PostNL N.V. is a public limited liability company with its registered seat and head office in The Hague, the Netherlands. PostNL provides businesses and consumers in the Benelux with an extensive range of services for their mail and parcels needs. Through our international sales network Spring, we connect local businesses around the world to consumers globally. PostNL\u2019s services involve collecting, sorting, transporting and delivering letters and parcels for the company\u2019s customers within specific timeframes. The company also provides services in the area of data management, direct marketing and fulfilment.
The consolidated financial statements include the financial statements of PostNL N.V. and its consolidated subsidiaries (hereafter referred to as \u2018PostNL\u2019, \u2018Group\u2019 or \u2018the company\u2019). The consolidated financial statements were authorised for issue by PostNL\u2019s Board of Management and Supervisory Board on 27 February 2023 and are subject to adoption at the Annual General Meeting of Shareholders on 18 April 2023.
The consolidated financial statements of PostNL:
have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), including International Accounting Standards (IAS) and related interpretations of the IFRS Interpretations Committee (IFRICs), and Dutch law,
have been prepared under the historical cost convention, except for financial instruments, and
have been prepared assuming a going concern.
The significant accounting policies applied in the preparation of these consolidated financial statements are included at the relevant notes to the consolidated financial statements or, in case of more general policies, see note '5.4 Summary of all other accounting policies'to the Consolidated financial statements for more information. These policies have been consistently applied to all the years presented, unless stated otherwise. All amounts included in the consolidated financial statements are presented in euros, unless stated otherwise. Note that the numbers presented in the financial statements and disclosures thereto may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures due to rounding.
Based on the cash flow-generating capability of the company, the current finance structure and the company\u2019s ability to realise its assets and discharge its liabilities in the normal course of business, PostNL\u2019s financial statements have been prepared assuming a going concern. As at 31 December 2022, the balance of cash and cash equivalents amounted to \u20ac556 million and the company has an undrawn multi-currency revolving credit facility of \u20ac200 million. Its financing arrangements do not include financial covenants. Bond repayments are not due until 2024.
In 2022, the war in Ukraine and macro-economic developments had a profound impact across society. High inflation and rapidly rising energy costs affected consumer confidence and spending, negatively impacting parcel volumes for much of the year. Rising inflation also led to increased costs for PostNL, which could not be absorbed through regular price increases. These issues also affected our customers, partners and suppliers. Globally, supply chain issues led to delays in the availability of products, while rising energy and other costs made the transportation of goods more expensive.
Management assessed the impact of the current developments on all material assets and liabilities. We performed a review for impairment triggers on goodwill and other intangibles, PP&E and Right-of-use assets. We also analysed the trade accounts receivable position and customers' payment behaviour. And last we assessed the need to make adjustments to the fair value accounted financial assets and balance sheet positions related to our non-current assets held for sale. The assessment did not reveal any need for significant negative adjustments to the accounts mentioned in and per year end 2022.
Based on a joint decision by PostNL, the pension fund and the trade unions, taken on 23 December 2023, PostNL\u2019s main pension plan has been amended as per 31 December 2022. As part of the amendment, the pension plan is now based on a \u2018collective defined contribution\u2019 plan. Among others, this means that as of 31 December 2022 PostNL will be only required to pay the regular pension contribution, as the agreement for top-up payments and restitution has been cancelled. As a result, if the financial position of the pension fund would deteriorate, PostNL is no longer obliged to make top-up payments. At the same time, PostNL is also no longer entitled to restitutions, even if the financial position of the pension fund would allow for that.
With the amendments made, the accounting classification of the main plan changed from a defined benefit plan to a defined contribution plan at 31 December 2022. According to IFRS, this change in classification is accounted for as a settlement. As part of the agreement and therewith settlement, the unconditional funding obligation has also been adjusted. The adjustment concerns a reduction of \u20ac20 million and an amended payment schedule (2022: \u20ac28 million; 2023: \u20ac16 million). On balance, this resulted in an improvement in PostNL\u2019s adjusted net debt position of \u20ac20 million at 31 December 2022.
The material settlement impact on different line items, like operating income and total comprehensive income, has been presented in a separate column in the related financial statements. Within the cash flow statement, the material non-cash settlement impact is directly segregated at the profit before tax starting entry. Through this method of presentation, the 2022 pre-settlement results can be compared with the 2021 results, which results are both based on the previously applicable defined benefit pension plan. As of 31 December 2022, pension expenses will equal the contribution paid by PostNL to the pension fund.
See note 3.5: Provisions for pension liabilities' to the Consolidated financial statements for more information.
On 1 March 2022, PostNL started a share buyback programme to neutralise the assumed dilutive impact of shares issued in relation to dividends over 2021-2023. The company targets to repurchase ordinary shares of PostNL N.V. to a value of maximum \u20ac250 million, spread over 2022 and 2023. In 2022, PostNL repurchased 51 million ordinary shares from the first tranche for a total amount of \u20ac164 million. Out of the 51 million shares, 16,358,973 shares were used for the payment of the 2021 final dividend in stock, 7,868,569 shares were used for the payment of the 2022 interim dividend in stock and 1,051,073 shares were used for the settlement of PostNL\u2019s equity-settled share plans. The remaining 25,721,385 shares were cancelled on 22 November 2022. A second tranche of the programme, scheduled to be executed during 2023, will be delayed until further recovery of business performance and in accordance with PostNL\u2019s capital allocation framework. The company aims at a leverage ratio (adjusted net debt/EBITDA) not exceeding 2.0.
On 27 September 2019, the State Secretary of Economic Affairs cleared the merger between PostNL and Sandd. Legal appeals have been filed by a number of parties against the approval. On 11 June 2020 the courts (Rechtbank Rotterdam) annulled the approval for consolidation in the Dutch postal market. The government appealed against the court decision. PostNL also decided to appeal. On 9 April 2021, the earlier approval of the merger was confirmed by a new decision taken by the State Secretary. This new decision, which has retroactive effect, has been included in the appeal procedure. On 2 July 2022, the Dutch Trade and Industry Appeals Tribunal ruled that the Minister for Economic Affairs and Climate Policy had been wrong to approve the merger of PostNL and Sandd. Although the approval and corresponding conditions are no longer valid, PostNL will continue to adhere to the conditions imposed in relation to the acquisition. The legality of the transaction is not at stake. As we obtained control as of the acquisition date of 22 October 2019, we have fully consolidated Sandd in our financial statements from that date going forward.
The preparation of PostNL's consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. It also requires management to exercise its judgement in the process of applying PostNL\u2019s accounting policies.
Estimates, assumptions and judgements are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting positions will, by definition, seldom equal the related actual results. On a continuous basis, we evaluate our expectations with the actual results, and include the learnings going forward.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed below.
Post-employment benefit accounting is intended to reflect the recognition of future benefit costs over the employee\u2019s approximate service period, based on the terms of the plans and the investment and funding decisions made. The accounting requires the company to make assumptions regarding variables such as the discount rate, the rate of benefit increases and future mortality rates. In relation to the plan assets, the valuation of level 3 investments is based on valuation techniques using inputs that are not based on observable market data. Changes in these key assumptions can have a significant impact on the defined benefit obligations, plan assets and pension costs incurred. Given the change in accounting classification of PostNL's main pension plan from defined benefit to defined contribution at 31 December 2022, this emphasis on critical accounting estimates and judgments applies only to the 2022 and 2021 results. For details on pensions, seeto the consolidated financial statements.
Other provisions mainly include expected costs related to jubilee, illness, long-term disability and termination employee benefit obligations and claims & indemnities. The provisions recorded reflect the present value of management's best estimate of the expenditure required to settle the obligation. Given the uncertain outcome, management must use a certain degree of judgement in this respect. This includes the thorough analysis and concluding view of our position and that of the third party. See note '3.5 Provisions for pension liabilities'to the Consolidated financial statements for more information on the other provisions.
In determining impairments of intangible assets including goodwill and software, tangible fixed assets and financial fixed assets, management must make significant judgements and estimates to determine whether the recoverable amount is less than the carrying value. The recoverable amount is the higher of the fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the asset-specific risks. Determining cash flows requires the use of judgements and estimates that have been included in PostNL\u2019s strategic plans and long-term forecasts. The data necessary for the execution of the impairment tests are based on management estimates of future cash flows, which make it necessary to estimate revenue growth rates and profit margins. See note '3.3 Intangible fixed assets' to the Consolidated financial statements for more information on the impairment test of goodwill.
PostNL has to estimate the deferred revenues from stamps sold but not yet used by its customers. The company uses a seasonal model based on historical figures in order to account for the seasonal effects on sales from stamps (for example, stamp sales for Christmas greetings in November and December). Additionally, the company handles large quantities of international mail and parcel volumes to and from foreign postal operators. Although the net outstanding accrual positions reflect our best estimate, given the assumptions involved, final settlements might deviate from the outstanding positions. See note '3.1 Working capital' to the Consolidated financial statements for details on the current positions.
The company is subject to income taxes in a number of jurisdictions. Significant judgement is required in determining the provision and liability for income taxes. PostNL recognises liabilities for potential tax issues based on estimates of whether additional taxes will be due, based on its best interpretation of the relevant tax laws and rules. PostNL recognises deferred tax assets to the extent that it is probable that future taxable profits will allow the deferred tax asset to be recovered. This is based on estimates of taxable income by jurisdiction in which the company operates and the period over which deferred tax assets are recoverable.See notes '2.2 Other income'and '3.8 Deferred income tax assets and liabilities' to the Consolidated financial statements for more information on income taxes and deferred tax assets.
Legal proceedings covering a range of matters are pending against the company in various jurisdictions. The cases and claims often raise difficult and complex factual and legal issues that are subject to many uncertainties and complexities, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction and the differences in applicable law. PostNL consults with legal counsel and certain other experts on matters related to litigation. PostNL recognises a liability when it is determined that an adverse outcome is probable and the amount of the loss can be reasonably estimated. See note '3.10 Commitments and contingencies'to the Consolidated financial statements for more information on commitments and contingencies.
The following provides a brief description of recent issued International Financial Reporting Standards, amendments and/or interpretations, that could have a material impact on our financial statements.
PostNL has adopted Onerous Contracts \u2013 Costs of Fulfilling a Contract (Amendments to IAS 37) from 1 January 2022. This resulted in a change in accounting policy for performing an onerous contract assessment. Previously, PostNL included only incremental costs to fulfil a contract when determining whether that contract was onerous. The revised policy is to include both incremental costs and an allocation of other direct costs. The amendments apply prospectively to contracts existing at the date when the amendments are first applied. The Group identified no contracts as onerous applying the revised accounting policy. There is no impact on the opening equity balances as at 1 January 2022 as a result of the change.
There are no other IFRS standards, amended standards or IFRIC interpretations taking effect for the first time for the financial year beginning 1 January 2022 that would be expected to have a material impact on the 2022 accounts of the Group.
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the financial statements have been reviewed by the Group. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective. It is not expected that the Group\u2019s consolidated financial statements will be significantly impacted.
PostNL's revenue from contracts with customers consist of the provision of postal and logistics services. Revenue from contracts with customers is recognised when the goods are transferred or the services are rendered to the customer at an amount that reflects the consideration to which PostNL expects to be entitled in exchange for those goods or services. Revenue is the gross inflow of economic benefits during the current year that arise from ordinary activities and result in an increase in equity, other than increases relating to contributions from equity participants.
If the consideration in a contract includes a variable amount, PostNL estimates the amount of consideration to which it will be entitled in exchange for transferring the goods or rendering the services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. PostNL provides volume discounts to certain customers once the quantity of goods transferred or services rendered during the period exceeds a threshold specified in the contract. Discounts are offset against amounts invoiced to the customer. To estimate the variable consideration for the expected future discounts, PostNL applies the expected value method. The variable consideration can be reasonably accurately determined from achieved volumes and contract agreements.
A contract liability is the obligation to transfer goods or render services to a customer for which PostNL has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before PostNL transfers goods or renders services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when PostNL performs under the contract and relate to amongst others deferred revenue from unused stamps, deferred revenue from franking machines and the rental of mailboxes. See note '3.1.3 Contract liabilities' to the Consolidated financial statements for more information.
Revenue from contracts with customers represent revenue from the transfer of goods and rendering of services to third parties less discounts, credit notes and taxes levied on sales. Accumulated experience is used to estimate and provide for the discounts.
Other operating revenue relates to the sale of goods and rendering of services not related to PostNL\u2019s ordinary postal and logistics services and mainly include rental income of temporarily leased-out property and custom clearance income.
The company\u2019s business involves the logistical service of delivering mail, parcels and other consignments. Nearly all of the company\u2019s revenues are represented by a single performance obligation being \u2018logistic services\u2019. Revenue is being recognised at a point in time when the goods are transferred or services are rendered to the customer, generally on delivery of the mail, parcels or other consignments. Other performance obligations within the company\u2019s business comprise the rental of post-boxes (revenue recognition over time) and stamp collection services (revenue recognition at a point in time).
The following table presents PostNL's revenue from contracts with customers relating to the reported operating segments. See note '2.7 Segment information'to the Consolidated financial statements for the segment information of the other revenue and eliminations.
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Parcels | 2,353 | 2,160 |
Mail in the Netherlands | 1,671 | 1,488 |
PostNL Other | 199 | 214 |
Eliminations | (777) | (731) |
Total | 3,447 | 3,132 |
The decrease in revenue is mainly driven by the strong volume decline in our domestic and international parcel delivery at Parcels in 2022, clearly impacted by the global macroeconomic and geopolitical environment impacting consumer confidence and consumer spending, together with the continued volume decline in addressed mail and the absence of the positive impact from non-recurring Covid-19-related items.
The following table presents the geographical segmentation of revenue from contracts with customers. The basis of allocation of revenue by geographical area is the country or region in which the entity recording the sales is located. Revenue from the rest of the world was impacted by the change in VAT regulation, global supply chain disruptions and zero Covid-19 policy in China.
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
The Netherlands | 2,982 | 2,736 |
Rest of Europe | 252 | 264 |
Europe | 3,235 | 3,000 |
Rest of the World | 212 | 132 |
Total | 3,447 | 3,132 |
Other income mainly relates to the profit or loss from the sale of group companies, the sale of assets held for sale and the sale or sale-and-leaseback of property, plant and equipment.
In 2022, other income of \u20ac7 million mainly relates to the sale of real estate in the Netherlands. In 2021, other income of \u20ac25 million mainly relates to the profit on the sale Cendris, a subsidiary of Mail in the Netherlands (\u20ac16 million), an amount received back from the purchase price of the acquisition of Sandd in 2019 and the profit on the sale of real estate in the Netherlands.
On 23 February 2021, PostNL completed the sale of Cendris, a specialist in customer contact services in the Netherlands and part of the segment Mail in the Netherlands, to Yource, market leader in customer contact within the Benelux region. The transaction resulted in a book profit of \u20ac16 million recorded within other income and net cash proceeds of \u20ac44 million.
Operating expenses related to ordinary activities are recognised on an accrual basis. In case it is not possible to directly relate the operating expenses to a particular income earned or expected future income, these expenses are recognised in the period incurred.
Lease expenses relate to short-term leases and leases of which the underlying assets are of low value. Payments made (net of any incentives received from the lessor) are charged to the income statement as incurred during the period of the lease.
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Parcels | 1,017 | 983 |
Mail in the Netherlands | 426 | 333 |
PostNL Other | 78 | 71 |
Work contracted out | 1,522 | 1,388 |
Rent & lease expenses | 13 | 12 |
External temporary staff | 174 | 170 |
Total | 1,708 | 1,570 |
Costs of work contracted out and other external expenses decreased by \u20ac138 million in 2022 mainly due to decreased volumes within Parcels and Mail in the Netherlands.
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Salaries | 849 | 867 |
Social security charges | 123 | 129 |
Salaries and social security charges | 972 | 997 |
| \u00a0 | \u00a0 | \u00a0 |
Defined benefit plans | 149 | 160 |
Defined contribution plans | 12 | 12 |
Regular pension charges | 161 | 172 |
Impact change in accounting classification of main pension plan | \u00a0 | 1,354 |
Total pension charges | 161 | 1,526 |
| \u00a0 | \u00a0 | \u00a0 |
Net releases from restructuring provisions | (2) | (1) |
Share-based payments | 3 | 2 |
Gross salaries, pensions and social security contributions | 1,134 | 2,523 |
| \u00a0 | \u00a0 | \u00a0 |
Capitalised salaries, pensions and social security contributions | (5) | (19) |
| \u00a0 | \u00a0 | \u00a0 |
Total | 1,129 | 2,504 |
In 2022, pension charges increased by \u20ac1,365 million, mainly resulting from the expenses related to the change in accounting classification of our main pension plan. See note '3.5 Provisions for pension liabilities'for more information on pensions; note '3.6 Other provisions' for the net releases from restructuring provisions; and note'3.5 Intangible fixed assets'for the capitalised salary costs, pensions and social security contributions related to IT investments.
1 | 2021 | 2022 |
|---|---|---|
Headcount | \u00a0 | \u00a0 |
Parcels | 8,246 | 8,300 |
Mail in the Netherlands | 27,611 | 25,725 |
PostNL Other | 1,508 | 1,622 |
Total at year end | 37,365 | 35,647 |
| \u00a0 | \u00a0 | \u00a0 |
Full-time equivalents (FTEs) | \u00a0 | \u00a0 |
Parcels | 6,862 | 7,146 |
Mail in the Netherlands | 13,934 | 13,055 |
PostNL Other | 1,385 | 1,514 |
Total year average | 22,181 | 21,715 |
External temporary staff year average | 2,978 | 2,647 |
The total headcount of PostNL decreased by 1,718 employees, which mainly relates to the reduction within Mail in the Netherlands due to the impact of volume decline and cost savings initiatives. Additionally, labour market tightness impacted PostNL's ability to maintain adequate staffing levels during 2022. The increase of employees within Parcels was due to more use of own staff instead of delivery partners. The labour force is also measured in FTEs based on the hours worked divided by the local standard. In 2022, the average number of FTEs decreased by 466 FTEs compared to 2021. The average number of employees working in the Netherlands was 20,772 FTEs (2021: 21,332) and outside the Netherlands was 943 FTEs (2021: 848).
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Amortisation of intangible assets | 40 | 44 |
Impairment of intangible assets | 1 | \u00a0 |
Depreciation property, plant and equipment | 46 | 46 |
Depreciation right-of-use assets | 62 | 66 |
Total | 149 | 156 |
In 2022, amortisation of intangible assets related to software for \u20ac41 million (2021: \u20ac37 million) and other intangibles for \u20ac3 million (2021: \u20ac3 million). The increase in amortisation of software relates to increased investments in IT projects.
The other operating expenses of \u20ac128 million (2021: \u20ac113 million) consist of IT, communication, office, travel, consulting and training expenses and other shared services costs.
In 2022, total incurred KPMG audit fees amounted to \u20ac2.1 million (2021 EY audit fees: \u20ac2.3 million).
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Audit fees | 1.8 | 1.6 |
Audit-related fees | 0.6 | 0.5 |
Tax advisory fees | 0.0 | 0.0 |
Other non-audit services | 0.0 | 0.0 |
Total | 2.3 | 2.1 |
Audit fees include fees from the audit of the financial statements. Audit-related services include fees from assurance engagements related to the non-financial information, regulatory reporting obligations, employee benefit plan data and Green Bond report.
In accordance with Dutch legislation, article 2:382a of the Dutch Civil Code, the total audit and audit-related fees charged by the auditorKPMG based in the Netherlands amounted to \u20ac2.0 million (2021 charged by EY: \u20ac2.0 million), subdivided into audit services of \u20ac1.5 million and audit-related services of \u20ac0.5 million.
Interest income and expense are recognised on a time-proportionate basis using the effective interest method. All borrowing costs are recognised in profit or loss using the effective interest method, except to the extent that they can be capitalised as cost of a qualifying asset.
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Interest expenses on long-term borrowings | 7 | 7 |
Interest on net defined benefit pension liabilities | 1 | 2 |
Interest on leases | 7 | 9 |
Other | 8 | 5 |
Interest and similar expense | 22 | 22 |
| \u00a0 | \u00a0 | \u00a0 |
Other interest and similar income | (1) | (3) |
| \u00a0 | \u00a0 | \u00a0 |
Net financial expense/(income) | 21 | 19 |
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised directly in other comprehensive income. The amount of income tax included in the income statement is determined in accordance with the rules established by the tax authorities, based on which income taxes are payable or recoverable.
Year ended at 31 December | 2021 | 2022 excl. change in pension accounting classification | Change in pension accounting classification | Total 2022 |
|---|---|---|---|---|
Current tax expense | 83 | 36 | \u00a0 | 36 |
Changes in deferred taxes | (10) | (16) | (350) | (366) |
Total income tax expense | 74 | 21 | (350) | (330) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Income taxes paid | 76 | (1) | \u00a0 | (1) |
The difference between the total income taxes in the income statement and the current tax expense is due to temporary differences. These differences are recognised as deferred tax assets or deferred tax liabilities, except for the tax effect on the change in pension accounting classification. See note '3.8 Deferred income tax assets and liabilities'to the Consolidated financial statements for more information.
In 2022, the income taxes paid relates mainly to income taxes paid in the Netherlands and German withholding tax refunds related to prior years. The 2022 difference between the total income tax expense (\u20ac(330) million) and the income taxes paid (\u20ac(1) million) can mainly be explained by the changes in deferred taxes (\u20ac366 million) and the 2022 movements of the net income tax payable position (\u20ac36 million).
Year ended at 31 December | 2021 | 2022 excl. change in pension accounting classification | Change in pension accounting classification | Total 2022 |
|---|---|---|---|---|
Dutch statutory income tax rate | 25.0 | 25.8 | \u00a0 | 25.8 |
Adjustment regarding statutory income tax rates other countries | 0.0 | 0.3 | (0.3) | 0.0 |
Weighted average statutory tax rate | 25.0 | 26.1 | (0.3) | 25.8 |
Tax effects of: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Non and partly deductible costs | 0.9 | 5.0 | (5.2) | (0.2) |
Exempt income | (1.5) | 0.6 | (0.6) | 0.0 |
Other | (0.0) | 12.8 | (13.3) | (0.5) |
Effective income tax rate | 24.4 | 44.5 | (19.4) | 25.1 |
The effective income tax rate including the change in pension accounting classification is 25.1%. However, due to the material impact of the change in pension accounting classification on our figures, the effective income tax rate excluding the change in pension accounting classification has also been stated in the table above. The latter effective income tax rate is 44.5%. This effective income tax rate, being higher compared to the Dutch statutory tax rate (25.8%), can mainly be explained as follows.
The line \u2018Non and partly deductible costs\u2019 mainly relates to the so-called mixed expenses (e.g. meals, entertainment) and the non-deductible treatment of our share based payments. The line \u2018Exempt income\u2019 relates to the non-taxable treatment of our (negative) results from (former) participations. The line \u2018Other\u2019 consists in 2022 mainly of the impact of the derecognition of previously recognised tax losses in various countries (13.1%), updates of our prior year tax positions in the Netherlands (0.7%) and several smaller effects (-1.0%).
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:
\u2022 represents a separate major line of business or geographical area of operations,
\u2022 is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations, or
\u2022 is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the income statement.
The following table presents the financial performance for the discontinued operations in the years 2021 and 2022.
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Revenues | \u00a0 | \u00a0 |
Expenses | (3) | (15) |
Operating income | (3) | (15) |
| \u00a0 | \u00a0 | \u00a0 |
Income taxes | 8 | 3 |
Profit/(loss) after taxes | 4 | (11) |
| \u00a0 | \u00a0 | \u00a0 |
Net result related to the sales transaction with Poste Italiane | 24 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 |
Profit/(loss) from discontinued operations | 29 | (11) |
In 2022, the net result of \u20ac(11) million mainly reflected the financial impact related to a settlement reached between PostNL and the Italian tax authorities. The settlement resolved an ongoing VAT dispute, previously reported as a specific contingent tax liability. The financial impact includes a payment due to the Italian tax authorities of \u20ac30 million partially offset by management\u2019s best estimate of the collectability of the related imputed VAT receivables from former customers of \u20ac16 million and a positive income tax effect of \u20ac3 million. No cash impact was yet visible in 2022. The VAT payable is included in 'Other current liabilities' and the VAT receivables from former customers are included in 'Prepayments and accrued income' in the consolidated statement of financial position.
Income taxes of \u20ac8 million in 2021 related for \u20ac6 million to tax losses connected to the liquidation of our former German entities recorded as current tax receivables and for \u20ac2 million to the update of the deferred tax position connected to the anticipated liquidation losses of our Italian Nexive entities.
In 2021, the net result of \u20ac24 million related to the sales transaction with Poste Italiane on 29 January 2021 and included a negative income tax effect of \u20ac6 million. The related cash proceeds amounted to \u20ac27 million.
PostNL presents (diluted) earnings per share (EPS) for its ordinary shares. EPS is calculated by dividing the profit or loss attributable to the equity holders of the parent by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is calculated by dividing the profit or loss attributable to the equity holders of the parent by the weighted average number of ordinary shares outstanding, including the effects for dilution of ordinary shares following the obligations to employees under existing share plans.
The following table summarises the outstanding shares for PostNL\u2019s calculation related to earnings per share.
Year averages and numbers at 31 December | 2021 | 2022 |
|---|---|---|
Number of issued and outstanding ordinary shares | 513,252,013 | 487,530,628 |
Shares held by the company to cover share plans | 0 | 0 |
| \u00a0 | \u00a0 | \u00a0 |
Average number of ordinary shares per year | 505,163,452 | 492,519,772 |
Diluted number of ordinary shares per year | 817,671 | 1,122,612 |
Average number of ordinary shares per year on a fully diluted basis | 505,981,123 | 493,642,384 |
At 31 December 2022, PostNL had potential obligations under share plans to deliver 1,122,612 shares (2021: 817,671 shares), calculated based on the share price of \u20ac1.7005 as at 31 December 2022 (31 December 2021: \u20ac3.827).
The consolidated statement of cash flows is prepared in accordance with IAS 7 using the indirect method. Cash flows in foreign currencies are translated at average exchange rates. Receipts and payments with respect to taxation on profits and interest payments are included in the cash flow from operating activities. Interest receipts and the cost of acquisition of subsidiaries, associates and investments, insofar as it was paid for in cash, are included in cash flows from investing activities. Acquisitions of subsidiaries are presented net of cash balances acquired. Cash flows from derivatives are recognised in the statement of cash flows in the same category as those of the hedged item.
In 2022, net cash from operating activities of \u20ac240 million (2021: \u20ac450 million) resulted from \u20ac259 million of cash generated from operations (2021: \u20ac547 million) and \u20ac1 million income tax received (2021: \u20ac76 million income tax paid) reduced by \u20ac20 million interest paid (2021: \u20ac21 million).
The decrease in cash generated from operations of \u20ac288 million is explained by \u20ac238 million lower profit before income tax adjusted for non-cash items and investment income and a lower change in working capital of \u20ac44 million.
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Total profit before tax adjusted for non cash items and investment income | 456 | 218 |
| \u00a0 | \u00a0 | \u00a0 |
Pension expense defined benefit plans | 149 | 160 |
Cash contributions defined benefit plans | (80) | (85) |
Payment unconditional funding obligation | (16) | (28) |
Change in pension liabilities | 53 | 47 |
| \u00a0 | \u00a0 | \u00a0 |
Additions to/releases from provisions | 7 | 10 |
Withdrawals | (9) | (12) |
Change in other provisions | (2) | (3) |
| \u00a0 | \u00a0 | \u00a0 |
Changes in working capital | 41 | (3) |
| \u00a0 | \u00a0 | \u00a0 |
Total cash generated from operations | 547 | 259 |
For the changes in provisions, reference is made to note 3.5 Provisions for pension liabilities and to note 3.6 Other provisions. The higher investments in working capital mainly related to a decrease in accruals for terminal dues and expenses to be paid, partly offset by lower trade receivables within Mail in the Netherlands.
The interest paid is explained as follows:
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Interest on long-term borrowings | 6 | 6 |
Interest on leases | 7 | 9 |
Bank charges and other | 9 | 5 |
Total | 21 | 20 |
The income taxes received of \u20ac1 million (2021: \u20ac76 million income taxes paid) mainly relates to income taxes paid in the Netherlands and German withholding tax refunds related to prior years.
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Disposal of subsidiaries | 44 | \u00a0 |
Capital expenditure on intangible assets and property, plant and equipment | (140) | (138) |
Proceeds from sale of property, plant and equipment | 10 | 12 |
Changes in other loans receivable | (3) | 3 |
Other | (2) | 1 |
Net cash (used in)/from investing activities | (92) | (122) |
In 2021, disposal of subsidiaries of \u20ac44 million relates to the net cash received for the sale of Cendris, a subsidiary from Mail in the Netherlands. The book profit on the sale of Cendris of \u20ac16 million is included in other income in the consolidated statement of profit or loss.
In 2022, capital expenditures on intangible assets of \u20ac80 million (2021: \u20ac56 million) mostly related to software including prepayments for software. The capital expenditures on property, plant and equipment amounting to \u20ac58 million (2021: \u20ac85 million) mainly related to new sorting and delivery centres within Parcels and to various other equipment. Capital expenditures are funded primarily by cash generated from operations and are part of strict cash control and review.
In 2022, proceeds from the sale of property, plant and equipment amounted to \u20ac12 million (2021: \u20ac10 million) and mainly related to the sale of real estate in the Netherlands .
In 2022, changes in other loans receivable included proceeds from a lessor loan relating to the lease of a sorting machine by Bol.com (2021: new lessor loan of \u20ac4 million).
In 2022, an amount of \u20ac(2) million is included for the acquisition of 50% of the shares of De Innovatie Studio, a joint venture and 5.3% of the shares in a shopping services app, an associated company (2021: \u20ac(2) million for the acquisition of 25% of the shares of VersTrade Nederland, an associated company).
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Dividends paid | (113) | (165) |
Share buyback | \u00a0 | (164) |
Changes related to non-controlling interests | \u00a0 | (1) |
Net cash from debt financing activities | (5) | (4) |
Repayments of leases/incentives | (69) | (74) |
Net cash (used in)/from financing activities | (186) | (408) |
In 2022, net cash from financing activities of \u20ac(408) million (2021: \u20ac(186) million) mainly related to the final 2021 and interim 2022 cash dividend paid of \u20ac165 million (2021: \u20ac113 million related to the final 2020 and interim 2021 cash dividend), the repurchase of shares of \u20ac164 million and the repayments of leases of \u20ac74 million (2021: \u20ac69 million). The net cash from debt financing activities includes an amount of \u20ac4 million (2021: \u20ac4 million) for the repayment of a (legal) lease loan relating to two Parcel sorting centres and sorting machines. Refer to note 3.4 for further information on leases. Reference is also made to note 4.1 Net debt and note 4.5 Financial instruments.
The decrease of total equity from \u20ac429 million on 31 December 2021 to \u20ac179 million on 31 December 2022 is mainly explained by net loss for the year of \u20ac993 million, the payments of cash dividends of \u20ac165 million in total and the repurchase of shares of \u20ac164 million, partly offset by other comprehensive income of \u20ac1,071 million. Other comprehensive income mainly consisted of a positive impact from pensions of \u20ac1,077 million including the impact of the change in the accounting classification of our main pension plan of \u20ac1,020 million.
As at 31 December 2022, issued share capital amounted to \u20ac39 million (2021: \u20ac41 million) and additional paid-in-capital amounted to \u20ac163 million (2021: \u20ac163 million). For details on Issued share capital and Additional paid-in capital, reference is made to note 4.6.
The following table presents the reserves included in the other reserves.
| \u00a0 | Currency translation reserve | Hedge reserve | Financial assets at fair value OCI | Other reserves | Total other reserves |
|---|---|---|---|---|---|
Balance at 1 January 2021 | 0 | (2) | 7 | (526) | (520) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total comprehensive income | 1 | 0 | 12 | 54 | 68 |
Appropriation of net income | \u00a0 | \u00a0 | \u00a0 | 305 | 305 |
Share-based compensation | \u00a0 | \u00a0 | \u00a0 | (0) | (0) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance at 31 December 2021 | 1 | (2) | 20 | (167) | (148) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total comprehensive income | 0 | 2 | (8) | 1,077 | 1,071 |
Appropriation of net income | \u00a0 | \u00a0 | \u00a0 | 518 | 518 |
Share buyback | \u00a0 | \u00a0 | \u00a0 | (162) | (162) |
Share-based compensation | \u00a0 | \u00a0 | \u00a0 | 2 | 2 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance at 31 December 2022 | 2 | 0 | 11 | 1,267 | 1,281 |
As at 31 December 2022, the translation reserve amounted to \u20ac2 million (2021: \u20ac1 million), mainly reflecting the movement in exchange rate differences on converting subsidiaries of Spring within Parcels into euros.
As at 31 December 2022, the hedge reserve amounted to \u20ac0 million (2021: \u20ac(2) million). The tax impact on the cash flow hedges included in the hedge reserve as at 31 December 2022 is \u20ac0 million (2021: \u20ac0 million). For more information, see note 4.5 to the consolidated financial statements.
As at 31 December 2022, the reserve related to the financial assets at fair value through OCI amounted to \u20ac11 million (2021: \u20ac20 million). The decrease in 2022 of \u20ac8 million mainly related to the decrease in value of the investment in Whistl (2021: increase of \u20ac12 million mainly related to Whistl). For more information, see note 4.2 to the consolidated financial statements.
As at 31 December 2022, the other reserves amounted to \u20ac1,267 million (2021: \u20ac(167) million). In 2022, the other reserves increased by \u20ac1,434 million mainly resulting from the appropriation of net income from 2021 of \u20ac518 million and a positive pension effect within other comprehensive income (net of tax) of \u20ac1,077 million, partly offset by the repurchase of shares of \u20ac(162) million. For details on pensions, reference is made to note 3.5.
As at 31 December 2022, retained earnings amounted to \u20ac(1,306) million (2021: \u20ac370 million). In 2022, retained earnings decreased by \u20ac1,676 million due to the total loss for the year attributable to the shareholders of the parent of \u20ac993 million in 2022, the appropriation of net income from 2021 of \u20ac(518) million and the payment of cash dividends of \u20ac165 million.
The Board of Management has proposed to make an amount of \u20ac60 million out of the distributable part of the shareholders' equity available for distribution of dividend. Refer to note 6.5 for more details of this proposal.
PostNL reports two operating segments: Parcels and Mail in the Netherlands and one other segment: PostNL Other. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers. These chief operating decision-makers, who are responsible for allocating resources and assessing the performance of the operating segments, have been identified as the Board of Management of PostNL that makes strategic decisions. Transfer prices between operating segments are on an arm's length basis. PostNL Other represents head office entities, including the difference between the recorded IFRS pension expense for the defined benefit pension plans and the actual cash contributions.
The following table presents the reconciliation of the 2022 segment information relating to the income statement of the reportable segments. Segment information relating to the balance sheet is reported in note 3.11.
Year ended at 31 December 2022 | Parcels | Mail in NL | PostNL Other | Eliminations | Total |
|---|---|---|---|---|---|
Revenue from contracts with customers | 1,918 | 1,211 | 2 | \u00a0 | 3,132 |
Intercompany sales | 242 | 277 | 212 | (731) | 0 |
Other operating revenue | 5 | 7 | 1 | \u00a0 | 13 |
Total operating revenue | 2,165 | 1,495 | 215 | (731) | 3,144 |
Other income | 0 | 7 | 0 | \u00a0 | 7 |
Depreciation/impairment PP&E | (28) | (14) | (4) | \u00a0 | (46) |
Amortisation/impairment intangibles | (2) | (2) | (40) | \u00a0 | (44) |
Depreciation/impairment right-of-use assets | (43) | (12) | (11) | \u00a0 | (66) |
Total operating income | 54 | 98 | (1,443) | \u00a0 | (1,291) |
Net financial income/(expense) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (19) |
Results from investments in JVs/associates | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (1) |
Income taxes | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 330 |
Profit/(loss) from discontinued operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (11) |
Profit/(loss) for the year | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (993) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Normalised EBIT | 56 | 107 | (80) | \u00a0 | 84 |
The key financial performance indicator for management of the reportable segments is normalised EBIT. Normalised EBIT is derived from the IFRS-based performance measure operating income adjusted for the impact of project costs and incidentals. Normalised EBIT is reported on a monthly basis to the chief operating decision-makers. The following table presents the reconciliation from reported operating income to normalised EBIT.
Year ended at 31 December | Reported operating income | Change in pension accounting classification | Project costs and other | Normalised EBIT |
|---|---|---|---|---|
Parcels | 54 | \u00a0 | 2 | 56 |
Mail in NL | 98 | 2 | 7 | 107 |
PostNL Other | (1,443) | 1,355 | 9 | (80) |
Total 2022 | (1,291) | 1,357 | 17 | 84 |
In 2022, normalised EBIT totalled \u20ac84 million (2021: \u20ac308 million). Normalised EBIT excludes exceptional items, which amounted to \u20ac1,375 million in 2022 (2021: \u20ac(15) million). We refer to note 3.5 for further information on the normalised impact of the change in accounting classification of our main pension plan. In 2022, the normalisation for project costs and other included results related to legal advisory costs (\u20ac6 million), settlement costs (\u20ac9 million) and discontinuation costs of an in-house Food delivery network (\u20ac2 million). The decrease of \u20ac225 million in normalised EBIT comprised lower results in Parcels (\u20ac174 million) and Mail in the Netherlands (\u20ac53 million), partly offset by a higher result at PostNL Other (\u20ac2 million).
The following tables present the reconciliation of the 2021 segment information relating to the income statement of the reportable segments. Segment information relating to the balance sheet is reported in note 3.11.
Year ended at 31 December 2021 | Parcels | Mail in NL | PostNL Other | Eliminations | Total |
|---|---|---|---|---|---|
Revenue from contracts with customers | 2,104 | 1,338 | 5 | \u00a0 | 3,447 |
Intercompany sales | 250 | 333 | 194 | (777) | 0 |
Other operating revenue | 7 | 11 | 1 | \u00a0 | 19 |
Total operating revenue | 2,361 | 1,683 | 200 | (777) | 3,466 |
Other income | 0 | 25 | 0 | \u00a0 | 25 |
Depreciation/impairment PP&E | (28) | (14) | (4) | \u00a0 | (46) |
Amortisation/impairment intangibles | (9) | (13) | (19) | \u00a0 | (41) |
Depreciation/impairment right-of-use assets | (39) | (12) | (12) | \u00a0 | (62) |
Total operating income | 230 | 176 | (81) | \u00a0 | 324 |
Net financial income/(expense) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (21) |
Results from investments in JVs/associates | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (0) |
Income taxes | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (74) |
Profit/(loss) from discontinued operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 29 |
Profit/(loss) for the year | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 258 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Normalised EBIT | 230 | 160 | (81) | \u00a0 | 308 |
Year ended at 31 December | Reported operating income | Book profit from the sale of Cendris | Project costs and other | Normalised EBIT |
|---|---|---|---|---|
Parcels | 230 | \u00a0 | \u00a0 | 230 |
Mail in NL | 176 | (16) | 0 | 160 |
PostNL Other | (81) | \u00a0 | \u00a0 | (81) |
Total 2021 | 324 | (16) | 0 | 308 |
Trade receivables are recorded where PostNL has the unconditional rights to consideration from the customers. Trade receivables that do not contain a significant financing component or for which PostNL has applied the practical expedient are measured at the transaction price determined under IFRS 15.
PostNL recognises an allowance for expected credit losses (ECLs). ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that PostNL expects to receive, discounted at an approximation of the original effective interest rate. For trade receivables, PostNL applies a simplified approach in calculating ECLs. Therefore, PostNL does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. PostNL has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The amount of the ECLs is recognised in the income statement. Any reversal of the ECLs is included in the income statement on the same line as where the original expense was recorded.
The risk of uncollectability of accounts receivable is primarily estimated based on prior experience with, and the past due status of, doubtful debtors adjusted for forward-looking factors. Large accounts are assessed individually based on factors that include ability to pay, bankruptcy and payment history. In addition, debtors in certain countries are subject to a higher collectability risk, which is taken into account when assessing the overall risk of uncollectability.
At 31 December | 2021 | 2022 |
|---|---|---|
Trade accounts receivable - total | 407 | 377 |
Allowance for expected credit losses | (7) | (7) |
Trade accounts receivable | 400 | 370 |
| \u00a0 | \u00a0 | \u00a0 |
VAT receivable | 4 | 4 |
Other accounts receivable | 7 | 8 |
Accounts receivable | 11 | 12 |
| \u00a0 | \u00a0 | \u00a0 |
Total accounts receivable | 411 | 382 |
Trade accounts receivable are non-interest bearing and are generally on terms of 3 to 30 days.
Trade accounts receivable include an amount of \u20ac144 million (2021: \u20ac165 million) that was unbilled at 31 December 2022. In 2021, an amount of \u20ac47 million of these unbilled trade receivables was reported as prepayments and accrued income. For comparison purposes, this amount has been reclassified to trade accounts receivable.
The main part of the allowance for expected credit losses related to a collective loss component established for groups of similar trade accounts receivable balances. This collective loss component is largely based on the ageing of the trade accounts receivable and is reviewed periodically. The fair value of the total (trade) accounts receivable approximated its carrying value.
The decrease of trade accounts receivable - total from \u20ac407 million on 31 December 2021 to \u20ac377 million on 31 December 2022 is mainly explained by higher revenue in 2021. The trade accounts receivable past due decreased from \u20ac125 million on 31 December 2021 to \u20ac122 million on 31 December 2022 (see table expected credit losses at the next page).
The top 10 trade accounts receivable accounted for 21% of the outstanding balance as at 31 December 2022 (2021: 19%). The concentration of the trade accounts receivable portfolio over the different regions can be summarised as follows:
Netherlands \u20ac305 million (2021: \u20ac347 million),
rest of Europe \u20ac45 million (2021: \u20ac42 million), and
the rest of the world \u20ac20 million (2021: \u20ac11 million).
The movements in the allowance for expected credit losses of trade accounts receivable were as follows:
| \u00a0 | 2021 | 2022 |
|---|---|---|
Balance at 1 January | 10 | 7 |
Provided for during financial year | 1 | 3 |
Receivables written off during year as uncollectable | (3) | (3) |
Balance at 31 December | 7 | 7 |
Set out below is the information about the credit risk exposure on the trade accounts receivable using a provision matrix.
At 31 December | Months due | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
|---|---|---|---|---|---|---|
| \u00a0 | Up to 1 month | 1-2 months | 2-3 months | 3-4 months | over 4 months | Total |
Expected credit loss rate | 0% | 1% | 2% | 7% | 14% | \u00a0 |
Gross amount of trade accounts receivable | 326 | 19 | 12 | 4 | 47 | 407 |
Trade accounts receivable past due | 49 | 17 | 12 | 3 | 44 | 125 |
Expected credit loss 2021 | 0 | 0 | 0 | 0 | 6 | 7 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Expected credit loss rate | 1% | 3% | 7% | 23% | 5% | \u00a0 |
Gross amount of trade accounts receivable | 276 | 19 | 10 | 4 | 67 | 377 |
Trade accounts receivable past due | 26 | 16 | 9 | 4 | 66 | 122 |
Expected credit loss 2022 | 2 | 1 | 1 | 1 | 3 | 7 |
At 31 December | 2021 | 2022 |
|---|---|---|
VAT payable | 32 | 67 |
Social security contributions payable | 24 | 30 |
Payments from customers received in advance | 49 | 48 |
Pension payable | \u00a0 | 16 |
Other | 6 | 7 |
Total | 111 | 168 |
The VAT payable increased by \u20ac35 million. This is mainly caused by an outstanding payment of \u20ac30 million related to a settlement reached between PostNL and the Italian tax authorities, reference is made to note 2.4.3: Profit/(loss) from discontinued operations. Pension payable in 2022 contains the last instalment of \u20ac16 million related to the unconditional funding obligation with the pension fund, reference is made to note 3.5: Provisions for pension liabilities.
At 31 December | 2021 | 2022 |
|---|---|---|
Deferred revenue from unused stamps | 42 | 47 |
Deferred revenue from franking machines | 10 | 7 |
Rental of mailboxes | 9 | 8 |
Other amounts received in advanced from customers | 10 | 8 |
Total | 70 | 70 |
We expect to perform almost all services related to the outstanding contract liabilities at 31 December 2022 within one year. However, note that within one year we expect outstanding contract liabilities more or less in line with the amounts currently reported.
At 31 December | 2021 | 2022 |
|---|---|---|
To be paid to third parties | 141 | 139 |
To be paid to personnel | 44 | 21 |
Vacation days/vacation payments | 97 | 98 |
Terminal dues | 204 | 181 |
Interest payable | 2 | 1 |
Other accrued current liabilities | 0 | 0 |
Total | 487 | 441 |
Main items within the expenses to be paid to third parties included payables to business partners of \u20ac20 million (2021: \u20ac24 million), claims of \u20ac4 million (2021: \u20ac6 million) and various other expenses to be paid.
Expenses to be paid to personnel included accrued wages and salaries of \u20ac17 million (2021: \u20ac24 million) and accruals for employee profit-sharing of \u20ac1 million (2021: \u20ac14 million).
The accrual for terminal dues relates to payables to foreign postal operators relating to the years 2022 and before, partly consisting of positions in SDR currency. The net payable position, including the receivable for terminal dues of \u20ac28 million (2021: \u20ac12 million) included in prepayments and accrued income, amounted to \u20ac153 million (2021: \u20ac192 million). The change reflects both the regular course of business as well as settlements of outstanding positions. The positions where there is no price multi- or bilateral agreement on price are based on our best estimate of the price for which we expect to settle.
Property, plant and equipment is valued at historical cost, less depreciation and impairment losses. The initial costs of an assets comprises its purchase price, costs of bringing the asset into working condition, handling and installation costs and non-refundable purchase taxes.
Land is not depreciated. System software is capitalised and amortised as a part of the tangible fixed asset for which it was acquired to operate.
Other property, plant and equipment is depreciated on a straight-line basis over its expected useful life, taking into account any residual value. The asset\u2019s residual value and useful life is reviewed on an annual basis and, if necessary, changes are accounted for prospectively.
For the accounting policy concerning impairments, reference is made to note 5.4.
| \u00a0 | Land and | Plant and | Other equipment | Construction | Total |
|---|---|---|---|---|---|
Depreciation percentage | 0%-10% | 10%-33% | 10%-33% | 0% | \u00a0 |
Historical cost | 392 | 414 | 46 | 44 | 896 |
Accumulated depreciation and impairments | (182) | (309) | (36) | \u00a0 | (526) |
Balance at 1 January 2021 | 210 | 106 | 10 | 44 | 370 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Transfers from right-of-use assets | 16 | 3 | \u00a0 | \u00a0 | 19 |
Capital expenditure | 16 | 37 | 7 | 34 | 93 |
Internal transfers and reclassifications | 28 | 23 | 1 | (52) | \u00a0 |
Depreciation | (13) | (28) | (5) | \u00a0 | (46) |
Transfers to assets held for sale | (3) | \u00a0 | \u00a0 | \u00a0 | (3) |
Total changes | 44 | 35 | 3 | (19) | 63 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Historical cost | 409 | 449 | 39 | 25 | 922 |
Accumulated depreciation and impairments | (155) | (308) | (26) | \u00a0 | (489) |
Balance at 31 December 2021 | 254 | 141 | 13 | 25 | 433 |
| \u00a0 | Land and | Plant and | Other equipment | Construction | Total |
|---|---|---|---|---|---|
Depreciation percentage | 0%-10% | 6%-33% | 10%-33% | 0% | \u00a0 |
Historical cost | 409 | 449 | 39 | 25 | 922 |
Accumulated depreciation and impairments | (155) | (308) | (26) | \u00a0 | (489) |
Balance at 1 January 2022 | 254 | 141 | 13 | 25 | 433 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | 12 | 23 | 4 | 32 | 70 |
Internal transfers and reclassifications | 4 | 10 | \u00a0 | (13) | \u00a0 |
Depreciation | (14) | (28) | (5) | \u00a0 | (46) |
Transfers to assets held for sale | (1) | \u00a0 | \u00a0 | \u00a0 | (1) |
Total changes | 1 | 5 | (1) | 18 | 24 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Historical cost | 401 | 426 | 38 | 44 | 909 |
Accumulated depreciation and impairments | (147) | (280) | (25) | \u00a0 | (452) |
Balance at 31 December 2022 | 255 | 146 | 13 | 44 | 457 |
In 2021, the transfers from right-of-use assets relate to the revision of one Parcels sorting centre and sorting machine lease as property, plant and equipment, as the related sale-and-leaseback transaction did not represent a true sale according to IFRS 15.
Capital expenditures 2022 are below the level of 2021. Investments were made in the new sorting and delivery centres within Parcels, and in various other equipment. Both developments also impacted the internal transfers and reclassifications from construction in progress to land and buildings and plant and equipment.
In 2022, the transfers to assets held for sale of \u20ac1 million (2021: \u20ac3 million) related to buildings in the Netherlands.
The property, plant and equipment assets include a number of Parcel sorting centres and sorting machines financed and legally owned by an entity especially set up for this purpose by a third party. The term of the related lease contracts and liabilities is 10 years. Up to 31 December 2022, 5 sorting centres and sorting machines (2018: 1, 2019: 3, 2021: 1) have been finalised and leased from this special entity, for which the related property, plant and equipment assets (2 locations with a total book value of \u20ac36 million at 31 December 2022) and corresponding (legal) lease loans, and right-of-use assets (3 locations) and corresponding lease liabilities have been recorded.
Goodwill represents the excess of the cost of acquisition over the fair value of PostNL\u2019s share of the identifiable net assets acquired. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of joint ventures and associates is included in investments in joint ventures/associates and is not separately recognised or tested for impairment. Gains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Separately-recognised goodwill arising on acquisitions is capitalised and subject to an annual impairment review. Goodwill is carried at cost less accumulated impairment losses.
Costs related to the development and installation of software for internal use are capitalised at historical cost and amortised over the estimated useful life. Other intangible assets acquired in a business combination are recognised at fair value at the acquisition date.
An asset under construction is transferred to its respective intangible asset category at the moment it is ready for use and is amortised using the straight-line method over its estimated useful life. Other intangible assets are valued at the lower of historical cost less amortisation and impairment. The asset\u2019s residual value and useful life is reviewed on an annual basis and, if necessary, changes are accounted for prospectively.
For the accounting policy concerning impairments of goodwill and other intangible fixed assets, reference is made to note 5.4.
| \u00a0 | Goodwill | Software | Other | Total |
|---|---|---|---|---|
Amortisation percentage | \u00a0 | 10%- 35% | 0%- 35% | \u00a0 |
Historical cost | 244 | 222 | 65 | 532 |
Accumulated amortisation and impairments | (36) | (144) | (12) | (192) |
Balance at 1 January 2021 | 208 | 79 | 53 | 339 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | \u00a0 | 40 | 17 | 56 |
Disposals | (1) | \u00a0 | \u00a0 | (1) |
Internal transfers/reclassifications | \u00a0 | 18 | (18) | \u00a0 |
Amortisation | \u00a0 | (37) | (3) | (40) |
Impairments | \u00a0 | (1) | \u00a0 | (1) |
Total changes | (1) | 20 | (4) | 15 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Historical cost | 243 | 238 | 63 | 545 |
Accumulated amortisation and impairments | (36) | (139) | (14) | (190) |
Balance at 31 December 2021 | 207 | 98 | 49 | 354 |
| \u00a0 | Goodwill | Software | Other | Total |
|---|---|---|---|---|
Amortisation percentage | \u00a0 | 10%- 35% | 0%- 35% | \u00a0 |
Historical cost | 243 | 238 | 63 | 545 |
Accumulated amortisation and impairments | (36) | (139) | (14) | (190) |
Balance at 1 January 2022 | 207 | 98 | 49 | 354 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | \u00a0 | 73 | 6 | 79 |
Internal transfers/reclassifications | \u00a0 | 17 | (17) | \u00a0 |
Amortisation | \u00a0 | (41) | (3) | (44) |
Total changes | \u00a0 | 49 | (14) | 35 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Historical cost | 243 | 297 | 52 | 593 |
Accumulated amortisation and impairments | (36) | (150) | (17) | (204) |
Balance at 31 December 2022 | 207 | 147 | 35 | 389 |
Goodwill is allocated to the Group\u2019s cash-generating units (CGUs) and tested for impairment. The CGUs correspond to an operation in a particular country or region and the nature of the services provided. Compared to 2021, the CGU structure has not changed.
In 2021, the disposal of goodwill of \u20ac1 million related to the finalisation of the preliminary purchase price allocation of the acquisition of MyParcel.com in 2020 (CGU Spring).
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Parcels | 32 | 32 |
Mail in the Netherlands | 174 | 174 |
Spring | 1 | 1 |
Total | 207 | 207 |
Based on the 2022 financial performance, a detailed review has been performed of the recoverable value of each CGU. The recoverable value is the higher of the value in use and fair value less costs of disposal. Fair value less costs of disposal represents the best estimate of the amount PostNL would receive if it sold the CGU. The recoverable value is determined based on the fair value less costs of disposal. The fair value less costs of disposal has been estimated on the basis of the present value of future cash flows, taking into account costs of disposal.
For both mature markets and non-mature markets, the estimated future net cash flows are based on a five-year (2021: five-year) forecast and business plan, which forecast period has been assessed as adequate to reach a sustainable basis for the calculation of the continuing value. The cash flow projections have been approved by management.
PostNL has determined the budgeted gross margin based on past performance and its expectations for market development. The weighted average growth rates used are consistent with the forecasts included in industry reports for the related operation and market and did not change materially compared to previous year. The weighted average pre-tax discount rate used in the CGU valuations was around 11.0% (2021: around 10.0%).
Key assumptions used to determine the recoverable values for each individual CGU are the following:
maturity of the underlying market, market share and volume development in order to determine the revenue mix and (long-term) growth rate,
level of operating income largely impacted by revenue and cost development, taking into account the nature of the underlying costs and potential economies of scale,
level of capital expenditure in network-related assets, and
discount rate to be applied following the nature of the underlying cash flows and foreign currency and inflation-related risks.
Management has carried out an impairment test for each individual CGU and concluded that the recoverable amount of the individual CGUs is significantly higher than the carrying amount.
The closing balance of software and other intangibles is build up as follows:
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Internally-generated software | 95 | 145 |
Purchased software | 3 | 2 |
Software under construction | 18 | 4 |
Customer lists | 31 | 31 |
Total | 147 | 182 |
The additions to software mainly concerned IT investments related to replacement and improvement of sorting and delivery processes within Mail in the Netherlands and Parcels, and software licenses and costs of internally-generated software for various IT projects including investments in our online landscape, logistic service platform and back office functionality. The reclassification from other intangibles was due to finalised IT projects.
The estimated amortisation expenses for software and other intangible assets are:
2023: \u20ac48 million,
2024: \u20ac42 million,
2025: \u20ac35 million, and
thereafter: \u20ac57 million.
Software and other intangible assets include an amount of \u20ac2 million (2021: \u20ac1 million) of capitalised development costs.
PostNL leases sorting centres, sorting machines, distribution centres, offices, warehouses, trucks, vans, cars, transport equipment and other equipment. Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the group. At the commencement date of the lease, the lease liabilities are measured at the present value of lease payments to be made over the lease term. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the incremental borrowing rate is used, being the rate that would have to be paid to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The lease payments include the exercise price of a purchase option reasonably certain to be exercised by PostNL and payments of penalties for terminating the lease, if the lease term reflects PostNL exercising the option to terminate. Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
PostNL elected to apply the practical expedient not to separate non-lease components from lease components, and instead account for each lease component and any associated non-lease components as a single lease component. PostNL elected also the practical expedient not to apply the requirements for short-term leases (with a lease term of 12 months or less and which do not contain a purchase option) and leases for which the underlying asset is of low value (<\u20ac5 thousand). The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.
| \u00a0 | Land and | Transport | Other | Total |
|---|---|---|---|---|
Depreciation percentage | 0%-10% | 10%-33% | 10%-33% | \u00a0 |
Historical cost | 215 | 122 | 31 | 368 |
Accumulated depreciation and impairments | (64) | (48) | (13) | (125) |
Balance at 1 January 2021 | 151 | 74 | 18 | 243 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Transfers to property, plant and equipment | (16) | \u00a0 | (3) | (19) |
New leases | 89 | 27 | 1 | 117 |
Lease modifications/reassessments | 13 | (1) | \u00a0 | 12 |
Disposals | (3) | \u00a0 | \u00a0 | (3) |
Depreciation | (32) | (27) | (3) | (62) |
Total changes | 52 | (1) | (6) | 45 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Historical cost | 274 | 137 | 23 | 435 |
Accumulated depreciation and impairments | (71) | (64) | (11) | (146) |
Balance at 31 December 2021 | 203 | 73 | 13 | 289 |
| \u00a0 | Land and | Transport | Other | Total |
|---|---|---|---|---|
Depreciation percentage | 0%-10% | 10%-33% | 10%-33% | \u00a0 |
Historical cost | 274 | 137 | 23 | 435 |
Accumulated depreciation and impairments | (71) | (64) | (11) | (146) |
Balance at 1 January 2022 | 203 | 73 | 13 | 289 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
New leases | 29 | 29 | 1 | 58 |
Lease modifications/reassessments | 11 | 2 | \u00a0 | 13 |
Depreciation | (35) | (29) | (2) | (66) |
Total changes | 5 | 2 | (1) | 6 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Historical cost | 298 | 153 | 24 | 474 |
Accumulated depreciation and impairments | (89) | (79) | (12) | (180) |
Balance at 31 December 2022 | 209 | 75 | 11 | 295 |
In 2021, the transfers to property, plant and equipment assets relate to the revision of one Parcels sorting centre and sorting machine lease as property, plant and equipment, as the related sale-and-leaseback transaction did not represent a true sale according to IFRS 15.
In 2022, the new leases of \u20ac58 million mainly relate to the replacement and expansion of buildings, vans and trucks. The new leases of \u20ac117 million in 2021 mainly relate to a new sorting and delivery centre in Belgium within Parcels, the new head office and the replacement and expansion of buildings, vans and trucks. In 2022, the lease modifications/reassessments of \u20ac13 million (2021: \u20ac12 million) mainly reflect changes to the lease payments and lease terms.
In 2021, the disposals of \u20ac3 million related to disposed and subleased contracts from buildings from Sandd.
The right-of-use assets include a number of Parcel sorting centres and sorting machines financed and owned by an entity especially set up for this purpose by a third party. The term of the related lease contracts and liabilities is 10 years. Up to 31 December 2022, 5 sorting centres and sorting machines (2018: 1, 2019: 3, 2021: 1) have been finalised and leased from this special entity, for which the related property, plant and equipment assets (2 locations with a total book value of \u20ac36 million at 31 December 2022) and corresponding (legal) lease loans, and right-of-use assets (3 locations) and corresponding lease liabilities have been recorded.
Further the right-of-use assets include four mail sorting centres and the international sorting centre with lease terms varying between 5 and 10 years (started in 2020) and the head office in The Hague with a lease term of 15 years (started in 2021).
At 31 December | 2021 | 2022 |
|---|---|---|
Long-term lease liabilities | 269 | 255 |
Short-term lease liabilities | 65 | 75 |
Total | 333 | 331 |
The total cash outflow from leases amounted to \u20ac86 million (2021: \u20ac82 million) and related for \u20ac74 million to repayments of lease liabilities (2021: \u20ac74 million, partly offset by \u20ac5 million of incentives received), and for \u20ac12 million to rent and lease expenses (2021: \u20ac13 million). Refer to note 4.1 for further information on the lease liabilities.
In 2022, rent and lease expenses of \u20ac12 million (2021: \u20ac13 million) relate for \u20ac10 million (2021: \u20ac11 million) to short-term leases and for \u20ac2 million (2021: \u20ac2 million) to leases for which the underlying asset is of low value. The interest expenses on lease liabilities amounted to \u20ac9 million (2021: \u20ac7 million).
The net defined benefit liability/asset for all pension and other post-employment plans that qualify as defined benefit plans is determined by calculating the present value of the defined benefit obligation and deducting the fair value of the plan assets. The resulting deficit or surplus is adjusted for any effect of limiting a net defined benefit asset to the asset ceiling and for any effect of minimum funding requirements.
PostNL uses actuarial calculations (projected unit credit method) to measure the obligations and the costs. Assumptions are made about financial variables (such as the discount rate and the rate of benefit increases) and demographic variables (such as employee turnover and mortality). The discount rate is determined by reference to market rates using high-quality corporate bonds. The assumed return on plan assets equals the discount rate applied in the calculation of the pension obligations at the beginning of the year.
Service costs are recognised as operating expenses in the income statement. Gains or losses on the amendment or curtailment of a defined benefit plan (past service cost) and gains or losses on a settlement are recognised as operating expenses in the income statement on the date of the amendment, curtailment or settlement.
The net interest expense/income on the net defined benefit liability/asset, asset ceiling and/or minimum funding requirements, is recognised as \u2018Interest and similar expenses/ income\u2019 in the income statement (below operating income).
Deviations between the expected and actual development of the pension obligation and plan assets, resulting in actuarial gains and losses, are recognised immediately within Other Comprehensive Income (net of tax). The impact of the asset ceiling and/or minimum funding requirements is also recognised within Other Comprehensive Income (net of tax).
Pension costs for defined contribution plans are expensed in the income statement when incurred or due.
PostNL\u2019s main Dutch defined benefit average pay pension plan (main plan) covers the employees subject to PostNL\u2019s collective labour agreement and staff with a personal labour agreement in the Netherlands. The main plan is externally funded in \u2018Stichting Pensioenfonds PostNL\u2019 (main fund), an independent legal entity which is not owned or controlled by any other legal entity and which falls under the regulatory supervision of De Nederlandsche Bank.
Based on a joint decision by PostNL, the pension fund and the trade unions, taken on 23 December 2022, PostNL\u2019s pension plan has been amended as per 31 December 2022. As a relevant amendment, the former annual indexation cap of 4% has been released, by which it was possible, combined with the solid financial position of the pension fund, to increase pensions by 10% as per 1 January 2023. This amendment directly benefitted the (future) purchasing power of all pension fund participants.
As part of the adjustment, the pension plan is now based on a collective defined contribution plan. Among others, this means that PostNL will be only required to pay the regular pension contribution, as the agreement for top-up payments and restitution has been cancelled. As a result, if the financial position of the pension fund would deteriorate, PostNL is no longer obliged to do top-up payments. At the same time, PostNL is also no longer entitled to restitutions, even if the financial position of the pension fund would allow for that.
Parties also agreed on the implementation of the new pension law regulation, that is expected to become effective in the course of 2023 and will mandate the transition to a new pension contract by 1 January 2027 at the latest. They agreed on a preferred contract that includes a contribution plan based on solidarity. Parties intend to transfer the accrued pensions into the new system. The transition will be accomplished entirely from the pension fund assets, with no financial contribution or compensation from PostNL.
Last, as part of the agreement, the unconditional funding obligation has also been adjusted. The adjustment concerns a reduction of \u20ac20 million and an amended payment schedule (2022: \u20ac28 million; 2023: \u20ac16 million). On balance, this has resulted in an improvement in PostNL\u2019s adjusted net debt position of \u20ac20 million as per the end of 2022.
The accounting consequence of the amended pension plan is a change from defined benefit accounting to defined contribution accounting per 31 December 2022. The settlement result as recorded in the statement of profit or loss comprises the release of the positive funded status and the reduction of the unconditional funding obligation. As a separate sequential step, the recorded asset ceiling adjustment is reversed within other comprehensive income.
The financial impact of the change in pension accounting classification is material, being a loss of \u20ac1,357 million (net loss: \u20ac1,007 million) recorded in the statement of profit or loss, comprising a defined benefit pension expense of \u20ac1,354 million and an addition to other provisions of \u20ac3 million, and a net defined benefit pension income of \u20ac1,020 million recorded in other comprehensive income.
Following the change towards a collective defined contribution plan, according to IFRS pension expenses will equal the contribution paid by PostNL to the pension fund as of 31 December 2022. In 2022 regular pension expenses are substantially higher than the paid contributions. Following the adjustment of the pension plan, this gap disappears as of 2023. As a consequence, pension expenses will thus be substantially lower.
The coverage ratio of the main fund increased substantially in 2022. By the end of 2022, the month-end coverage ratio amounted 130.6% (2021: 126.2%). The increase in coverage ratio is mainly explained by the positive effect on plan liabilities resulting from an increase of the interest rate, partly offset by a negative return on plan assets and the impact of the decision to increase pensions by 10% per 1 January 2023. The fund's 12-month average coverage ratio amounted 134.8% per 31 December 2022 (2021: 121.4%).
Until 31 December 2022, the main plan was a defined benefit average pay scheme, with a basis accrual rate of 1.875% of the pensionable base and retirement age set at 68 years. The pensionable base is derived as the pensionable salary, with a statutory maximum of \u20ac114,866 (level 2022), minus a state pension offset. As of 31 December 2022, the main plan is a collective defined contribution plan.
Pension (cash) contributions are bounded by a minimum level of 21.7% and a maximum level of 29.2% of the pensionable salary base. The calculations are based on the main fund's expected return on plan assets. Based on the total maximum premium amount, the intended pension accrual can be reduced in any year. Given the applicable financing arrangements and current low interest rates, it is expected that the accrual rate will be lower than the basis level of 1.875% for the coming years. The accrual rate for 2022 and 2023 has been set at 1.826% and 1.855% of the pensionable base.
In respect of the collective defined contribition plan, a fixed premium calculation methodology (including assumptions used) applies for fixed periods of 5 years. Only in case of obligatory adjustments, for example on the regulated maximum allowed expected return on equities, the assumptions used might need to change. On the basis of current facts and circumstances, the ex-ante expected total pension cash contribution rate will equal the maximum level of 29.2% for the upcoming fixed period (until the transition to the anticipated new pension contract).
The returns on plan assets are linked to the strategic investment policy of the main fund. The fund uses interest rate derivates to reduce the net interest exposure on its assets and liabilities. The plan assets may from time to time include investments in PostNL\u2019s own financial instruments through indirect holdings by mutual funds. Around 66% of the fund's total plan assets have a quoted market price in an active market. The unquoted part relates to investments in investment funds which invest in non-listed assets (for example real estate investments) and non-listed derivatives.
At 31 December | Actual mix | Actual mix |
|---|---|---|
Equities | 34% | 32% |
Fixed interest and inflation linked bonds | 55% | 59% |
Real estate and alternative investment | 11% | 9% |
Total | 100% | 100% |
| \u00a0 | \u00a0 | \u00a0 |
Return | 7.6% | (17.2%) |
The following table presents an overview of the movement of the provision for post-employment benefit plans during 2022.
| \u00a0 | Dutch main pension plan | Other plans | Total |
|---|---|---|---|
Balance at 1 January 2022 | (64) | (3) | (67) |
Post-employment benefit income/(expenses) | (162) | (0) | (162) |
Employer contributions | 85 | 0 | 85 |
Instalment unconditional funding obligation | 28 | \u00a0 | 28 |
Actuarial gains/(losses) | 663 | 1 | 663 |
Pension asset ceiling/minimum funding requirement | (586) | \u00a0 | (586) |
Balance at 31 December 2022 before settlement | (36) | (2) | (38) |
Pension settlement costs within statement of profit or loss | (1,354) | \u00a0 | (1,354) |
Pension settlement gain within OCI | 1,374 | \u00a0 | 1,374 |
Transfer to current pension payable | 16 | \u00a0 | 16 |
Balance at 31 December 2022 | 0 | (2) | (2) |
Other provisions settlement costs within statement of profit or loss | (3) | \u00a0 | (3) |
The following table gives a break-down of total pension costs, pension cash contributions, actuarial gains and losses, and the impact of the asset ceiling and/or minimum funding requirement.
| \u00a0 | \u00a0 | 2021 | 2022 |
|---|---|---|---|
Regular defined benefit costs | \u00a0 | (150) | (162) |
Pension settlement costs within statement of profit or loss | \u00a0 | \u00a0 | (1,354) |
Defined contribution costs | \u00a0 | (12) | (12) |
Total employer pension costs | \u00a0 | (162) | (1,528) |
Of which included within salaries, pensions and social security contributions | refer to note 2.3.2 | (161) | (1,526) |
Of which included within interest and similar expenses | refer to note 2.4.1 | (1) | (2) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Defined benefit cash contributions | \u00a0 | 80 | 85 |
Defined benefit instalment unconditional funding obligation | \u00a0 | 16 | 28 |
Defined contribution cash contributions | \u00a0 | 12 | 12 |
Total employer pension cash contributions | \u00a0 | 108 | 125 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Actuarial gain/(loss) due to: | \u00a0 | \u00a0 | \u00a0 |
Change in discount rate | \u00a0 | 1,495 | 3,703 |
Change in rate of benefit increases from 1.5% to 5.25% for 2023 and 1.7% thereafter (2021: from 0.8% to 1.5%) | \u00a0 | (1,590) | (760) |
Change in future benefit accrual rate | \u00a0 | (3) | (106) |
Changes in demographic assumptions | \u00a0 | 46 | (147) |
Experience adjustments | \u00a0 | 96 | (45) |
Actuarial gain/(loss) on benefit obligations | \u00a0 | 45 | 2,646 |
Actuarial gain/(loss) on plan assets | \u00a0 | 763 | (1,983) |
Total actuarial gain/(loss) | \u00a0 | 807 | 663 |
Net charge within Other Comprehensive Income | \u00a0 | 606 | 492 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Adjustment for pension asset ceiling | \u00a0 | (752) | (615) |
Adjustment for minimum funding requirement | \u00a0 | 16 | 29 |
Subtotal gross adjustment before settlement | \u00a0 | (735) | (586) |
Pension settlement gain within OCI | \u00a0 | \u00a0 | 1,374 |
Total gross adjustment | \u00a0 | (735) | 788 |
Net charge within Other Comprehensive Income | \u00a0 | (551) | 585 |
The actuarial loss of \u20ac106 million (2021: \u20ac3 million) resulting from a change in the rate of benefit accrual that follows from the maximum level of pension (cash) contributions of 29.2% for the year 2022. Based on the current interest rates and the applicable financing agreement, it is expected that the benefit accrual rate will be lower than the basis level of 1.875% for the coming years.
For 2023, we expect total employer cash contributions of around \u20ac94 million, excluding the last instalment of the unconditional funding obligation of \u20ac16 million (2022: \u20ac97 million, excluding the instalment of the unconditional funding obligation of \u20ac28 million).
For 2023, we expect total employer pension costs within operating income of around \u20ac94 million (2022: \u20ac172 million, excluding the impact of the change in pension accounting classification).
The following table reconciles the opening and closing balances of the present value of the defined benefit obligation and the fair value of plan assets, the funded status and the netted pension provisions, and the employer pension expenses of PostNL's defined benefit post-employment plans.
| \u00a0 | 2021 | 2022 |
|---|---|---|
Change in benefit obligation | \u00a0 | \u00a0 |
Benefit obligation at beginning of year | (10,235) | (10,133) |
Service costs | (160) | (174) |
Interest costs | (31) | (104) |
Actuarial (losses)/gains | 45 | 2,646 |
Benefits paid | 248 | 261 |
Settlement benefit obligation | \u00a0 | 7,498 |
Benefit obligation at end of year | (10,133) | (6) |
Of which funded benefit obligations | (10,131) | (5) |
Of which unfunded benefit obligations | (2) | (2) |
| \u00a0 | \u00a0 | \u00a0 |
Change in plan assets | \u00a0 | \u00a0 |
Fair value of plan assets at beginning of year | 10,230 | 10,882 |
Assumed return on plan assets | 30 | 111 |
Employee contributions | 20 | 22 |
Employer contributions | 80 | 85 |
Instalment unconditional funding obligation | 16 | 28 |
Other costs | (10) | (8) |
Actuarial (losses)/gains | 763 | (1,983) |
Benefits paid | (248) | (261) |
Settlement plan assets | \u00a0 | (8,873) |
Fair value of plan assets at end of year | 10,882 | 4 |
| \u00a0 | \u00a0 | \u00a0 |
Change in funded status | \u00a0 | \u00a0 |
Funded status at the beginning of year | (5) | 749 |
Operating expenses | (149) | (160) |
Interest (expenses)/income | (0) | 7 |
Employer contributions | 96 | 113 |
Actuarial (losses)/gains | 807 | 663 |
Settlement of benefit obligation and plan assets | \u00a0 | (1,374) |
Funded status at end of year | 749 | (2) |
Impact of pension asset ceiling | (752) | \u00a0 |
Impact of minimum funding requirement | (64) | \u00a0 |
Netted pension liabilities | (67) | (2) |
| \u00a0 | \u00a0 | \u00a0 |
Components of employer pension expenses | \u00a0 | \u00a0 |
Service costs (net of employee contributions) | (140) | (152) |
Interest (expenses)/income | (1) | (2) |
Other costs | (10) | (8) |
Pension settlement costs within statement of profit or loss | \u00a0 | (1,354) |
Total post-employment benefit income/(expenses) | (150) | (1,516) |
| \u00a0 | \u00a0 | \u00a0 |
Weighted average assumptions as at 31 December | \u00a0 | \u00a0 |
Discount rate | 1.0% | 3.4% |
Rate of benefit increases | 1.5% | 1.7% |
Life expectancy 65 year old men/women (in years) | 21.1/23.4 | 21.4 / 23.7 |
The discount rate is based on the long-term yield on high quality (AA-rated) corporate bonds, taking into account the duration of the projected pension liabilities of around 16 years. The corporate bond yield information is sourced from iBoxx, taking into account a minimum outstanding amount and other defined selection criteria. By applying curve-fitting procedures, a yield curve is generated. Using the full yield curve, the discounted value of the expected future benefit payments is matched with the comparable present value when using a single discount rate.
The conditional benefit increases are based on the (derived) Consumer Price Index. The assumed rate of benefit increases is based on advice, published statistics, the pension plan's ambition level and the actual financial status of the pension fund.
Assumptions regarding the longevity outlook are based on advice, published statistics and experience per country. The applied prospective longevity rates are derived from the Dutch mortality table 'AG prognosetafel 2022' taking into account experience rates based on postal areas, as applied by the main fund.
Provisions are recognised when there is a present obligation as a result of a past event, making it probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of management\u2019s best estimate of the expenditure required to settle the present obligation on the balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The gross-up of the provision following the discounting of the provision is recorded in the income statement as interest expense.
PostNL recognises termination benefits when the company has committed to terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or provides termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the balance sheet date are discounted to their present value.
Provisions for onerous contracts are recorded when the unavoidable costs of meeting the obligation under the contract exceed the economic benefits expected to arise from that contract, taking into account impairment of fixed assets first. The provision includes both incremental costs and an allocation of other direct costs.
The following table presents the changes in the short-term and long-term provisions.
| \u00a0 | Other employee | Restructuring | Claims and indemnities | Other | Total |
|---|---|---|---|---|---|
Non-current other provisions | 18 | \u00a0 | 9 | 1 | 29 |
Current other provisions | 7 | 5 | 8 | \u00a0 | 21 |
Balance at 1 January 2022 | 25 | 5 | 18 | 2 | 50 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | 15 | \u00a0 | 4 | 1 | 20 |
Withdrawals | (2) | (2) | (7) | (1) | (12) |
Releases | \u00a0 | (2) | (6) | \u00a0 | (7) |
Total changes | 13 | (4) | (9) | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Non-current other provisions | 26 | \u00a0 | 7 | 2 | 35 |
Current other provisions | 12 | 1 | 1 | \u00a0 | 15 |
Balance at 31 December 2022 | 38 | 1 | 9 | 2 | 50 |
The estimated utilisation of the other provisions in 2023 is \u20ac15 million, in 2024 \u20ac5 million, in 2025 \u20ac2 million and in 2026 and thereafter \u20ac28 million.
As at 31 December 2022, the other employee benefit obligations mainly related to a provision for jubilee benefits of \u20ac11 million (2021: \u20ac12 million), expected costs related to continued salary payments during illness of \u20ac7 million (2021: \u20ac6 million), expected disability costs for the WGA benefits, following the decision to become self-insured (in Dutch: \u201ceigenrisicodrager\u201d) as from 1 January 2021, of \u20ac13 million (2021: \u20ac6 million) and termination benefits for early retirement of \u20ac6 million (2021: \u20ac0 million). The added provision for termination benefits resulted partly from the collective labour agreement negotiations and partly from the change in pension accounting classification (refer to note 3.5).
The withdrawals in restructuring provision of \u20ac2 million concerned severance payments under the cost saving programmes. The release of \u20ac2 million mainly related to the restructuring programme within operations Mail Netherlands, resulting from reduced redundancies and periodical reassessments of the expected cash costs.
The provision for claims and indemnities includes provisions for claims from third parties with respect to PostNL\u2019s ordinary business activities, as well as indemnities and disputes related to business disposals. The withdrawals of \u20ac7 million are mainly related to a settlement of disputes within Sandd for \u20ac5 million and the ACM fine of \u20ac2 million related to Mail in the Netherlands\u2019 delivery quality of 2019. More detailed information relating to these provisions is not provided, as such information could prejudice the company\u2019s position with respect to these claims and indemnities.
An associate is an entity over which PostNL has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint arrangement is an arrangement of which two or more parties have joint control. There are two types of joint arrangements: joint operations and joint ventures. PostNL only participates in entities that can be considered as a joint venture.
PostNL\u2019s share in the results of joint ventures and associates is included in the consolidated income statement using the equity method. The carrying value of PostNL\u2019s share in joint ventures and associates includes goodwill on acquisition and includes changes to reflect PostNL\u2019s share in net earnings of the respective companies, reduced by dividends received. When PostNL\u2019s share of accumulated losses in a joint venture or associate exceeds its interest in the company, the book value of the investment is reduced to zero and PostNL does not recognise further losses unless PostNL is bound by guarantees or other undertakings in relation to the joint venture or associate.
For the accounting policy concerning impairments, reference is made to note 5.4.
The following table presents the changes in the carrying value of the investments in joint ventures and associates.
| \u00a0 | 2021 | 2022 |
|---|---|---|
Balance at 1 January | 3 | 6 |
Share in net result | (0) | (1) |
Additions | 3 | 2 |
Transfer MyParcel.com to investments in group companies | 1 | \u00a0 |
Balance at 31 December | 6 | 7 |
As at 31 December 2022, the investments in associates mainly related to minority shareholdings in Roamler Care, CB Healthcare and VersTrade Nederland within Parcels. The joint ventures mainly related to the 50% interest in De Innovatie Studio within PostNL Other.
In 2022, the additions of \u20ac2 million related to the acquisition of 50% of the shares of De Innovatie Studio, 5.3% of the shares in a shopping services app (with the aim to expand our stake to 20% in the short-term) and an additional capital contribution in Roamler Care. De Innovatie Studio is a collaboration with Dasym with the goal to create solutions to relevant consumer problems around Smart Living.
In 2021, the additions of \u20ac3 million related to the acquisition of 25% of the shares of VersTrade Nederland and an additional capital contribution in CB Healthcare. VersTrade Nederland is an online food marketplace, which connects food professionals, such as restaurateurs, caterers, specialty stores and online retailers, to food and beverage suppliers.
Management has assessed none of the investments in joint ventures and associates to be material to the company. On a 100% basis, the profit/(loss) of all immaterial investments in joint ventures amounted to \u20ac0 million (2021: \u20ac0 million). The profit/(loss) of all immaterial investments in associates amounted to \u20ac(4) million (2021: \u20ac1 million).
Deferred tax assets and liabilities arising from temporary differences between the carrying amounts of assets and liabilities and the tax base of assets and liabilities are calculated using the substantively enacted tax rates expected to apply when they are realised or settled. Deferred tax assets are recognised if it is probable that they will be realised. At the end of each reporting period the amounts of deferred tax assets and the amounts of unrecognised deferred tax assets are reassessed. Deferred tax assets and liabilities within the same tax group, where a legally enforceable right to offset exists, are presented net in the balance sheet.
The following table shows the movements in deferred taxes in 2022:
| \u00a0 | Net balance 1 January 2022 | Changes via income statement | Changes via OCI | Other changes | Net balance 31 December 2022 | Assets | Liabilities |
|---|---|---|---|---|---|---|---|
Provisions | 4 | 377 | (374) | \u00a0 | 7 | 7 | 0 |
Intangible assets | (35) | (9) | \u00a0 | \u00a0 | (45) | 4 | 48 |
Property, plant and equipment | (48) | 2 | \u00a0 | \u00a0 | (46) | 3 | 49 |
Leases | 9 | (1) | \u00a0 | \u00a0 | 8 | 75 | 67 |
Losses carried forward | 10 | (3) | \u00a0 | \u00a0 | 7 | 7 | 0 |
Other | 34 | (0) | (1) | 3 | 36 | 38 | 1 |
Deferred tax assets/liabilities | (26) | 365 | (375) | 3 | (32) | 134 | 166 |
Offsetting | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (125) | (125) |
Net deferred taxes | (26) | 365 | (375) | 3 | (32) | 9 | 40 |
Of the deferred tax assets at 31 December 2022, before offsetting, \u20ac57 million (2021: \u20ac53 million) is to be recovered within 12 months and \u20ac77 million (2021: \u20ac77 million) after 12 months. Of the deferred tax liabilities at 31 December 2022, before offsetting, an amount of \u20ac35 million (2021: \u20ac37 million) is to be settled within 12 months and an amount of \u20ac131 million (2021: \u20ac119 million) after 12 months.
The changes via other comprehensive income of \u20ac(374) million mainly relate to taxes on OCI from the change in pension accounting classification.
The other changes of \u20ac3 million (2021: \u20ac(4) million) represent an adjustment of the Dutch deferred tax asset position in connection with the anticipated liquidation of the former Nexive entities.
The total accumulated losses available for carry forward at 31 December 2022 amounted to \u20ac110 million (2021: \u20ac97 million). With these losses carried forward, future tax benefits of \u20ac29 million could be recognised (2021: \u20ac25 million). Tax deductible losses give rise to deferred tax assets at the statutory tax rate in the relevant country. Deferred tax assets are recognised if it is probable that they will be realised. The probability of the realisation is impacted by uncertainties regarding the realisation of such benefits, for example as a result of the expiration of tax losses carried forward and projected future taxable income.
As a result PostNL has not recognised \u20ac21 million (2021: \u20ac15 million) of the potential future tax benefits and has recorded deferred tax assets of \u20ac7 million at 31 December 2022 (2021: \u20ac10 million).
The expiration of total accumulated losses is as follows:
2023: \u20ac1 million,
2024: \u20ac1 million,
2025: \u20ac2 million,
2026: \u20ac0 million,
2027 and thereafter: \u20ac1 million, and
Indefinite: \u20ac105 million.
The following table shows the movements in deferred taxes in 2021:
| \u00a0 | Net balance 1 January 2021 | Changes via income statement | Changes via OCI | Other changes | Net balance 31 December 2021 | Assets | Liabilities |
|---|---|---|---|---|---|---|---|
Provisions | 3 | 19 | (18) | \u00a0 | 4 | 4 | 0 |
Intangible assets | (28) | (7) | \u00a0 | \u00a0 | (35) | 4 | 40 |
Property, plant and equipment | (46) | (0) | \u00a0 | (2) | (48) | 3 | 51 |
Leases | 8 | (1) | \u00a0 | 2 | 9 | 74 | 65 |
Losses carried forward | 9 | 1 | \u00a0 | \u00a0 | 10 | 10 | 0 |
Other | 41 | (3) | \u00a0 | (4) | 34 | 34 | 0 |
Deferred tax assets/liabilities | (13) | 10 | (18) | (4) | (26) | 131 | 156 |
Offsetting | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (120) | (120) |
Net deferred taxes | (13) | 10 | (18) | (4) | (26) | 11 | 37 |
Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of the carrying amount and fair value less costs to sell. Assets held for sale are no longer amortised or depreciated from the date they are classified as such. Accounting for assets classified as held for sale requires the use of assumptions and estimates. In line with IFRS 5, management assessed compliance with these statements and the assumptions used in the fair value calculations as well as the estimated costs to sell.
For the accounting policy concerning impairments, reference is made to note 5.4.
As at 31 December 2022, assets classified as held for sale amounted to \u20ac6 million (2021: \u20ac11 million) and related to buildings held for sale in the Netherlands.
Property, plant and equipment included in assets held for sale relate to buildings in the Netherlands. The book profit from the sale of buildings is included in other income in the consolidated statement of profit or loss. The following table presents the movements of the balance sheet positions during 2022 and 2021.
| \u00a0 | 2021 | 2022 |
|---|---|---|
Balance at 1 January | 14 | 11 |
Disposals | (5) | (6) |
Transfers from property, plant and equipment | 3 | 1 |
Balance at 31 December | 11 | 6 |
Commitments are probable obligations that arises from past events whose existence will only be confirmed by the occurrence (or non-occurrence) of one or more probable future events.
Contingencies are possible obligations (contingent liabilities) or possible assets (contingent assets) that arise from past events whose existence will only be confirmed by the occurrence (or non-occurrence) of one or more uncertain future events, not wholly within the control of the entity.
At 31 December | 2021 | 2022 |
|---|---|---|
Short-term leases and leases of low-value assets | 6 | 5 |
Leases, not commenced | 12 | 29 |
Capital expenditure | 49 | 68 |
Purchase commitments | 155 | 138 |
Other commitments | 11 | 10 |
As at 31 December 2022, \u20ac154 million of the commitments indicated above are of a short-term nature (2021: \u20ac153 million).
In 2022, short-term leases mainly consists of leases of depots in Mail in the Netherlands. Leases of low-value assets are mainly related to the lease of scooters.
As at 31 December 2022, commitments in connection with leases not commenced amounted to \u20ac29 million (2021: \u20ac12 million). These commitments related mainly to a new sorting centre within Parcels and to new leases of vans and cars.
As at 31 December 2022, commitments in connection with capital expenditure amounted to \u20ac68 million (2021: \u20ac49 million) and are related to property, plant and equipment. These commitments primarily relate to the new sorting centres of Parcels.
As at 31 December 2022, PostNL had unconditional purchase commitments of \u20ac138 million (2021: \u20ac155 million), primarily related to various service and maintenance contracts for information technology, security, salary registration and cleaning.
As at 31 December 2022, other commitments related to parking lots for the new head office.
Multinational groups of the size of PostNL are exposed to varying degrees of uncertainty related to their tax planning, their (changes in) transfer pricing models, regulatory reviews and tax audits, fuelled by tax regulations and relevant practices in the countries where PostNL operates being subject to change. PostNL accounts for its (income) taxes on the basis of its own internal analyses, if needed, supported by external advice. PostNL continually monitors its global tax position, and whenever uncertainties arise, assesses the potential consequences and either records the receivable, discloses a contingent asset, accrues the liability or discloses a contingent liability in its financial statements, depending on the strength of the company\u2019s position and the resulting chance of income or risk of loss.
As at 31 December 2022, PostNL, on behalf of its subsidiaries, had various bank and insurance guarantees outstanding. However, none resulted in an off-balance sheet commitment for the Group as the relating obligations to external parties have already been recognised by these subsidiaries following their ordinary course of business.
The company is involved in several legal proceedings relating to the normal conduct of its business, such as claims for loss of goods, delays in delivery, trademark infringements, contracting and employment issues, and general liability. The majority of these claims are for amounts below \u20ac1 million and are insured and/or provided for. PostNL does not expect any liability arising from any of these legal proceedings to have a material impact.
As a specific contingent legal liability, the Belgian labour inspectorate in 2021 filed several cases against PostNL regarding breaches with applicable social laws and regulations in Belgium. PostNL has been subpoenaed for alleged false self-employment, illegal postings of employees and as an alleged accomplice for not paying the connected social contributions. The court hearing in these cases took place in September 2022. The court decided to postpone the case until April 2023. Subsequently, in 2022, PostNL became subject to a criminal investigation by the Belgian investigative judge into alleged breaches of labour law in Belgium in respect to delivery partners of PostNL. Pending this ongoing investigation by the investigative judge the aforementioned court case is postponed, against which PostNL has filed an appeal.
The company is also involved in other regulatory proceedings. While it is not feasible to predict or determine the ultimate outcome of these proceedings, the company is of the opinion that they may have an impact on the company\u2019s financial position, result of operations and cash flows going forward. The company has made provisions for probable liabilities where deemed necessary and to the extent a reliable estimate of the future cash outflows can be made.
Following the demerger of Express, PostNL and TNT Express entered into a separation agreement, which remained valid despite the sale of the shares in TNT Express under the public offer by FedEx in May 2016. The separation agreement creates certain rights and obligations for both PostNL and TNT Express after the demerger. Relevant aspects relate to litigation, such as claims and litigation handling, non-allocated and non-anticipated claims and release of provisions. As at 31 December 2022, no events had occurred that triggered disclosure of a significant contingent asset or liability following the aforementioned agreement with TNT Express.
PostNL reports two operating segments: Parcels and Mail in the Netherlands and one other segment: PostNL Other. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers. These chief operating decision-makers, who are responsible for allocating resources and assessing the performance of the operating segments, have been identified as the Board of Management of PostNL that makes strategic decisions. Transfer prices between operating segments are on an arm's length basis.
A reconciliation of the segment information relating to the balance sheet of the reportable segments is presented below. Segment information relating to the income statement is reported in note 2.7.
At 31 December 2022 | Parcels | Mail in NL | PostNL Other | Total |
|---|---|---|---|---|
Intangible assets | 40 | 201 | 148 | 389 |
Property, plant and equipment | 344 | 101 | 12 | 457 |
Right-of-use assets | 187 | 42 | 65 | 295 |
Other non-current assets | 32 | 1 | 20 | 53 |
Trade accounts receivable | 219 | 150 | 1 | 370 |
Other current assets | 39 | 60 | 553 | 652 |
Assets classified as held for sale | 0 | 3 | 2 | 6 |
Total assets | 861 | 558 | 802 | 2,221 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Non-current liabilities | 184 | 117 | 757 | 1,057 |
Trade accounts payable | 68 | 81 | 33 | 182 |
Other current liabilities | 243 | 507 | 51 | 802 |
Total liabilities | 495 | 706 | 841 | 2,042 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cash out for capital expenditures | 35 | 17 | 85 | 138 |
The increase in 2022 in intangible assets within PostNL Other relates to the centralisation and increase of IT assets. A reconciliation of the segment information relating to the balance sheet of the reportable segments as at 31 December 2021 is presented in the following table.
At 31 December 2021 | Parcels | Mail in NL | PostNL Other | Total |
|---|---|---|---|---|
Intangible assets | 49 | 225 | 80 | 354 |
Property, plant and equipment | 324 | 99 | 10 | 433 |
Right-of-use assets | 183 | 42 | 64 | 289 |
Other non-current assets | 35 | 2 | 28 | 65 |
Trade accounts receivable1 | 216 | 180 | 3 | 400 |
Other current assets1 | 33 | 60 | 839 | 932 |
Assets classified as held for sale | 0 | 9 | 2 | 11 |
Total assets | 840 | 617 | 1,027 | 2,484 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Non-current liabilities | 187 | 132 | 809 | 1,129 |
Trade accounts payable | 72 | 67 | 30 | 168 |
Other current liabilities | 260 | 559 | (61) | 758 |
Total liabilities | 519 | 758 | 778 | 2,055 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cash out for capital expenditures | 54 | 36 | 50 | 140 |
At 31 December | The Netherlands | Other countries | Total |
|---|---|---|---|
Intangible assets | 353 | 1 | 354 |
Property, plant and equipment | 426 | 7 | 433 |
Right-of-use assets | 254 | 35 | 289 |
Financial fixed assets | 58 | 7 | 65 |
Total non-current assets 2021 | 1,091 | 50 | 1,141 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Intangible assets | 388 | 1 | 389 |
Property, plant and equipment | 447 | 10 | 457 |
Right-of-use assets | 259 | 35 | 295 |
Financial fixed assets | 46 | 7 | 53 |
Total non-current assets 2022 | 1,141 | 53 | 1,194 |
The segment information from a geographical perspective is derived as follows: the basis of allocation of assets and investments by geographical area is the location of the assets.
PostNL distinguishes the following categories of financial assets and liabilities:
\u25cf financial assets and liabilities at fair value through profit or loss,
\u25cf financial assets and liabilities measured at amortised costs,
\u25cf financial assets at fair value through other comprehensive income
Management determines the classification of PostNL\u2019s financial assets and liabilities at initial recognition.
PostNL uses derivative financial instruments, such as forward currency contracts, interest rate swaps to hedge its foreign currency risks and interest rate risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value.
The change in the fair value of a hedging instrument is recognised in the statement of profit or loss as financial income or expense.
Cash flow hedges (hedges of a particular risk associated with a recognised asset or liability or a highly probable forecasted transaction).
At the inception of a hedge relationship, PostNL formally designates and documents the hedge relationship to which it wants to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. For all cash flow hedges PostNL wants to apply hedge accounting.
The effective portion of the change in the fair value of the hedging instrument is recognised in OCI in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the statement of profit or loss. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item.
Amounts accumulated in OCI are recycled in the income statement in the periods when the hedged item will affect profit and loss (for example, when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non-financial asset, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the asset or liability.
When a hedging instrument expires or is sold, or when the hedge no longer meets the criteria for hedge accounting, any cumulative gains or losses existing in equity at that time remain in equity until the underlying transaction is ultimately recognised in the income statement. When an underlying transaction is no longer expected to occur, the cumulative gains or losses that were reported in equity are immediately transferred to the income statement.
Fair value measurement is based on the following fair value measurement hierarchy:
\u25cf 1) quoted prices (unadjusted) in active markets,
\u25cf 2) inputs other than quoted prices that are observable either directly (prices) or indirectly (derived from quoted prices), and
\u25cf 3) inputs not based on observable market data. Valuation techniques used include the use of recent arm\u2019s-length transactions, reference to other instruments that are substantially the same, statutory/management reports and discounted cash flow analysis.
A financial asset is measured at amortised cost if both of the following conditions are met:
\u25cf the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
\u25cf the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All financial liabilities are measured at amortised cost, except for financial liabilities at fair value through profit or loss. Financial liabilities are recognised initially at fair value net of transaction costs incurred and are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the financial liability using the effective interest method.
PostNL's equity investments are classified as equity instruments designated at fair value through OCI. Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as financial income in the statement of profit or loss when the right of payment has been established, except when PostNL benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.
At 31 December | 2021 | 2022 |
|---|---|---|
Short- and long-term debt | 732 | 745 |
Long-term interest bearing assets | (20) | (17) |
Cash and cash equivalents | (848) | (556) |
Net debt | (136) | 172 |
Pension liabilities | 67 | 18 |
Lease liabilities (on balance) | 333 | 331 |
Lease liabilities (off balance)1 | 17 | 29 |
Deferred tax assets on lease liabilities2 | (79) | (83) |
Adjusted net debt | 203 | 467 |
As at 31 December 2022, adjusted net debt amounted to \u20ac467 million (2021: \u20ac203 million). The increase of \u20ac264 million mainly resulted from the repurchase of shares of \u20ac164 million, dividend payments of \u20ac165 million and new leases of \u20ac70 million, partly offset by positive net cash from operating and investing activities of \u20ac118 million and a decrease in pension liabilities of \u20ac49 million.
Reference is made to note 3.4 Leases, note 3.5 Provisions for pension liabilities and note 3.10 Commitments and contingencies for more detailed information on leases (on and off balance) and pensions.
As at 31 December 2022, long-term interest-bearing assets of \u20ac17 million (2021: \u20ac20 million) mainly include a lessor loan of \u20ac16 million (2021: \u20ac18 million) relating to the finance lease of a sorting machine by Bol.com. The expected credit loss amounts to \u20ac0 million.
At 31 December | Nominal amount | Average amount | Effective interest rate |
|---|---|---|---|
Cash at bank and in hand | 411 | \u00a0 | \u00a0 |
Bank deposits | 65 | 114 | (0.64%) |
Money Market Funds | 372 | 357 | (0.56%) |
Total cash and cash equivalents 2021 | 848 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cash at bank and in hand | 127 | \u00a0 | \u00a0 |
Bank deposits | 205 | 107 | 0.39% |
Money Market Funds | 224 | 281 | (0.22%) |
Total cash and cash equivalents 2022 | 556 | \u00a0 | \u00a0 |
As at 31 December 2022, included in cash and cash equivalents was \u20ac0 million (2021: \u20ac0 million) of restricted cash. The fair value of cash and cash equivalents approximated the carrying value.
As at 31 December 2022, the total of debt-related liabilities consists of long-term debt of \u20ac980 million (2021: \u20ac997 million) and short-term debt of \u20ac96 million (2021: \u20ac69 million).
| \u00a0 | Eurobonds | Lease liabilities | Other loans | Total |
|---|---|---|---|---|
2023 | 0 | 75 | 21 | 96 |
2024 | 398 | 65 | 4 | 467 |
2025 | 0 | 52 | 4 | 57 |
Thereafter | 299 | 138 | 19 | 456 |
Total borrowings | 697 | 331 | 48 | 1,076 |
Of which included in long-term debt | 697 | 255 | 27 | 980 |
Of which included in short-term debt | 0 | 75 | 21 | 96 |
In 2022, the other loans of \u20ac48 million include the long term liability of future (legal) lease payments for land, buildings and machinery of two Parcels sorting centres and sorting machines with an interest rate of 1.8% and a short-term pre-lease financing with an interest rate of Euribor +1.2%.
The following table presents the cash and the non-cash changes in debt during 2022.
| \u00a0 | Eurobonds | Lease liabilities | Other loans | Total |
|---|---|---|---|---|
Balance at 1 January 2022 | 697 | 333 | 36 | 1,066 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Proceeds | \u00a0 | \u00a0 | 0 | 0 |
Repayments/lease-incentives | \u00a0 | (74) | (4) | (78) |
Total cash movements | 0 | (74) | (4) | (78) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
New leases | \u00a0 | 58 | \u00a0 | 58 |
Lease modifications/reassessments | \u00a0 | 13 | \u00a0 | 13 |
New loan related to building of NLI | \u00a0 | \u00a0 | 16 | 16 |
Amortisation | 1 | \u00a0 | \u00a0 | 1 |
Total non-cash movements | 1 | 71 | 16 | 88 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance at 31 December 2022 | 697 | 331 | 48 | 1,076 |
Refer to note 4.5 for more details on the current outstanding eurobonds.
The following table presents the cash and the non-cash changes in debt during 2021.
| \u00a0 | Eurobonds | Lease liabilities | Other loans | Total |
|---|---|---|---|---|
Balance at 1 January 2021 | 696 | 294 | 12 | 1,002 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Proceeds | \u00a0 | \u00a0 | 0 | 0 |
Repayments | \u00a0 | (69) | (5) | (73) |
Total cash movements | 0 | (69) | (5) | (73) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Lease liability transfered to other loans | \u00a0 | (19) | 19 | 0 |
New leases | \u00a0 | 117 | \u00a0 | 117 |
Lease modifications/reassessments | \u00a0 | 12 | \u00a0 | 12 |
Disposal of leases | \u00a0 | (2) | \u00a0 | (2) |
New loan related to building of NLI | \u00a0 | \u00a0 | 9 | 9 |
Amortisation | 1 | \u00a0 | \u00a0 | 1 |
Total non-cash movements | 1 | 108 | 28 | 137 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance at 31 December 2021 | 697 | 333 | 36 | 1,066 |
The following table presents the changes in the carrying value of the financial assets at fair value through OCI.
| \u00a0 | 2021 | 2022 |
|---|---|---|
Balance at 1 January | 15 | 28 |
Additions | 2 | 1 |
Remeasurement recognised in OCI | 12 | (8) |
Repayment of our stake in Endeit | (1) | (2) |
Balance at 31 December | 28 | 20 |
As at 31 December 2022, the investments in financial assets at fair value through OCI relate to investments in equity shares of non-listed companies. PostNL holds non-controlling interests in Whistl Group Holdings Limited, Endeit Fund II Coo\u0308peratief U.A., Endeit Fund III Coo\u0308peratief U.A. and Clean Clothes B.V. The assessment of fair value is based on key performance indicators included in related management and statutory reports and derived from the expected development of business and financial performance and external valuation insights, if available. In 2022, the fair value remeasurement of \u20ac(8) million mainly related to our stake in Whistl.
Capital management is focused on the following components of the current capital structure:
targeting a leverage ratio (adjusted net debt/EBITDA) not exceeding 2.0 (outcome 2022: 1.9);
structural availability of \u20ac100 million to \u20ac200 million of undrawn committed facilities out of our revolving credit facility (reference is made to note 4.4);
structural funding via a combination of public and bank debt, with a risk-weighted mix of fixed and floating interest;
cash pooling systems that ensure optimal cash requirements for the PostNL Group by facilitating centralised funding and surplus cash concentration at group level;
tax-optimal internal and external funding focused on optimising the cost of capital for PostNL, within boundaries that are sustainable on a long-term basis.
PostNL\u2019s activities expose the company to a variety of financial risks, such as interest rate risk, foreign currency exchange risk, credit risk and liquidity risk. All these risks arise in the normal course of business and PostNL therefore uses various techniques and financial derivatives to mitigate them.
The following analyses provides quantitative information regarding PostNL\u2019s exposure to the financial risks described above. There are certain limitations and simplifications inherent in the analyses presented, primarily due to the assumption that rates change in a parallel fashion and instantaneously. At the same time, for example, the impact of changes in interest on foreign exchange exposures and vice versa is ignored. In addition, the analyses are unable to reflect the complex market reactions that would normally arise from the market shifts assumed.
PostNL uses derivative financial instruments solely for the purpose of hedging currency and interest exposures. The company enters into contracts related to derivative financial instruments for periods commensurate with its underlying exposures and does not take positions independent of these exposures. None of these financial instruments are leveraged or used for trading purposes or to take speculative positions.
Financial risk management is carried out by Group Treasury under policies approved by the Board of Management. Group Treasury identifies, evaluates and hedges financial risks and exposures in close cooperation with operating units. The Board of Management provides written principles for overall risk management, as well as written policies covering the financial risks. Periodic reporting on financial risks is embedded in the overall risk framework and is provided to the Board of Management in a structural way.
Group Treasury matches and manages the intragroup and external financial exposures. Although the company generally enters into hedging arrangements and other contracts to reduce its exposures, these measures may be inadequate or may subject the company to increased operating or financing costs.
PostNL identifies interest rate risk associated with its financial assets and borrowings. Virtually all debts are at fixed rates, a movement in the rate will therefore only affect the cost base per the moment of fixing the rate of the debt instrument. PostNL enters into hedging arrangements to mitigate the interest exposure, at the moment the execution of material lease and debt instruments becomes more certain. As at 31 December 2022, PostNL\u2019s gross interest-bearing borrowings, including lease obligations, totalled \u20ac1,076 million (2021: \u20ac1,066 million), all at fixed interest rates. Financial assets are on average of a short-term nature.
At 31 December 2022, if interest rates on borrowings and financial assets had been 1% higher with other variables held constant, the profit before income tax would have been \u20ac6 million higher (2021: \u20ac8 million). The potential profit increase is entirely attributable to interest income on the cash and cash equivalents. Equity would be positively affected by \u20ac6 million (2021: \u20ac6 million), mainly due to the interest income on cash and cash equivalents and the cash flow hedge impact on equity of the outstanding interest rate swaps.
PostNL has international operations that generate foreign currency exchange risks arising from future commercial transactions, recognised assets and liabilities, investments and divestments in foreign currencies other than functional currencies of the respective business units of PostNL, irrespective of whether it is the euro (PostNL\u2019s functional and reporting currency) or another functional currency. For accounting purposes the European Central Bank is used as the source.
The main currencies of PostNL\u2019s external hedges are the British Pound, Hong Kong Dollar and US Dollar.
The Board of Management has set a policy requiring Group companies to manage their foreign exchange risk against the functional currency. Group companies are required to hedge material exposures via the use of foreign exchange derivatives with Group Treasury, whereby a financing company operated by Group Treasury trades these foreign exchange derivatives with external banks. As at 31 December 2022, PostNL had no net investment hedges outstanding. Significant acquisitions and local debt are usually funded in the currency of the underlying assets.
As at 31 December 2022, if the euro had weakened 10% against the British Pound, the Hong Kong Dollar and the US Dollar with all other variables held constant, the profit before income taxes on the foreign exchange exposure on financial instruments would have been \u20ac0 million lower/higher (2021: \u20ac0 million). In 2022, the net income sensitivity to movements in euro/pound sterling, euro/HK dollar and euro/US dollar exchange rates is negligible and did not change compared to 2021. Equity would have been positively impacted by \u20ac2 million (2021: \u20ac2 million), all related to the move in the hedge reserve.
Credit risk represents the potential losses that the company would incur if counterparties are unable to fulfil the terms of underlying agreements. Credit risk arises from cash and cash equivalents, derivatives and deposits with banks and financial institutions as well as credit exposures relating to customers. The credit risk exposure is minimised by only transacting with financial institutions, ensuring established credit guidelines are met and by managing its customer portfolio.
The top 10 trade accounts receivable accounted for 21% of outstanding trade receivables as at 31 December 2022. In 2022, we noticed no material negative impact from Covid-19 on the payment behaviour of our customers.
Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, PostNL attempts to maintain flexibility in funding by keeping committed credit lines available. The terms and conditions of PostNL\u2019s material long-term and short-term debts, as well as its material drawn or undrawn committed credit facilities do not include any financial covenants. There are no obligations to accelerate repayments of these material debts and committed facilities in the event of a credit rating downgrade. A downgrade in PostNL\u2019s credit rating may negatively affect its ability to obtain funds from financial institutions and banks and increase its financing costs by increasing the interest rates on its outstanding debt or the interest rates at which the company is able to refinance existing debt or incur new debt.
At 31 December 2022, the \u20ac200 million committed credit facility (maturity date: December 2026) was undrawn (2021: undrawn).
The following table analyses PostNL\u2019s financial liabilities, categorising them into relevant maturity groupings based on the remaining period on the balance sheet to the contractual maturity date. The outgoing flows disclosed in the table are the contractual undiscounted cash flows that contain the redemptions and interest payments.
At 31 December | Less than | Between 1 and 3 years | Thereafter | Book value |
|---|---|---|---|---|
Eurobonds | 6 | 412 | 304 | 697 |
Leases | 71 | 125 | 164 | 333 |
Other loans | 5 | 9 | 24 | 36 |
Foreign exchange contracts - outgoing | 317 | \u00a0 | \u00a0 | 1 |
Trade accounts payable | 168 | \u00a0 | \u00a0 | 168 |
Other current liabilities | 54 | \u00a0 | \u00a0 | 54 |
Total outgoing flows | 621 | 546 | 492 | 1,289 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Foreign exchange contracts - incoming | 317 | \u00a0 | \u00a0 | \u00a0 |
Total mitigation via incoming flows | 317 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total liquidity risk 2021 | 304 | 546 | 492 | 1,289 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Eurobonds | 6 | 408 | 302 | 697 |
Leases | 83 | 128 | 151 | 331 |
Other loans | 21 | 9 | 20 | 48 |
Foreign exchange contracts - outgoing | 217 | \u00a0 | \u00a0 | 1 |
Trade accounts payable | 182 | \u00a0 | \u00a0 | 182 |
Other current liabilities | 54 | \u00a0 | \u00a0 | 54 |
Total outgoing flows | 563 | 545 | 473 | 1,313 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Foreign exchange contracts - incoming | 217 | \u00a0 | \u00a0 | \u00a0 |
Total mitigation via incoming flows | 217 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total liquidity risk 2022 | 346 | 545 | 473 | 1,313 |
In line with IFRS 9 and IFRS 13, the following categories of financial assets and financial liabilities can be distinguished.
At 31 December | Notes | Input information level (IFRS13) | Loans and receivables | Derivatives used for hedging | Financial assets at fair value through OCI | Total |
|---|---|---|---|---|---|---|
Other loans receivable | \u00a0 | level 2 | 20 | \u00a0 | \u00a0 | 20 |
Other financial fixed assets | \u00a0 | level 3 | \u00a0 | \u00a0 | 28 | 28 |
Accounts receivable | level 2 | 411 | \u00a0 | \u00a0 | 411 | |
Derivatives1 | \u00a0 | level 2 | \u00a0 | 1 | \u00a0 | 1 |
Cash and cash equivalents | \u00a0 | 848 | \u00a0 | \u00a0 | 848 | |
Total assets balance sheet 2021 | \u00a0 | \u00a0 | 1,279 | 1 | 28 | 1,308 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Other loans receivable | \u00a0 | level 2 | 17 | \u00a0 | \u00a0 | 17 |
Other financial fixed assets | \u00a0 | level 3 | \u00a0 | \u00a0 | 20 | 20 |
Accounts receivable | level 2 | 382 | \u00a0 | \u00a0 | 382 | |
Derivatives1 | \u00a0 | level 2 | \u00a0 | 5 | \u00a0 | 5 |
Cash and cash equivalents | \u00a0 | 556 | \u00a0 | \u00a0 | 556 | |
Total assets balance sheet 2022 | \u00a0 | \u00a0 | 955 | 5 | 20 | 980 |
Fair value represents the price that would be received when selling an asset in an orderly transaction between willing market participants. For the level 3 financial assets at fair value through OCI our valuations have been measured by using the market approach as per 31 December 2021 and 31 December 2022.
At 31 December | Notes | Input information level (IFRS13) | Financial liabilities measured at amortised costs | Derivatives used for hedging | Total |
|---|---|---|---|---|---|
Long-term debt | level 1&21 | 728 | \u00a0 | 728 | |
Trade accounts payable | \u00a0 | level 22 | 168 | \u00a0 | 168 |
Short-term debt | level 22 | 4 | \u00a0 | 4 | |
Other current liabilities3 | level 22 | 54 | 1 | 55 | |
Total liabilities balance sheet 2021 | \u00a0 | \u00a0 | 954 | 1 | 955 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Long-term debt | level 1&21 | 725 | \u00a0 | 725 | |
Trade accounts payable | \u00a0 | level 22 | 182 | \u00a0 | 182 |
Short-term debt | level 22 | 21 | \u00a0 | 21 | |
Other current liabilities3 | level 22 | 52 | 3 | 55 | |
Total liabilities balance sheet 2022 | \u00a0 | \u00a0 | 979 | 3 | 982 |
All financial instruments are reported on a gross basis per instrument. Netting of financial instruments per contractual counterparty will not have a material impact on the outstanding balances.
For the details on the outstanding eurobonds, see the following table.
At 31 December | Nominal | Costs/discount to be amortised | Carrying | Fair |
|---|---|---|---|---|
1.000% eurobond 2024 | 400 | 1 | 399 | 410 |
0.625% eurobond 2026 | 300 | 3 | 297 | 306 |
Total outstanding eurobonds 2021 | 700 | 3 | 697 | 716 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
1.000% eurobond 2024 | 400 | 1 | 399 | 380 |
0.625% eurobond 2026 | 300 | 2 | 298 | 267 |
Total outstanding eurobonds 2022 | 700 | 3 | 697 | 647 |
For the details on the outstanding leases, see the table below.
At 31 December | Nominal | Fixed/floating interest | Carrying | Fair value |
|---|---|---|---|---|
Total outstanding leases 2021 | 333 | fixed | 333 | 333 |
Total outstanding leases 2022 | 331 | fixed | 331 | 331 |
For the details on the outstanding foreign exchange contracts, see the table below.
At 31 December | Carrying value | Fair value | Nominal value | Hedge | Amount in equity |
|---|---|---|---|---|---|
Asset | 1 | 1 | 86 | balance sheet/cashflow | 0 |
Liability | 1 | 1 | 112 | balance sheet/cashflow | 0 |
Foreign exchange contracts 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Asset | 1 | 1 | 76 | balance sheet/cashflow | 1 |
Liability | 3 | 3 | 141 | balance sheet/cashflow | (2) |
Foreign exchange contracts 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
The fair value of these outstanding foreign exchange hedges is recorded as a current asset in \u2018prepayments and accrued income\u2019 or as a current liability in \u2018other current liabilities\u2019 and includes credit valuation adjustments.
In 2022, the total ineffective portion on all derivatives recognised in the income statement that arises from the use of fair value and cash flow hedges amounted to \u20ac0 million (2021: \u20ac0 million).
For the details on the outstanding interest rate swaps, see the table below.
At 31 December | Carrying value | Fair value | Nominal value | Hedge | Amount in equity |
|---|---|---|---|---|---|
Interest rate swaps 2021 | 0 | 0 | 0 | balance sheet/cashflow | 0 |
Interest rate swaps 2022 | 4 | 4 | 51 | balance sheet/cashflow | 3 |
The fair value of these outstanding interest rate swaps is recorded as a current asset in \u2018prepayments and accrued income\u2019 or as a current liability in \u2018other current liabilities\u2019 and includes credit valuation adjustments.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Where any Group company purchases PostNL\u2019s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, are included in equity.
Since 4 August 2011, the company\u2019s authorised share capital amounts to \u20ac120 million, divided into 750,000,000 ordinary shares and 750,000,000 preference shares B, both of \u20ac0.08 nominal value each.
The ordinary shares are in deposit or registered form. Deposit shares are represented by a global note held by the Dutch clearing system Euroclear Netherlands and are transferable through Euroclear Netherlands\u2019 book entry system. Ordinary shares in registered form are transferred by means of a deed of transfer and PostNL\u2019s written acknowledgement of the transfer. PostNL does not have share certificates for ordinary shares represented by the global note. The preference shares B are in registered form.
At 31 December 2022, the company's issued share capital amounted to \u20ac39 million (2021: \u20ac41 million). The number of authorised, issued and outstanding shares by class of share is as presented in the table hereafter.
In 2022, PostNL repurchased 51 million ordinary shares under the first tranche of the share buyback programme. Out of the 51 million shares, 16,358,973 shares were used for the payment of the 2021 final dividend in stock, 7,868,569 shares were used for the payment of the 2022 interim dividend in stock and 1,051,073 shares were used for the settlement of PostNL\u2019s equity-settled share plans. The remaining 25,721,385 shares were cancelled on 22 November 2022.
For all equity-settled share plans, PostNL intends to perform the settlement by issuing new shares or assigning repurchased shares to 'Stichting Managementparticipatie PostNL' (Foundation Management Participation PostNL). In 2022, the company issued 0 ordinary shares (2021: 747,526 shares) under its incentive schemes to 'Stichting Managementparticipatie PostNL' (Foundation Management Participation PostNL), and assigned 1,051,073 repurchased ordinary shares (2021: 0) under its incentive schemes to 'Stichting Managementparticipatie PostNL' (Foundation Management Participation PostNL). As at 31 December 2022, the company held no shares to cover its obligations under the existing share plans or for cancellation (2021: 0 shares).
Before proposed appropriation of profit | 2021 | 2022 |
|---|---|---|
Authorised by class | \u00a0 | \u00a0 |
Ordinary shares | 750,000,000 | 750,000,000 |
Preference shares B | 750,000,000 | 750,000,000 |
Total authorised | 1,500,000,000 | 1,500,000,000 |
| \u00a0 | \u00a0 | \u00a0 |
Issued and outstanding | \u00a0 | \u00a0 |
Per 1 January of the reported year | 494,991,389 | 513,252,013 |
Cancellation of repurchased shares | \u00a0 | (25,721,385) |
Issued for stock dividend | 17,513,098 | 0 |
Issued under its incentive schemes | 747,526 | 0 |
Per 31 December of the reported year | 513,252,013 | 487,530,628 |
| \u00a0 | \u00a0 | \u00a0 |
Issued and outstanding per 31 December by class | \u00a0 | \u00a0 |
Ordinary shares | 513,252,013 | 487,530,628 |
of which held by the company to cover share plans | 0 | 0 |
of which a foundation incorporated by the company only holds the legal title | 1,852,045 | 2,273,128 |
Preference shares B | 0 | 0 |
For administration and compliance purposes, since May 2013 all shares belonging to PostNL employees under PostNL incentive schemes are held by Stichting Managementparticipatie PostNL (Foundation Management Participation PostNL). These shares are held on an omnibus securities account with ABN AMRO Bank, the Netherlands. Foundation Management Participation PostNL legally owns the shares, while the beneficial ownership of the shares is vested in the employees, who are also entitled to dividend received by Foundation Management Participation PostNL on their behalf. At 31 December 2022, the number of PostNL shares involved amounted to 2,273,128 shares (2021: 1,852,045 shares) with a nominal value of \u20ac0.08 per share.
Stichting Continuiteit PostNL (Foundation Continuity PostNL) was formed to safeguard the interests of PostNL, the undertaking connected with PostNL and all parties involved. It does this by, among other things, preventing any influences that could threaten PostNL\u2019s continuity, independence and identity, as far as possible. Foundation Continuity PostNL is an independent legal entity and is not owned or controlled by PostNL or any other legal person.
PostNL\u2019s articles of association provide for protective preference shares B that can be issued to Foundation Continuity PostNL to serve these interests. The preference shares B have a nominal value of \u20ac0.08 and have the same voting rights as PostNL\u2019s ordinary shares.
PostNL and Foundation Continuity PostNL have entered into a call option agreement, which enables Foundation Continuity PostNL to acquire a number of preference shares B not exceeding the total issued amount of shares minus one and minus any shares already issued to Foundation Continuity PostNL. The call option agreement is meant as a preventive countermeasure against influences that might threaten the continuity, independence and identity of the company. Preference shares B will be outstanding no longer than is strictly necessary. At 31 December 2022 no preference shares B were issued.
At 31 December 2022, additional paid-in capital of \u20ac163 million (2021: \u20ac163 million) is fully exempt for Dutch tax purposes to the extent that this has been paid in by shareholders of the company.
Equity-settled share-based compensation plans
PostNL operates a number of equity-settled share-based compensation plans, under which the employees receive (conditional) shares of the Group for services rendered. The fair value of the employee services received, as measured at the grant date, in exchange for the grant of the shares is recognised as an expense, with a corresponding increase in equity.
Non-market performance and service conditions are included in assumptions about the number of (conditional) shares that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all the specified vesting conditions are to be satisfied. In addition, for some share-based compensation plans, employees provide services in advance of the grant date and therefore the grant date fair value is estimated for the purposes of recognising the expense between service commencement date and grant date. At the end of each reporting period, the Group revises its estimates of the number of shares that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity.
Total remuneration of the Supervisory Board in 2022 amounted to \u20ac357,937 (2021: \u20ac341,840). For details see the 'Remuneration report'.
The members of the Supervisory Board receive no compensation related to performance and/or equity and accrue no pension rights with the company. The members of the Supervisory Board receive no severance payments in the event of termination. PostNL does not grant loans, including mortgage loans, advance payments, guarantees and options or shares to any member of the Supervisory Board.
In 2022, the total remuneration based on IFRS of the Board of Management amounted to \u20ac2,057,994 (2021: \u20ac2,164,617). The following table presents total remuneration of the Board of Management:
| \u00a0 | \u00a0 | Base salary1 | Other benefits2 | Pension costs3 | One year variable | Multi-year variable | Total remuneration |
|---|---|---|---|---|---|---|---|
Herna Verhagen - CEO | 2022 | 679,639 | 188,717 | 45,565 | \u00a0 | 263,564 | 1,177,485 |
2021 | 659,844 | 183,551 | 42,595 | 173,209 | 177,877 | 1,237,076 | |
Pim Berendsen - CFO | 2022 | 516,526 | 118,078 | 45,594 | \u00a0 | 200,311 | 880,509 |
2021 | 501,481 | 112,874 | 46,362 | 131,639 | 135,185 | 927,541 |
The base salaries for both members of the Board of Management were increased with 3% in 2022 compared to 2021 in line with the remuneration policy.
PostNL accounts for the short-term incentive on the basis of the performance of the year reported. In 2022, as targets were not achieved no accrual was formed to pay in 2023. In 2022, an amount of \u20ac304,848 was paid to the members of the Board of Management in relation to the short-term incentive of 2021.
In 2022, the total share-based payment costs relating to the long-term incentive performance share plan for the members of the Board of Management amounted to \u20ac463,875 (2021: \u20ac313,062).
The members of the Board of Management are awarded a long-term incentive, which represents a maximum potential reward of 37.5% of the annual base salary in the form of a performance share plan. The characteristics of this performance share plan are:
it is a conditional equity-settled share plan based on a three-year performance period
each year shares are conditionally allocated to members of the Board of Management
a conditional dividend equivalent is added to the conditional shares equal to the dividend rights of ordinary shares
the conditional shares and their conditional dividend equivalents will vest after a performance period of three years
vesting is subject to the achievement of targets set on each of the long-term performance measures supportive to the attainment of PostNL\u2019s strategy
if a member of the Board of Management leaves the company during the performance period due to circumstances involving fraud or gross misbehaviour, any accrued rights on the long-term incentive plan will terminate and become void
if a member of the Board of Management leaves the company due to other reasons, a pro rata performance and time-based vesting applies, unless decided otherwise by the Supervisory board
In compliance with the Dutch Corporate Governance Code, following a three-year performance period, the holding period for vested shares expires two years thereafter or at termination of employment/service if this occurs earlier. For compliance reasons, a sale of shares may not occur within six months following the date of termination of the employment/service. Any sale of shares for the purpose of using the proceeds to pay for the tax due at vesting of these shares is exempted.
Name of Director - position | Specification of plan | Number of shares held at 1 Jan 2022 | Number of shares granted during 20221 | Number of dividend shares2 | Number of shares settled during 2022 | Number of shares forfeited during 2022 | Net number of shares under a holding period at 31 Dec 2022 | Number of shares subject to a performance condition at 31 Dec 2022 |
|---|---|---|---|---|---|---|---|---|
Herna Verhagen - CEO | PSP 2022 | \u00a0 | 78,839 | 5,086 | \u00a0 | \u00a0 | \u00a0 | 83,925 |
| \u00a0 | PSP 2021 | 54,837 | \u00a0 | 10,214 | \u00a0 | \u00a0 | \u00a0 | 65,051 |
| \u00a0 | PSP 2020 | 176,204 | \u00a0 | 32,817 | \u00a0 | \u00a0 | \u00a0 | 209,021 |
| \u00a0 | PSP 2019 | 115,090 | \u00a0 | 13,161 | (85,501) | (42,750) | 44,246 | \u00a0 |
| \u00a0 | PSP 2018 | 30,687 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 30,687 | \u00a0 |
| \u00a0 | PSP 2017 | 10,629 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | Total shares | 387,447 | 78,839 | 61,278 | (85,501) | (42,750) | 74,933 | 357,997 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Pim Berendsen - CFO | PSP 2022 | \u00a0 | 59,917 | 3,866 | \u00a0 | \u00a0 | \u00a0 | 63,783 |
| \u00a0 | PSP 2021 | 41,677 | \u00a0 | 7,763 | \u00a0 | \u00a0 | \u00a0 | 49,440 |
| \u00a0 | PSP 2020 | 133,915 | \u00a0 | 24,941 | \u00a0 | \u00a0 | \u00a0 | 158,856 |
| \u00a0 | PSP 2019 | 87,470 | \u00a0 | 10,003 | (64,982) | (32,491) | 33,628 | \u00a0 |
| \u00a0 | PSP 2018 | 23,322 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 23,322 | \u00a0 |
| \u00a0 | Total shares | 286,384 | 59,917 | 46,573 | (64,982) | (32,491) | 56,950 | 272,079 |
Total shares | \u00a0 | 673,831 | 138,756 | 107,851 | (150,483) | (75,241) | 131,883 | 630,076 |
Specification of plan | Performance period | Grant date |
|---|---|---|
PSP 2022 | 01/01/2022-31/12/2024 | 12/05/2022 |
PSP 2021 | 01/01/2021-31/12/2023 | 14/05/2021 |
PSP 2020 | 01/01/2020-31/12/2022 | 06/05/2020 |
PSP 2019 | 01/01/2019-31/12/2021 | 10/05/2019 |
PSP 2018 | 01/01/2018-31/12/2020 | 09/05/2018 |
The vesting date is generally equal to grand date plus three years. Subsequently a holding period of two years applies.
Note that the number of outstanding conditional shares does not represent the total number of shares held by each member of the Board of Management, which includes vested shares under PostNL's performance share plan and variable remuneration. Reference is made to chapter 15 Remuneration, section actual remuneration, tabel 'Shares held by Board of Management'.
In 2022, an amount of \u20ac463,875 (2021: \u20ac313,062) was expensed for the cost of the performance shares of the Board of Management. The costs are determined by multiplying the number of granted performance shares by the fair value of such shares on the date of the grant (PSP 2022: \u20ac2.817 per share; PSP 2021: \u20ac4.375 per share; PSP 2020: \u20ac1.341 per share; PSP 2019: \u20ac1.853 per share) and by taking into account expected vesting percentages.
Other periodic compensation included company costs related to tax and social security, pension allowances, company car and other compensation.
The pension costs consist of the service costs for the reported year (net of employee contributions) and risk premium for the net pension plan. The members of the Board of Management are participants in a career average defined benefit scheme.
No loans, advance payments or guarantees were granted to members of the Board of Management in 2022 (2021: nil).
The short-term incentive for senior management represents a potential reward of a percentage of the annual base salary (the percentage depending on the job level), which is based on annual performance measures. Of the realised achievements, 50% is paid in cash and 50% is paid in PostNL shares in the following year. Shares will be granted unconditionally and will be delivered without restrictions or a restricted period, other than those defined in the PostNL insider trading policy.
The 50% of the short-term incentive settled in shares is accounted for as an equity-settled share-based payment. The accrued share-based payment costs relating to this short-term incentive amounted to \u20ac0.4 million in 2022 (2021: \u20ac1.8 million). The realised amounts will be granted and paid in PostNL shares in 2023.
A selected group of members of senior management is awarded a long-term incentive, which represents a potential reward of 37.5% of the annual base salary in the form of a performance share plan that contains three-year performance measures. The long-term incentive is part of the remuneration package for this selected group of senior management. It is aimed particularly at aligning their interests with the long-term interests of the company and its shareholders.
The performance share plan contains the same characteristics as the performance share plan of the Board of Management with the exception that there is no holding period applicable for senior management.
Specification of plan | Number of shares held at 1 Jan 2022 | Number of shares granted during 20221 | Number of dividend shares2 | Number of shares settled during 2022 | Number of shares forfeited during 2022 | Number of shares outstanding at |
|---|---|---|---|---|---|---|
PSP 2022 | \u00a0 | 221,543 | 14,295 | \u00a0 | \u00a0 | 235,838 |
PSP 2021 | 151,686 | \u00a0 | 28,257 | \u00a0 | \u00a0 | 179,943 |
PSP 2020 | 421,442 | \u00a0 | 78,495 | \u00a0 | \u00a0 | 499,937 |
PSP 2019 | 267,037 | \u00a0 | 30,538 | (198,384) | (99,191) | 0 |
Total shares | 840,165 | 221,543 | 151,585 | (198,384) | (99,191) | 915,718 |
In 2022, an amount of \u20ac570,446 (2021: \u20ac500,642) was expensed for the cost of the performance shares of senior management. The costs are determined by multiplying the number of granted performance shares by the fair value of such shares on the date of the grant (PSP 2022: \u20ac2.817 per share; PSP 2021: \u20ac4.375 per share; PSP 2020: \u20ac1.341 per share; PSP 2019: \u20ac1.853 per share) and by taking into account expected vesting percentages.
Since 2011, senior management have had the opportunity, on a voluntary basis, to participate in a bonus/matching plan. The company sees the bonus matching plan as part of the remuneration package for the members of senior management, particularly aimed at aligning their interests with the long-term interests of the company and shareholders. At the discretion of the Supervisory Board, grants are made on an annual basis in accordance with the bonus matching plan which has been approved by the Supervisory Board. The significant aspects of the plan are:
bonus shares are purchased by the participant using 25% of the gross (cash) variable remuneration and delivered upon the grant of the right on matching shares
the number of bonus shares is calculated by dividing 25% of an individual\u2019s gross annual cash bonus relating to the preceding financial year by the share price on Euronext Amsterdam on the date the grant is made
the rights to matching shares are granted free of charge. The number of matching shares is equal to the number of bonus shares (equity settled scheme)
the matching rights vest three years after the delivery of the bonus shares
for each bonus share that is sold within three years, the associated right to one matching share lapses. If more than 50% of the bonus shares are sold within three years, the entire right to matching shares lapses with immediate effect
if a participant leaves the company for certain reasons (retirement, certain reorganisations, disability or death), the right to matching shares will vest immediately and he/she can exercise his/her right pro rata
a participant loses the right to exercise his/her right on matching shares when he/she leaves the company for reasons other than those mentioned
The exercise of the rights to matching shares is subject to the PostNL insiders trading policy.
Specification of plan | Vesting period | Number of shares outstanding at 1 Jan 2022 | Number of shares granted during 2022 | Number of shares settled during 2022 | Number of shares forfeited during 2022 | Number of shares outstanding at 31 Dec 2022 |
|---|---|---|---|---|---|---|
Bonus matching 2022 | 12/05/2022-12/05/2025 | \u00a0 | 45,561 | \u00a0 | \u00a0 | 45,561 |
Bonus matching 2021 | 14/05/2021-14/05/2024 | 37,908 | \u00a0 | - | (3,302) | 34,606 |
Bonus matching 2020 | 06/05/2020-06/05/2023 | 50,598 | \u00a0 | - | (6,135) | 44,463 |
Bonus matching 2019 | 10/05/2019-10/05/2022 | 34,536 | \u00a0 | (34,274) | (262) | 0 |
Total | \u00a0 | 123,042 | 45,561 | (34,274) | (9,699) | 124,630 |
In 2022, an amount of \u20ac94,917 (2021: \u20ac75,326) was expensed for the cost of the equity-settled bonus matching shares. The costs are determined by multiplying the number of granted matching shares by the fair value of such shares on the date of the grant (2022: \u20ac2.817 per share; 2021: \u20ac4.375 per share; 2020: \u20ac1.341 per share; 2019: \u20ac1.853 per share) and by taking into account expected vesting percentages.
For all equity-settled and cash-settled share plans, PostNL intends to perform the settlement (or in case of cash-settled plans, fund the settlement) by issuing new shares or assigning repurchased shares. Accordingly, the company does not need to actively hedge the risk in connection with its obligations. As a result, the company assigned 1,051,073 repurchased shares in 2022 (2021: 0) to cover its obligations under the existing share plans. As at 31 December 2022, the total number of shares held for this purpose was nil (2021: 0).
The identified related parties of the Group are its Group companies, its joint ventures and associates, shareholders with significant influence, its pension fund and the members of the Board of Management and Supervisory Board. The PostNL Group companies have trading relationships with a number of joint ventures as well as with companies in which PostNL holds minority stakes. In some cases, there are contractual arrangements in place under which PostNL companies source supplies from such undertakings, or such undertakings source supplies from PostNL. Transactions are carried out at arm's length.
During 2022, sales of PostNL to joint ventures and associates amounted to \u20ac3 million (2021: \u20ac0 million). Purchases of PostNL from joint ventures and associates amounted to \u20ac0 million (2021: \u20ac0 million). The net amounts due from the joint ventures and associates amounted to \u20ac0 million (2021: \u20ac0 million). Related party transactions with PostNL\u2019s pension fund are presented in note 3.5 to the consolidated financial statements.
PostNL considers the members of the Board of Management and Supervisory Board as key management personnel as defined by IAS 24. For disclosure on related party transactions with the Board of Management and Supervisory Board, see note 5.1 to the consolidated financial statements.
In 2022, PostNL did not acquire new business by the acquisition of the shares of other entities.
The consolidated financial statements include the financial figures of PostNL N.V. and its subsidiaries, associates and joint ventures and have been prepared using uniform accounting policies for like transactions and other events in similar circumstances. All significant intercompany transactions and balances have been eliminated on consolidation. A complete list of subsidiaries, associates and joint ventures included in PostNL\u2019s consolidated financial statements is filed for public review at the Chamber of Commerce in The Hague. This list has been prepared in accordance with the provisions of article 379 (1) and article 414 of book 2 of the Dutch Civil Code.
A subsidiary is an entity controlled directly or indirectly by PostNL N.V. Control is defined as the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether PostNL controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to PostNL and are de-consolidated from the date on which control ceases. PostNL uses the acquisition method of accounting to account for the acquisition of subsidiaries. The consideration of an acquisition is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of exchange. The consideration transferred also includes the fair value arising from contingent consideration arrangements. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values on the acquisition date irrespective of the extent of any non-controlling interest. Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred over the fair value of PostNL\u2019s share of the identifiable net assets of the subsidiary is recorded as goodwill. If the cost of acquisition is less than the fair value of PostNL\u2019s share of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement. The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
When the Group ceases to have control or significant influence, any retained interest in the entity is re-measured to its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequent accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are recycled to profit or loss. The non-controlling interest is initially measured at the proportion of the non-controlling interest in the recognised net fair value of the assets, liabilities and contingent liabilities. Losses applicable to the non-controlling interest in excess of the non-controlling interest in the subsidiary\u2019s equity are allocated against PostNL\u2019s interests.
Items included in the financial statements of each of the Group\u2019s entities are measured using the currency of the primary environment in which the entity operates ('the functional currency'). These consolidated financial statements are presented in euros, which is PostNL\u2019s functional and presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transactions. Monetary assets and liabilities in foreign currencies are translated to the functional currency using year-end exchange rates. Foreign currency exchange gains and losses resulting from the settlement of foreign currency transactions and balances and from the translation at year-end exchange rates are recognised in the income statement except for qualifying cash flow hedges and qualifying net investment hedges that are directly recognised in other comprehensive income.
The results and financial position of all Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
assets and liabilities are translated at the closing exchange rates,
income and expenses are translated at average exchange rates, and
the resulting exchange rate differences based on the different ways of translating between the balance sheet and the income statement are recognised as a separate component of equity (translation reserve).
Foreign currency exchange differences arising from the translation of the net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to the translation reserve. When a foreign operation is sold, such exchange differences are recycled in the income statement as part of the gain or loss on the sale.
Goodwill is not subject to amortisation but is tested for impairment annually or whenever there is an indication that the asset might be impaired. For the purposes of assessing impairment, assets are grouped at the lowest levels at which there are separately identifiable cash flows, being the cash-generating units (CGUs). If the recoverable value of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of the goodwill allocated to the CGU and then pro rata to other assets of the CGU. The recoverable amount is the higher of the fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the asset-specific risks. For the purpose of assessing impairment, corporate assets are allocated to specific CGUs before impairment testing. The allocation of the corporate assets is based on the contribution of those assets to the future cash flows of the CGU under review. Impairment losses recognised for goodwill are not reversed in a subsequent period.
PostNL assesses on each balance sheet date whether there is objective evidence that an investment in a joint venture or associate may need to be impaired. If the recoverable value of the investment is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The recoverable amount is the higher of the fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the asset-specific risks. The fair value less costs of disposal of a joint venture or associate is reviewed based on observable publicly available market data. Possible impairment charges may be reversed if there is an indication that the impairment no longer exists or has been reduced.
At each balance sheet date, PostNL reviews its finite-lived intangible assets and property, plant and equipment for an indication of impairment. If any indication exists, the recoverable amount of the assets is estimated. The recoverable amount is defined as the higher of an asset\u2019s fair value less costs of disposal and its value in use. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Any impairment loss is recognised immediately in the income statement. Impairment losses recognised in prior periods shall be reversed only if there has been a change in the estimates used to determine the asset\u2019s recoverable amount since the last impairment loss was recognised. The recoverable amount shall not exceed the carrying amount that would have been determined had no impairment loss been recognised in previous periods. A reversal of an impairment loss is recognised immediately in the income statement.
The company recognises a liability and an expense for profit-sharing by employees, based on a calculation that takes into consideration quantitative and qualitative performance measures in accordance with contractual arrangements.
Dividend distribution to PostNL\u2019s shareholders is recognised as a liability in the financial statements in the year in which the dividends are approved by the shareholders. If PostNL offers its shareholders (the choice of) dividends in additional shares, the additionally issued shares are recognised at their nominal amount.
On 19 January 2023, PostNL announced that an agreement was reached with the trade unions BVPP and CNV on a new collective labour agreement (CLA) for PostNL and one for Saturday deliverers. The agreements specify a total wage increase of up to 9.5% over two years. All payment components related to 2022 have been expensed in 2022. In addition, in February 2023, PostNL will make a one-time payment of 1.5% of annual salary. Both CLAs are effective as of 1 April 2022 and end on 31 March 2024.
Year ended at 31 December | Notes | 2021 | 2022 excl. change in pension accounting classification | Change in pension accounting classification | Total 2022 |
|---|---|---|---|---|---|
Dividend income | 6.2.1 | 200 | 150 | \u00a0 | 150 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Reversal impairment/(impairment) investments in subsidiaries | 6.2.2 | 524 | (1,465) | \u00a0 | (1,465) |
Salaries, pensions and social security contributions | 6.2.3 | (74) | (76) | (1,354) | (1,430) |
Other operating expenses | \u00a0 | 0 | 0 | \u00a0 | 0 |
Total operating expenses | \u00a0 | 450 | (1,541) | (1,354) | (2,895) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Operating income | \u00a0 | 650 | (1,391) | (1,354) | (2,745) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Interest and similar income | \u00a0 | 0 | 0 | \u00a0 | 0 |
Interest and similar expenses | \u00a0 | (9) | (9) | \u00a0 | (9) |
Net financial expense | 6.2.4 | (9) | (9) | \u00a0 | (9) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Profit/(loss) before income taxes | \u00a0 | 641 | (1,400) | (1,354) | (2,754) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Income taxes | 6.2.5 | 21 | 22 | 349 | 371 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Profit/(loss) for the year attributable to shareholders | \u00a0 | 662 | (1,378) | (1,005) | (2,383) |
Year ended at 31 December | Notes | 2021 | 2022 excl. change in pension accounting classification | Change in pension accounting classification | Total 2022 |
|---|---|---|---|---|---|
Profit/(loss) for the year attributable to shareholders | \u00a0 | 662 | (1,378) | (1,005) | (2,383) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Actuarial gains/(losses) pensions, net of tax | 605 | 491 | \u00a0 | 491 | |
Pension asset ceiling/minimum funding requirement, net of tax | (551) | (435) | 1,020 | 585 | |
Other comprehensive income that will not be reclassified to the income statement | \u00a0 | 54 | 57 | 1,020 | 1,076 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total comprehensive income for the year | \u00a0 | 715 | (1,322) | 15 | (1,307) |
Year ended at 31 December | Notes | 2021 | 2022 |
|---|---|---|---|
Profit/(loss) before income taxes | \u00a0 | 641 | (2,754) |
Change in pension accounting classification | \u00a0 | \u00a0 | 1,354 |
Profit/(loss) before income taxes, excluding change in pension accounting classification | \u00a0 | 641 | (1,400) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Adjustments for: | \u00a0 | \u00a0 | \u00a0 |
Reversal impairment/(impairment) investments in subsidiaries | \u00a0 | (524) | 1,465 |
Share-based payments | \u00a0 | 3 | 2 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Dividend income | \u00a0 | (200) | (150) |
Interest and similar income | \u00a0 | (0) | (0) |
Interest and similar expenses | \u00a0 | 9 | 9 |
Investment income | \u00a0 | (191) | (141) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Pension liabilities | \u00a0 | 54 | 47 |
Other provisions | \u00a0 | 0 | 0 |
Changes in provisions | \u00a0 | 54 | 47 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Changes in working capital | \u00a0 | 0 | 1 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cash used in operations | \u00a0 | (17) | (27) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Interest paid | \u00a0 | (6) | (6) |
Income taxes received/(paid) | \u00a0 | (101) | 78 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Net cash (used in)/from operating activities | (124) | 45 | |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Dividend received | \u00a0 | 200 | 150 |
Changes in accounts receivable from Group companies | \u00a0 | 37 | 134 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Net cash (used in)/from investing activities | 6.3.2 | 237 | 284 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Dividends paid | \u00a0 | (113) | (165) |
Share buyback | \u00a0 | \u00a0 | (164) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Net cash (used in)/from financing activities | 6.3.3 | (113) | (329) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total change in cash and cash equivalents | \u00a0 | (0) | 0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cash and cash equivalents at the beginning of the year | \u00a0 | 0 | 0 |
Total change in cash and cash equivalents | \u00a0 | (0) | 0 |
Cash and cash equivalents at the end of the year | \u00a0 | 0 | 0 |
At 31 December, before appropriation of profit | Notes | 2021 | 2022 |
|---|---|---|---|
Assets | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Investments in subsidiaries | 3,526 | 2,061 | |
Total non-current assets | \u00a0 | 3,526 | 2,061 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Accounts receivable from Group companies | 6.4.3 | 286 | 151 |
Other accounts receivable | \u00a0 | 2 | 1 |
Income tax receivable | \u00a0 | 101 | 21 |
Total current assets | \u00a0 | 389 | 173 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total assets | \u00a0 | 3,915 | 2,234 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Equity and liabilities | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Issued share capital | \u00a0 | 41 | 39 |
Additional paid-in capital | \u00a0 | 163 | 163 |
Revaluation reserve investments in subsidiaries | \u00a0 | 2,502 | 1,037 |
Other reserves | \u00a0 | (188) | 2,711 |
Retained earnings | \u00a0 | 632 | (2,433) |
Total shareholders' equity | 6.3.4 | 3,151 | 1,517 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Provision for pension liabilities | 6.4.2 | 64 | 0 |
Eurobonds | 6.4.4 | 697 | 697 |
Other provisions | \u00a0 | 1 | 2 |
Total non-current liabilities | \u00a0 | 762 | 699 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Accounts payable to Group companies | \u00a0 | 1 | 0 |
Other current liabilities | \u00a0 | 1 | 17 |
Total current liabilities | \u00a0 | 2 | 17 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total equity and liabilities | \u00a0 | 3,915 | 2,234 |
| \u00a0 | Issued share capital | Additional paid-in capital | Revaluation reserve | Other reserves | Retained earnings | Total shareholders' equity |
|---|---|---|---|---|---|---|
Balance at 1 January 2021 | 40 | 161 | 1,978 | (22) | 388 | 2,546 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total comprehensive income | \u00a0 | \u00a0 | \u00a0 | 54 | 662 | 715 |
Appropriation of net income | \u00a0 | \u00a0 | \u00a0 | 305 | (305) | 0 |
Final dividend previous year | 1 | (1) | \u00a0 | \u00a0 | (84) | (84) |
Interim dividend current year | 0 | (0) | \u00a0 | \u00a0 | (29) | (29) |
Share-based compensation | 0 | 3 | \u00a0 | (0) | \u00a0 | 3 |
Addition revaluation reserve | \u00a0 | \u00a0 | 524 | (524) | \u00a0 | 0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance at 31 December 2021 | 41 | 163 | 2,502 | (188) | 632 | 3,151 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Total comprehensive income | \u00a0 | \u00a0 | \u00a0 | 1,076 | (2,383) | (1,307) |
Appropriation of net income | \u00a0 | \u00a0 | \u00a0 | 518 | (518) | 0 |
Final dividend previous year | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (114) | (114) |
Interim dividend current year | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (50) | (50) |
Share buyback | (2) | \u00a0 | \u00a0 | (162) | \u00a0 | (164) |
Share-based compensation | \u00a0 | \u00a0 | \u00a0 | 2 | \u00a0 | 2 |
Reduction revaluation reserve | \u00a0 | \u00a0 | (1,465) | 1,465 | \u00a0 | 0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance at 31 December 2022 | 39 | 163 | 1,037 | 2,711 | (2,433) | 1,517 |
PostNL N.V. (hereafter referred to as \u2018the company\u2019) is a public limited liability company with its registered seat and head office at Waldorpstraat 3, 2521 CA, The Hague, the Netherlands. The Chamber of Commerce number is 27124700.
The company\u2019s principal activity is acting as a holding company for the Group companies of the PostNL Group (\u2018the Group\u2019) that provide businesses and consumers in the Benelux with an extensive range of services for their mail needs. Through our international sales network Spring, we connect local businesses around the world to consumers globally. The company is the ultimate parent company of the Group.
The corporate financial statements were authorised for issue by PostNL\u2019s Board of Management and Supervisory Board on 27 February 2023 and are subject to adoption at the Annual General Meeting of Shareholders on 18 April 2023.
The significant accounting policies applied in the preparation of these corporate financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. All amounts included in the financial statements are presented in euros, unless stated otherwise. Note that the numbers presented in the financial statements and disclosures thereto may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures due to rounding.
The corporate financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS-EU) and Dutch law. IFRS-EU includes the application of International Accounting Standards (IAS), related interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and interpretations of the Standing Interpretations Committee (SIC), issued and effective, or issued and adopted early, as at 31 December 2022.
In the corporate financial statements, the same accounting principles have been applied as set out in the notes to the consolidated financial statements, except for the valuation of the investments as presented under financial fixed assets in the corporate financial statements. These policies have been consistently applied to all years presented.
In the corporate financial statements, the investments in subsidiaries are recorded at cost less impairments (deemed cost upon adoption of IFRS-EU). In the corporate statement of income, dividend received from the investments is recorded as dividend income. Due to this application, the corporate equity and net result are not equal to the consolidated equity and net result. A reconciliation for total shareholders\u2019 equity and total comprehensive income is presented in note 6.5 to the corporate financial statements.
For new and amended standards we refer to the descriptions included in the \u2018Changes in accounting policies and disclosures' in the notes to the consolidated financial statements. The company has assessed the impact on the corporate financial statements. None of these is expected to have a significant effect on the corporate financial statements.
The corporate financial statements are presented in euros, the company\u2019s functional currency.
The preparation of the corporate financial statements in conformity with IFRS-EU requires management to exercise judgements and make estimates and assumptions that affect the application of the company's accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results could differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the corporate financial statements are disclosed in the note \u2018Critical accounting estimates and judgements' to the consolidated financial statements.
Key accounting estimates and judgements affecting the assessment and measurement of impairment are included in note 6.4.1 to the corporate financial statements.
PostNL operates a number of equity-settled share-based compensation plans, under which the entity receives services from employees as consideration for (conditional) shares of the Group. For the company's accounting policies on equity-settled share-based compensation plans, we refer to note 5.1 of the consolidated financial statements.
Dividend distribution to the company\u2019s shareholders is recognised as a liability in the corporate financial statements, in the period in which the dividends are approved by the company\u2019s shareholders.
Dividend income is recognised when the right to receive payment is established. The dividend income from the company\u2019s subsidiaries for 2022 was \u20ac150 million (2021: \u20ac200 million).
In 2022, an impairment of \u20ac1,465 million on the company\u2019s investments in subsidiaries was accounted for (2021: impairment reversal of \u20ac524 million). Reference is made to note 6.4.1 to the corporate financial statements.
In 2022, salaries, pensions and social security contributions, excluding the impact of the change in accounting classification of the main pension plan of \u20ac1,354 million, amounted to \u20ac76 million (2021: \u20ac74 million). In accordance with IAS 19.41, the net defined benefit cost for the company\u2019s pension plans shall be recognised in the corporate financial statements. For PostNL, the contributions charged to other Group companies were lower than the pension expense incurred, resulting in a negative amount of salaries, pensions and social security contributions over the year. For further information on defined benefit pension costs, see note 6.4.2 to the corporate financial statements. PostNL N.V. does not have any employees other than the Board of Management.
PostNL has financing relationships with both external banks and with PostNL companies, mainly with PostNL Finance BV. As a result, PostNL records both external interest income and expenses from financial institutions and from PostNL Finance BV.
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Interest expenses on long-term borrowings | 7 | 7 |
Interest on net defined benefit pension liabilities | 1 | 2 |
Other interest and similar expense | 2 | 1 |
Interest and similar expense | 9 | 9 |
| \u00a0 | \u00a0 | \u00a0 |
Other interest and similar income | (0) | 0 |
| \u00a0 | \u00a0 | \u00a0 |
Net financial expense/(income) | 9 | 9 |
Interest expenses on long-term borrowings relate to the outstanding eurobonds. Reference is made to note 4.1 to the consolidated financial statements.
The company is tax-resident in the Netherlands. The tax expense for the year comprises current and deferred tax. Tax is recognised in the statement of income, except to the extent that it relates to items recognised directly in other comprehensive income.
The amount of income tax included in the statement of income is determined in accordance with the rules established by the tax authorities in the Netherlands, based on which income taxes are payable or recoverable.
Year ended at 31 December | 2021 | 2022 excl. change in pension accounting classification | Change in pension accounting classification | Total 2022 |
|---|---|---|---|---|
Current tax expense | (6) | 3 | \u00a0 | 3 |
Changes in deferred taxes | (15) | (25) | (349) | (374) |
Total income tax expense/(income) | (21) | (22) | (349) | (371) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Income taxes paid/(received) | 101 | (78) | \u00a0 | (78) |
The difference between the total income taxes in the income statement and the current tax expense is due to temporary differences. These differences are recognised as deferred tax assets or deferred tax liabilities, except for the tax effect on the change in pension accounting classification. In 2022, the change in deferred taxes also includes an amount of \u20ac(374) million (2021: \u20ac(18) million) via other comprehensive income fully related to taxes on OCI from pensions.
Year ended at 31 December | 2021 | 2022 excl. change in pension accounting classification | Change in pension accounting classification | Total 2022 |
|---|---|---|---|---|
Dutch statutory income tax rate | 25.0 | 25.8 | \u00a0 | 25.8 |
Tax effects of: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Non taxable impairment reversal/non deductible impairment | (20.4) | (27.0) | 13.3 | (13.7) |
Exempt income | (7.8) | 2.8 | (1.4) | 1.4 |
Other | (0.1) | \u00a0 | \u00a0 | \u00a0 |
Effective income tax rate | (3.3) | 1.6 | 11.9 | 13.5 |
The effective income tax rate including the change in pension accounting classification is 13.5%. However, due to the material impact of the change in pension accounting classification on our figures, the effective income tax rate excluding the change in pension accounting classification has also been stated in the table above. The latter effective income tax rate is 1.6%. This effective income tax rate, being lower compared to the Dutch statutory tax rate (25.8%), can mainly be explained as follows.
In 2022, the income taxes of \u20ac(22) million (2021: \u20ac(21) million) on the result before income taxes of \u20ac(1,400) million (2021: \u20ac641 million), resulted in an effective income tax rate of 1.6% (2021: (3.3)%). Adjusted for the tax-exempt dividend income of \u20ac150 million (2021: \u20ac200 million) and the non deductible impairment of \u20ac1,465 million (2021: non taxable impairment reversal of \u20ac524 million), the result before income taxes would have been \u20ac(85) million (2021: \u20ac(83) million), which with income taxes unchanged at \u20ac(22) million (2021: \u20ac(21) million) would have resulted in an effective income tax rate of 25.5% (2021: 25.1%).
Deferred tax assets and liabilities are presented net in the balance sheet if the company has a legally enforceable right to offset current tax assets against current tax liabilities and the deferred taxes relate to the same taxation authority. Based on this reporting principle, the deferred tax assets as at 31 December 2022 amounts to \u20ac0 million (2021: \u20ac0 million).
The increase in net cash from operating activities from \u20ac(124) million in 2021 to \u20ac45 million in 2022 mainly related to the change in income taxes received/(paid). In 2022, the second instalment of \u20ac28 million of the unconditional funding obligation relating to the final payment of the transitional pension plans was paid (2021: first instalment of \u20ac16 million). In 2022, the total cash outflow for interest paid of \u20ac6 million (2021: \u20ac6 million) mainly related to interest on PostNL\u2019s long-term borrowings. In 2022, the company received income taxes totalling \u20ac78 million (2021: \u20ac101 million paid) which include internal settlements with Group companies within the PostNL fiscal unity.
In 2022, net cash from investing activities amounted to \u20ac284 million (2021: \u20ac237 million) and related to dividend received from the company's subsidiaries of \u20ac150 million (2021: \u20ac200 million) and changes in accounts receivable from Group companies of \u20ac134 million (2021: \u20ac37 million), mainly related to an intercompany receivable from PostNL Finance B.V.
In 2022, the net cash from financing activities amounted to \u20ac(329) million (2021: \u20ac(113) million) and related for \u20ac164 million to the share buyback and for \u20ac165 million to the final 2021 and interim 2022 cash dividend paid (2021: \u20ac113 million related to the final 2020 and interim 2021 cash dividend).
As at 31 December 2022, equity amounts to \u20ac1,517 million (2021: \u20ac3,151 million). For the disclosure on issued share capital and additional paid-in capital, see notes 2.6 and 4.6 to the consolidated financial statements.
The revaluation reserve investments in subsidiaries is a legal reserve and is restricted for distribution.
As at 31 December 2022, the revaluation reserve of \u20ac1,037 million (2021: \u20ac2,502 million) related to the applied deemed cost approach for the investments in subsidiaries as of 1 January 2010, partly offset by the net recorded impairment charges of \u20ac1,545 million.
During 2022, the other reserves increased to \u20ac2,711 million from \u20ac(188) million, mainly due to a reclassification from the revaluation reserve of \u20ac1,465 million, the appropriation of net income for 2021 of \u20ac518 million and a positive pension effect within other comprehensive income of \u20ac1,076 million, partly offset by the share buyback of \u20ac162 million.
Investments in subsidiaries and associated companies are stated at cost, less impairment. Dividend income from the company\u2019s subsidiaries and associated companies is recognised when the right to receive payment is established.
At each balance sheet date, the company reviews whether there is an indication that its investments in subsidiaries might be impaired.
An indication may include management\u2019s downward adjustment of the strategic plan or other areas where observable data indicates a measurable decrease in the estimated future cash flows. These determinations require significant judgement. In making this judgement, management evaluates, among other factors, the financial performance of and business outlook for its investments, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.
If any indication for impairment exists, the recoverable amount of the investments is estimated. The recoverable amount is defined as the higher of an investment\u2019s fair value less costs of disposal and its value in use. If the recoverable amount of an investment is estimated to be less than its carrying amount, the carrying amount of the investment is reduced to its recoverable amount. Any impairment loss is recognised immediately in the statement of income.
The investments\u2019 fair value less costs of disposal represents the best estimate of the amount the company would receive if it sold its investments. The fair value of each investment has been estimated on the basis of the present value of future cash flows, taking into account costs of disposal. The determination of the investment\u2019s value in use is based on calculations using pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using estimated growth rates.
Impairment losses recognised in prior periods shall be reversed only if there has been a change in the estimates or external market information used to determine the investment\u2019s recoverable amount since the last impairment loss was recognised. The recoverable amount shall not exceed the carrying amount that would have been determined had no impairment loss been recognised in prior years.
The movement in the investments in subsidiaries is as follows:
| \u00a0 | 2021 | 2022 |
|---|---|---|
Balance at 1 January | 3,002 | 3,526 |
Reversal impairment/(impairment) | 524 | (1,465) |
Balance at 31 December | 3,526 | 2,061 |
The subsidiary undertakings of the company as at 31 December 2022, and the company\u2019s percentage interest, are set out below.
Name of direct subsidiairy | Country of incorporation | Ownership % |
|---|---|---|
PostNL Holding B.V. | Netherlands | 100% |
A complete list of investments in subsidiaries, associated companies and jointly-controlled entities will be attached to the company\u2019s Annual Report made available to the Chamber of Commerce.
A detailed review has been performed of the recoverability of the investments in subsidiaries. The recoverable value of each investment is the higher of the value in use and fair value less costs of disposal. The recoverable value is determined based on the fair value less costs of disposal as this was higher than the value in use at year end 2022. The fair value less costs of disposal has been estimated on the basis of the present value of future cash flows, taking into account costs of disposal. For all investments, the estimated future cash flows are based on a five-year (2021: five-year) forecast and business plan, which forecast period has been assessed as adequate to reach a sustainable basis for the calculation of the continuing value.
The estimated future cash flows are derived from the most recent strategic planning approved by management, including inherent uncertainties like future volume developments, efficiency measures and the impact of regulatory decisions and developments. The company has determined the budgeted gross margin based on past performance and its expectations for market development. The weighted average growth rates used are consistent with the forecasts included in industry reports for the related operation and market and did not change materially compared to previous year. The weighted average pre-tax discount rate applied in the investments' valuations was around 11.0% (2021: around 10.0%).
Key assumptions used to determine the recoverable values for the investments of the company are the following:
maturity of the underlying market, market share and volume development in order to determine the revenue mix and (long-term) growth rate,
level of operating income largely impacted by revenue and cost development, taking into account the nature of the underlying costs and potential economies of scale,
level of capital expenditure in network-related assets, and
discount rate to be applied following the nature of the underlying cash flows and foreign currency and inflation-related risks.
As the investments in subsidiaries are vulnerable to changes in the discount rate and changes in operating income, a sensitivity analysis has been performed for the investments. The sensitivity analysis included the impact of the following items which are considered to be most critical when determining the recoverable value:
an increase or decrease in the discount rate of 0.5%, and
an increase or decrease in operating income of 5%.
If the discount rate were to change by 0.5%, this would impact the investments in subsidiaries by around \u20ac135 million (2021: \u20ac280 million). A change in operating income of 5% would impact the investments in subsidiaries by around \u20ac125 million (2021: \u20ac185 million).
The detailed review of the value of the investments in subsidiaries resulted in the recoverable value being \u20ac1,465 million lower than their carrying value. The recoverable amount of continuing operations is derived from the 2022 strategic planning, taking into account the current geopolitical conditions causing economic uncertainty, low consumer spending and high labour and energy inflation. These developments have negatively affected our current 2022s performance. They have also tempered our expected future e-commercegrowth, which remains a sustainably growing business line in which we operate successfully, when compared to the forecast including assumptions used in last year's valuation. The valuation was also negatively affected by a slightly higher discount rate in 2022 and a reduction in excess cash given the share buyback and dividends paid out in 2022. Based on the detailed review, management concluded that an impairment of \u20ac1,465 million was present for the investments in subsidiaries. Consequently, management recorded an impairment of \u20ac1,465 million in 2022 (2021: impairment reversal of \u20ac524 million). Within equity, the revaluation reserve associated with the initial revaluation of the investments in subsidiaries has been decreased by the impairment amount.
For the accounting policies on pension liabilities, reference is made to note 3.5 to the consolidated financial statements.
The company is the sponsoring employer of the main Dutch pension plan, which is externally funded in a separate pension fund and cover the majority of PostNL\u2019s employees in the Netherlands.
As main development in 2022, the amended pension plan, triggering a change in pension accounting from defined benefit to defined contribution as of 31 December 2022 and the recording of an accompanying pension settlement, had a significant financial impact on the corporate financial statements of the company. Reference is made to note 3.5 to the consolidated financial statements.
In accordance with IAS 19.41, PostNL recognises the net defined benefit cost in the corporate financial statements of the company. The relevant Group companies recognise the costs equal to the contributions payable for the period in their financial statements. In its corporate financial statements, PostNL recognises the contributions received from the relevant Group companies as a benefit that offsets the corporate defined benefit pension expense. As a result, the corporate financial statements record a lower defined benefit pension expense of \u20ac1,430 million (2021: \u20ac73 million) compared to the defined benefit pension expenses of \u20ac1,516 million (2021: \u20ac150 million) as recorded in the consolidated financial statements.
The following table reconciles the opening and closing balances of the present value of the defined benefit obligation and the fair value of plan assets, the funded status and the employer pension income for the sponsored pension plan of the company. In line with the disclosure note on pensions included in the consolidated financial statements, the table also shows the corporate settlement impact resulting from the change in pension accounting classification.
| \u00a0 | 2021 | 2022 |
|---|---|---|
Change in benefit obligation | \u00a0 | \u00a0 |
Benefit obligation at beginning of year | (10,226) | (10,126) |
Service costs | (160) | (174) |
Interest costs | (31) | (104) |
Other movements | (2) | \u00a0 |
Actuarial (losses)/gains | 44 | 2,645 |
Benefits paid | 248 | 261 |
Settlement benefit obligation | \u00a0 | 7,498 |
Benefit obligation at end of year | (10,126) | 0 |
| \u00a0 | \u00a0 | \u00a0 |
Change in plan assets | \u00a0 | \u00a0 |
Fair value of plan assets at beginning of year | 10,225 | 10,878 |
Assumed return on plan assets | 31 | 111 |
Other movements | 1 | \u00a0 |
Contributions group companies | 98 | 107 |
Employer contributions | 2 | (0) |
Instalment unconditional funding obligation | 16 | 28 |
Other costs | (10) | (8) |
Actuarial (losses)/gains | 763 | (1,982) |
Benefits paid | (248) | (261) |
Settlement plan assets | \u00a0 | (8,873) |
Fair value of plan assets at end of year | 10,878 | 0 |
| \u00a0 | \u00a0 | \u00a0 |
Change in funded status | \u00a0 | \u00a0 |
Funded status at the beginning of year | (0) | 752 |
Operating expenses (incl. contributions group companies) | (72) | (74) |
Interest (expenses)/income | (0) | 7 |
Employer contributions | 2 | (0) |
Instalment unconditional funding obligation | 16 | 28 |
Actuarial (losses)/gains | 807 | 663 |
Settlement of benefit obligation and plan assets | \u00a0 | (1,374) |
Funded status at end of year | 752 | 0 |
Impact of pension asset ceiling | (752) | \u00a0 |
Impact of minimum funding requirement | (64) | \u00a0 |
Netted pension liabilities | (64) | 0 |
| \u00a0 | \u00a0 | \u00a0 |
Components of employer pension expenses | \u00a0 | \u00a0 |
Service costs | (160) | (174) |
Interest (expenses)/income | (1) | (2) |
Other costs | (10) | (8) |
Contributions group companies | 98 | 107 |
Pension settlement costs within statement of profit or loss | \u00a0 | (1,354) |
Post-employment benefit income/(expenses) | (73) | (1,430) |
| \u00a0 | \u00a0 | \u00a0 |
Weighted average assumptions as at 31 December | \u00a0 | \u00a0 |
Discount rate | 1.0% | 3.4% |
Rate of benefit increases | 1.5% | 1.7% |
Life expectancy 65 year old men/women (in years) | 21.1/23.4 | 21.4 / 23.7 |
As at 31 December 2022, accounts receivable from Group companies amounted to \u20ac151 million (2021: \u20ac286 million) which mainly related to a receivable from PostNL Finance B.V. The fair value of the accounts receivable from and payable to Group companies approximated the carrying value, due to the short-term nature. The allowance for expected credit losses has been assessed to be non-material.
As at 31 December 2022, the eurobonds amounted to \u20ac697 million non-current (2021: \u20ac697 million). For the disclosure on the eurobonds, reference is made to notes 4.1 and 4.5 to the consolidated financial statements.
In 2022, the non-cash changes in the total debt amounted to \u20ac1 million (2021: \u20ac1 million) and related to the amortisation of costs included in the eurobonds.
Year ended at 31 December | 2021 | \u00a0 | 2022 | \u00a0 |
|---|---|---|---|---|
| \u00a0 | Equity | Income | Equity | Income |
Consolidated: Equity and profit/(loss) for the year | 426 | 257 | 177 | (993) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Reconciliation items previous years | 2,335 | \u00a0 | 2,725 | \u00a0 |
Reversal impairment/(impairment) investments in subsidiaries | 524 | 524 | (1,465) | (1,465) |
Results from investments | (119) | (119) | 75 | 75 |
Other comprehensive income (CTA/hedges/pensions) | (14) | \u00a0 | 5 | \u00a0 |
Total reconciliation items | 2,725 | 405 | 1,340 | (1,390) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Corporate: Shareholders' equity and profit/(loss) for the year | 3,151 | 662 | 1,517 | (2,383) |
The differences between total shareholders\u2019 equity and total comprehensive income according to the IFRS-EU consolidated financial statements and the corporate financial statements under IFRS-EU in general relate to the accounting of the investments in subsidiaries at cost less impairments (deemed cost upon adoption of IFRS-EU) in the corporate financial statements and subsequent (reversal of) impairments.
The reconciling items for equity and income are further detailed below.
The 'reconciliation items previous years' of \u20ac2,725 million in 2022 relate to the difference between the consolidated equity as at 31 December 2021 of \u20ac426 million and the corporate equity of \u20ac3,151 million at that date.
For details of the impairment of the investments in subsidiaries recognised in the corporate financial statements in 2022, see note 6.4.1 to the corporate financial statements.
The 2022 results from investments were \u20ac75 million higher in the corporate financial statements and can be calculated from the result from the corporate income statement of \u20ac(2,383) million, plus the impairment of the investments in subsidiaries of \u20ac1,465 million, minus the result from the consolidated income statement of \u20ac(993) million. The difference relates to the difference between the dividend income and the result from the investments in subsidiaries. The 2021 results from investments were \u20ac119 million lower in the corporate financial statements and can be calculated from the result from the corporate income statement of \u20ac662 million, minus the reversal of the impairment of the investments in subsidiaries of \u20ac524 million, minus the result from the consolidated income statement of \u20ac257 million. The difference relates to the difference between the dividend income and the result from the investments in subsidiaries.
The reconciliation item \u2018Other comprehensive income' represents hedge and currency translation adjustments and adjustments for actuarial gains/(losses) which were recognised in the consolidated financial statements but not in the corporate financial statements as the investments are stated at cost. It also represents other comprehensive income from the change in value of financial assets at fair value through OCI that was recognised in the consolidated financial statements but not in the corporate financial statements.
The 2022 difference in other comprehensive income of \u20ac5 million included \u20ac1 million of actuarial gains on pensions, \u20ac(8) million of the change in value of financial assets at fair value through OCI and \u20ac2 million other items. The 2021 difference in other comprehensive income of \u20ac(14) million included \u20ac1 million of actuarial losses on pensions, \u20ac12 million of the change in value of financial assets at fair value through OCI and \u20ac1 million other items.
At 31 December 2022, the company issued a declaration of joint and several liability for some of its Group companies in compliance with article 403, book 2 of the Dutch Civil Code. Those Group companies are:
| \u00a0 | \u00a0 |
|---|---|
DM Productions B.V. | PostNL Finance B.V. |
G3 Worldwide Mail N.V. | PostNL Holding B.V. |
Koninklijke PostNL B.V. | PostNL Pakketten Benelux B.V. |
Logistics Solutions B.V. | PostNL Real Estate B.V. |
PostNL Cross Border Solutions B.V. | PostNL TGN B.V. |
PostNL Customer Excellence B.V. | PostNL Transport B.V. |
PostNL Data Solutions B.V. | PS Nachtdistributie B.V. |
PostNL E-commerce Services B.V. | \u00a0 |
The company forms a fiscal unity with a majority of its Dutch subsidiaries for corporate income tax and VAT purposes. A company and its subsidiaries that are part of these fiscal unities are jointly and severally liable for the tax payable by these fiscal unities.
In addition to the declaration of joint and several liability in compliance with article 403, book 2 of the Dutch Civil Code, the company provided parental support relating to the following items:
committed revolving credit facilities of \u20ac200 million;
bank guarantee facilities of \u20ac87 million;
ordinary business activities of the Group of \u20ac88 million;
ISDA agreements;
payment guarantee for self-insurance of WGA (\u201cWerkhervatting Gedeeltelijk Arbeidsongeschikten\u201d) benefit payments as of 1 January 2021.
For details on the separation agreement with TNT Express, see note 3.10 to the consolidated financial statements.
For disclosure on the company\u2019s overall financial risk management programme, reference is made to note 4.4 to the consolidated financial statements.
For a summary of the company\u2019s financial instruments relevant to these corporate financial statements, reference is made to note 4.5 to the consolidated financial statements.
The company\u2019s shares are widely held. As such, no ultimate controlling party can be identified. The company, acting as a holding company, has relationships with a number of Group companies. In some cases, there are contractual arrangements in place under which the company sources supplies from such undertakings or such undertakings source supplies from the company. Transactions are in principle carried out at arm\u2019s length.
Year ended at 31 December | 2021 | \u00a0 | 2022 | \u00a0 |
|---|---|---|---|---|
| \u00a0 | Transactions | Balances | Transactions | Balances |
Dividend income PostNL Group companies | 200 | \u00a0 | 150 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Accounts receivable from PostNL Group companies/interest income | 0 | 286 | 0 | 151 |
Accounts payable to PostNL Group companies/interest expense | (1) | 1 | (0) | 0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Net investing activities from accounts receivable from Group companies | 37 | \u00a0 | 134 | \u00a0 |
Income tax received from/(paid to) PostNL Group companies | (30) | \u00a0 | 78 | \u00a0 |
For the compensation of the members of the Board of Management and Supervisory Board, see note 5.1 to the consolidated financial statements.
For disclosure on subsequent events, reference is made to note 5.5 to the consolidated financial statements.
The list containing the information referred to in article 379 and article 414 of book 2 of the Dutch Civil Code is filed at the office of the Chamber of Commerce in The Hague.
In accordance with our dividend policy, the condition for paying out dividend is a leverage ratio (adjusted net debt/EBITDA) not exceeding 2.0. This condition was met per year-end 2022 (leverage ratio: 1.9). The Board of Management has decided, with the approval of the Supervisory Board, subject to shareholders approval at the 2022 Annual General Meeting of Shareholders, to declare a dividend of \u20ac0.16 per ordinary share over 2022, of which \u20ac0.14 per ordinary share has been paid as an interim dividend. The dividend will be paid, at shareholder's election, either in ordinary PostNL shares or in cash.
The Board of Management, with the approval of the Supervisory Board, shall withdraw the corporate loss of \u20ac2,383 million from the reserves. For detailed information on PostNL\u2019s corporate performance, and the resulting loss, refer to section 6: Corporate financial statements. Furthermore, the Board of Management, with the approval of the Supervisory Board, proposes to make an amount of \u20ac60 million out of the distributable part of the shareholders' equity available for distribution of the proposed dividend.
Subject to the adoption of PostNL\u2019s financial statements by the General Meeting of Shareholders, and given a 2022 interim dividend of \u20ac0.14 has been paid, the proposed 2022 final dividend has been set at \u20ac0.02 per ordinary share of \u20ac0.08 nominal value, based on the outstanding number of 487,530,628 ordinary shares as per 31 December 2022. The final dividend of \u20ac0.02 will be paid, at shareholder\u2019s election, either in ordinary PostNL shares or in cash. The dividend in shares will be paid out of additional paid in capital as part of the distributable reserves, free of withholding tax in the Netherlands.
The ex-dividend date will be 20 April 2023, the record date is 21 April 2023 and the election period will start on 24 April 2023 and will end on 9 May 2023 at 3PM CET. The conversion ratio will be based on the volume-weighted average share price for all PostNL shares traded on Euronext Amsterdam over the three trading day period from 5 May 2023 up to and including 9 May 2023. The value of the stock dividend, based on this VWAP, will, subject to rounding, be targeted at but not be lower than the cash dividend. There will be no trading in stock dividend rights. The dividend will be payable as of 11 May 2023.
Upon approval of this proposal, corporate profit will be appropriated as follows, whereby the final dividend represents a cash dividend under the assumption of 100% cash election.
| \u00a0 | 2022 |
|---|---|
Result attributable to the shareholders | (2,383) |
| \u00a0 | \u00a0 |
Appropriation in accordance with the articles of association: | \u00a0 |
Reserves withdrawn by the Board of Management and approved by the Supervisory Board (article 31, paragraph 2) | 2,443 |
Dividend on ordinary shares | 60 |
| \u00a0 | \u00a0 |
(Interim) dividend paid in cash | (50) |
| \u00a0 | \u00a0 |
Final dividend | 10 |
The Hague, the Netherlands, 27 February 2023
Herna Verhagen (CEO)
Pim Berendsen (CFO)
Jan Nooitgedagt (Chairman)
Jeroen Hoencamp
Marike van Lier Lels
Nienke Meijer
Ad Melkert
Koos Timmermans
Hannie Vlug
PostNL N.V.
Waldorpstraat 3
2521 CA The Hague
The Netherlands
PostNL N.V. is a public limited liability company with its registered seat and head office in The Hague, the Netherlands. PostNL provides businesses and consumers in the Benelux with an extensive range of services for their mail and parcels needs. Through our international sales network Spring, we connect local businesses around the world to consumers globally. PostNL\u2019s services involve collecting, sorting, transporting and delivering letters and parcels for the company\u2019s customers within specific timeframes. The company also provides services in the area of data management, direct marketing and fulfilment.
The consolidated financial statements include the financial statements of PostNL N.V. and its consolidated subsidiaries (hereafter referred to as \u2018PostNL\u2019, \u2018Group\u2019 or \u2018the company\u2019). The consolidated financial statements were authorised for issue by PostNL\u2019s Board of Management and Supervisory Board on 27 February 2023 and are subject to adoption at the Annual General Meeting of Shareholders on 18 April 2023.
In 2022, the war in Ukraine and macro-economic developments had a profound impact across society. High inflation and rapidly rising energy costs affected consumer confidence and spending, negatively impacting parcel volumes for much of the year. Rising inflation also led to increased costs for PostNL, which could not be absorbed through regular price increases. These issues also affected our customers, partners and suppliers. Globally, supply chain issues led to delays in the availability of products, while rising energy and other costs made the transportation of goods more expensive.
Management assessed the impact of the current developments on all material assets and liabilities. We performed a review for impairment triggers on goodwill and other intangibles, PP&E and Right-of-use assets. We also analysed the trade accounts receivable position and customers' payment behaviour. And last we assessed the need to make adjustments to the fair value accounted financial assets and balance sheet positions related to our non-current assets held for sale. The assessment did not reveal any need for significant negative adjustments to the accounts mentioned in and per year end 2022.
Based on a joint decision by PostNL, the pension fund and the trade unions, taken on 23 December 2023, PostNL\u2019s main pension plan has been amended as per 31 December 2022. As part of the amendment, the pension plan is now based on a \u2018collective defined contribution\u2019 plan. Among others, this means that as of 31 December 2022 PostNL will be only required to pay the regular pension contribution, as the agreement for top-up payments and restitution has been cancelled. As a result, if the financial position of the pension fund would deteriorate, PostNL is no longer obliged to make top-up payments. At the same time, PostNL is also no longer entitled to restitutions, even if the financial position of the pension fund would allow for that.
With the amendments made, the accounting classification of the main plan changed from a defined benefit plan to a defined contribution plan at 31 December 2022. According to IFRS, this change in classification is accounted for as a settlement. As part of the agreement and therewith settlement, the unconditional funding obligation has also been adjusted. The adjustment concerns a reduction of \u20ac20 million and an amended payment schedule (2022: \u20ac28 million; 2023: \u20ac16 million). On balance, this resulted in an improvement in PostNL\u2019s adjusted net debt position of \u20ac20 million at 31 December 2022.
The material settlement impact on different line items, like operating income and total comprehensive income, has been presented in a separate column in the related financial statements. Within the cash flow statement, the material non-cash settlement impact is directly segregated at the profit before tax starting entry. Through this method of presentation, the 2022 pre-settlement results can be compared with the 2021 results, which results are both based on the previously applicable defined benefit pension plan. As of 31 December 2022, pension expenses will equal the contribution paid by PostNL to the pension fund.
See note 3.5: Provisions for pension liabilities' to the Consolidated financial statements for more information.
On 1 March 2022, PostNL started a share buyback programme to neutralise the assumed dilutive impact of shares issued in relation to dividends over 2021-2023. The company targets to repurchase ordinary shares of PostNL N.V. to a value of maximum \u20ac250 million, spread over 2022 and 2023. In 2022, PostNL repurchased 51 million ordinary shares from the first tranche for a total amount of \u20ac164 million. Out of the 51 million shares, 16,358,973 shares were used for the payment of the 2021 final dividend in stock, 7,868,569 shares were used for the payment of the 2022 interim dividend in stock and 1,051,073 shares were used for the settlement of PostNL\u2019s equity-settled share plans. The remaining 25,721,385 shares were cancelled on 22 November 2022. A second tranche of the programme, scheduled to be executed during 2023, will be delayed until further recovery of business performance and in accordance with PostNL\u2019s capital allocation framework. The company aims at a leverage ratio (adjusted net debt/EBITDA) not exceeding 2.0.
On 27 September 2019, the State Secretary of Economic Affairs cleared the merger between PostNL and Sandd. Legal appeals have been filed by a number of parties against the approval. On 11 June 2020 the courts (Rechtbank Rotterdam) annulled the approval for consolidation in the Dutch postal market. The government appealed against the court decision. PostNL also decided to appeal. On 9 April 2021, the earlier approval of the merger was confirmed by a new decision taken by the State Secretary. This new decision, which has retroactive effect, has been included in the appeal procedure. On 2 July 2022, the Dutch Trade and Industry Appeals Tribunal ruled that the Minister for Economic Affairs and Climate Policy had been wrong to approve the merger of PostNL and Sandd. Although the approval and corresponding conditions are no longer valid, PostNL will continue to adhere to the conditions imposed in relation to the acquisition. The legality of the transaction is not at stake. As we obtained control as of the acquisition date of 22 October 2019, we have fully consolidated Sandd in our financial statements from that date going forward.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-0": { "value": "PostNL N.V.", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-2": { "value": "public limited liability company", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-3": { "value": "the Netherlands", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-5": { "value": "Benelux", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-6": { "value": "PostNL\u2019s services involve collecting, sorting, transporting and delivering letters and parcels for the company\u2019s customers within specific timeframes. The company also provides services in the area of data management, direct marketing and fulfilment.", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-7": { "value": "PostNL N.V.", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-399": { "value": "1.2 Accounting principles applied The consolidated financial statements of PostNL: have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), including International Accounting Standards (IAS) and related interpretations of the IFRS Interpretations Committee (IFRICs), and Dutch law, have been prepared under the historical cost convention, except for financial instruments, and have been prepared assuming a going concern. The significant accounting policies applied in the preparation of these consolidated financial statements are included at the relevant notes to the consolidated financial statements or, in case of more general policies, see note '5.4 Summary of all other accounting policies'to the Consolidated financial statements for more information. These policies have been consistently applied to all the years presented, unless stated otherwise. All amounts included in the consolidated financial statements are presented in euros, unless stated otherwise. Note that the numbers presented in the financial statements and disclosures thereto may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures due to rounding. Going concern Based on the cash flow-generating capability of the company, the current finance structure and the company\u2019s ability to realise its assets and discharge its liabilities in the normal course of business, PostNL\u2019s financial statements have been prepared assuming a going concern. As at 31 December 2022, the balance of cash and cash equivalents amounted to \u20ac556 million and the company has an undrawn multi-currency revolving credit facility of \u20ac200 million. Its financing arrangements do not include financial covenants. Bond repayments are not due until 2024. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-401": { "value": "The preparation of PostNL's consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. It also requires management to exercise its judgement in the process of applying PostNL\u2019s accounting policies.
Estimates, assumptions and judgements are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting positions will, by definition, seldom equal the related actual results. On a continuous basis, we evaluate our expectations with the actual results, and include the learnings going forward.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed below.
Post-employment benefit accounting is intended to reflect the recognition of future benefit costs over the employee\u2019s approximate service period, based on the terms of the plans and the investment and funding decisions made. The accounting requires the company to make assumptions regarding variables such as the discount rate, the rate of benefit increases and future mortality rates. In relation to the plan assets, the valuation of level 3 investments is based on valuation techniques using inputs that are not based on observable market data. Changes in these key assumptions can have a significant impact on the defined benefit obligations, plan assets and pension costs incurred. Given the change in accounting classification of PostNL's main pension plan from defined benefit to defined contribution at 31 December 2022, this emphasis on critical accounting estimates and judgments applies only to the 2022 and 2021 results. For details on pensions, seeto the consolidated financial statements.
Other provisions mainly include expected costs related to jubilee, illness, long-term disability and termination employee benefit obligations and claims & indemnities. The provisions recorded reflect the present value of management's best estimate of the expenditure required to settle the obligation. Given the uncertain outcome, management must use a certain degree of judgement in this respect. This includes the thorough analysis and concluding view of our position and that of the third party. See note '3.5 Provisions for pension liabilities'to the Consolidated financial statements for more information on the other provisions.
In determining impairments of intangible assets including goodwill and software, tangible fixed assets and financial fixed assets, management must make significant judgements and estimates to determine whether the recoverable amount is less than the carrying value. The recoverable amount is the higher of the fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the asset-specific risks. Determining cash flows requires the use of judgements and estimates that have been included in PostNL\u2019s strategic plans and long-term forecasts. The data necessary for the execution of the impairment tests are based on management estimates of future cash flows, which make it necessary to estimate revenue growth rates and profit margins. See note '3.3 Intangible fixed assets' to the Consolidated financial statements for more information on the impairment test of goodwill.
PostNL has to estimate the deferred revenues from stamps sold but not yet used by its customers. The company uses a seasonal model based on historical figures in order to account for the seasonal effects on sales from stamps (for example, stamp sales for Christmas greetings in November and December). Additionally, the company handles large quantities of international mail and parcel volumes to and from foreign postal operators. Although the net outstanding accrual positions reflect our best estimate, given the assumptions involved, final settlements might deviate from the outstanding positions. See note '3.1 Working capital' to the Consolidated financial statements for details on the current positions.
The company is subject to income taxes in a number of jurisdictions. Significant judgement is required in determining the provision and liability for income taxes. PostNL recognises liabilities for potential tax issues based on estimates of whether additional taxes will be due, based on its best interpretation of the relevant tax laws and rules. PostNL recognises deferred tax assets to the extent that it is probable that future taxable profits will allow the deferred tax asset to be recovered. This is based on estimates of taxable income by jurisdiction in which the company operates and the period over which deferred tax assets are recoverable.See notes '2.2 Other income'and '3.8 Deferred income tax assets and liabilities' to the Consolidated financial statements for more information on income taxes and deferred tax assets.
Legal proceedings covering a range of matters are pending against the company in various jurisdictions. The cases and claims often raise difficult and complex factual and legal issues that are subject to many uncertainties and complexities, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction and the differences in applicable law. PostNL consults with legal counsel and certain other experts on matters related to litigation. PostNL recognises a liability when it is determined that an adverse outcome is probable and the amount of the loss can be reasonably estimated. See note '3.10 Commitments and contingencies'to the Consolidated financial statements for more information on commitments and contingencies.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-402": { "value": "1.5 Changes in accounting policies and disclosures The following provides a brief description of recent issued International Financial Reporting Standards, amendments and/or interpretations, that could have a material impact on our financial statements. Amendments to IAS 37: Onerous Contracts \u2013 Costs of Fulfilling a Contract PostNL has adopted Onerous Contracts \u2013 Costs of Fulfilling a Contract (Amendments to IAS 37) from 1 January 2022. This resulted in a change in accounting policy for performing an onerous contract assessment. Previously, PostNL included only incremental costs to fulfil a contract when determining whether that contract was onerous. The revised policy is to include both incremental costs and an allocation of other direct costs. The amendments apply prospectively to contracts existing at the date when the amendments are first applied. The Group identified no contracts as onerous applying the revised accounting policy. There is no impact on the opening equity balances as at 1 January 2022 as a result of the change. There are no other IFRS standards, amended standards or IFRIC interpretations taking effect for the first time for the financial year beginning 1 January 2022 that would be expected to have a material impact on the 2022 accounts of the Group. The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the financial statements have been reviewed by the Group. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective. It is not expected that the Group\u2019s consolidated financial statements will be significantly impacted. ", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-404": { "value": "2.1 Operating revenue Accounting policies Revenue recognition PostNL's revenue from contracts with customers consist of the provision of postal and logistics services. Revenue from contracts with customers is recognised when the goods are transferred or the services are rendered to the customer at an amount that reflects the consideration to which PostNL expects to be entitled in exchange for those goods or services. Revenue is the gross inflow of economic benefits during the current year that arise from ordinary activities and result in an increase in equity, other than increases relating to contributions from equity participants. Variable consideration/volume discounts If the consideration in a contract includes a variable amount, PostNL estimates the amount of consideration to which it will be entitled in exchange for transferring the goods or rendering the services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. PostNL provides volume discounts to certain customers once the quantity of goods transferred or services rendered during the period exceeds a threshold specified in the contract. Discounts are offset against amounts invoiced to the customer. To estimate the variable consideration for the expected future discounts, PostNL applies the expected value method. The variable consideration can be reasonably accurately determined from achieved volumes and contract agreements. Contract liabilities A contract liability is the obligation to transfer goods or render services to a customer for which PostNL has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before PostNL transfers goods or renders services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when PostNL performs under the contract and relate to amongst others deferred revenue from unused stamps, deferred revenue from franking machines and the rental of mailboxes. See note '3.1.3 Contract liabilities' to the Consolidated financial statements for more information. Revenue from contracts with customers Revenue from contracts with customers represent revenue from the transfer of goods and rendering of services to third parties less discounts, credit notes and taxes levied on sales. Accumulated experience is used to estimate and provide for the discounts. Other operating revenue Other operating revenue relates to the sale of goods and rendering of services not related to PostNL\u2019s ordinary postal and logistics services and mainly include rental income of temporarily leased-out property and custom clearance income. The company\u2019s business involves the logistical service of delivering mail, parcels and other consignments. Nearly all of the company\u2019s revenues are represented by a single performance obligation being \u2018logistic services\u2019. Revenue is being recognised at a point in time when the goods are transferred or services are rendered to the customer, generally on delivery of the mail, parcels or other consignments. Other performance obligations within the company\u2019s business comprise the rental of post-boxes (revenue recognition over time) and stamp collection services (revenue recognition at a point in time). The following table presents PostNL's revenue from contracts with customers relating to the reported operating segments. See note '2.7 Segment information'to the Consolidated financial statements for the segment information of the other revenue and eliminations. PostNL Revenue from contracts with customers in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 Parcels 2,353 2,160 Mail in the Netherlands 1,671 1,488 PostNL Other 199 214 Eliminations (777) (731) Total 3,447 3,132 The decrease in revenue is mainly driven by the strong volume decline in our domestic and international parcel delivery at Parcels in 2022, clearly impacted by the global macroeconomic and geopolitical environment impacting consumer confidence and consumer spending, together with the continued volume decline in addressed mail and the absence of the positive impact from non-recurring Covid-19-related items. The following table presents the geographical segmentation of revenue from contracts with customers. The basis of allocation of revenue by geographical area is the country or region in which the entity recording the sales is located. Revenue from the rest of the world was impacted by the change in VAT regulation, global supply chain disruptions and zero Covid-19 policy in China. PostNL Geographical segmentation in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 The Netherlands 2,982 2,736 Rest of Europe 252 264 Europe 3,235 3,000 Rest of the World 212 132 Total 3,447 3,132 ", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-447": { "value": "Accounting policies Revenue recognition PostNL's revenue from contracts with customers consist of the provision of postal and logistics services. Revenue from contracts with customers is recognised when the goods are transferred or the services are rendered to the customer at an amount that reflects the consideration to which PostNL expects to be entitled in exchange for those goods or services. Revenue is the gross inflow of economic benefits during the current year that arise from ordinary activities and result in an increase in equity, other than increases relating to contributions from equity participants. Variable consideration/volume discounts If the consideration in a contract includes a variable amount, PostNL estimates the amount of consideration to which it will be entitled in exchange for transferring the goods or rendering the services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. PostNL provides volume discounts to certain customers once the quantity of goods transferred or services rendered during the period exceeds a threshold specified in the contract. Discounts are offset against amounts invoiced to the customer. To estimate the variable consideration for the expected future discounts, PostNL applies the expected value method. The variable consideration can be reasonably accurately determined from achieved volumes and contract agreements. Contract liabilities A contract liability is the obligation to transfer goods or render services to a customer for which PostNL has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before PostNL transfers goods or renders services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when PostNL performs under the contract and relate to amongst others deferred revenue from unused stamps, deferred revenue from franking machines and the rental of mailboxes. See note '3.1.3 Contract liabilities' to the Consolidated financial statements for more information. Revenue from contracts with customers Revenue from contracts with customers represent revenue from the transfer of goods and rendering of services to third parties less discounts, credit notes and taxes levied on sales. Accumulated experience is used to estimate and provide for the discounts. Other operating revenue Other operating revenue relates to the sale of goods and rendering of services not related to PostNL\u2019s ordinary postal and logistics services and mainly include rental income of temporarily leased-out property and custom clearance income. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-405": { "value": "2.2 Other income Accounting policies Other income mainly relates to the profit or loss from the sale of group companies, the sale of assets held for sale and the sale or sale-and-leaseback of property, plant and equipment. In 2022, other income of \u20ac7 million mainly relates to the sale of real estate in the Netherlands. In 2021, other income of \u20ac25 million mainly relates to the profit on the sale Cendris, a subsidiary of Mail in the Netherlands (\u20ac16 million), an amount received back from the purchase price of the acquisition of Sandd in 2019 and the profit on the sale of real estate in the Netherlands. Sale of Cendris On 23 February 2021, PostNL completed the sale of Cendris, a specialist in customer contact services in the Netherlands and part of the segment Mail in the Netherlands, to Yource, market leader in customer contact within the Benelux region. The transaction resulted in a book profit of \u20ac16 million recorded within other income and net cash proceeds of \u20ac44 million. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-406": { "value": "Operating expenses related to ordinary activities are recognised on an accrual basis. In case it is not possible to directly relate the operating expenses to a particular income earned or expected future income, these expenses are recognised in the period incurred.
Lease expenses relate to short-term leases and leases of which the underlying assets are of low value. Payments made (net of any incentives received from the lessor) are charged to the income statement as incurred during the period of the lease.
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Parcels | 1,017 | 983 |
Mail in the Netherlands | 426 | 333 |
PostNL Other | 78 | 71 |
Work contracted out | 1,522 | 1,388 |
Rent & lease expenses | 13 | 12 |
External temporary staff | 174 | 170 |
Total | 1,708 | 1,570 |
Costs of work contracted out and other external expenses decreased by \u20ac138 million in 2022 mainly due to decreased volumes within Parcels and Mail in the Netherlands.
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Salaries | 849 | 867 |
Social security charges | 123 | 129 |
Salaries and social security charges | 972 | 997 |
| \u00a0 | \u00a0 | \u00a0 |
Defined benefit plans | 149 | 160 |
Defined contribution plans | 12 | 12 |
Regular pension charges | 161 | 172 |
Impact change in accounting classification of main pension plan | \u00a0 | 1,354 |
Total pension charges | 161 | 1,526 |
| \u00a0 | \u00a0 | \u00a0 |
Net releases from restructuring provisions | (2) | (1) |
Share-based payments | 3 | 2 |
Gross salaries, pensions and social security contributions | 1,134 | 2,523 |
| \u00a0 | \u00a0 | \u00a0 |
Capitalised salaries, pensions and social security contributions | (5) | (19) |
| \u00a0 | \u00a0 | \u00a0 |
Total | 1,129 | 2,504 |
In 2022, pension charges increased by \u20ac1,365 million, mainly resulting from the expenses related to the change in accounting classification of our main pension plan. See note '3.5 Provisions for pension liabilities'for more information on pensions; note '3.6 Other provisions' for the net releases from restructuring provisions; and note'3.5 Intangible fixed assets'for the capitalised salary costs, pensions and social security contributions related to IT investments.
1 | 2021 | 2022 |
|---|---|---|
Headcount | \u00a0 | \u00a0 |
Parcels | 8,246 | 8,300 |
Mail in the Netherlands | 27,611 | 25,725 |
PostNL Other | 1,508 | 1,622 |
Total at year end | 37,365 | 35,647 |
| \u00a0 | \u00a0 | \u00a0 |
Full-time equivalents (FTEs) | \u00a0 | \u00a0 |
Parcels | 6,862 | 7,146 |
Mail in the Netherlands | 13,934 | 13,055 |
PostNL Other | 1,385 | 1,514 |
Total year average | 22,181 | 21,715 |
External temporary staff year average | 2,978 | 2,647 |
The total headcount of PostNL decreased by 1,718 employees, which mainly relates to the reduction within Mail in the Netherlands due to the impact of volume decline and cost savings initiatives. Additionally, labour market tightness impacted PostNL's ability to maintain adequate staffing levels during 2022. The increase of employees within Parcels was due to more use of own staff instead of delivery partners. The labour force is also measured in FTEs based on the hours worked divided by the local standard. In 2022, the average number of FTEs decreased by 466 FTEs compared to 2021. The average number of employees working in the Netherlands was 20,772 FTEs (2021: 21,332) and outside the Netherlands was 943 FTEs (2021: 848).
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Amortisation of intangible assets | 40 | 44 |
Impairment of intangible assets | 1 | \u00a0 |
Depreciation property, plant and equipment | 46 | 46 |
Depreciation right-of-use assets | 62 | 66 |
Total | 149 | 156 |
In 2022, amortisation of intangible assets related to software for \u20ac41 million (2021: \u20ac37 million) and other intangibles for \u20ac3 million (2021: \u20ac3 million). The increase in amortisation of software relates to increased investments in IT projects.
The other operating expenses of \u20ac128 million (2021: \u20ac113 million) consist of IT, communication, office, travel, consulting and training expenses and other shared services costs.
In 2022, total incurred KPMG audit fees amounted to \u20ac2.1 million (2021 EY audit fees: \u20ac2.3 million).
Year ended at 31 December | 2021 | 2022 |
|---|---|---|
Audit fees | 1.8 | 1.6 |
Audit-related fees | 0.6 | 0.5 |
Tax advisory fees | 0.0 | 0.0 |
Other non-audit services | 0.0 | 0.0 |
Total | 2.3 | 2.1 |
Audit fees include fees from the audit of the financial statements. Audit-related services include fees from assurance engagements related to the non-financial information, regulatory reporting obligations, employee benefit plan data and Green Bond report.
In accordance with Dutch legislation, article 2:382a of the Dutch Civil Code, the total audit and audit-related fees charged by the auditorKPMG based in the Netherlands amounted to \u20ac2.0 million (2021 charged by EY: \u20ac2.0 million), subdivided into audit services of \u20ac1.5 million and audit-related services of \u20ac0.5 million.
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-407": { "value": "2.3.3 Depreciation, amortisation and impairments PostNL Depreciation, amortisation and impairments in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 Amortisation of intangible assets 40 44 Impairment of intangible assets 1 \u00a0Depreciation property, plant and equipment 46 46 Depreciation right-of-use assets 62 66 Total 149 156 In 2022, amortisation of intangible assets related to software for \u20ac41 million (2021: \u20ac37 million) and other intangibles for \u20ac3 million (2021: \u20ac3 million). The increase in amortisation of software relates to increased investments in IT projects. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-408": { "value": "2.3.4 Other operating expenses The other operating expenses of \u20ac128 million (2021: \u20ac113 million) consist of IT, communication, office, travel, consulting and training expenses and other shared services costs. In 2022, total incurred KPMG audit fees amounted to \u20ac2.1 million (2021 EY audit fees: \u20ac2.3 million). PostNL Audit fees in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 Audit fees 1.8 1.6 Audit-related fees 0.6 0.5 Tax advisory fees 0.0 0.0 Other non-audit services 0.0 0.0 Total 2.3 2.1 Audit fees include fees from the audit of the financial statements. Audit-related services include fees from assurance engagements related to the non-financial information, regulatory reporting obligations, employee benefit plan data and Green Bond report. In accordance with Dutch legislation, article 2:382a of the Dutch Civil Code, the total audit and audit-related fees charged by the auditorKPMG based in the Netherlands amounted to \u20ac2.0 million (2021 charged by EY: \u20ac2.0 million), subdivided into audit services of \u20ac1.5 million and audit-related services of \u20ac0.5 million. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-409": { "value": "2.4.1 Net financial expense/(income) Accounting policies Interest income and expense are recognised on a time-proportionate basis using the effective interest method. All borrowing costs are recognised in profit or loss using the effective interest method, except to the extent that they can be capitalised as cost of a qualifying asset. PostNL Net financial expense/(income) in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 Interest expenses on long-term borrowings 7 7 Interest on net defined benefit pension liabilities 1 2 Interest on leases 7 9 Other 8 5 Interest and similar expense 22 22 \u00a0\u00a0\u00a0Other interest and similar income (1) (3) \u00a0\u00a0\u00a0Net financial expense/(income) 21 19 ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-448": { "value": "Accounting policies Interest income and expense are recognised on a time-proportionate basis using the effective interest method. All borrowing costs are recognised in profit or loss using the effective interest method, except to the extent that they can be capitalised as cost of a qualifying asset. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-410": { "value": "2.4.2 Income taxes Accounting policies The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised directly in other comprehensive income. The amount of income tax included in the income statement is determined in accordance with the rules established by the tax authorities, based on which income taxes are payable or recoverable. PostNL Income taxes in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 excl. change in pension accounting classification Change in pension accounting classification Total 2022 Current tax expense 83 36 \u00a036 Changes in deferred taxes (10) (16) (350) (366) Total income tax expense 74 21 (350) (330) \u00a0\u00a0\u00a0\u00a0\u00a0Income taxes paid 76 (1) \u00a0(1) The difference between the total income taxes in the income statement and the current tax expense is due to temporary differences. These differences are recognised as deferred tax assets or deferred tax liabilities, except for the tax effect on the change in pension accounting classification. See note '3.8 Deferred income tax assets and liabilities'to the Consolidated financial statements for more information. In 2022, the income taxes paid relates mainly to income taxes paid in the Netherlands and German withholding tax refunds related to prior years. The 2022 difference between the total income tax expense (\u20ac(330) million) and the income taxes paid (\u20ac(1) million) can mainly be explained by the changes in deferred taxes (\u20ac366 million) and the 2022 movements of the net income tax payable position (\u20ac36 million). PostNL Effective income tax rate in % 2021, 2022 Year ended at 31 December 2021 2022 excl. change in pension accounting classification Change in pension accounting classification Total 2022 Dutch statutory income tax rate 25.0 25.8 \u00a025.8 Adjustment regarding statutory income tax rates other countries 0.0 0.3 (0.3) 0.0 Weighted average statutory tax rate 25.0 26.1 (0.3) 25.8 Tax effects of: \u00a0\u00a0\u00a0\u00a0Non and partly deductible costs 0.9 5.0 (5.2) (0.2) Exempt income (1.5) 0.6 (0.6) 0.0 Other (0.0) 12.8 (13.3) (0.5) Effective income tax rate 24.4 44.5 (19.4) 25.1 The effective income tax rate including the change in pension accounting classification is 25.1%. However, due to the material impact of the change in pension accounting classification on our figures, the effective income tax rate excluding the change in pension accounting classification has also been stated in the table above. The latter effective income tax rate is 44.5%. This effective income tax rate, being higher compared to the Dutch statutory tax rate (25.8%), can mainly be explained as follows. The line \u2018Non and partly deductible costs\u2019 mainly relates to the so-called mixed expenses (e.g. meals, entertainment) and the non-deductible treatment of our share based payments. The line \u2018Exempt income\u2019 relates to the non-taxable treatment of our (negative) results from (former) participations. The line \u2018Other\u2019 consists in 2022 mainly of the impact of the derecognition of previously recognised tax losses in various countries (13.1%), updates of our prior year tax positions in the Netherlands (0.7%) and several smaller effects (-1.0%). ", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-449": { "value": "Accounting policies The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised directly in other comprehensive income. The amount of income tax included in the income statement is determined in accordance with the rules established by the tax authorities, based on which income taxes are payable or recoverable. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-411": { "value": "2.4.3 Profit/(loss) from discontinued operations Accounting policies Discontinued operations A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and: \u2022 represents a separate major line of business or geographical area of operations, \u2022 is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations, or \u2022 is a subsidiary acquired exclusively with a view to resale. Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the income statement. The following table presents the financial performance for the discontinued operations in the years 2021 and 2022. PostNL Financial performance in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 Revenues \u00a0\u00a0Expenses (3) (15) Operating income (3) (15) \u00a0\u00a0\u00a0Income taxes 8 3 Profit/(loss) after taxes 4 (11) \u00a0\u00a0\u00a0Net result related to the sales transaction with Poste Italiane 24 \u00a0\u00a0\u00a0\u00a0Profit/(loss) from discontinued operations 29 (11) In 2022, the net result of \u20ac(11) million mainly reflected the financial impact related to a settlement reached between PostNL and the Italian tax authorities. The settlement resolved an ongoing VAT dispute, previously reported as a specific contingent tax liability. The financial impact includes a payment due to the Italian tax authorities of \u20ac30 million partially offset by management\u2019s best estimate of the collectability of the related imputed VAT receivables from former customers of \u20ac16 million and a positive income tax effect of \u20ac3 million. No cash impact was yet visible in 2022. The VAT payable is included in 'Other current liabilities' and the VAT receivables from former customers are included in 'Prepayments and accrued income' in the consolidated statement of financial position. Income taxes of \u20ac8 million in 2021 related for \u20ac6 million to tax losses connected to the liquidation of our former German entities recorded as current tax receivables and for \u20ac2 million to the update of the deferred tax position connected to the anticipated liquidation losses of our Italian Nexive entities. In 2021, the net result of \u20ac24 million related to the sales transaction with Poste Italiane on 29 January 2021 and included a negative income tax effect of \u20ac6 million. The related cash proceeds amounted to \u20ac27 million. 3.9 Assets classified as held for sale Accounting policies Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of the carrying amount and fair value less costs to sell. Assets held for sale are no longer amortised or depreciated from the date they are classified as such. Accounting for assets classified as held for sale requires the use of assumptions and estimates. In line with IFRS 5, management assessed compliance with these statements and the assumptions used in the fair value calculations as well as the estimated costs to sell. For the accounting policy concerning impairments, reference is made to note 5.4. As at 31 December 2022, assets classified as held for sale amounted to \u20ac6 million (2021: \u20ac11 million) and related to buildings held for sale in the Netherlands. Property, plant and equipment Property, plant and equipment included in assets held for sale relate to buildings in the Netherlands. The book profit from the sale of buildings is included in other income in the consolidated statement of profit or loss. The following table presents the movements of the balance sheet positions during 2022 and 2021. PostNL Property, plant and equipment in \u20ac\u00a0million 2021, 2022 \u00a02021 2022 Balance at 1 January 14 11 Disposals (5) (6) Transfers from property, plant and equipment 3 1 Balance at 31 December 11 6 ", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-450": { "value": "Accounting policies Discontinued operations A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and: \u2022 represents a separate major line of business or geographical area of operations, \u2022 is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations, or \u2022 is a subsidiary acquired exclusively with a view to resale. Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the income statement. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-412": { "value": "2.4.4 Earnings per ordinary share: (201.6) eurocents (2021: 50.9 eurocents) Accounting policies PostNL presents (diluted) earnings per share (EPS) for its ordinary shares. EPS is calculated by dividing the profit or loss attributable to the equity holders of the parent by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is calculated by dividing the profit or loss attributable to the equity holders of the parent by the weighted average number of ordinary shares outstanding, including the effects for dilution of ordinary shares following the obligations to employees under existing share plans. The following table summarises the outstanding shares for PostNL\u2019s calculation related to earnings per share. PostNL (Average) number of outstanding ordinary shares in shares 2021, 2022 Year averages and numbers at 31 December 2021 2022 Number of issued and outstanding ordinary shares 513,252,013 487,530,628 Shares held by the company to cover share plans 0 0 \u00a0\u00a0\u00a0Average number of ordinary shares per year 505,163,452 492,519,772 Diluted number of ordinary shares per year 817,671 1,122,612 Average number of ordinary shares per year on a fully diluted basis 505,981,123 493,642,384 At 31 December 2022, PostNL had potential obligations under share plans to deliver 1,122,612 shares (2021: 817,671 shares), calculated based on the share price of \u20ac1.7005 as at 31 December 2022 (31 December 2021: \u20ac3.827). ", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-451": { "value": "Accounting policies PostNL presents (diluted) earnings per share (EPS) for its ordinary shares. EPS is calculated by dividing the profit or loss attributable to the equity holders of the parent by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is calculated by dividing the profit or loss attributable to the equity holders of the parent by the weighted average number of ordinary shares outstanding, including the effects for dilution of ordinary shares following the obligations to employees under existing share plans. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-413": { "value": "2.5 Cash flow performance Accounting policies The consolidated statement of cash flows is prepared in accordance with IAS 7 using the indirect method. Cash flows in foreign currencies are translated at average exchange rates. Receipts and payments with respect to taxation on profits and interest payments are included in the cash flow from operating activities. Interest receipts and the cost of acquisition of subsidiaries, associates and investments, insofar as it was paid for in cash, are included in cash flows from investing activities. Acquisitions of subsidiaries are presented net of cash balances acquired. Cash flows from derivatives are recognised in the statement of cash flows in the same category as those of the hedged item. 2.5.1 Net cash (used in)/from operating activities In 2022, net cash from operating activities of \u20ac240 million (2021: \u20ac450 million) resulted from \u20ac259 million of cash generated from operations (2021: \u20ac547 million) and \u20ac1 million income tax received (2021: \u20ac76 million income tax paid) reduced by \u20ac20 million interest paid (2021: \u20ac21 million). Cash generated from operations The decrease in cash generated from operations of \u20ac288 million is explained by \u20ac238 million lower profit before income tax adjusted for non-cash items and investment income and a lower change in working capital of \u20ac44 million. PostNL Cash generated from operations in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 Total profit before tax adjusted for non cash items and investment income 456 218 \u00a0\u00a0\u00a0Pension expense defined benefit plans 149 160 Cash contributions defined benefit plans (80) (85) Payment unconditional funding obligation (16) (28) Change in pension liabilities 53 47 \u00a0\u00a0\u00a0Additions to/releases from provisions 7 10 Withdrawals (9) (12) Change in other provisions (2) (3) \u00a0\u00a0\u00a0Changes in working capital 41 (3) \u00a0\u00a0\u00a0Total cash generated from operations 547 259 For the changes in provisions, reference is made to note 3.5 Provisions for pension liabilities and to note 3.6 Other provisions. The higher investments in working capital mainly related to a decrease in accruals for terminal dues and expenses to be paid, partly offset by lower trade receivables within Mail in the Netherlands. Interest paid The interest paid is explained as follows: PostNL Interest paid in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 Interest on long-term borrowings 6 6 Interest on leases 7 9 Bank charges and other 9 5 Total 21 20 Income taxes received/(paid) The income taxes received of \u20ac1 million (2021: \u20ac76 million income taxes paid) mainly relates to income taxes paid in the Netherlands and German withholding tax refunds related to prior years. 2.5.2 Net cash (used in)/from investing activities PostNL Net cash investing activities in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 Disposal of subsidiaries 44 \u00a0Capital expenditure on intangible assets and property, plant and equipment (140) (138) Proceeds from sale of property, plant and equipment 10 12 Changes in other loans receivable (3) 3 Other (2) 1 Net cash (used in)/from investing activities (92) (122) Disposal of subsidiaries In 2021, disposal of subsidiaries of \u20ac44 million relates to the net cash received for the sale of Cendris, a subsidiary from Mail in the Netherlands. The book profit on the sale of Cendris of \u20ac16 million is included in other income in the consolidated statement of profit or loss. Capital expenditure on intangible assets and property, plant and equipment In 2022, capital expenditures on intangible assets of \u20ac80 million (2021: \u20ac56 million) mostly related to software including prepayments for software. The capital expenditures on property, plant and equipment amounting to \u20ac58 million (2021: \u20ac85 million) mainly related to new sorting and delivery centres within Parcels and to various other equipment. Capital expenditures are funded primarily by cash generated from operations and are part of strict cash control and review. Proceeds from sale of property, plant and equipment In 2022, proceeds from the sale of property, plant and equipment amounted to \u20ac12 million (2021: \u20ac10 million) and mainly related to the sale of real estate in the Netherlands . Changes in other loans receivable In 2022, changes in other loans receivable included proceeds from a lessor loan relating to the lease of a sorting machine by Bol.com (2021: new lessor loan of \u20ac4 million). Other In 2022, an amount of \u20ac(2) million is included for the acquisition of 50% of the shares of De Innovatie Studio, a joint venture and 5.3% of the shares in a shopping services app, an associated company (2021: \u20ac(2) million for the acquisition of 25% of the shares of VersTrade Nederland, an associated company). 2.5.3 Net cash (used in)/from financing activities PostNL Net cash financing activities in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 Dividends paid (113) (165) Share buyback \u00a0(164) Changes related to non-controlling interests \u00a0(1) Net cash from debt financing activities (5) (4) Repayments of leases/incentives (69) (74) Net cash (used in)/from financing activities (186) (408) In 2022, net cash from financing activities of \u20ac(408) million (2021: \u20ac(186) million) mainly related to the final 2021 and interim 2022 cash dividend paid of \u20ac165 million (2021: \u20ac113 million related to the final 2020 and interim 2021 cash dividend), the repurchase of shares of \u20ac164 million and the repayments of leases of \u20ac74 million (2021: \u20ac69 million). The net cash from debt financing activities includes an amount of \u20ac4 million (2021: \u20ac4 million) for the repayment of a (legal) lease loan relating to two Parcel sorting centres and sorting machines. Refer to note 3.4 for further information on leases. Reference is also made to note 4.1 Net debt and note 4.5 Financial instruments. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-452": { "value": "Accounting policies The consolidated statement of cash flows is prepared in accordance with IAS 7 using the indirect method. Cash flows in foreign currencies are translated at average exchange rates. Receipts and payments with respect to taxation on profits and interest payments are included in the cash flow from operating activities. Interest receipts and the cost of acquisition of subsidiaries, associates and investments, insofar as it was paid for in cash, are included in cash flows from investing activities. Acquisitions of subsidiaries are presented net of cash balances acquired. Cash flows from derivatives are recognised in the statement of cash flows in the same category as those of the hedged item. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-414": { "value": "2.6 Other comprehensive income and equity development The decrease of total equity from \u20ac429 million on 31 December 2021 to \u20ac179 million on 31 December 2022 is mainly explained by net loss for the year of \u20ac993 million, the payments of cash dividends of \u20ac165 million in total and the repurchase of shares of \u20ac164 million, partly offset by other comprehensive income of \u20ac1,071 million. Other comprehensive income mainly consisted of a positive impact from pensions of \u20ac1,077 million including the impact of the change in the accounting classification of our main pension plan of \u20ac1,020 million. Issued share capital and Additional paid-in-capital As at 31 December 2022, issued share capital amounted to \u20ac39 million (2021: \u20ac41 million) and additional paid-in-capital amounted to \u20ac163 million (2021: \u20ac163 million). For details on Issued share capital and Additional paid-in capital, reference is made to note 4.6. The following table presents the reserves included in the other reserves. PostNL Other reserves in \u20ac\u00a0million 2021, 2022 \u00a0Currency translation reserve Hedge reserve Financial assets at fair value OCI Other reserves Total other reserves Balance at 1 January 2021 0 (2) 7 (526) (520) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total comprehensive income 1 0 12 54 68 Appropriation of net income \u00a0\u00a0\u00a0305 305 Share-based compensation \u00a0\u00a0\u00a0(0) (0) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Balance at 31 December 2021 1 (2) 20 (167) (148) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total comprehensive income 0 2 (8) 1,077 1,071 Appropriation of net income \u00a0\u00a0\u00a0518 518 Share buyback \u00a0\u00a0\u00a0(162) (162) Share-based compensation \u00a0\u00a0\u00a02 2 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Balance at 31 December 2022 2 0 11 1,267 1,281 Currency translation reserve As at 31 December 2022, the translation reserve amounted to \u20ac2 million (2021: \u20ac1 million), mainly reflecting the movement in exchange rate differences on converting subsidiaries of Spring within Parcels into euros. Hedge reserve As at 31 December 2022, the hedge reserve amounted to \u20ac0 million (2021: \u20ac(2) million). The tax impact on the cash flow hedges included in the hedge reserve as at 31 December 2022 is \u20ac0 million (2021: \u20ac0 million). For more information, see note 4.5 to the consolidated financial statements. Financial assets at fair value through OCI As at 31 December 2022, the reserve related to the financial assets at fair value through OCI amounted to \u20ac11 million (2021: \u20ac20 million). The decrease in 2022 of \u20ac8 million mainly related to the decrease in value of the investment in Whistl (2021: increase of \u20ac12 million mainly related to Whistl). For more information, see note 4.2 to the consolidated financial statements. Other reserves As at 31 December 2022, the other reserves amounted to \u20ac1,267 million (2021: \u20ac(167) million). In 2022, the other reserves increased by \u20ac1,434 million mainly resulting from the appropriation of net income from 2021 of \u20ac518 million and a positive pension effect within other comprehensive income (net of tax) of \u20ac1,077 million, partly offset by the repurchase of shares of \u20ac(162) million. For details on pensions, reference is made to note 3.5. Retained earnings As at 31 December 2022, retained earnings amounted to \u20ac(1,306) million (2021: \u20ac370 million). In 2022, retained earnings decreased by \u20ac1,676 million due to the total loss for the year attributable to the shareholders of the parent of \u20ac993 million in 2022, the appropriation of net income from 2021 of \u20ac(518) million and the payment of cash dividends of \u20ac165 million. The Board of Management has proposed to make an amount of \u20ac60 million out of the distributable part of the shareholders' equity available for distribution of dividend. Refer to note 6.5 for more details of this proposal. ", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-415": { "value": "PostNL reports two operating segments: Parcels and Mail in the Netherlands and one other segment: PostNL Other. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers. These chief operating decision-makers, who are responsible for allocating resources and assessing the performance of the operating segments, have been identified as the Board of Management of PostNL that makes strategic decisions. Transfer prices between operating segments are on an arm's length basis. PostNL Other represents head office entities, including the difference between the recorded IFRS pension expense for the defined benefit pension plans and the actual cash contributions.
The following table presents the reconciliation of the 2022 segment information relating to the income statement of the reportable segments. Segment information relating to the balance sheet is reported in note 3.11.
Year ended at 31 December 2022 | Parcels | Mail in NL | PostNL Other | Eliminations | Total |
|---|---|---|---|---|---|
Revenue from contracts with customers | 1,918 | 1,211 | 2 | \u00a0 | 3,132 |
Intercompany sales | 242 | 277 | 212 | (731) | 0 |
Other operating revenue | 5 | 7 | 1 | \u00a0 | 13 |
Total operating revenue | 2,165 | 1,495 | 215 | (731) | 3,144 |
Other income | 0 | 7 | 0 | \u00a0 | 7 |
Depreciation/impairment PP&E | (28) | (14) | (4) | \u00a0 | (46) |
Amortisation/impairment intangibles | (2) | (2) | (40) | \u00a0 | (44) |
Depreciation/impairment right-of-use assets | (43) | (12) | (11) | \u00a0 | (66) |
Total operating income | 54 | 98 | (1,443) | \u00a0 | (1,291) |
Net financial income/(expense) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (19) |
Results from investments in JVs/associates | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (1) |
Income taxes | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 330 |
Profit/(loss) from discontinued operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (11) |
Profit/(loss) for the year | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (993) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Normalised EBIT | 56 | 107 | (80) | \u00a0 | 84 |
The key financial performance indicator for management of the reportable segments is normalised EBIT. Normalised EBIT is derived from the IFRS-based performance measure operating income adjusted for the impact of project costs and incidentals. Normalised EBIT is reported on a monthly basis to the chief operating decision-makers. The following table presents the reconciliation from reported operating income to normalised EBIT.
Year ended at 31 December | Reported operating income | Change in pension accounting classification | Project costs and other | Normalised EBIT |
|---|---|---|---|---|
Parcels | 54 | \u00a0 | 2 | 56 |
Mail in NL | 98 | 2 | 7 | 107 |
PostNL Other | (1,443) | 1,355 | 9 | (80) |
Total 2022 | (1,291) | 1,357 | 17 | 84 |
In 2022, normalised EBIT totalled \u20ac84 million (2021: \u20ac308 million). Normalised EBIT excludes exceptional items, which amounted to \u20ac1,375 million in 2022 (2021: \u20ac(15) million). We refer to note 3.5 for further information on the normalised impact of the change in accounting classification of our main pension plan. In 2022, the normalisation for project costs and other included results related to legal advisory costs (\u20ac6 million), settlement costs (\u20ac9 million) and discontinuation costs of an in-house Food delivery network (\u20ac2 million). The decrease of \u20ac225 million in normalised EBIT comprised lower results in Parcels (\u20ac174 million) and Mail in the Netherlands (\u20ac53 million), partly offset by a higher result at PostNL Other (\u20ac2 million).
The following tables present the reconciliation of the 2021 segment information relating to the income statement of the reportable segments. Segment information relating to the balance sheet is reported in note 3.11.
Year ended at 31 December 2021 | Parcels | Mail in NL | PostNL Other | Eliminations | Total |
|---|---|---|---|---|---|
Revenue from contracts with customers | 2,104 | 1,338 | 5 | \u00a0 | 3,447 |
Intercompany sales | 250 | 333 | 194 | (777) | 0 |
Other operating revenue | 7 | 11 | 1 | \u00a0 | 19 |
Total operating revenue | 2,361 | 1,683 | 200 | (777) | 3,466 |
Other income | 0 | 25 | 0 | \u00a0 | 25 |
Depreciation/impairment PP&E | (28) | (14) | (4) | \u00a0 | (46) |
Amortisation/impairment intangibles | (9) | (13) | (19) | \u00a0 | (41) |
Depreciation/impairment right-of-use assets | (39) | (12) | (12) | \u00a0 | (62) |
Total operating income | 230 | 176 | (81) | \u00a0 | 324 |
Net financial income/(expense) | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (21) |
Results from investments in JVs/associates | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (0) |
Income taxes | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (74) |
Profit/(loss) from discontinued operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 29 |
Profit/(loss) for the year | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 258 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Normalised EBIT | 230 | 160 | (81) | \u00a0 | 308 |
Year ended at 31 December | Reported operating income | Book profit from the sale of Cendris | Project costs and other | Normalised EBIT |
|---|---|---|---|---|
Parcels | 230 | \u00a0 | \u00a0 | 230 |
Mail in NL | 176 | (16) | 0 | 160 |
PostNL Other | (81) | \u00a0 | \u00a0 | (81) |
Total 2021 | 324 | (16) | 0 | 308 |
PostNL reports two operating segments: Parcels and Mail in the Netherlands and one other segment: PostNL Other. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers. These chief operating decision-makers, who are responsible for allocating resources and assessing the performance of the operating segments, have been identified as the Board of Management of PostNL that makes strategic decisions. Transfer prices between operating segments are on an arm's length basis.
A reconciliation of the segment information relating to the balance sheet of the reportable segments is presented below. Segment information relating to the income statement is reported in note 2.7.
At 31 December 2022 | Parcels | Mail in NL | PostNL Other | Total |
|---|---|---|---|---|
Intangible assets | 40 | 201 | 148 | 389 |
Property, plant and equipment | 344 | 101 | 12 | 457 |
Right-of-use assets | 187 | 42 | 65 | 295 |
Other non-current assets | 32 | 1 | 20 | 53 |
Trade accounts receivable | 219 | 150 | 1 | 370 |
Other current assets | 39 | 60 | 553 | 652 |
Assets classified as held for sale | 0 | 3 | 2 | 6 |
Total assets | 861 | 558 | 802 | 2,221 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Non-current liabilities | 184 | 117 | 757 | 1,057 |
Trade accounts payable | 68 | 81 | 33 | 182 |
Other current liabilities | 243 | 507 | 51 | 802 |
Total liabilities | 495 | 706 | 841 | 2,042 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cash out for capital expenditures | 35 | 17 | 85 | 138 |
The increase in 2022 in intangible assets within PostNL Other relates to the centralisation and increase of IT assets. A reconciliation of the segment information relating to the balance sheet of the reportable segments as at 31 December 2021 is presented in the following table.
At 31 December 2021 | Parcels | Mail in NL | PostNL Other | Total |
|---|---|---|---|---|
Intangible assets | 49 | 225 | 80 | 354 |
Property, plant and equipment | 324 | 99 | 10 | 433 |
Right-of-use assets | 183 | 42 | 64 | 289 |
Other non-current assets | 35 | 2 | 28 | 65 |
Trade accounts receivable1 | 216 | 180 | 3 | 400 |
Other current assets1 | 33 | 60 | 839 | 932 |
Assets classified as held for sale | 0 | 9 | 2 | 11 |
Total assets | 840 | 617 | 1,027 | 2,484 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Non-current liabilities | 187 | 132 | 809 | 1,129 |
Trade accounts payable | 72 | 67 | 30 | 168 |
Other current liabilities | 260 | 559 | (61) | 758 |
Total liabilities | 519 | 758 | 778 | 2,055 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cash out for capital expenditures | 54 | 36 | 50 | 140 |
At 31 December | The Netherlands | Other countries | Total |
|---|---|---|---|
Intangible assets | 353 | 1 | 354 |
Property, plant and equipment | 426 | 7 | 433 |
Right-of-use assets | 254 | 35 | 289 |
Financial fixed assets | 58 | 7 | 65 |
Total non-current assets 2021 | 1,091 | 50 | 1,141 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Intangible assets | 388 | 1 | 389 |
Property, plant and equipment | 447 | 10 | 457 |
Right-of-use assets | 259 | 35 | 295 |
Financial fixed assets | 46 | 7 | 53 |
Total non-current assets 2022 | 1,141 | 53 | 1,194 |
The segment information from a geographical perspective is derived as follows: the basis of allocation of assets and investments by geographical area is the location of the assets.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-453": { "value": "Accounting policies PostNL reports two operating segments: Parcels and Mail in the Netherlands and one other segment: PostNL Other. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers. These chief operating decision-makers, who are responsible for allocating resources and assessing the performance of the operating segments, have been identified as the Board of Management of PostNL that makes strategic decisions. Transfer prices between operating segments are on an arm's length basis. PostNL Other represents head office entities, including the difference between the recorded IFRS pension expense for the defined benefit pension plans and the actual cash contributions. Accounting policies PostNL reports two operating segments: Parcels and Mail in the Netherlands and one other segment: PostNL Other. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers. These chief operating decision-makers, who are responsible for allocating resources and assessing the performance of the operating segments, have been identified as the Board of Management of PostNL that makes strategic decisions. Transfer prices between operating segments are on an arm's length basis. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-1": { "value": "the Netherlands", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-417": { "value": "3.1.1 Accounts receivable Accounting policies Trade receivables are recorded where PostNL has the unconditional rights to consideration from the customers. Trade receivables that do not contain a significant financing component or for which PostNL has applied the practical expedient are measured at the transaction price determined under IFRS 15. PostNL recognises an allowance for expected credit losses (ECLs). ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that PostNL expects to receive, discounted at an approximation of the original effective interest rate. For trade receivables, PostNL applies a simplified approach in calculating ECLs. Therefore, PostNL does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. PostNL has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The amount of the ECLs is recognised in the income statement. Any reversal of the ECLs is included in the income statement on the same line as where the original expense was recorded. The risk of uncollectability of accounts receivable is primarily estimated based on prior experience with, and the past due status of, doubtful debtors adjusted for forward-looking factors. Large accounts are assessed individually based on factors that include ability to pay, bankruptcy and payment history. In addition, debtors in certain countries are subject to a higher collectability risk, which is taken into account when assessing the overall risk of uncollectability. PostNL Accounts receivable in \u20ac\u00a0million 2021, 2022 At 31 December 2021 2022 Trade accounts receivable - total 407 377 Allowance for expected credit losses (7) (7) Trade accounts receivable 400 370 \u00a0\u00a0\u00a0VAT receivable 4 4 Other accounts receivable 7 8 Accounts receivable 11 12 \u00a0\u00a0\u00a0Total accounts receivable 411 382 Trade accounts receivable are non-interest bearing and are generally on terms of 3 to 30 days. Trade accounts receivable include an amount of \u20ac144 million (2021: \u20ac165 million) that was unbilled at 31 December 2022. In 2021, an amount of \u20ac47 million of these unbilled trade receivables was reported as prepayments and accrued income. For comparison purposes, this amount has been reclassified to trade accounts receivable. The main part of the allowance for expected credit losses related to a collective loss component established for groups of similar trade accounts receivable balances. This collective loss component is largely based on the ageing of the trade accounts receivable and is reviewed periodically. The fair value of the total (trade) accounts receivable approximated its carrying value. The decrease of trade accounts receivable - total from \u20ac407 million on 31 December 2021 to \u20ac377 million on 31 December 2022 is mainly explained by higher revenue in 2021. The trade accounts receivable past due decreased from \u20ac125 million on 31 December 2021 to \u20ac122 million on 31 December 2022 (see table expected credit losses at the next page). The top 10 trade accounts receivable accounted for 21% of the outstanding balance as at 31 December 2022 (2021: 19%). The concentration of the trade accounts receivable portfolio over the different regions can be summarised as follows: Netherlands \u20ac305 million (2021: \u20ac347 million), rest of Europe \u20ac45 million (2021: \u20ac42 million), and the rest of the world \u20ac20 million (2021: \u20ac11 million). The movements in the allowance for expected credit losses of trade accounts receivable were as follows: PostNL Statement of changes in the allowance for expected credit losses of trade accounts receivable in \u20ac\u00a0million 2021, 2022 \u00a02021 2022 Balance at 1 January 10 7 Provided for during financial year 1 3 Receivables written off during year as uncollectable (3) (3) Balance at 31 December 7 7 Set out below is the information about the credit risk exposure on the trade accounts receivable using a provision matrix. PostNL Expected credit losses in \u20ac\u00a0million 2021, 2022 At 31 December Months due \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Up to 1 month 1-2 months 2-3 months 3-4 months over 4 months Total Expected credit loss rate 0% 1% 2% 7% 14% \u00a0Gross amount of trade accounts receivable 326 19 12 4 47 407 Trade accounts receivable past due 49 17 12 3 44 125 Expected credit loss 2021 0 0 0 0 6 7 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Expected credit loss rate 1% 3% 7% 23% 5% \u00a0Gross amount of trade accounts receivable 276 19 10 4 67 377 Trade accounts receivable past due 26 16 9 4 66 122 Expected credit loss 2022 2 1 1 1 3 7 ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-454": { "value": "Accounting policies Trade receivables are recorded where PostNL has the unconditional rights to consideration from the customers. Trade receivables that do not contain a significant financing component or for which PostNL has applied the practical expedient are measured at the transaction price determined under IFRS 15. PostNL recognises an allowance for expected credit losses (ECLs). ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that PostNL expects to receive, discounted at an approximation of the original effective interest rate. For trade receivables, PostNL applies a simplified approach in calculating ECLs. Therefore, PostNL does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. PostNL has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The amount of the ECLs is recognised in the income statement. Any reversal of the ECLs is included in the income statement on the same line as where the original expense was recorded. The risk of uncollectability of accounts receivable is primarily estimated based on prior experience with, and the past due status of, doubtful debtors adjusted for forward-looking factors. Large accounts are assessed individually based on factors that include ability to pay, bankruptcy and payment history. In addition, debtors in certain countries are subject to a higher collectability risk, which is taken into account when assessing the overall risk of uncollectability. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-418": { "value": "3.1.2 Other current liabilities PostNL Other current liabilities in \u20ac\u00a0million 2021, 2022 At 31 December 2021 2022 VAT payable 32 67 Social security contributions payable 24 30 Payments from customers received in advance 49 48 Pension payable \u00a016 Other 6 7 Total 111 168 The VAT payable increased by \u20ac35 million. This is mainly caused by an outstanding payment of \u20ac30 million related to a settlement reached between PostNL and the Italian tax authorities, reference is made to note 2.4.3: Profit/(loss) from discontinued operations. Pension payable in 2022 contains the last instalment of \u20ac16 million related to the unconditional funding obligation with the pension fund, reference is made to note 3.5: Provisions for pension liabilities. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-419": { "value": "3.1.3 Contract liabilities PostNL Contract liabilities in \u20ac\u00a0million 2021, 2022 At 31 December 2021 2022 Deferred revenue from unused stamps 42 47 Deferred revenue from franking machines 10 7 Rental of mailboxes 9 8 Other amounts received in advanced from customers 10 8 Total 70 70 We expect to perform almost all services related to the outstanding contract liabilities at 31 December 2022 within one year. However, note that within one year we expect outstanding contract liabilities more or less in line with the amounts currently reported. ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-420": { "value": "3.1.4 Accrued current liabilities PostNL Accrued current liabilities in \u20ac\u00a0million 2021, 2022 At 31 December 2021 2022 To be paid to third parties 141 139 To be paid to personnel 44 21 Vacation days/vacation payments 97 98 Terminal dues 204 181 Interest payable 2 1 Other accrued current liabilities 0 0 Total 487 441 Main items within the expenses to be paid to third parties included payables to business partners of \u20ac20 million (2021: \u20ac24 million), claims of \u20ac4 million (2021: \u20ac6 million) and various other expenses to be paid. Expenses to be paid to personnel included accrued wages and salaries of \u20ac17 million (2021: \u20ac24 million) and accruals for employee profit-sharing of \u20ac1 million (2021: \u20ac14 million). The accrual for terminal dues relates to payables to foreign postal operators relating to the years 2022 and before, partly consisting of positions in SDR currency. The net payable position, including the receivable for terminal dues of \u20ac28 million (2021: \u20ac12 million) included in prepayments and accrued income, amounted to \u20ac153 million (2021: \u20ac192 million). The change reflects both the regular course of business as well as settlements of outstanding positions. The positions where there is no price multi- or bilateral agreement on price are based on our best estimate of the price for which we expect to settle. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-421": { "value": "3.2 Property, plant and equipment Accounting policies Property, plant and equipment is valued at historical cost, less depreciation and impairment losses. The initial costs of an assets comprises its purchase price, costs of bringing the asset into working condition, handling and installation costs and non-refundable purchase taxes. Land is not depreciated. System software is capitalised and amortised as a part of the tangible fixed asset for which it was acquired to operate. Other property, plant and equipment is depreciated on a straight-line basis over its expected useful life, taking into account any residual value. The asset\u2019s residual value and useful life is reviewed on an annual basis and, if necessary, changes are accounted for prospectively. For the accounting policy concerning impairments, reference is made to note 5.4. PostNL Property, plant and equipment in \u20ac\u00a0million 2021 \u00a0Land and buildings Plant and equipment Other equipment Construction in progress Total Depreciation percentage 0%-10% 10%-33% 10%-33% 0% \u00a0Historical cost 392 414 46 44 896 Accumulated depreciation and impairments (182) (309) (36) \u00a0(526) Balance at 1 January 2021 210 106 10 44 370 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Transfers from right-of-use assets 16 3 \u00a0\u00a019 Capital expenditure 16 37 7 34 93 Internal transfers and reclassifications 28 23 1 (52) \u00a0Depreciation (13) (28) (5) \u00a0(46) Transfers to assets held for sale (3) \u00a0\u00a0\u00a0(3) Total changes 44 35 3 (19) 63 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Historical cost 409 449 39 25 922 Accumulated depreciation and impairments (155) (308) (26) \u00a0(489) Balance at 31 December 2021 254 141 13 25 433 PostNL Property, plant and equipment in \u20ac\u00a0million 2022 \u00a0Land and buildings Plant and equipment Other equipment Construction in progress Total Depreciation percentage 0%-10% 6%-33% 10%-33% 0% \u00a0Historical cost 409 449 39 25 922 Accumulated depreciation and impairments (155) (308) (26) \u00a0(489) Balance at 1 January 2022 254 141 13 25 433 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Capital expenditure 12 23 4 32 70 Internal transfers and reclassifications 4 10 \u00a0(13) \u00a0Depreciation (14) (28) (5) \u00a0(46) Transfers to assets held for sale (1) \u00a0\u00a0\u00a0(1) Total changes 1 5 (1) 18 24 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Historical cost 401 426 38 44 909 Accumulated depreciation and impairments (147) (280) (25) \u00a0(452) Balance at 31 December 2022 255 146 13 44 457 In 2021, the transfers from right-of-use assets relate to the revision of one Parcels sorting centre and sorting machine lease as property, plant and equipment, as the related sale-and-leaseback transaction did not represent a true sale according to IFRS 15. Capital expenditures 2022 are below the level of 2021. Investments were made in the new sorting and delivery centres within Parcels, and in various other equipment. Both developments also impacted the internal transfers and reclassifications from construction in progress to land and buildings and plant and equipment. In 2022, the transfers to assets held for sale of \u20ac1 million (2021: \u20ac3 million) related to buildings in the Netherlands. The property, plant and equipment assets include a number of Parcel sorting centres and sorting machines financed and legally owned by an entity especially set up for this purpose by a third party. The term of the related lease contracts and liabilities is 10 years. Up to 31 December 2022, 5 sorting centres and sorting machines (2018: 1, 2019: 3, 2021: 1) have been finalised and leased from this special entity, for which the related property, plant and equipment assets (2 locations with a total book value of \u20ac36 million at 31 December 2022) and corresponding (legal) lease loans, and right-of-use assets (3 locations) and corresponding lease liabilities have been recorded. ", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-455": { "value": "Accounting policies Property, plant and equipment is valued at historical cost, less depreciation and impairment losses. The initial costs of an assets comprises its purchase price, costs of bringing the asset into working condition, handling and installation costs and non-refundable purchase taxes. Land is not depreciated. System software is capitalised and amortised as a part of the tangible fixed asset for which it was acquired to operate. Other property, plant and equipment is depreciated on a straight-line basis over its expected useful life, taking into account any residual value. The asset\u2019s residual value and useful life is reviewed on an annual basis and, if necessary, changes are accounted for prospectively. For the accounting policy concerning impairments, reference is made to note 5.4. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-422": { "value": "3.3 Intangible fixed assets Accounting policies Goodwill Goodwill represents the excess of the cost of acquisition over the fair value of PostNL\u2019s share of the identifiable net assets acquired. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of joint ventures and associates is included in investments in joint ventures/associates and is not separately recognised or tested for impairment. Gains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity sold. Separately-recognised goodwill arising on acquisitions is capitalised and subject to an annual impairment review. Goodwill is carried at cost less accumulated impairment losses. Other intangible fixed assets Costs related to the development and installation of software for internal use are capitalised at historical cost and amortised over the estimated useful life. Other intangible assets acquired in a business combination are recognised at fair value at the acquisition date. An asset under construction is transferred to its respective intangible asset category at the moment it is ready for use and is amortised using the straight-line method over its estimated useful life. Other intangible assets are valued at the lower of historical cost less amortisation and impairment. The asset\u2019s residual value and useful life is reviewed on an annual basis and, if necessary, changes are accounted for prospectively. For the accounting policy concerning impairments of goodwill and other intangible fixed assets, reference is made to note 5.4. PostNL Intangible fixed assets in \u20ac\u00a0million 2021 \u00a0Goodwill Software Other Total Amortisation percentage \u00a010%- 35% 0%- 35% \u00a0Historical cost 244 222 65 532 Accumulated amortisation and impairments (36) (144) (12) (192) Balance at 1 January 2021 208 79 53 339 \u00a0\u00a0\u00a0\u00a0\u00a0Additions \u00a040 17 56 Disposals (1) \u00a0\u00a0(1) Internal transfers/reclassifications \u00a018 (18) \u00a0Amortisation \u00a0(37) (3) (40) Impairments \u00a0(1) \u00a0(1) Total changes (1) 20 (4) 15 \u00a0\u00a0\u00a0\u00a0\u00a0Historical cost 243 238 63 545 Accumulated amortisation and impairments (36) (139) (14) (190) Balance at 31 December 2021 207 98 49 354 PostNL Intangible fixed assets in \u20ac\u00a0million 2022 \u00a0Goodwill Software Other Total Amortisation percentage \u00a010%- 35% 0%- 35% \u00a0Historical cost 243 238 63 545 Accumulated amortisation and impairments (36) (139) (14) (190) Balance at 1 January 2022 207 98 49 354 \u00a0\u00a0\u00a0\u00a0\u00a0Additions \u00a073 6 79 Internal transfers/reclassifications \u00a017 (17) \u00a0Amortisation \u00a0(41) (3) (44) Total changes \u00a049 (14) 35 \u00a0\u00a0\u00a0\u00a0\u00a0Historical cost 243 297 52 593 Accumulated amortisation and impairments (36) (150) (17) (204) Balance at 31 December 2022 207 147 35 389 Goodwill Goodwill is allocated to the Group\u2019s cash-generating units (CGUs) and tested for impairment. The CGUs correspond to an operation in a particular country or region and the nature of the services provided. Compared to 2021, the CGU structure has not changed. In 2021, the disposal of goodwill of \u20ac1 million related to the finalisation of the preliminary purchase price allocation of the acquisition of MyParcel.com in 2020 (CGU Spring). PostNL Goodwill per CGU in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 Parcels 32 32 Mail in the Netherlands 174 174 Spring 1 1 Total 207 207 Based on the 2022 financial performance, a detailed review has been performed of the recoverable value of each CGU. The recoverable value is the higher of the value in use and fair value less costs of disposal. Fair value less costs of disposal represents the best estimate of the amount PostNL would receive if it sold the CGU. The recoverable value is determined based on the fair value less costs of disposal. The fair value less costs of disposal has been estimated on the basis of the present value of future cash flows, taking into account costs of disposal. For both mature markets and non-mature markets, the estimated future net cash flows are based on a five-year (2021: five-year) forecast and business plan, which forecast period has been assessed as adequate to reach a sustainable basis for the calculation of the continuing value. The cash flow projections have been approved by management. PostNL has determined the budgeted gross margin based on past performance and its expectations for market development. The weighted average growth rates used are consistent with the forecasts included in industry reports for the related operation and market and did not change materially compared to previous year. The weighted average pre-tax discount rate used in the CGU valuations was around 11.0% (2021: around 10.0%). Key assumptions used to determine the recoverable values for each individual CGU are the following: maturity of the underlying market, market share and volume development in order to determine the revenue mix and (long-term) growth rate, level of operating income largely impacted by revenue and cost development, taking into account the nature of the underlying costs and potential economies of scale, level of capital expenditure in network-related assets, and discount rate to be applied following the nature of the underlying cash flows and foreign currency and inflation-related risks. Management has carried out an impairment test for each individual CGU and concluded that the recoverable amount of the individual CGUs is significantly higher than the carrying amount. Software and other intangibles The closing balance of software and other intangibles is build up as follows: PostNL Software and other intangibles in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 Internally-generated software 95 145 Purchased software 3 2 Software under construction 18 4 Customer lists 31 31 Total 147 182 The additions to software mainly concerned IT investments related to replacement and improvement of sorting and delivery processes within Mail in the Netherlands and Parcels, and software licenses and costs of internally-generated software for various IT projects including investments in our online landscape, logistic service platform and back office functionality. The reclassification from other intangibles was due to finalised IT projects. The estimated amortisation expenses for software and other intangible assets are: 2023: \u20ac48 million, 2024: \u20ac42 million, 2025: \u20ac35 million, and thereafter: \u20ac57 million. Software and other intangible assets include an amount of \u20ac2 million (2021: \u20ac1 million) of capitalised development costs. ", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-456": { "value": "Accounting policies Goodwill Goodwill represents the excess of the cost of acquisition over the fair value of PostNL\u2019s share of the identifiable net assets acquired. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of joint ventures and associates is included in investments in joint ventures/associates and is not separately recognised or tested for impairment. Gains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity sold. Separately-recognised goodwill arising on acquisitions is capitalised and subject to an annual impairment review. Goodwill is carried at cost less accumulated impairment losses. Other intangible fixed assets Costs related to the development and installation of software for internal use are capitalised at historical cost and amortised over the estimated useful life. Other intangible assets acquired in a business combination are recognised at fair value at the acquisition date. An asset under construction is transferred to its respective intangible asset category at the moment it is ready for use and is amortised using the straight-line method over its estimated useful life. Other intangible assets are valued at the lower of historical cost less amortisation and impairment. The asset\u2019s residual value and useful life is reviewed on an annual basis and, if necessary, changes are accounted for prospectively. For the accounting policy concerning impairments of goodwill and other intangible fixed assets, reference is made to note 5.4. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-423": { "value": "PostNL leases sorting centres, sorting machines, distribution centres, offices, warehouses, trucks, vans, cars, transport equipment and other equipment. Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the group. At the commencement date of the lease, the lease liabilities are measured at the present value of lease payments to be made over the lease term. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the incremental borrowing rate is used, being the rate that would have to be paid to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The lease payments include the exercise price of a purchase option reasonably certain to be exercised by PostNL and payments of penalties for terminating the lease, if the lease term reflects PostNL exercising the option to terminate. Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
PostNL elected to apply the practical expedient not to separate non-lease components from lease components, and instead account for each lease component and any associated non-lease components as a single lease component. PostNL elected also the practical expedient not to apply the requirements for short-term leases (with a lease term of 12 months or less and which do not contain a purchase option) and leases for which the underlying asset is of low value (<\u20ac5 thousand). The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.
| \u00a0 | Land and | Transport | Other | Total |
|---|---|---|---|---|
Depreciation percentage | 0%-10% | 10%-33% | 10%-33% | \u00a0 |
Historical cost | 215 | 122 | 31 | 368 |
Accumulated depreciation and impairments | (64) | (48) | (13) | (125) |
Balance at 1 January 2021 | 151 | 74 | 18 | 243 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Transfers to property, plant and equipment | (16) | \u00a0 | (3) | (19) |
New leases | 89 | 27 | 1 | 117 |
Lease modifications/reassessments | 13 | (1) | \u00a0 | 12 |
Disposals | (3) | \u00a0 | \u00a0 | (3) |
Depreciation | (32) | (27) | (3) | (62) |
Total changes | 52 | (1) | (6) | 45 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Historical cost | 274 | 137 | 23 | 435 |
Accumulated depreciation and impairments | (71) | (64) | (11) | (146) |
Balance at 31 December 2021 | 203 | 73 | 13 | 289 |
| \u00a0 | Land and | Transport | Other | Total |
|---|---|---|---|---|
Depreciation percentage | 0%-10% | 10%-33% | 10%-33% | \u00a0 |
Historical cost | 274 | 137 | 23 | 435 |
Accumulated depreciation and impairments | (71) | (64) | (11) | (146) |
Balance at 1 January 2022 | 203 | 73 | 13 | 289 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
New leases | 29 | 29 | 1 | 58 |
Lease modifications/reassessments | 11 | 2 | \u00a0 | 13 |
Depreciation | (35) | (29) | (2) | (66) |
Total changes | 5 | 2 | (1) | 6 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Historical cost | 298 | 153 | 24 | 474 |
Accumulated depreciation and impairments | (89) | (79) | (12) | (180) |
Balance at 31 December 2022 | 209 | 75 | 11 | 295 |
In 2021, the transfers to property, plant and equipment assets relate to the revision of one Parcels sorting centre and sorting machine lease as property, plant and equipment, as the related sale-and-leaseback transaction did not represent a true sale according to IFRS 15.
In 2022, the new leases of \u20ac58 million mainly relate to the replacement and expansion of buildings, vans and trucks. The new leases of \u20ac117 million in 2021 mainly relate to a new sorting and delivery centre in Belgium within Parcels, the new head office and the replacement and expansion of buildings, vans and trucks. In 2022, the lease modifications/reassessments of \u20ac13 million (2021: \u20ac12 million) mainly reflect changes to the lease payments and lease terms.
In 2021, the disposals of \u20ac3 million related to disposed and subleased contracts from buildings from Sandd.
The right-of-use assets include a number of Parcel sorting centres and sorting machines financed and owned by an entity especially set up for this purpose by a third party. The term of the related lease contracts and liabilities is 10 years. Up to 31 December 2022, 5 sorting centres and sorting machines (2018: 1, 2019: 3, 2021: 1) have been finalised and leased from this special entity, for which the related property, plant and equipment assets (2 locations with a total book value of \u20ac36 million at 31 December 2022) and corresponding (legal) lease loans, and right-of-use assets (3 locations) and corresponding lease liabilities have been recorded.
Further the right-of-use assets include four mail sorting centres and the international sorting centre with lease terms varying between 5 and 10 years (started in 2020) and the head office in The Hague with a lease term of 15 years (started in 2021).
At 31 December | 2021 | 2022 |
|---|---|---|
Long-term lease liabilities | 269 | 255 |
Short-term lease liabilities | 65 | 75 |
Total | 333 | 331 |
The total cash outflow from leases amounted to \u20ac86 million (2021: \u20ac82 million) and related for \u20ac74 million to repayments of lease liabilities (2021: \u20ac74 million, partly offset by \u20ac5 million of incentives received), and for \u20ac12 million to rent and lease expenses (2021: \u20ac13 million). Refer to note 4.1 for further information on the lease liabilities.
In 2022, rent and lease expenses of \u20ac12 million (2021: \u20ac13 million) relate for \u20ac10 million (2021: \u20ac11 million) to short-term leases and for \u20ac2 million (2021: \u20ac2 million) to leases for which the underlying asset is of low value. The interest expenses on lease liabilities amounted to \u20ac9 million (2021: \u20ac7 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-457": { "value": "PostNL leases sorting centres, sorting machines, distribution centres, offices, warehouses, trucks, vans, cars, transport equipment and other equipment. Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the group. At the commencement date of the lease, the lease liabilities are measured at the present value of lease payments to be made over the lease term. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the incremental borrowing rate is used, being the rate that would have to be paid to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The lease payments include the exercise price of a purchase option reasonably certain to be exercised by PostNL and payments of penalties for terminating the lease, if the lease term reflects PostNL exercising the option to terminate. Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
PostNL elected to apply the practical expedient not to separate non-lease components from lease components, and instead account for each lease component and any associated non-lease components as a single lease component. PostNL elected also the practical expedient not to apply the requirements for short-term leases (with a lease term of 12 months or less and which do not contain a purchase option) and leases for which the underlying asset is of low value (<\u20ac5 thousand). The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.
The following table presents the changes in the carrying value of the financial assets at fair value through OCI.
| \u00a0 | 2021 | 2022 |
|---|---|---|
Balance at 1 January | 15 | 28 |
Additions | 2 | 1 |
Remeasurement recognised in OCI | 12 | (8) |
Repayment of our stake in Endeit | (1) | (2) |
Balance at 31 December | 28 | 20 |
As at 31 December 2022, the investments in financial assets at fair value through OCI relate to investments in equity shares of non-listed companies. PostNL holds non-controlling interests in Whistl Group Holdings Limited, Endeit Fund II Coo\u0308peratief U.A., Endeit Fund III Coo\u0308peratief U.A. and Clean Clothes B.V. The assessment of fair value is based on key performance indicators included in related management and statutory reports and derived from the expected development of business and financial performance and external valuation insights, if available. In 2022, the fair value remeasurement of \u20ac(8) million mainly related to our stake in Whistl.
In line with IFRS 9 and IFRS 13, the following categories of financial assets and financial liabilities can be distinguished.
At 31 December | Notes | Input information level (IFRS13) | Loans and receivables | Derivatives used for hedging | Financial assets at fair value through OCI | Total |
|---|---|---|---|---|---|---|
Other loans receivable | \u00a0 | level 2 | 20 | \u00a0 | \u00a0 | 20 |
Other financial fixed assets | \u00a0 | level 3 | \u00a0 | \u00a0 | 28 | 28 |
Accounts receivable | level 2 | 411 | \u00a0 | \u00a0 | 411 | |
Derivatives1 | \u00a0 | level 2 | \u00a0 | 1 | \u00a0 | 1 |
Cash and cash equivalents | \u00a0 | 848 | \u00a0 | \u00a0 | 848 | |
Total assets balance sheet 2021 | \u00a0 | \u00a0 | 1,279 | 1 | 28 | 1,308 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Other loans receivable | \u00a0 | level 2 | 17 | \u00a0 | \u00a0 | 17 |
Other financial fixed assets | \u00a0 | level 3 | \u00a0 | \u00a0 | 20 | 20 |
Accounts receivable | level 2 | 382 | \u00a0 | \u00a0 | 382 | |
Derivatives1 | \u00a0 | level 2 | \u00a0 | 5 | \u00a0 | 5 |
Cash and cash equivalents | \u00a0 | 556 | \u00a0 | \u00a0 | 556 | |
Total assets balance sheet 2022 | \u00a0 | \u00a0 | 955 | 5 | 20 | 980 |
Fair value represents the price that would be received when selling an asset in an orderly transaction between willing market participants. For the level 3 financial assets at fair value through OCI our valuations have been measured by using the market approach as per 31 December 2021 and 31 December 2022.
At 31 December | Notes | Input information level (IFRS13) | Financial liabilities measured at amortised costs | Derivatives used for hedging | Total |
|---|---|---|---|---|---|
Long-term debt | level 1&21 | 728 | \u00a0 | 728 | |
Trade accounts payable | \u00a0 | level 22 | 168 | \u00a0 | 168 |
Short-term debt | level 22 | 4 | \u00a0 | 4 | |
Other current liabilities3 | level 22 | 54 | 1 | 55 | |
Total liabilities balance sheet 2021 | \u00a0 | \u00a0 | 954 | 1 | 955 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Long-term debt | level 1&21 | 725 | \u00a0 | 725 | |
Trade accounts payable | \u00a0 | level 22 | 182 | \u00a0 | 182 |
Short-term debt | level 22 | 21 | \u00a0 | 21 | |
Other current liabilities3 | level 22 | 52 | 3 | 55 | |
Total liabilities balance sheet 2022 | \u00a0 | \u00a0 | 979 | 3 | 982 |
All financial instruments are reported on a gross basis per instrument. Netting of financial instruments per contractual counterparty will not have a material impact on the outstanding balances.
For the details on the outstanding eurobonds, see the following table.
At 31 December | Nominal | Costs/discount to be amortised | Carrying | Fair |
|---|---|---|---|---|
1.000% eurobond 2024 | 400 | 1 | 399 | 410 |
0.625% eurobond 2026 | 300 | 3 | 297 | 306 |
Total outstanding eurobonds 2021 | 700 | 3 | 697 | 716 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
1.000% eurobond 2024 | 400 | 1 | 399 | 380 |
0.625% eurobond 2026 | 300 | 2 | 298 | 267 |
Total outstanding eurobonds 2022 | 700 | 3 | 697 | 647 |
For the details on the outstanding leases, see the table below.
At 31 December | Nominal | Fixed/floating interest | Carrying | Fair value |
|---|---|---|---|---|
Total outstanding leases 2021 | 333 | fixed | 333 | 333 |
Total outstanding leases 2022 | 331 | fixed | 331 | 331 |
For the details on the outstanding foreign exchange contracts, see the table below.
At 31 December | Carrying value | Fair value | Nominal value | Hedge | Amount in equity |
|---|---|---|---|---|---|
Asset | 1 | 1 | 86 | balance sheet/cashflow | 0 |
Liability | 1 | 1 | 112 | balance sheet/cashflow | 0 |
Foreign exchange contracts 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Asset | 1 | 1 | 76 | balance sheet/cashflow | 1 |
Liability | 3 | 3 | 141 | balance sheet/cashflow | (2) |
Foreign exchange contracts 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
The fair value of these outstanding foreign exchange hedges is recorded as a current asset in \u2018prepayments and accrued income\u2019 or as a current liability in \u2018other current liabilities\u2019 and includes credit valuation adjustments.
In 2022, the total ineffective portion on all derivatives recognised in the income statement that arises from the use of fair value and cash flow hedges amounted to \u20ac0 million (2021: \u20ac0 million).
For the details on the outstanding interest rate swaps, see the table below.
At 31 December | Carrying value | Fair value | Nominal value | Hedge | Amount in equity |
|---|---|---|---|---|---|
Interest rate swaps 2021 | 0 | 0 | 0 | balance sheet/cashflow | 0 |
Interest rate swaps 2022 | 4 | 4 | 51 | balance sheet/cashflow | 3 |
The fair value of these outstanding interest rate swaps is recorded as a current asset in \u2018prepayments and accrued income\u2019 or as a current liability in \u2018other current liabilities\u2019 and includes credit valuation adjustments.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-436": { "value": "4.3 Capital management Capital management is focused on the following components of the current capital structure: targeting a leverage ratio (adjusted net debt/EBITDA) not exceeding 2.0 (outcome 2022: 1.9); structural availability of \u20ac100 million to \u20ac200 million of undrawn committed facilities out of our revolving credit facility (reference is made to note 4.4); structural funding via a combination of public and bank debt, with a risk-weighted mix of fixed and floating interest; cash pooling systems that ensure optimal cash requirements for the PostNL Group by facilitating centralised funding and surplus cash concentration at group level; tax-optimal internal and external funding focused on optimising the cost of capital for PostNL, within boundaries that are sustainable on a long-term basis. ", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-437": { "value": "4.4 Financial risk management PostNL\u2019s activities expose the company to a variety of financial risks, such as interest rate risk, foreign currency exchange risk, credit risk and liquidity risk. All these risks arise in the normal course of business and PostNL therefore uses various techniques and financial derivatives to mitigate them. The following analyses provides quantitative information regarding PostNL\u2019s exposure to the financial risks described above. There are certain limitations and simplifications inherent in the analyses presented, primarily due to the assumption that rates change in a parallel fashion and instantaneously. At the same time, for example, the impact of changes in interest on foreign exchange exposures and vice versa is ignored. In addition, the analyses are unable to reflect the complex market reactions that would normally arise from the market shifts assumed. PostNL uses derivative financial instruments solely for the purpose of hedging currency and interest exposures. The company enters into contracts related to derivative financial instruments for periods commensurate with its underlying exposures and does not take positions independent of these exposures. None of these financial instruments are leveraged or used for trading purposes or to take speculative positions. Financial risk management is carried out by Group Treasury under policies approved by the Board of Management. Group Treasury identifies, evaluates and hedges financial risks and exposures in close cooperation with operating units. The Board of Management provides written principles for overall risk management, as well as written policies covering the financial risks. Periodic reporting on financial risks is embedded in the overall risk framework and is provided to the Board of Management in a structural way. Group Treasury matches and manages the intragroup and external financial exposures. Although the company generally enters into hedging arrangements and other contracts to reduce its exposures, these measures may be inadequate or may subject the company to increased operating or financing costs. Interest rate risk PostNL identifies interest rate risk associated with its financial assets and borrowings. Virtually all debts are at fixed rates, a movement in the rate will therefore only affect the cost base per the moment of fixing the rate of the debt instrument. PostNL enters into hedging arrangements to mitigate the interest exposure, at the moment the execution of material lease and debt instruments becomes more certain. As at 31 December 2022, PostNL\u2019s gross interest-bearing borrowings, including lease obligations, totalled \u20ac1,076 million (2021: \u20ac1,066 million), all at fixed interest rates. Financial assets are on average of a short-term nature. At 31 December 2022, if interest rates on borrowings and financial assets had been 1% higher with other variables held constant, the profit before income tax would have been \u20ac6 million higher (2021: \u20ac8 million). The potential profit increase is entirely attributable to interest income on the cash and cash equivalents. Equity would be positively affected by \u20ac6 million (2021: \u20ac6 million), mainly due to the interest income on cash and cash equivalents and the cash flow hedge impact on equity of the outstanding interest rate swaps. Foreign currency exchange risk PostNL has international operations that generate foreign currency exchange risks arising from future commercial transactions, recognised assets and liabilities, investments and divestments in foreign currencies other than functional currencies of the respective business units of PostNL, irrespective of whether it is the euro (PostNL\u2019s functional and reporting currency) or another functional currency. For accounting purposes the European Central Bank is used as the source. The main currencies of PostNL\u2019s external hedges are the British Pound, Hong Kong Dollar and US Dollar. The Board of Management has set a policy requiring Group companies to manage their foreign exchange risk against the functional currency. Group companies are required to hedge material exposures via the use of foreign exchange derivatives with Group Treasury, whereby a financing company operated by Group Treasury trades these foreign exchange derivatives with external banks. As at 31 December 2022, PostNL had no net investment hedges outstanding. Significant acquisitions and local debt are usually funded in the currency of the underlying assets. As at 31 December 2022, if the euro had weakened 10% against the British Pound, the Hong Kong Dollar and the US Dollar with all other variables held constant, the profit before income taxes on the foreign exchange exposure on financial instruments would have been \u20ac0 million lower/higher (2021: \u20ac0 million). In 2022, the net income sensitivity to movements in euro/pound sterling, euro/HK dollar and euro/US dollar exchange rates is negligible and did not change compared to 2021. Equity would have been positively impacted by \u20ac2 million (2021: \u20ac2 million), all related to the move in the hedge reserve. Credit risk Credit risk represents the potential losses that the company would incur if counterparties are unable to fulfil the terms of underlying agreements. Credit risk arises from cash and cash equivalents, derivatives and deposits with banks and financial institutions as well as credit exposures relating to customers. The credit risk exposure is minimised by only transacting with financial institutions, ensuring established credit guidelines are met and by managing its customer portfolio. The top 10 trade accounts receivable accounted for 21% of outstanding trade receivables as at 31 December 2022. In 2022, we noticed no material negative impact from Covid-19 on the payment behaviour of our customers. Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, PostNL attempts to maintain flexibility in funding by keeping committed credit lines available. The terms and conditions of PostNL\u2019s material long-term and short-term debts, as well as its material drawn or undrawn committed credit facilities do not include any financial covenants. There are no obligations to accelerate repayments of these material debts and committed facilities in the event of a credit rating downgrade. A downgrade in PostNL\u2019s credit rating may negatively affect its ability to obtain funds from financial institutions and banks and increase its financing costs by increasing the interest rates on its outstanding debt or the interest rates at which the company is able to refinance existing debt or incur new debt. At 31 December 2022, the \u20ac200 million committed credit facility (maturity date: December 2026) was undrawn (2021: undrawn). The following table analyses PostNL\u2019s financial liabilities, categorising them into relevant maturity groupings based on the remaining period on the balance sheet to the contractual maturity date. The outgoing flows disclosed in the table are the contractual undiscounted cash flows that contain the redemptions and interest payments. PostNL Maturity liquidity risks in \u20ac\u00a0million 2021, 2022 At 31 December Less than 1 year Between 1 and 3 years Thereafter Book value Eurobonds 6 412 304 697 Leases 71 125 164 333 Other loans 5 9 24 36 Foreign exchange contracts - outgoing 317 \u00a0\u00a01 Trade accounts payable 168 \u00a0\u00a0168 Other current liabilities 54 \u00a0\u00a054 Total outgoing flows 621 546 492 1,289 \u00a0\u00a0\u00a0\u00a0\u00a0Foreign exchange contracts - incoming 317 \u00a0\u00a0\u00a0Total mitigation via incoming flows 317 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total liquidity risk 2021 304 546 492 1,289 \u00a0\u00a0\u00a0\u00a0\u00a0Eurobonds 6 408 302 697 Leases 83 128 151 331 Other loans 21 9 20 48 Foreign exchange contracts - outgoing 217 \u00a0\u00a01 Trade accounts payable 182 \u00a0\u00a0182 Other current liabilities 54 \u00a0\u00a054 Total outgoing flows 563 545 473 1,313 \u00a0\u00a0\u00a0\u00a0\u00a0Foreign exchange contracts - incoming 217 \u00a0\u00a0\u00a0Total mitigation via incoming flows 217 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total liquidity risk 2022 346 545 473 1,313 ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-439": { "value": "4.6 Equity Accounting policies Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Where any Group company purchases PostNL\u2019s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, are included in equity. Authorised share capital Since 4 August 2011, the company\u2019s authorised share capital amounts to \u20ac120 million, divided into 750,000,000 ordinary shares and 750,000,000 preference shares B, both of \u20ac0.08 nominal value each. Form of shares The ordinary shares are in deposit or registered form. Deposit shares are represented by a global note held by the Dutch clearing system Euroclear Netherlands and are transferable through Euroclear Netherlands\u2019 book entry system. Ordinary shares in registered form are transferred by means of a deed of transfer and PostNL\u2019s written acknowledgement of the transfer. PostNL does not have share certificates for ordinary shares represented by the global note. The preference shares B are in registered form. Issued share capital At 31 December 2022, the company's issued share capital amounted to \u20ac39 million (2021: \u20ac41 million). The number of authorised, issued and outstanding shares by class of share is as presented in the table hereafter. Issuance/repurchase of shares to cover share plans In 2022, PostNL repurchased 51 million ordinary shares under the first tranche of the share buyback programme. Out of the 51 million shares, 16,358,973 shares were used for the payment of the 2021 final dividend in stock, 7,868,569 shares were used for the payment of the 2022 interim dividend in stock and 1,051,073 shares were used for the settlement of PostNL\u2019s equity-settled share plans. The remaining 25,721,385 shares were cancelled on 22 November 2022. For all equity-settled share plans, PostNL intends to perform the settlement by issuing new shares or assigning repurchased shares to 'Stichting Managementparticipatie PostNL' (Foundation Management Participation PostNL). In 2022, the company issued 0 ordinary shares (2021: 747,526 shares) under its incentive schemes to 'Stichting Managementparticipatie PostNL' (Foundation Management Participation PostNL), and assigned 1,051,073 repurchased ordinary shares (2021: 0) under its incentive schemes to 'Stichting Managementparticipatie PostNL' (Foundation Management Participation PostNL). As at 31 December 2022, the company held no shares to cover its obligations under the existing share plans or for cancellation (2021: 0 shares). PostNL Shares number of shares 2021, 2022 Before proposed appropriation of profit 2021 2022 Authorised by class \u00a0\u00a0Ordinary shares 750,000,000 750,000,000 Preference shares B 750,000,000 750,000,000 Total authorised 1,500,000,000 1,500,000,000 \u00a0\u00a0\u00a0Issued and outstanding \u00a0\u00a0Per 1 January of the reported year 494,991,389 513,252,013 Cancellation of repurchased shares \u00a0(25,721,385) Issued for stock dividend 17,513,098 0 Issued under its incentive schemes 747,526 0 Per 31 December of the reported year 513,252,013 487,530,628 \u00a0\u00a0\u00a0Issued and outstanding per 31 December by class \u00a0\u00a0Ordinary shares 513,252,013 487,530,628 of which held by the company to cover share plans 0 0 of which a foundation incorporated by the company only holds the legal title 1,852,045 2,273,128 Preference shares B 0 0 Incentive scheme and Foundation Management Participation PostNL For administration and compliance purposes, since May 2013 all shares belonging to PostNL employees under PostNL incentive schemes are held by Stichting Managementparticipatie PostNL (Foundation Management Participation PostNL). These shares are held on an omnibus securities account with ABN AMRO Bank, the Netherlands. Foundation Management Participation PostNL legally owns the shares, while the beneficial ownership of the shares is vested in the employees, who are also entitled to dividend received by Foundation Management Participation PostNL on their behalf. At 31 December 2022, the number of PostNL shares involved amounted to 2,273,128 shares (2021: 1,852,045 shares) with a nominal value of \u20ac0.08 per share. Foundation Continuity PostNL and preference shares B Stichting Continuiteit PostNL (Foundation Continuity PostNL) was formed to safeguard the interests of PostNL, the undertaking connected with PostNL and all parties involved. It does this by, among other things, preventing any influences that could threaten PostNL\u2019s continuity, independence and identity, as far as possible. Foundation Continuity PostNL is an independent legal entity and is not owned or controlled by PostNL or any other legal person. PostNL\u2019s articles of association provide for protective preference shares B that can be issued to Foundation Continuity PostNL to serve these interests. The preference shares B have a nominal value of \u20ac0.08 and have the same voting rights as PostNL\u2019s ordinary shares. PostNL and Foundation Continuity PostNL have entered into a call option agreement, which enables Foundation Continuity PostNL to acquire a number of preference shares B not exceeding the total issued amount of shares minus one and minus any shares already issued to Foundation Continuity PostNL. The call option agreement is meant as a preventive countermeasure against influences that might threaten the continuity, independence and identity of the company. Preference shares B will be outstanding no longer than is strictly necessary. At 31 December 2022 no preference shares B were issued. Additional paid-in capital At 31 December 2022, additional paid-in capital of \u20ac163 million (2021: \u20ac163 million) is fully exempt for Dutch tax purposes to the extent that this has been paid in by shareholders of the company. ", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-466": { "value": "Accounting policies Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Where any Group company purchases PostNL\u2019s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, are included in equity. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-441": { "value": "5.1 Remuneration of Supervisory Board, Board of Management and senior management Accounting policies Equity-settled share-based compensation plans PostNL operates a number of equity-settled share-based compensation plans, under which the employees receive (conditional) shares of the Group for services rendered. The fair value of the employee services received, as measured at the grant date, in exchange for the grant of the shares is recognised as an expense, with a corresponding increase in equity. Non-market performance and service conditions are included in assumptions about the number of (conditional) shares that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all the specified vesting conditions are to be satisfied. In addition, for some share-based compensation plans, employees provide services in advance of the grant date and therefore the grant date fair value is estimated for the purposes of recognising the expense between service commencement date and grant date. At the end of each reporting period, the Group revises its estimates of the number of shares that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity. Remuneration of members of the Supervisory Board Total remuneration of the Supervisory Board in 2022 amounted to \u20ac357,937 (2021: \u20ac341,840). For details see the 'Remuneration report'. The members of the Supervisory Board receive no compensation related to performance and/or equity and accrue no pension rights with the company. The members of the Supervisory Board receive no severance payments in the event of termination. PostNL does not grant loans, including mortgage loans, advance payments, guarantees and options or shares to any member of the Supervisory Board. Remuneration of members of the Board of Management In 2022, the total remuneration based on IFRS of the Board of Management amounted to \u20ac2,057,994 (2021: \u20ac2,164,617). The following table presents total remuneration of the Board of Management: PostNL Remuneration of the Board of Management in \u20ac 2021, 2022 \u00a0\u00a0Base salary1 Other benefits2 Pension costs3 One year variable Multi-year variable Total remuneration Herna Verhagen - CEO 2022 679,639 188,717 45,565 \u00a0263,564 1,177,485 2021 659,844 183,551 42,595 173,209 177,877 1,237,076 Pim Berendsen - CFO 2022 516,526 118,078 45,594 \u00a0200,311 880,509 2021 501,481 112,874 46,362 131,639 135,185 927,541 1 Base salaries 2022 were indexed with 3.0%. 2 Other benefits include company costs related to tax and social security, pension allowances, company car and other compensation. 3 Pension costs represent the service costs of the defined benefit scheme and risk premium for the net pension plan. Base salary The base salaries for both members of the Board of Management were increased with 3% in 2022 compared to 2021 in line with the remuneration policy. Accrued for short-term incentive PostNL accounts for the short-term incentive on the basis of the performance of the year reported. In 2022, as targets were not achieved no accrual was formed to pay in 2023. In 2022, an amount of \u20ac304,848 was paid to the members of the Board of Management in relation to the short-term incentive of 2021. Accrued for long-term incentive In 2022, the total share-based payment costs relating to the long-term incentive performance share plan for the members of the Board of Management amounted to \u20ac463,875 (2021: \u20ac313,062). Performance share plan (PSP) The members of the Board of Management are awarded a long-term incentive, which represents a maximum potential reward of 37.5% of the annual base salary in the form of a performance share plan. The characteristics of this performance share plan are: it is a conditional equity-settled share plan based on a three-year performance period each year shares are conditionally allocated to members of the Board of Management a conditional dividend equivalent is added to the conditional shares equal to the dividend rights of ordinary shares the conditional shares and their conditional dividend equivalents will vest after a performance period of three years vesting is subject to the achievement of targets set on each of the long-term performance measures supportive to the attainment of PostNL\u2019s strategy if a member of the Board of Management leaves the company during the performance period due to circumstances involving fraud or gross misbehaviour, any accrued rights on the long-term incentive plan will terminate and become void if a member of the Board of Management leaves the company due to other reasons, a pro rata performance and time-based vesting applies, unless decided otherwise by the Supervisory board In compliance with the Dutch Corporate Governance Code, following a three-year performance period, the holding period for vested shares expires two years thereafter or at termination of employment/service if this occurs earlier. For compliance reasons, a sale of shares may not occur within six months following the date of termination of the employment/service. Any sale of shares for the purpose of using the proceeds to pay for the tax due at vesting of these shares is exempted. PostNL Performance share plan Board of Management number of shares 2022 Name of Director - position Specification of plan Number of shares held at 1 Jan 2022 Number of shares granted during 20221 Number of dividend shares2 Number of shares settled during 2022 Number of shares forfeited during 2022 Net number of shares under a holding period at 31 Dec 2022 Number of shares subject to a performance condition at 31 Dec 2022 Herna Verhagen - CEO PSP 2022 \u00a078,839 5,086 \u00a0\u00a0\u00a083,925 \u00a0PSP 2021 54,837 \u00a010,214 \u00a0\u00a0\u00a065,051 \u00a0PSP 2020 176,204 \u00a032,817 \u00a0\u00a0\u00a0209,021 \u00a0PSP 2019 115,090 \u00a013,161 (85,501) (42,750) 44,246 \u00a0\u00a0PSP 2018 30,687 \u00a0\u00a0\u00a0\u00a030,687 \u00a0\u00a0PSP 2017 10,629 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total shares 387,447 78,839 61,278 (85,501) (42,750) 74,933 357,997 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Pim Berendsen - CFO PSP 2022 \u00a059,917 3,866 \u00a0\u00a0\u00a063,783 \u00a0PSP 2021 41,677 \u00a07,763 \u00a0\u00a0\u00a049,440 \u00a0PSP 2020 133,915 \u00a024,941 \u00a0\u00a0\u00a0158,856 \u00a0PSP 2019 87,470 \u00a010,003 (64,982) (32,491) 33,628 \u00a0\u00a0PSP 2018 23,322 \u00a0\u00a0\u00a0\u00a023,322 \u00a0\u00a0Total shares 286,384 59,917 46,573 (64,982) (32,491) 56,950 272,079 Total shares \u00a0673,831 138,756 107,851 (150,483) (75,241) 131,883 630,076 1 The number of conditional shares granted is based on 37.5% of the annual base salary divided by the five-day average Euronext Amsterdam share price of PostNL prior to the date of publication of the Q1 2022 results (\u20ac3.139). 2 Conditional dividend shares were granted following the final dividend 2021 and interim dividend 2022. PostNL The main conditions of share award plans 2022 Specification of plan Performance period Grant date PSP 2022 01/01/2022-31/12/2024 12/05/2022 PSP 2021 01/01/2021-31/12/2023 14/05/2021 PSP 2020 01/01/2020-31/12/2022 06/05/2020 PSP 2019 01/01/2019-31/12/2021 10/05/2019 PSP 2018 01/01/2018-31/12/2020 09/05/2018 The vesting date is generally equal to grand date plus three years. Subsequently a holding period of two years applies. Note that the number of outstanding conditional shares does not represent the total number of shares held by each member of the Board of Management, which includes vested shares under PostNL's performance share plan and variable remuneration. Reference is made to chapter 15 Remuneration, section actual remuneration, tabel 'Shares held by Board of Management'. In 2022, an amount of \u20ac463,875 (2021: \u20ac313,062) was expensed for the cost of the performance shares of the Board of Management. The costs are determined by multiplying the number of granted performance shares by the fair value of such shares on the date of the grant (PSP 2022: \u20ac2.817 per share; PSP 2021: \u20ac4.375 per share; PSP 2020: \u20ac1.341 per share; PSP 2019: \u20ac1.853 per share) and by taking into account expected vesting percentages. Other periodic compensation Other periodic compensation included company costs related to tax and social security, pension allowances, company car and other compensation. Pension costs The pension costs consist of the service costs for the reported year (net of employee contributions) and risk premium for the net pension plan. The members of the Board of Management are participants in a career average defined benefit scheme. Loans, advance payments of guarantees No loans, advance payments or guarantees were granted to members of the Board of Management in 2022 (2021: nil). Remuneration of senior management Short-term incentive The short-term incentive for senior management represents a potential reward of a percentage of the annual base salary (the percentage depending on the job level), which is based on annual performance measures. Of the realised achievements, 50% is paid in cash and 50% is paid in PostNL shares in the following year. Shares will be granted unconditionally and will be delivered without restrictions or a restricted period, other than those defined in the PostNL insider trading policy. The 50% of the short-term incentive settled in shares is accounted for as an equity-settled share-based payment. The accrued share-based payment costs relating to this short-term incentive amounted to \u20ac0.4 million in 2022 (2021: \u20ac1.8 million). The realised amounts will be granted and paid in PostNL shares in 2023. Performance share plan A selected group of members of senior management is awarded a long-term incentive, which represents a potential reward of 37.5% of the annual base salary in the form of a performance share plan that contains three-year performance measures. The long-term incentive is part of the remuneration package for this selected group of senior management. It is aimed particularly at aligning their interests with the long-term interests of the company and its shareholders. The performance share plan contains the same characteristics as the performance share plan of the Board of Management with the exception that there is no holding period applicable for senior management. PostNL Performance share plan senior management 2022 Specification of plan Number of shares held at 1 Jan 2022 Number of shares granted during 20221 Number of dividend shares2 Number of shares settled during 2022 Number of shares forfeited during 2022 Number of shares outstanding at 31 Dec 2022 PSP 2022 \u00a0221,543 14,295 \u00a0\u00a0235,838 PSP 2021 151,686 \u00a028,257 \u00a0\u00a0179,943 PSP 2020 421,442 \u00a078,495 \u00a0\u00a0499,937 PSP 2019 267,037 \u00a030,538 (198,384) (99,191) 0 Total shares 840,165 221,543 151,585 (198,384) (99,191) 915,718 1 The number of conditional shares is based on 37.5% of the annual base salary divided by the five-day average Euronext Amsterdam share price of PostNL prior to the date of publication of the Q1 2022 results (\u20ac3,139). 2 Conditional dividend shares were granted following the final dividend 2021 and interim dividend 2022. In 2022, an amount of \u20ac570,446 (2021: \u20ac500,642) was expensed for the cost of the performance shares of senior management. The costs are determined by multiplying the number of granted performance shares by the fair value of such shares on the date of the grant (PSP 2022: \u20ac2.817 per share; PSP 2021: \u20ac4.375 per share; PSP 2020: \u20ac1.341 per share; PSP 2019: \u20ac1.853 per share) and by taking into account expected vesting percentages. Bonus matching share plan Since 2011, senior management have had the opportunity, on a voluntary basis, to participate in a bonus/matching plan. The company sees the bonus matching plan as part of the remuneration package for the members of senior management, particularly aimed at aligning their interests with the long-term interests of the company and shareholders. At the discretion of the Supervisory Board, grants are made on an annual basis in accordance with the bonus matching plan which has been approved by the Supervisory Board. The significant aspects of the plan are: bonus shares are purchased by the participant using 25% of the gross (cash) variable remuneration and delivered upon the grant of the right on matching shares the number of bonus shares is calculated by dividing 25% of an individual\u2019s gross annual cash bonus relating to the preceding financial year by the share price on Euronext Amsterdam on the date the grant is made the rights to matching shares are granted free of charge. The number of matching shares is equal to the number of bonus shares (equity settled scheme) the matching rights vest three years after the delivery of the bonus shares for each bonus share that is sold within three years, the associated right to one matching share lapses. If more than 50% of the bonus shares are sold within three years, the entire right to matching shares lapses with immediate effect if a participant leaves the company for certain reasons (retirement, certain reorganisations, disability or death), the right to matching shares will vest immediately and he/she can exercise his/her right pro rata a participant loses the right to exercise his/her right on matching shares when he/she leaves the company for reasons other than those mentioned The exercise of the rights to matching shares is subject to the PostNL insiders trading policy. PostNL Bonus matching plan senior management 2022 Specification of plan Vesting period Number of shares outstanding at 1 Jan 2022 Number of shares granted during 2022 Number of shares settled during 2022 Number of shares forfeited during 2022 Number of shares outstanding at 31 Dec 2022 Bonus matching 2022 12/05/2022-12/05/2025 \u00a045,561 \u00a0\u00a045,561 Bonus matching 2021 14/05/2021-14/05/2024 37,908 \u00a0- (3,302) 34,606 Bonus matching 2020 06/05/2020-06/05/2023 50,598 \u00a0- (6,135) 44,463 Bonus matching 2019 10/05/2019-10/05/2022 34,536 \u00a0(34,274) (262) 0 Total \u00a0123,042 45,561 (34,274) (9,699) 124,630 In 2022, an amount of \u20ac94,917 (2021: \u20ac75,326) was expensed for the cost of the equity-settled bonus matching shares. The costs are determined by multiplying the number of granted matching shares by the fair value of such shares on the date of the grant (2022: \u20ac2.817 per share; 2021: \u20ac4.375 per share; 2020: \u20ac1.341 per share; 2019: \u20ac1.853 per share) and by taking into account expected vesting percentages. Financing of equity-settled plans For all equity-settled and cash-settled share plans, PostNL intends to perform the settlement (or in case of cash-settled plans, fund the settlement) by issuing new shares or assigning repurchased shares. Accordingly, the company does not need to actively hedge the risk in connection with its obligations. As a result, the company assigned 1,051,073 repurchased shares in 2022 (2021: 0) to cover its obligations under the existing share plans. As at 31 December 2022, the total number of shares held for this purpose was nil (2021: 0). ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-467": { "value": "Accounting policies Equity-settled share-based compensation plans PostNL operates a number of equity-settled share-based compensation plans, under which the employees receive (conditional) shares of the Group for services rendered. The fair value of the employee services received, as measured at the grant date, in exchange for the grant of the shares is recognised as an expense, with a corresponding increase in equity. Non-market performance and service conditions are included in assumptions about the number of (conditional) shares that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all the specified vesting conditions are to be satisfied. In addition, for some share-based compensation plans, employees provide services in advance of the grant date and therefore the grant date fair value is estimated for the purposes of recognising the expense between service commencement date and grant date. At the end of each reporting period, the Group revises its estimates of the number of shares that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-442": { "value": "5.2 Related party transactions and balances The identified related parties of the Group are its Group companies, its joint ventures and associates, shareholders with significant influence, its pension fund and the members of the Board of Management and Supervisory Board. The PostNL Group companies have trading relationships with a number of joint ventures as well as with companies in which PostNL holds minority stakes. In some cases, there are contractual arrangements in place under which PostNL companies source supplies from such undertakings, or such undertakings source supplies from PostNL. Transactions are carried out at arm's length. During 2022, sales of PostNL to joint ventures and associates amounted to \u20ac3 million (2021: \u20ac0 million). Purchases of PostNL from joint ventures and associates amounted to \u20ac0 million (2021: \u20ac0 million). The net amounts due from the joint ventures and associates amounted to \u20ac0 million (2021: \u20ac0 million). Related party transactions with PostNL\u2019s pension fund are presented in note 3.5 to the consolidated financial statements. PostNL considers the members of the Board of Management and Supervisory Board as key management personnel as defined by IAS 24. For disclosure on related party transactions with the Board of Management and Supervisory Board, see note 5.1 to the consolidated financial statements. ", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-443": { "value": "5.3 Business combinations In 2022, PostNL did not acquire new business by the acquisition of the shares of other entities. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-468": { "value": "5.4 Summary of all other accounting policies Consolidation The consolidated financial statements include the financial figures of PostNL N.V. and its subsidiaries, associates and joint ventures and have been prepared using uniform accounting policies for like transactions and other events in similar circumstances. All significant intercompany transactions and balances have been eliminated on consolidation. A complete list of subsidiaries, associates and joint ventures included in PostNL\u2019s consolidated financial statements is filed for public review at the Chamber of Commerce in The Hague. This list has been prepared in accordance with the provisions of article 379 (1) and article 414 of book 2 of the Dutch Civil Code. Subsidiaries A subsidiary is an entity controlled directly or indirectly by PostNL N.V. Control is defined as the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether PostNL controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to PostNL and are de-consolidated from the date on which control ceases. PostNL uses the acquisition method of accounting to account for the acquisition of subsidiaries. The consideration of an acquisition is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of exchange. The consideration transferred also includes the fair value arising from contingent consideration arrangements. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values on the acquisition date irrespective of the extent of any non-controlling interest. Acquisition-related costs are expensed as incurred. The excess of the consideration transferred over the fair value of PostNL\u2019s share of the identifiable net assets of the subsidiary is recorded as goodwill. If the cost of acquisition is less than the fair value of PostNL\u2019s share of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement. The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. When the Group ceases to have control or significant influence, any retained interest in the entity is re-measured to its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequent accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are recycled to profit or loss. The non-controlling interest is initially measured at the proportion of the non-controlling interest in the recognised net fair value of the assets, liabilities and contingent liabilities. Losses applicable to the non-controlling interest in excess of the non-controlling interest in the subsidiary\u2019s equity are allocated against PostNL\u2019s interests. Functional currency and presentation currency Items included in the financial statements of each of the Group\u2019s entities are measured using the currency of the primary environment in which the entity operates ('the functional currency'). These consolidated financial statements are presented in euros, which is PostNL\u2019s functional and presentation currency. Foreign currency transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transactions. Monetary assets and liabilities in foreign currencies are translated to the functional currency using year-end exchange rates. Foreign currency exchange gains and losses resulting from the settlement of foreign currency transactions and balances and from the translation at year-end exchange rates are recognised in the income statement except for qualifying cash flow hedges and qualifying net investment hedges that are directly recognised in other comprehensive income. Foreign operations The results and financial position of all Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: assets and liabilities are translated at the closing exchange rates, income and expenses are translated at average exchange rates, and the resulting exchange rate differences based on the different ways of translating between the balance sheet and the income statement are recognised as a separate component of equity (translation reserve). Foreign currency exchange differences arising from the translation of the net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to the translation reserve. When a foreign operation is sold, such exchange differences are recycled in the income statement as part of the gain or loss on the sale. Impairment of goodwill Goodwill is not subject to amortisation but is tested for impairment annually or whenever there is an indication that the asset might be impaired. For the purposes of assessing impairment, assets are grouped at the lowest levels at which there are separately identifiable cash flows, being the cash-generating units (CGUs). If the recoverable value of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of the goodwill allocated to the CGU and then pro rata to other assets of the CGU. The recoverable amount is the higher of the fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the asset-specific risks. For the purpose of assessing impairment, corporate assets are allocated to specific CGUs before impairment testing. The allocation of the corporate assets is based on the contribution of those assets to the future cash flows of the CGU under review. Impairment losses recognised for goodwill are not reversed in a subsequent period. Impairment of investments in joint ventures and associates PostNL assesses on each balance sheet date whether there is objective evidence that an investment in a joint venture or associate may need to be impaired. If the recoverable value of the investment is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The recoverable amount is the higher of the fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the asset-specific risks. The fair value less costs of disposal of a joint venture or associate is reviewed based on observable publicly available market data. Possible impairment charges may be reversed if there is an indication that the impairment no longer exists or has been reduced. Impairment of finite-lived intangible assets and property, plant and equipment At each balance sheet date, PostNL reviews its finite-lived intangible assets and property, plant and equipment for an indication of impairment. If any indication exists, the recoverable amount of the assets is estimated. The recoverable amount is defined as the higher of an asset\u2019s fair value less costs of disposal and its value in use. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Any impairment loss is recognised immediately in the income statement. Impairment losses recognised in prior periods shall be reversed only if there has been a change in the estimates used to determine the asset\u2019s recoverable amount since the last impairment loss was recognised. The recoverable amount shall not exceed the carrying amount that would have been determined had no impairment loss been recognised in previous periods. A reversal of an impairment loss is recognised immediately in the income statement. Profit sharing The company recognises a liability and an expense for profit-sharing by employees, based on a calculation that takes into consideration quantitative and qualitative performance measures in accordance with contractual arrangements. Dividend distribution Dividend distribution to PostNL\u2019s shareholders is recognised as a liability in the financial statements in the year in which the dividends are approved by the shareholders. If PostNL offers its shareholders (the choice of) dividends in additional shares, the additionally issued shares are recognised at their nominal amount. ", "dimensions": { "concept": "ifrs-full:DescriptionOfOtherAccountingPoliciesRelevantToUnderstandingOfFinancialStatements", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-444": { "value": "5.5 Subsequent events On 19 January 2023, PostNL announced that an agreement was reached with the trade unions BVPP and CNV on a new collective labour agreement (CLA) for PostNL and one for Saturday deliverers. The agreements specify a total wage increase of up to 9.5% over two years. All payment components related to 2022 have been expensed in 2022. In addition, in February 2023, PostNL will make a one-time payment of 1.5% of annual salary. Both CLAs are effective as of 1 April 2022 and end on 31 March 2024. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-446": { "value": "6 Corporate financial statements Corporate statement of profit or loss PostNL Corporate statement of profit or loss in \u20ac\u00a0million 2021, 2022 Year ended at 31 December Notes 2021 2022 excl. change in pension accounting classification Change in pension accounting classification Total 2022 Dividend income 6.2.1 200 150 \u00a0150 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Reversal impairment/(impairment) investments in subsidiaries 6.2.2 524 (1,465) \u00a0(1,465) Salaries, pensions and social security contributions 6.2.3 (74) (76) (1,354) (1,430) Other operating expenses \u00a00 0 \u00a00 Total operating expenses \u00a0450 (1,541) (1,354) (2,895) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Operating income \u00a0650 (1,391) (1,354) (2,745) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Interest and similar income \u00a00 0 \u00a00 Interest and similar expenses \u00a0(9) (9) \u00a0(9) Net financial expense 6.2.4 (9) (9) \u00a0(9) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Profit/(loss) before income taxes \u00a0641 (1,400) (1,354) (2,754) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Income taxes 6.2.5 21 22 349 371 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Profit/(loss) for the year attributable to shareholders \u00a0662 (1,378) (1,005) (2,383) Corporate statement of comprehensive income PostNL Corporate statement of comprehensive income in \u20ac\u00a0million 2021, 2022 Year ended at 31 December Notes 2021 2022 excl. change in pension accounting classification Change in pension accounting classification Total 2022 Profit/(loss) for the year attributable to shareholders \u00a0662 (1,378) (1,005) (2,383) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Actuarial gains/(losses) pensions, net of tax 6.4.2 605 491 \u00a0491 Pension asset ceiling/minimum funding requirement, net of tax 6.4.2 (551) (435) 1,020 585 Other comprehensive income that will not be reclassified to the income statement \u00a054 57 1,020 1,076 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total comprehensive income for the year \u00a0715 (1,322) 15 (1,307) Corporate statement of cash flows PostNL Corporate statement of cash flows in \u20ac\u00a0million 2021, 2022 Year ended at 31 December Notes 2021 2022 Profit/(loss) before income taxes \u00a0641 (2,754) Change in pension accounting classification \u00a0\u00a01,354 Profit/(loss) before income taxes, excluding change in pension accounting classification \u00a0641 (1,400) \u00a0\u00a0\u00a0\u00a0Adjustments for: \u00a0\u00a0\u00a0Reversal impairment/(impairment) investments in subsidiaries \u00a0(524) 1,465 Share-based payments \u00a03 2 \u00a0\u00a0\u00a0\u00a0Dividend income \u00a0(200) (150) Interest and similar income \u00a0(0) (0) Interest and similar expenses \u00a09 9 Investment income \u00a0(191) (141) \u00a0\u00a0\u00a0\u00a0Pension liabilities \u00a054 47 Other provisions \u00a00 0 Changes in provisions \u00a054 47 \u00a0\u00a0\u00a0\u00a0Changes in working capital \u00a00 1 \u00a0\u00a0\u00a0\u00a0Cash used in operations \u00a0(17) (27) \u00a0\u00a0\u00a0\u00a0Interest paid \u00a0(6) (6) Income taxes received/(paid) \u00a0(101) 78 \u00a0\u00a0\u00a0\u00a0Net cash (used in)/from operating activities 6.3.1 (124) 45 \u00a0\u00a0\u00a0\u00a0Dividend received \u00a0200 150 Changes in accounts receivable from Group companies \u00a037 134 \u00a0\u00a0\u00a0\u00a0Net cash (used in)/from investing activities 6.3.2 237 284 \u00a0\u00a0\u00a0\u00a0Dividends paid \u00a0(113) (165) Share buyback \u00a0\u00a0(164) \u00a0\u00a0\u00a0\u00a0Net cash (used in)/from financing activities 6.3.3 (113) (329) \u00a0\u00a0\u00a0\u00a0Total change in cash and cash equivalents \u00a0(0) 0 \u00a0\u00a0\u00a0\u00a0Cash and cash equivalents at the beginning of the year \u00a00 0 Total change in cash and cash equivalents \u00a0(0) 0 Cash and cash equivalents at the end of the year \u00a00 0 Corporate statement of financial position PostNL Corporate statement of financial position in \u20ac\u00a0million 2021, 2022 At 31 December, before appropriation of profit Notes 2021 2022 Assets \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Investments in subsidiaries 6.4.1 3,526 2,061 Total non-current assets \u00a03,526 2,061 \u00a0\u00a0\u00a0\u00a0Accounts receivable from Group companies 6.4.3 286 151 Other accounts receivable \u00a02 1 Income tax receivable \u00a0101 21 Total current assets \u00a0389 173 \u00a0\u00a0\u00a0\u00a0Total assets \u00a03,915 2,234 \u00a0\u00a0\u00a0\u00a0Equity and liabilities \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Issued share capital \u00a041 39 Additional paid-in capital \u00a0163 163 Revaluation reserve investments in subsidiaries \u00a02,502 1,037 Other reserves \u00a0(188) 2,711 Retained earnings \u00a0632 (2,433) Total shareholders' equity 6.3.4 3,151 1,517 \u00a0\u00a0\u00a0\u00a0Provision for pension liabilities 6.4.2 64 0 Eurobonds 6.4.4 697 697 Other provisions \u00a01 2 Total non-current liabilities \u00a0762 699 \u00a0\u00a0\u00a0\u00a0Accounts payable to Group companies \u00a01 0 Other current liabilities \u00a01 17 Total current liabilities \u00a02 17 \u00a0\u00a0\u00a0\u00a0Total equity and liabilities \u00a03,915 2,234 Corporate statement of changes in equity PostNL Corporate statement of changes in equity in \u20ac\u00a0million 2021, 2022 \u00a0Issued share capital Additional paid-in capital Revaluation reserve investments in subsidiaries Other reserves Retained earnings Total shareholders' equity Balance at 1 January 2021 40 161 1,978 (22) 388 2,546 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total comprehensive income \u00a0\u00a0\u00a054 662 715 Appropriation of net income \u00a0\u00a0\u00a0305 (305) 0 Final dividend previous year 1 (1) \u00a0\u00a0(84) (84) Interim dividend current year 0 (0) \u00a0\u00a0(29) (29) Share-based compensation 0 3 \u00a0(0) \u00a03 Addition revaluation reserve \u00a0\u00a0524 (524) \u00a00 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Balance at 31 December 2021 41 163 2,502 (188) 632 3,151 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total comprehensive income \u00a0\u00a0\u00a01,076 (2,383) (1,307) Appropriation of net income \u00a0\u00a0\u00a0518 (518) 0 Final dividend previous year \u00a0\u00a0\u00a0\u00a0(114) (114) Interim dividend current year \u00a0\u00a0\u00a0\u00a0(50) (50) Share buyback (2) \u00a0\u00a0(162) \u00a0(164) Share-based compensation \u00a0\u00a0\u00a02 \u00a02 Reduction revaluation reserve \u00a0\u00a0(1,465) 1,465 \u00a00 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Balance at 31 December 2022 39 163 1,037 2,711 (2,433) 1,517 6.1 Basis of preparation General information and description of the business PostNL N.V. (hereafter referred to as \u2018the company\u2019) is a public limited liability company with its registered seat and head office at Waldorpstraat 3, 2521 CA, The Hague, the Netherlands. The Chamber of Commerce number is 27124700. The company\u2019s principal activity is acting as a holding company for the Group companies of the PostNL Group (\u2018the Group\u2019) that provide businesses and consumers in the Benelux with an extensive range of services for their mail needs. Through our international sales network Spring, we connect local businesses around the world to consumers globally. The company is the ultimate parent company of the Group. The corporate financial statements were authorised for issue by PostNL\u2019s Board of Management and Supervisory Board on 27 February 2023 and are subject to adoption at the Annual General Meeting of Shareholders on 18 April 2023. Summary of significant accounting policies The significant accounting policies applied in the preparation of these corporate financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. All amounts included in the financial statements are presented in euros, unless stated otherwise. Note that the numbers presented in the financial statements and disclosures thereto may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures due to rounding. Accounting principles applied The corporate financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS-EU) and Dutch law. IFRS-EU includes the application of International Accounting Standards (IAS), related interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and interpretations of the Standing Interpretations Committee (SIC), issued and effective, or issued and adopted early, as at 31 December 2022. Basis of measurement In the corporate financial statements, the same accounting principles have been applied as set out in the notes to the consolidated financial statements, except for the valuation of the investments as presented under financial fixed assets in the corporate financial statements. These policies have been consistently applied to all years presented. In the corporate financial statements, the investments in subsidiaries are recorded at cost less impairments (deemed cost upon adoption of IFRS-EU). In the corporate statement of income, dividend received from the investments is recorded as dividend income. Due to this application, the corporate equity and net result are not equal to the consolidated equity and net result. A reconciliation for total shareholders\u2019 equity and total comprehensive income is presented in note 6.5 to the corporate financial statements. Changes in accounting policies and disclosures For new and amended standards we refer to the descriptions included in the \u2018Changes in accounting policies and disclosures' in the notes to the consolidated financial statements. The company has assessed the impact on the corporate financial statements. None of these is expected to have a significant effect on the corporate financial statements. Functional and presentation currency The corporate financial statements are presented in euros, the company\u2019s functional currency. Use of estimates and judgements The preparation of the corporate financial statements in conformity with IFRS-EU requires management to exercise judgements and make estimates and assumptions that affect the application of the company's accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the corporate financial statements are disclosed in the note \u2018Critical accounting estimates and judgements' to the consolidated financial statements. Key accounting estimates and judgements affecting the assessment and measurement of impairment are included in note 6.4.1 to the corporate financial statements. Share-based payments PostNL operates a number of equity-settled share-based compensation plans, under which the entity receives services from employees as consideration for (conditional) shares of the Group. For the company's accounting policies on equity-settled share-based compensation plans, we refer to note 5.1 of the consolidated financial statements. Dividend distribution Dividend distribution to the company\u2019s shareholders is recognised as a liability in the corporate financial statements, in the period in which the dividends are approved by the company\u2019s shareholders. 6.2 Result for the year 6.2.1 Dividend income Dividend income is recognised when the right to receive payment is established. The dividend income from the company\u2019s subsidiaries for 2022 was \u20ac150 million (2021: \u20ac200 million). 6.2.2 Impairment investments in subsidiaries In 2022, an impairment of \u20ac1,465 million on the company\u2019s investments in subsidiaries was accounted for (2021: impairment reversal of \u20ac524 million). Reference is made to note 6.4.1 to the corporate financial statements. 6.2.3 Salaries, pensions and social security contributions In 2022, salaries, pensions and social security contributions, excluding the impact of the change in accounting classification of the main pension plan of \u20ac1,354 million, amounted to \u20ac76 million (2021: \u20ac74 million). In accordance with IAS 19.41, the net defined benefit cost for the company\u2019s pension plans shall be recognised in the corporate financial statements. For PostNL, the contributions charged to other Group companies were lower than the pension expense incurred, resulting in a negative amount of salaries, pensions and social security contributions over the year. For further information on defined benefit pension costs, see note 6.4.2 to the corporate financial statements. PostNL N.V. does not have any employees other than the Board of Management. 6.2.4 Net financial expense/(income) PostNL has financing relationships with both external banks and with PostNL companies, mainly with PostNL Finance BV. As a result, PostNL records both external interest income and expenses from financial institutions and from PostNL Finance BV. PostNL Net financial expense/(income) in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 Interest expenses on long-term borrowings 7 7 Interest on net defined benefit pension liabilities 1 2 Other interest and similar expense 2 1 Interest and similar expense 9 9 \u00a0\u00a0\u00a0Other interest and similar income (0) 0 \u00a0\u00a0\u00a0Net financial expense/(income) 9 9 Interest expenses on long-term borrowings relate to the outstanding eurobonds. Reference is made to note 4.1 to the consolidated financial statements. 6.2.5 Income taxes Accounting policies The company is tax-resident in the Netherlands. The tax expense for the year comprises current and deferred tax. Tax is recognised in the statement of income, except to the extent that it relates to items recognised directly in other comprehensive income. The amount of income tax included in the statement of income is determined in accordance with the rules established by the tax authorities in the Netherlands, based on which income taxes are payable or recoverable. PostNL Corporate income taxes in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 excl. change in pension accounting classification Change in pension accounting classification Total 2022 Current tax expense (6) 3 \u00a03 Changes in deferred taxes (15) (25) (349) (374) Total income tax expense/(income) (21) (22) (349) (371) \u00a0\u00a0\u00a0\u00a0\u00a0Income taxes paid/(received) 101 (78) \u00a0(78) The difference between the total income taxes in the income statement and the current tax expense is due to temporary differences. These differences are recognised as deferred tax assets or deferred tax liabilities, except for the tax effect on the change in pension accounting classification. In 2022, the change in deferred taxes also includes an amount of \u20ac(374) million (2021: \u20ac(18) million) via other comprehensive income fully related to taxes on OCI from pensions. PostNL Corporate effective income tax rate in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 2022 excl. change in pension accounting classification Change in pension accounting classification Total 2022 Dutch statutory income tax rate 25.0 25.8 \u00a025.8 Tax effects of: \u00a0\u00a0\u00a0\u00a0Non taxable impairment reversal/non deductible impairment (20.4) (27.0) 13.3 (13.7) Exempt income (7.8) 2.8 (1.4) 1.4 Other (0.1) \u00a0\u00a0\u00a0Effective income tax rate (3.3) 1.6 11.9 13.5 The effective income tax rate including the change in pension accounting classification is 13.5%. However, due to the material impact of the change in pension accounting classification on our figures, the effective income tax rate excluding the change in pension accounting classification has also been stated in the table above. The latter effective income tax rate is 1.6%. This effective income tax rate, being lower compared to the Dutch statutory tax rate (25.8%), can mainly be explained as follows. In 2022, the income taxes of \u20ac(22) million (2021: \u20ac(21) million) on the result before income taxes of \u20ac(1,400) million (2021: \u20ac641 million), resulted in an effective income tax rate of 1.6% (2021: (3.3)%). Adjusted for the tax-exempt dividend income of \u20ac150 million (2021: \u20ac200 million) and the non deductible impairment of \u20ac1,465 million (2021: non taxable impairment reversal of \u20ac524 million), the result before income taxes would have been \u20ac(85) million (2021: \u20ac(83) million), which with income taxes unchanged at \u20ac(22) million (2021: \u20ac(21) million) would have resulted in an effective income tax rate of 25.5% (2021: 25.1%). Deferred tax assets and liabilities are presented net in the balance sheet if the company has a legally enforceable right to offset current tax assets against current tax liabilities and the deferred taxes relate to the same taxation authority. Based on this reporting principle, the deferred tax assets as at 31 December 2022 amounts to \u20ac0 million (2021: \u20ac0 million). 6.3 Cash flow performance and equity development 6.3.1 Net cash (used in)/from operating activities The increase in net cash from operating activities from \u20ac(124) million in 2021 to \u20ac45 million in 2022 mainly related to the change in income taxes received/(paid). In 2022, the second instalment of \u20ac28 million of the unconditional funding obligation relating to the final payment of the transitional pension plans was paid (2021: first instalment of \u20ac16 million). In 2022, the total cash outflow for interest paid of \u20ac6 million (2021: \u20ac6 million) mainly related to interest on PostNL\u2019s long-term borrowings. In 2022, the company received income taxes totalling \u20ac78 million (2021: \u20ac101 million paid) which include internal settlements with Group companies within the PostNL fiscal unity. 6.3.2 Net cash (used in)/from investing activities In 2022, net cash from investing activities amounted to \u20ac284 million (2021: \u20ac237 million) and related to dividend received from the company's subsidiaries of \u20ac150 million (2021: \u20ac200 million) and changes in accounts receivable from Group companies of \u20ac134 million (2021: \u20ac37 million), mainly related to an intercompany receivable from PostNL Finance B.V. 6.3.3 Net cash (used in)/from financing activities In 2022, the net cash from financing activities amounted to \u20ac(329) million (2021: \u20ac(113) million) and related for \u20ac164 million to the share buyback and for \u20ac165 million to the final 2021 and interim 2022 cash dividend paid (2021: \u20ac113 million related to the final 2020 and interim 2021 cash dividend). 6.3.4 Equity As at 31 December 2022, equity amounts to \u20ac1,517 million (2021: \u20ac3,151 million). For the disclosure on issued share capital and additional paid-in capital, see notes 2.6 and 4.6 to the consolidated financial statements. The revaluation reserve investments in subsidiaries is a legal reserve and is restricted for distribution. As at 31 December 2022, the revaluation reserve of \u20ac1,037 million (2021: \u20ac2,502 million) related to the applied deemed cost approach for the investments in subsidiaries as of 1 January 2010, partly offset by the net recorded impairment charges of \u20ac1,545 million. During 2022, the other reserves increased to \u20ac2,711 million from \u20ac(188) million, mainly due to a reclassification from the revaluation reserve of \u20ac1,465 million, the appropriation of net income for 2021 of \u20ac518 million and a positive pension effect within other comprehensive income of \u20ac1,076 million, partly offset by the share buyback of \u20ac162 million. 6.4 Corporate statement of financial position 6.4.1 Investments in subsidiaries Accounting policies Investments in subsidiaries and associated companies Investments in subsidiaries and associated companies are stated at cost, less impairment. Dividend income from the company\u2019s subsidiaries and associated companies is recognised when the right to receive payment is established. Impairment of investments in subsidiaries At each balance sheet date, the company reviews whether there is an indication that its investments in subsidiaries might be impaired. An indication may include management\u2019s downward adjustment of the strategic plan or other areas where observable data indicates a measurable decrease in the estimated future cash flows. These determinations require significant judgement. In making this judgement, management evaluates, among other factors, the financial performance of and business outlook for its investments, including factors such as industry and sector performance, changes in technology and operational and financing cash flow. If any indication for impairment exists, the recoverable amount of the investments is estimated. The recoverable amount is defined as the higher of an investment\u2019s fair value less costs of disposal and its value in use. If the recoverable amount of an investment is estimated to be less than its carrying amount, the carrying amount of the investment is reduced to its recoverable amount. Any impairment loss is recognised immediately in the statement of income. The investments\u2019 fair value less costs of disposal represents the best estimate of the amount the company would receive if it sold its investments. The fair value of each investment has been estimated on the basis of the present value of future cash flows, taking into account costs of disposal. The determination of the investment\u2019s value in use is based on calculations using pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using estimated growth rates. Impairment losses recognised in prior periods shall be reversed only if there has been a change in the estimates or external market information used to determine the investment\u2019s recoverable amount since the last impairment loss was recognised. The recoverable amount shall not exceed the carrying amount that would have been determined had no impairment loss been recognised in prior years. The movement in the investments in subsidiaries is as follows: PostNL Investments in in subsidiaries in \u20ac\u00a0million 2021, 2022 \u00a02021 2022 Balance at 1 January 3,002 3,526 Reversal impairment/(impairment) 524 (1,465) Balance at 31 December 3,526 2,061 The subsidiary undertakings of the company as at 31 December 2022, and the company\u2019s percentage interest, are set out below. PostNL Breakdown corporate investments 2022 Name of direct subsidiairy Country of incorporation Ownership % PostNL Holding B.V. Netherlands 100% A complete list of investments in subsidiaries, associated companies and jointly-controlled entities will be attached to the company\u2019s Annual Report made available to the Chamber of Commerce. A detailed review has been performed of the recoverability of the investments in subsidiaries. The recoverable value of each investment is the higher of the value in use and fair value less costs of disposal. The recoverable value is determined based on the fair value less costs of disposal as this was higher than the value in use at year end 2022. The fair value less costs of disposal has been estimated on the basis of the present value of future cash flows, taking into account costs of disposal. For all investments, the estimated future cash flows are based on a five-year (2021: five-year) forecast and business plan, which forecast period has been assessed as adequate to reach a sustainable basis for the calculation of the continuing value. The estimated future cash flows are derived from the most recent strategic planning approved by management, including inherent uncertainties like future volume developments, efficiency measures and the impact of regulatory decisions and developments. The company has determined the budgeted gross margin based on past performance and its expectations for market development. The weighted average growth rates used are consistent with the forecasts included in industry reports for the related operation and market and did not change materially compared to previous year. The weighted average pre-tax discount rate applied in the investments' valuations was around 11.0% (2021: around 10.0%). Key assumptions used to determine the recoverable values for the investments of the company are the following: maturity of the underlying market, market share and volume development in order to determine the revenue mix and (long-term) growth rate, level of operating income largely impacted by revenue and cost development, taking into account the nature of the underlying costs and potential economies of scale, level of capital expenditure in network-related assets, and discount rate to be applied following the nature of the underlying cash flows and foreign currency and inflation-related risks. As the investments in subsidiaries are vulnerable to changes in the discount rate and changes in operating income, a sensitivity analysis has been performed for the investments. The sensitivity analysis included the impact of the following items which are considered to be most critical when determining the recoverable value: an increase or decrease in the discount rate of 0.5%, and an increase or decrease in operating income of 5%. If the discount rate were to change by 0.5%, this would impact the investments in subsidiaries by around \u20ac135 million (2021: \u20ac280 million). A change in operating income of 5% would impact the investments in subsidiaries by around \u20ac125 million (2021: \u20ac185 million). The detailed review of the value of the investments in subsidiaries resulted in the recoverable value being \u20ac1,465 million lower than their carrying value. The recoverable amount of continuing operations is derived from the 2022 strategic planning, taking into account the current geopolitical conditions causing economic uncertainty, low consumer spending and high labour and energy inflation. These developments have negatively affected our current 2022s performance. They have also tempered our expected future e-commercegrowth, which remains a sustainably growing business line in which we operate successfully, when compared to the forecast including assumptions used in last year's valuation. The valuation was also negatively affected by a slightly higher discount rate in 2022 and a reduction in excess cash given the share buyback and dividends paid out in 2022. Based on the detailed review, management concluded that an impairment of \u20ac1,465 million was present for the investments in subsidiaries. Consequently, management recorded an impairment of \u20ac1,465 million in 2022 (2021: impairment reversal of \u20ac524 million). Within equity, the revaluation reserve associated with the initial revaluation of the investments in subsidiaries has been decreased by the impairment amount. 6.4.2 Provisions for pension liabilities Accounting policies For the accounting policies on pension liabilities, reference is made to note 3.5 to the consolidated financial statements. The company is the sponsoring employer of the main Dutch pension plan, which is externally funded in a separate pension fund and cover the majority of PostNL\u2019s employees in the Netherlands. As main development in 2022, the amended pension plan, triggering a change in pension accounting from defined benefit to defined contribution as of 31 December 2022 and the recording of an accompanying pension settlement, had a significant financial impact on the corporate financial statements of the company. Reference is made to note 3.5 to the consolidated financial statements. In accordance with IAS 19.41, PostNL recognises the net defined benefit cost in the corporate financial statements of the company. The relevant Group companies recognise the costs equal to the contributions payable for the period in their financial statements. In its corporate financial statements, PostNL recognises the contributions received from the relevant Group companies as a benefit that offsets the corporate defined benefit pension expense. As a result, the corporate financial statements record a lower defined benefit pension expense of \u20ac1,430 million (2021: \u20ac73 million) compared to the defined benefit pension expenses of \u20ac1,516 million (2021: \u20ac150 million) as recorded in the consolidated financial statements. The following table reconciles the opening and closing balances of the present value of the defined benefit obligation and the fair value of plan assets, the funded status and the employer pension income for the sponsored pension plan of the company. In line with the disclosure note on pensions included in the consolidated financial statements, the table also shows the corporate settlement impact resulting from the change in pension accounting classification. PostNL Detailed overview of changes in corporate defined benefit plans in \u20ac\u00a0million 2021, 2022 \u00a02021 2022 Change in benefit obligation \u00a0\u00a0Benefit obligation at beginning of year (10,226) (10,126) Service costs (160) (174) Interest costs (31) (104) Other movements (2) \u00a0Actuarial (losses)/gains 44 2,645 Benefits paid 248 261 Settlement benefit obligation \u00a07,498 Benefit obligation at end of year (10,126) 0 \u00a0\u00a0\u00a0Change in plan assets \u00a0\u00a0Fair value of plan assets at beginning of year 10,225 10,878 Assumed return on plan assets 31 111 Other movements 1 \u00a0Contributions group companies 98 107 Employer contributions 2 (0) Instalment unconditional funding obligation 16 28 Other costs (10) (8) Actuarial (losses)/gains 763 (1,982) Benefits paid (248) (261) Settlement plan assets \u00a0(8,873) Fair value of plan assets at end of year 10,878 0 \u00a0\u00a0\u00a0Change in funded status \u00a0\u00a0Funded status at the beginning of year (0) 752 Operating expenses (incl. contributions group companies) (72) (74) Interest (expenses)/income (0) 7 Employer contributions 2 (0) Instalment unconditional funding obligation 16 28 Actuarial (losses)/gains 807 663 Settlement of benefit obligation and plan assets \u00a0(1,374) Funded status at end of year 752 0 Impact of pension asset ceiling (752) \u00a0Impact of minimum funding requirement (64) \u00a0Netted pension liabilities (64) 0 \u00a0\u00a0\u00a0Components of employer pension expenses \u00a0\u00a0Service costs (160) (174) Interest (expenses)/income (1) (2) Other costs (10) (8) Contributions group companies 98 107 Pension settlement costs within statement of profit or loss \u00a0(1,354) Post-employment benefit income/(expenses) (73) (1,430) \u00a0\u00a0\u00a0Weighted average assumptions as at 31 December \u00a0\u00a0Discount rate 1.0% 3.4% Rate of benefit increases 1.5% 1.7% Life expectancy 65 year old men/women (in years) 21.1/23.4 21.4 / 23.7 6.4.3 Accounts receivable from Group companies As at 31 December 2022, accounts receivable from Group companies amounted to \u20ac151 million (2021: \u20ac286 million) which mainly related to a receivable from PostNL Finance B.V. The fair value of the accounts receivable from and payable to Group companies approximated the carrying value, due to the short-term nature. The allowance for expected credit losses has been assessed to be non-material. 6.4.4 Eurobonds As at 31 December 2022, the eurobonds amounted to \u20ac697 million non-current (2021: \u20ac697 million). For the disclosure on the eurobonds, reference is made to notes 4.1 and 4.5 to the consolidated financial statements. In 2022, the non-cash changes in the total debt amounted to \u20ac1 million (2021: \u20ac1 million) and related to the amortisation of costs included in the eurobonds. 6.5 Other notes Reconciliation corporate and consolidated equity and comprehensive income PostNL Consolidated to corporate equity and total comprehensive income in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 \u00a02022 \u00a0\u00a0Equity Income Equity Income Consolidated: Equity and profit/(loss) for the year 426 257 177 (993) \u00a0\u00a0\u00a0\u00a0\u00a0Reconciliation items previous years 2,335 \u00a02,725 \u00a0Reversal impairment/(impairment) investments in subsidiaries 524 524 (1,465) (1,465) Results from investments (119) (119) 75 75 Other comprehensive income (CTA/hedges/pensions) (14) \u00a05 \u00a0Total reconciliation items 2,725 405 1,340 (1,390) \u00a0\u00a0\u00a0\u00a0\u00a0Corporate: Shareholders' equity and profit/(loss) for the year 3,151 662 1,517 (2,383) The differences between total shareholders\u2019 equity and total comprehensive income according to the IFRS-EU consolidated financial statements and the corporate financial statements under IFRS-EU in general relate to the accounting of the investments in subsidiaries at cost less impairments (deemed cost upon adoption of IFRS-EU) in the corporate financial statements and subsequent (reversal of) impairments. The reconciling items for equity and income are further detailed below. Reconciliation items The 'reconciliation items previous years' of \u20ac2,725 million in 2022 relate to the difference between the consolidated equity as at 31 December 2021 of \u20ac426 million and the corporate equity of \u20ac3,151 million at that date. For details of the impairment of the investments in subsidiaries recognised in the corporate financial statements in 2022, see note 6.4.1 to the corporate financial statements. The 2022 results from investments were \u20ac75 million higher in the corporate financial statements and can be calculated from the result from the corporate income statement of \u20ac(2,383) million, plus the impairment of the investments in subsidiaries of \u20ac1,465 million, minus the result from the consolidated income statement of \u20ac(993) million. The difference relates to the difference between the dividend income and the result from the investments in subsidiaries. The 2021 results from investments were \u20ac119 million lower in the corporate financial statements and can be calculated from the result from the corporate income statement of \u20ac662 million, minus the reversal of the impairment of the investments in subsidiaries of \u20ac524 million, minus the result from the consolidated income statement of \u20ac257 million. The difference relates to the difference between the dividend income and the result from the investments in subsidiaries. The reconciliation item \u2018Other comprehensive income' represents hedge and currency translation adjustments and adjustments for actuarial gains/(losses) which were recognised in the consolidated financial statements but not in the corporate financial statements as the investments are stated at cost. It also represents other comprehensive income from the change in value of financial assets at fair value through OCI that was recognised in the consolidated financial statements but not in the corporate financial statements. The 2022 difference in other comprehensive income of \u20ac5 million included \u20ac1 million of actuarial gains on pensions, \u20ac(8) million of the change in value of financial assets at fair value through OCI and \u20ac2 million other items. The 2021 difference in other comprehensive income of \u20ac(14) million included \u20ac1 million of actuarial losses on pensions, \u20ac12 million of the change in value of financial assets at fair value through OCI and \u20ac1 million other items. Commitments and contingencies Declaration of joint and several liability At 31 December 2022, the company issued a declaration of joint and several liability for some of its Group companies in compliance with article 403, book 2 of the Dutch Civil Code. Those Group companies are: PostNL Declaration of joint and several liability 2022 \u00a0\u00a0DM Productions B.V. PostNL Finance B.V. G3 Worldwide Mail N.V. PostNL Holding B.V. Koninklijke PostNL B.V. PostNL Pakketten Benelux B.V. Logistics Solutions B.V. PostNL Real Estate B.V. PostNL Cross Border Solutions B.V. PostNL TGN B.V. PostNL Customer Excellence B.V. PostNL Transport B.V. PostNL Data Solutions B.V. PS Nachtdistributie B.V. PostNL E-commerce Services B.V. \u00a0Fiscal unity in the Netherlands The company forms a fiscal unity with a majority of its Dutch subsidiaries for corporate income tax and VAT purposes. A company and its subsidiaries that are part of these fiscal unities are jointly and severally liable for the tax payable by these fiscal unities. Parental support In addition to the declaration of joint and several liability in compliance with article 403, book 2 of the Dutch Civil Code, the company provided parental support relating to the following items: committed revolving credit facilities of \u20ac200 million; bank guarantee facilities of \u20ac87 million; ordinary business activities of the Group of \u20ac88 million; ISDA agreements; payment guarantee for self-insurance of WGA (\u201cWerkhervatting Gedeeltelijk Arbeidsongeschikten\u201d) benefit payments as of 1 January 2021. Separation agreement TNT Express For details on the separation agreement with TNT Express, see note 3.10 to the consolidated financial statements. Financial risk management For disclosure on the company\u2019s overall financial risk management programme, reference is made to note 4.4 to the consolidated financial statements. Financial instruments For a summary of the company\u2019s financial instruments relevant to these corporate financial statements, reference is made to note 4.5 to the consolidated financial statements. Related party transactions and balances The company\u2019s shares are widely held. As such, no ultimate controlling party can be identified. The company, acting as a holding company, has relationships with a number of Group companies. In some cases, there are contractual arrangements in place under which the company sources supplies from such undertakings or such undertakings source supplies from the company. Transactions are in principle carried out at arm\u2019s length. PostNL Related party transactions in \u20ac\u00a0million 2021, 2022 Year ended at 31 December 2021 \u00a02022 \u00a0\u00a0Transactions Balances Transactions Balances Dividend income PostNL Group companies 200 \u00a0150 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Accounts receivable from PostNL Group companies/interest income 0 286 0 151 Accounts payable to PostNL Group companies/interest expense (1) 1 (0) 0 \u00a0\u00a0\u00a0\u00a0\u00a0Net investing activities from accounts receivable from Group companies 37 \u00a0134 \u00a0Income tax received from/(paid to) PostNL Group companies (30) \u00a078 \u00a0For the compensation of the members of the Board of Management and Supervisory Board, see note 5.1 to the consolidated financial statements. Subsequent events For disclosure on subsequent events, reference is made to note 5.5 to the consolidated financial statements. Subsidiaries and associated companies at 31 December 2022 The list containing the information referred to in article 379 and article 414 of book 2 of the Dutch Civil Code is filed at the office of the Chamber of Commerce in The Hague. Appropriation of profit Dividend proposal 2022 In accordance with our dividend policy, the condition for paying out dividend is a leverage ratio (adjusted net debt/EBITDA) not exceeding 2.0. This condition was met per year-end 2022 (leverage ratio: 1.9). The Board of Management has decided, with the approval of the Supervisory Board, subject to shareholders approval at the 2022 Annual General Meeting of Shareholders, to declare a dividend of \u20ac0.16 per ordinary share over 2022, of which \u20ac0.14 per ordinary share has been paid as an interim dividend. The dividend will be paid, at shareholder's election, either in ordinary PostNL shares or in cash. Appropriation of profit The Board of Management, with the approval of the Supervisory Board, shall withdraw the corporate loss of \u20ac2,383 million from the reserves. For detailed information on PostNL\u2019s corporate performance, and the resulting loss, refer to section 6: Corporate financial statements. Furthermore, the Board of Management, with the approval of the Supervisory Board, proposes to make an amount of \u20ac60 million out of the distributable part of the shareholders' equity available for distribution of the proposed dividend. Subject to the adoption of PostNL\u2019s financial statements by the General Meeting of Shareholders, and given a 2022 interim dividend of \u20ac0.14 has been paid, the proposed 2022 final dividend has been set at \u20ac0.02 per ordinary share of \u20ac0.08 nominal value, based on the outstanding number of 487,530,628 ordinary shares as per 31 December 2022. The final dividend of \u20ac0.02 will be paid, at shareholder\u2019s election, either in ordinary PostNL shares or in cash. The dividend in shares will be paid out of additional paid in capital as part of the distributable reserves, free of withholding tax in the Netherlands. The ex-dividend date will be 20 April 2023, the record date is 21 April 2023 and the election period will start on 24 April 2023 and will end on 9 May 2023 at 3PM CET. The conversion ratio will be based on the volume-weighted average share price for all PostNL shares traded on Euronext Amsterdam over the three trading day period from 5 May 2023 up to and including 9 May 2023. The value of the stock dividend, based on this VWAP, will, subject to rounding, be targeted at but not be lower than the cash dividend. There will be no trading in stock dividend rights. The dividend will be payable as of 11 May 2023. Upon approval of this proposal, corporate profit will be appropriated as follows, whereby the final dividend represents a cash dividend under the assumption of 100% cash election. PostNL Appropriation of corporate profit in \u20ac\u00a0million 2022 \u00a02022 Result attributable to the shareholders (2,383) \u00a0\u00a0Appropriation in accordance with the articles of association: \u00a0Reserves withdrawn by the Board of Management and approved by the Supervisory Board (article 31, paragraph 2) 2,443 Dividend on ordinary shares 60 \u00a0\u00a0(Interim) dividend paid in cash (50) \u00a0\u00a0Final dividend 10 The Hague, the Netherlands, 27 February 2023 Board of Management Herna Verhagen (CEO) Pim Berendsen (CFO) Supervisory Board Jan Nooitgedagt (Chairman) Jeroen Hoencamp Marike van Lier Lels Nienke Meijer Ad Melkert Koos Timmermans Hannie Vlug PostNL N.V. Waldorpstraat 3 2521 CA The Hague The Netherlands ", "dimensions": { "concept": "ifrs-full:DisclosureOfConsolidatedAndSeparateFinancialStatementsExplanatory", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-4": { "value": "Waldorpstraat 3, 2521 CA, The Hague, the Netherlands", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:724500Q41FHN0P1GPC53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } } } }