Delivered a record level of 337 million parcels in 2020
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PostNL has released preliminary results, which were positively impacted by the lockdown in the Netherlands starting mid-December. As a result, operational performance accelerated further. PostNL has delivered a record level of 337.0 million parcels in 2020, of which around 25.0 million are estimated to be non-recurring and related to Covid-19.
At the same time, Mail in the Netherlands realised an exceptional performance in the last weeks of the year as more greeting cards and single items were sent during the lockdown. Total revenue is expected to amount to around €3,250.0 million in 2020. FY 2020 normalised EBIT is expected to come in at around €240.0 million, strongly outperforming previous guidance, with a very strong free cash flow of around €185.0 million.
The results were driven by a very strong business performance both at Parcels and at Mail in the Netherlands. Following the strong Q4 results, the Company will increase the performance-related compensation to reward people for all their efforts. It will also reward the people working for its sorting and delivery partners of Parcels in the Netherlands with an extra payment.
At Parcels, volume growth in Q4, 2020 amounted to 29.6% (FY 2020: 19.2%). PostNL delivered 337.0 million parcels in 2020, of which around 25.0 million parcels are estimated to be non-recurring as they are related to Covid-19. The favourable price/mix developments continued in the fourth quarter are coupled with positive impacts from yield measures. Its flexible infrastructure, combined with more equally spread flow, shows the robustness of the business model in this exceptional situation. Good performance at both Spring and Logistics continued. Normalised EBIT for Q4, 2020 is expected to amount to €75.0 million, up €35.0 million compared with Q4, 2019 (FY 2020: €209.0 million, of which around €40.0 million qualifies as exceptional driven by Covid-19).
At Mail in the Netherlands, volume decline in Q4 was 0.2% (FY 2020: 9.6%). Normal substitution was almost fully offset by a recovery in direct mail and more greeting cards. The latter resulted in a more favourable price/mix development that is not expected to recur.
Due to the continued unprecedented circumstances, visibility going forward remains limited. While the lockdown continues into the beginning of 2021, leading to ongoing strong parcel volumes but also additional costs, among others to keep retail points open. PostNL assumes that the impact of Covid-19 will gradually fade out in 2021. Based on the preliminary results for 2020 and current assumptions, PostNL expects normalised EBIT for 2021 to be higher than normalised EBIT 2020 corrected for the exceptional Covid-19 impact of around €55.0 million, an improvement of business performance, mainly at Parcels and normalised comprehensive income to be comparable to the level of 2020.
PostNL will continue to invest in its network to be able to accommodate future eCommerce growth. In addition, PostNL will accelerate the digitalisation of its activities.