netherlands in 2019 Key drivers performance in 2019 • Volume decline and price increases Current business model New mail route • Switch to New mail route - step change in business model enables us to adapt organisation to future volume decline 24h delivery • Benefits for customers, emplo
Slide 25: Anticipated step-up cost savings in 2019 - 2020
Anticipated step-up cost savings in 2019 - 2020 Well-supported by several projects underpinned by robust plans and clear milestones Transition towards new mail route introduction start phase 2 equal flow mode; optimisations New mail route 43 38 ~30 <20 Centralisation locations pilot sequence impleme
Slide 26: Significant Market Power
Significant Market Power New draft decision creates uncertainty in the market • ACM has published a new draft SMP-decision • PostNL strongly disagrees with this draft decision • ACM creates new uncertainty in market • Draft decision does not reflect the reality and Financial impact related to ACM me
Slide 27: Confidence in accelerating our transition
Confidence in accelerating our transition Key drivers performance in 2019 Towards e-commerce logistics player • Focus on growth potential of our business • Improving balance between continuing volume growth, profitability and cash flow FY 2016: 33% • Expanding our network in the Benelux by three new
Slide 28: Financial review
Financial review Pim Berendsen 28
Slide 29: Financial highlights FY 2018
Financial highlights FY 2018 Underlying cash operating income in upper-part of guided range (in € millions) FY 2017 FY 2018 Reported revenue 2,725 2,772 Reported operating income 284 185 Restructuring related charges 25 3 Project costs and other (2) 28 Elimination intercompany results from discontin
Slide 30: Statement of income
Statement of income Lower operating income partly compensated by lower financial expenses and income taxes (in € millions) FY 2017 FY 2018 Revenue 2,725 2,772 Operating income 284 185 Net financial expenses (42) (24) Results from investments in associates and joint ventures (10) 0 Income taxes (53)
Slide 31: Cash conversion – FY 2018
Cash conversion – FY 2018 (in € millions) UCOI 2018 188 Capex (55) (in € millions) FY 2018 Reversal one-offs Base capex 51 Depreciation & Amortisation as % of revenue 1.8% 83 Cost savings initiatives 15 Change in WC (122) New sorting and delivery centres 29 Total capex 95 Interest paid (26) Income t
Slide 32: Positive consolidated equity at YE 2018
Positive consolidated equity at YE 2018 Consolidated statement of financial position (in € millions) 31 Dec 2018 31 Dec 2018 Intangible fixed assets 212 Consolidated equity 46 Property, plant and equipment 494 Non-controlling interests 3 Financial fixed assets 92 Total equity 49 Other current assets
Slide 33: Intention to pay progressive dividend in 2018 delivered
Intention to pay progressive dividend in 2018 delivered Dividend 2018 proposal: €0.24 per share Capital return to shareholders Development dividend per share • Progressive dividend over 2018 by applying deviation from €0.24 pay-out ratio as set in dividend policy as indicated before proposed €0.23 •
Slide 34: Outlook 2019
Outlook 2019 (in € millions) Revenue UCOI / margin 2018 outlook 2019 2018 margin outlook 2019 Parcels 1,555 + low teens 117 (7.5%) 7.5% - 9.5% Mail in the Netherlands 1,678 - mid single digit 93 (5.5%) 3% - 5% PostNL Other / eliminations (461) (22) Total 2,772 + low single digit 188 (6.8%) 170-200 C
Slide 35: Financial strategy
Financial strategy Solid financial position with aim for progressive dividend Strong financial position • Solid balance sheet as per YE 2018 (in € millions) Positive consolidated equity 46 Eurobond with coupon of 1.0%, maturity Nov-2024, 400 nominal value Netted pension liabilities 296 245 Lease lia
Slide 36: Dividend policy unchanged
Dividend policy unchanged Leverage ratio Priorities for capital allocation indicative • Aim to pay progressive dividend, in line with dividend policy 2.0 • Invest in growth: close to core, adjacent and transformational • Intention to compensate for dilution of EPS 2016 2018 2019 245 Progressive divi
Slide 37: Agenda item 3: Annual Report 2018
Agenda item 3 Annual Report 2018 Jaarverslag 2018
Slide 38: Agenda item 4: Corporate Governance chapter
Agenda item 4 Discussion of the Corporate Governance chapter in the Annual Report 2018 Bespreking van het corporate governance hoofdstuk in het jaarverslag 2018
Slide 39: Agenda item 5: Remuneration policy execution
Agenda item 5 Discussion of the execution of the remuneration policy during the financial year 2018 Bespreking van de uitvoering van het bezoldigingsbeleid gedurende het boekjaar 2018
Slide 40: Remuneration 2018
Remuneration 2018 Overview • Market assessment • Peer group selection • Compensation benchmark • Execution of remuneration policy in 2018 • No changes in remuneration policy (as approved in 2013 AGM) 40
Slide 41: Market assessment: peer group selection
Market assessment Peer group selection Every 3 years review and benchmark remuneration Board of Management (BoM) Criteria peer group selection 2018 Peer group ▪ Focus on listed Dutch companies (AEX – AMX) with similar characteristics: Aalberts Industries IMCD • HQ in NL Arcadis KPN • Regular corpora
Slide 42: Market assessment: compensation benchmark
Market assessment Compensation benchmark Outcome assessment: ▪ base salary positioned between 25th percentile and median; ▪ total direct compensation (base salary, target STI and expected value LTI) positioned well below 25th percentile The Remuneration Committee agreed to leave the BoM’s remunerati
Slide 43: Remuneration policy PostNL
Remuneration policy PostNL Variable pay Short term Long term - Cash - - Shares - Financial targets (60%) Internal financial & strategic targets (100%) • Underlying cash operating income PostNL • Underlying net cash income PostNL • Adjusted net cash flow from operating/investing activities • Cost sav
Slide 44: Remuneration 2018 for CEO and current CFO
Remuneration 2018 for CEO and current CFO* According to remuneration policy as approved in 2013 Total compensation CEO : €885,188 CFO : €510,385 Base salary Variable pay CEO : €625,000 (100%) CEO : €260,188 (41,63%) CFO : €333,819 (100%) CFO : €176,566 (41,63%) Short term performance criteria Long t
Slide 45: Agenda item 6: Adoption of 2018 financial statements
Agenda item 6 Adoption of the 2018 financial statements (Resolution) Vaststelling van de jaarrekening over het boekjaar 2018 (Besluit)
Slide 46: Voting
Voting Stemmen Insert the card with the gold chip pointing towards you Voer de kaart in met de gouden chip naar u toe Open LUMI AGM app and log in Open LUMI AGM app en log in 46
Slide 47: Voting
Voting Stemmen When the chairman invites you to vote the options will appear in the device screen Wanneer de voorzitter u uitnodigt om te gaan stemmen verschijnen de stemopties in het beeldscherm • Button 1 to vote for • Toets 1 om voor te stemmen • Button 2 to vote against • Toets 2 om tegen te ste
Slide 48: Voting test
Het is vandaag mooi weer Voor / For 676,210 Tegen / Against 10,180 Onthouding / Abstain 112,333 Voor / For (EEN 98.52% Tegen / Against [1.48%
Slide 49: Agenda Item voting result
Agendapunt 6 / Agenda Item 6 Voor / For 158,246,527 Tegen / Against 9,845 Onthouding / Abstain 31,512,825 Voor /For (EN 99,993 Tegen / Against {0.01%
Slide 50: Agenda item 7: Dividend policy and appropriation of profit
Agenda item 7 a. Dividend policy Dividendbeleid b. Appropriation of profit (Resolution) Winstbestemming (Besluit) 50
Slide 51: Dividend 2018 proposal: €0.24 per share
Dividend 2018 proposal: €0.24 per share Capital return to shareholders Dividend calendar 2019 • Proposed dividend 2018 of €0.24 per share, based on 80% of 16 April AGM underlying net cash income of €138m, election dividend 18 April ex-dividend date • €0.07 per share paid as interim dividend in Augus
Slide 52: Agenda Item 7b voting result
Agendapunt 7b / Agenda Item 7b Voor / For 189,439,939 Tegen / Against 309,652 Onthouding / Abstain 45,020 Voor / For (ENR 99,241 Tegen / Against {0.16%
Slide 53: Agenda item 8: Release from liability, Board of Management
Agenda item 8 Release from liability of the members of the Board of Management (Resolution) Het verlenen van kwijting aan de leden van de Raad van Bestuur (Besluit) 53
Slide 54: Agenda Item voting result
Agendapunt 8 / Agenda Item 8 Voor / For 157,038,772 Tegen / Against 613,700 Onthouding / Abstain 32,126,874 Voor / For (EE 29.61% Tegen / Against {0.39%
Slide 55: Agenda item 9: Release from liability, Supervisory Board
Agenda item 9 Release from liability of the members of the Supervisory Board (Resolution) Het verlenen van kwijting aan de leden van de Raad van Commissarissen (Besluit) 55
Slide 56: Agenda Item voting result
Agendapunt 9 / Agenda Item 9 Voor / For 157,043,091 Tegen / Against 619,608 Onthouding / Abstain 32,132,455 Voor / For (EE 29.61% Tegen / Against {0.39%
Slide 57: Agenda item 10: Supervisory Board
Agenda item 10 Supervisory Board Raad van Commissarissen a. Announcement of two vacancies in the Supervisory Board Kennisgeving van twee vacatures in de Raad van Commissarissen b. Opportunity for the General Meeting of Shareholders to make recommendations for the (re)appointment of members of the Su
Slide 58: Agenda item 11: Appoint Ms Van Lier Lels
Agenda item 11 Proposal to appoint Ms Van Lier Lels as member of the Supervisory Board (Resolution) Voorstel tot benoeming van mevrouw Van Lier Lels tot lid van de Raad van Commissarissen (Besluit) 58
Slide 59: Agenda Item voting result
Agendapunt 11 / Agenda Item 11 Voor / For 156,802,412 Tegen / Against 900,777 Onthouding / Abstain 32,019,045 Voor / For (EEE 39.3% Tegen / Against {0.57%
Slide 60: Agenda item 12: Reappoint Ms Menssen
Agenda item 12 Proposal to reappoint Ms Menssen as member of the Supervisory Board (Resolution) Voorstel tot herbenoeming van mevrouw Menssen tot lid van de Raad van Commissarissen (Besluit) 60
Slide 61: Agenda Item voting result
Agendapunt 12 / Agenda Item 12 Voor / For 127,812,219 Tegen / Against 30,389,919 Onthouding / Abstain 31,514,843 Voor / For «(ENN 0.79% Tegen/ Against [19.21%
Slide 62: Agenda item 13: Vacancies in Supervisory Board 2020
Agenda item 13 Announcement of vacancies in the Supervisory Board as per the close of the Annual General Meeting of Shareholders in 2020 Mededeling van vacatures in de Raad van Commissarissen die na afloop van de Jaarlijkse Algemene Vergadering van Aandeelhouders in 2020 zullen ontstaan 62
Slide 63: Agenda item 14: Intended reappointment of Ms Verhagen
Agenda item 14 Intended reappointment of Ms Verhagen as member of the Board of Management Voorgenomen herbenoeming van mevrouw Verhagen tot lid van de Raad van Bestuur 63
Slide 64: Agenda item 15: Reappoint Ernst & Young
Agenda item 15 Proposal to reappoint Ernst & Young Accountants LLP as accountant of the company (Resolution) Voorstel tot herbenoeming Ernst & Young Accountants LLP als accountant van de vennootschap (Besluit) 64
Slide 65: Agenda Item voting result
Agendapunt 15 / Agenda Item 15 Voor / For 156,933,666 Tegen / Against 1,585,955 Onthouding / Abstain 31,221,888 Voor / For (93,007 Tegen/ Against 1.00%
Slide 66: Agenda item 16: Authority to issue ordinary shares
Agenda item 16 Designation of the Board of Management as authorised body to issue ordinary shares (Resolution) Aanwijzing van de Raad van Bestuur als bevoegd orgaan tot het uitgeven van gewone aandelen (Besluit) 66
Slide 67: Agenda Item voting result
Agendapunt 16 / Agenda Item 16 Voor / For 157,196,457 Tegen / Against 1,310,475 Onthouding / Abstain 31,238,388 Voor / For (ENN 9.172% Tegen / Against [0.83%
Slide 68: Agenda item 17: Limit pre-emptive right
Agenda item 17 Designation of the Board of Management as authorised body to limit or exclude the pre-emptive right upon the issue of ordinary shares (Resolution) Aanwijzing van de Raad van Bestuur als bevoegd orgaan tot het beperken of uitsluiten van het voorkeursrecht bij uitgifte van gewone aandel
Slide 69: Agenda Item voting result
Agendapunt 17 / Agenda Item 17 Voor / For 156,457,004 Tegen / Against 2,050,618 Onthouding / Abstain 31,237,888 Voor / For - (N o8.71% Tegen / Against 1.29%
Slide 70: Agenda item 18: Authorisation to acquire own shares
Agenda item 18 Authorisation of the Board of Management to have the company acquire its own shares (Resolution) Machtiging van de Raad van Bestuur tot het verkrijgen van eigen aandelen door de vennootschap (Besluit) 70
Slide 71: Agenda Item voting result
Agendapunt 18 / Agenda Item 18 Voor / For 158,157,654 Tegen / Against 278,452 Onthouding / Abstain 31,309,402 Voor/ For «(EEN 39.52% Tegen / Against {0.18%
Slide 72: Agenda item 19: Questions
Agenda item 19 Questions Rondvraag 72
Slide 73: Agenda item 20: Close
Agenda item 20 Close Sluiting 73