Good morning, ladies and gentlemen. Welcome to this PostNL call. At this moment, all participants are in a listen-only mode, and after the presentation, there'll be an opportunity to ask questions. Now, I would like to hand over the conference call to Ms. Inge Laudy, Manager Investor Relations. Please go ahead, madam. Thank you, and thank you all for joining us this morning. As you have seen, we have published a press release this morning with the preliminary results for Q3, actually, sorry, Q4 and full year 2023, ahead of announcing results on February 26. Then we will provide further details on our Q4 results and an outlook for 2024. We thought it was a good idea to provide you some explanation and give you the opportunity to ask questions on today's announcements to Herna and Pim. And they are with us in the call. So Pim, over to you. Well, thank you, Inge, and good morning to all of you, and thank you for being present so quickly after we've issued our preliminary results. And as Inge said, and what you know, of course, of us, is we think it's really important to engage with you as quickly as possible, and to also offer you the moment for further, further explanations. Then, when we've published our Q3 results on the 6th of November, we've guided towards the lower end of the EUR 100 million-EUR 130 million bandwidth for normalized EBIT, with a consensus that stands at 97. The preliminary results came in at around EUR 92 million of normalized EBIT. And there's, I think, three factors that explain the difference between the lower end of that bandwidth and the outcome so far, and I'll touch upon those step by step. So first and foremost, we've seen lower volumes than anticipated, while we already had locked in the cost and the capacity, predominantly in November and December, in the e-commerce market. What we've continued to see is a more negative mix in product... a negative shift in product mix that relates to both parcels and mail in the Netherlands. I will come back to that a little bit later on. Next to that, there were still an awful lot of pressure on costs predominantly related to higher and still high illness rates. While we're disappointed to be reporting an outcome below our previously stated expectations, there are certainly also a few points that we're very positive about. I think if you look back at the peak season, operationally, it has been very successful. So our clients have been very happy with the performance, and their customer journeys were very strong, and we truly believe that will help our competitive position going forward substantially. Next to that, you might have already seen a very strong free cash flow, obviously on the back of tight working capital management and CapEx. Let's take a bit more time to look at the preliminary results. I said, for the full year, we expect normalized EBIT to come in around EUR 92 million, which is in line with our initial outlook, but below our range we guided on the 6th of November. At the same time, focus on CapEx and strict working capital management contributed to a strong cash flow performance with a free cash flow of EUR 52 million for 2023, which is well above our outlook on cash flow. Please note that all these numbers are still unaudited, so not yet final. As we've discussed already a couple of times before in 2023, we operate in an environment where short-term visibility is limited and where it becomes increasingly difficult to predict volumes. That's not a PostNL phenomenon. We see that with all of our customers and also across the industry. And unfortunately, the fourth quarter did not bring the level of parcels volumes that we were expecting and had organized for. Especially in this peak, with largely fixed costs, already minor deviations from expectations impact the bottom line quite materially. That's also something that we've covered in our previous calls before. At the same time, the shift in product mix was less favorable, both in parcels and in mail. Lastly, the high illness rate remained a matter of concern and put more pressure on costs than anticipated. In our peak season, we delivered millions of season greetings and parcels to deliver special moments to the consumer. Operationally, this was very successful. Let's talk a bit more on the business performance in the fourth quarter. Revenue came in around EUR 889 million, and we expect normalized EBIT to be EUR 77 million for the quarter, and a strong free cash flow in the quarter of around EUR 143 million. Whilst normalized EBIT came in below our expectations, focus on CapEx, strict working capital management contribute to a very strong cash flow performance at EUR 52 million for the year, well above the outlook, and obviously, that resulted in a leverage ratio that will be significantly below the 2.0x. We expect it to be around 1.7, and that, of course, is a good basis for dividend. The dividend will be determined, as you know, on the basis of normalized comprehensive income that is expected to come in around EUR 52 million for the year. A few comments on the value drivers for Q4, and obviously, full details, full reconciliations and bridges will be provided to you on the 26th of February. But nonetheless, a few highlights. At parcels, volumes were up 0.9% in the quarter, mainly driven by strong growth from our international customers, while domestic volumes were lagging. For the full year, volumes were around flat compared to 2022, which is slightly better than our initial volume guidance. But the volume was not spread over the year as we've expected. Volume development in fourth quarter was lagging our anticipations, and especially lagging volume in a locked-in cost environment directly impacts results. Furthermore, we had continued headwind in shifting customer mix, mainly driven by a shift in consumer preferences to more Asian web shops. At Mail in the Netherlands, volumes were only down 1.9% for the quarter, obviously impacted by elections and a very strong direct marketing volume development. However, profitability was lower due to the negative product mix. Both these products, of course, give lower contributions than single items and letterbox parcels that were below expectations, for which, of course, letterbox parcels follows the same e-commerce trends. Also, the high, high illness rate remained a matter of concern and put more pressure on costs than anticipated. We had to add roughly EUR 6 million to provisions that cover payments to employees that are ill for a longer period of time. Our plans to reduce 200-300 FTEs in overhead, mainly at parcels and other indirect cost measures, are now fully finalized, and roughly EUR 5 million of savings are already achieved in the fourth quarter. We are on track to achieve the annual cost savings around EUR 25 million in 2024. Lastly, within Mail, in the fourth quarter, we achieved EUR 10 million of cost saving in Mail in the Netherlands, resulting in a full year cost savings of around about EUR 39 million, which is a significant step up from the cost savings we were able to realize in 2022. To wrap it up, unfortunately, the geopolitical environment has not stabilized, and the macroeconomic uncertainty remains there. We faced ongoing high cost increases, and in anticipation of these developments, we took all the necessary actions to mitigate as much as possible this inflationary pressure. We have no doubt about our long-term strategy and the future growth of e-commerce, but we have to adjust to these different market circumstances. On February 26, we'll provide full details on Q4, full year 2023, and obviously spend also time to explain the outlook that we have for 2024. Now, let's give it back, through the operator to all of you, to, answer some of the questions I'm sure you'll, you'll have. Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Once again, if you would like to ask a question, please press star one and one on your telephone. We will now go to your first question. One moment, please. Your first question comes from the line of Marco Limite from Barclays. Please go ahead. Hi, good morning. Thanks for taking my question. The first question is actually on your Q4 parcel volume growth, which have been, yeah, softer than what you were expecting, basically, based on your previous guidance. Can you just tell us what has been the sequential development throughout the quarter? And the second question is on cost savings. You are saying that clearly you're still targeting to achieve EUR 25 million cost savings from FTE reduction in 2024. Can you just remind us how much cost savings have you already realized in 2023? You said EUR 5 million Q4, but what's the total amount for 2023? My last question is, is there an update on the negotiation for the CLA renewal? Thank you. Thank you, Marco, for your questions. First on parcel volume growth, and as I have hopefully interpreted your question right, it's about the sequence of the development throughout the quarter. Basically, what we've seen is that, the ramp up was as steep as we expected, but also the drop was equally steep quickly after the peak moment. So the second half of November and December have driven the lowest deviation in comparison to our volume expectations. So I think the combination of those, let's call it the last six, seven weeks of the year, led to a deviation of around about four million parcels for the quarter... also with, as said, different composition of domestic and cross-border parcels. So that's roughly what you need to think about. On the cost savings, of the 200-300 FTE, kind of the in-year contribution is, is around about the EUR 5 million mark that I, shared with you. And that will mature, grow towards the EUR 25 million, with full year impact of EUR 25 million in 2024. On the collective labor agreement negotiations, the only thing I can say is that we are in those negotiations for the renewal of the collective labor agreement for our mail deliverers. That negotiation is ongoing. And, yeah, I cannot content-wise comment more on the status of that, at this point in time. Okay, thank you. Thank you. Once again, if you would like to ask a question, please press star one and one on your telephone keypad. We will now go to your next question. Your next question comes from the line of Nicolas Mulder from Kepler. Please go ahead. Hi, good morning. Two questions from my side, please. So first, can you please help me bridge the normalized EBIT to normalized comprehensive income? I think, mathematically the costs amounted to EUR 35 million, which is clearly more than we saw in a lot of recent quarters. So what happened there? And secondly, on the, let's say, strong free cash flow, which was supported by working capital and CapEx discipline. On the CapEx, is that CapEx that was cut, or is it CapEx that was postponed to 2024? Thank you. Thank you, Nicolas, for your questions. First one, well, the bridge from Normalized EBIT to Normalized Comprehensive Income, I think we've always said that it's. You should not compare kind of the 2022 flow to this one, because obviously in that year there were very many impacts related to the pension deal that we were concluded, that, that have influenced the bridge from Normalized EBIT to Normalized Comprehensive Income. So this year, it's basically just a function predominantly from EBIT to the adjustments and tax related elements that bring you to Normalized Comprehensive Income, with at some points revaluation, goodwill impairment elements in relation to investments that, that happen below Normalized EBIT levels. So that is, that is roughly what is there. So if you take out the pension element that was big in 2022, it's just a normal pattern. All the elements that are, let's say, in between reconciliation will obviously be in detail disclosed on the 26th. But we think the pattern is quite normal and standard. If you talk about the second question, so working capital and CapEx, it's not that it's kind of phased, we just postponed stuff and it will happen in the beginning of January. The contribution of cuts in CapEx has been there, but very small in comparison to the strong working capital management. And maybe to clarify, that has not been the result of pushing back payments, that then also subsequently lead to significant outflows in January. It's really on the back of very strong focus on our DSO, DPO positions, very strong view on the overdue position, so really pushing on the debtor side of things, together with our sales force, and that has led to this, to this performance. Thank you, Pim, for the answers. If I may follow up on the bridge, I totally understand the difference in reporting structure between 2022 and 2023, but also the quarters in 2023 were very different from the implied value that you presented us with this morning. Can you perhaps... If you don't want to share too much detail, can you say whether the additional costs that I'm at least seeing here are in the P&L, i.e., financial result, tax result, or is it something that is in other comprehensive income? Well, I don't automatically understand kind of the, the, where the question comes from, if you look back at the previous quarters. So in my mind, that followed the same logic, but maybe some exceptions in other comprehensive income in the fourth quarter, given the fact that in between quarters, we don't reevaluate our investments in financial assets and what have you, maybe. So that can be the explanation. I'll look into it after this call, and if there's anything else to share, we'll come back to you. But I don't see anything- Thank you ... specific here. All right. Thank you. We will now go to your next question. One moment, please. Your next question comes from the line of Henk Slotboom from the IDEA. Please go ahead. Good morning, all. Thanks for taking my questions. I've got two and a half, because the first question I count as half. I missed what you said about the mail volumes, Pim. Was that down 0.9%? No, the mail volumes were down 1.9% for the quarter. Okay. Well, there was a hiccup in the line there. Parcels were down 0.9, so maybe that is... Either I made a mistake or that is where the misunderstanding comes from. No, no, no, no, no. There was a blip in the connection, so that probably explains it. Pim, you said we're trying to mitigate as much as possible the impact of cost inflation. Substantial part of the cost inflation relates to wages, eh? We had a change in the minimum wage system. Will the cost savings, as you penciled them in, the EUR 25 million, for example, will that be enough to offset the impact of the increase of the minimum wage? Your PostNL has consulted with alone already, or is there still a negative effect? Do you still need to step up further cost savings? Well, if you take this as kind of a single measure, certainly the 200-300 FTE reduction will not be enough to offset the expected wage increases from 2023- 2024. Certainly not enough, but of course, that's not the only thing we do, eh? So this really related to adjusting the indirect cost levels within our e-commerce space, given the fact that we're looking at market developments that were less favorable already. Mm-hmm. What we do next to that is, of course, push as much as we can of cost increases towards our customers, both on the mail and on the parcel side, and try to always seek, efficiency improvements, that also help us to alleviate some of this inflationary pressure. But as we have seen in 2023, it's... Well, competitive markets, it's not easy to put everything through to price increases, so we probably will need to do more if the current market circumstances continue. What we'll do, how we'll do that, and what the implications will be, that's just a bit too early today. But certainly only looking at the 200-300 is kind of underestimating what we're already doing, and probably needs more than that in 2024. Okay. And then, a final question, and perhaps I should ask you this question again on the 26th of February. I was going through my old notes yesterday, and going back to the presentation you gave in 2021, with related to the step-up in CapEx in anticipation of the further growth in parcels. Now, I realize bloody well that the market circumstances have changed, and that is beyond your own control. But there was one element, the Digital Next element, that caught my attention yesterday. Roughly, all together, with the measures you were taking, not only Digital Next, but also the other things, step up in operating results of around EUR 80 million-EUR 100 million, if I'm correct, and around EUR 40 million of that would come from digitization. Is it fair to assume that I understand that operationally, things have gone differently, and I think it's largely to do with external factors, but the EUR 40 million you expected from digitization, is that something we see back in 2024? And that would make us slightly more optimistic, even if the market would linger on along the lines of 2023. Yeah, a good and a big question, Henk, and I think I would look at it slightly different, and that's in this way. Of course, when we've announced this, that benefits on digital were also a function of growth. There are some elements impact your operations on the digital side if you use algorithms, some really related to increased positions in some of the customer segments. So what we can say is that the Digital Next program does contribute positively to the EBIT, but also over time, we've faced certain investments. We've adjusted the pace of Digital Next as well because of those different market circumstances. So the program is, in our minds, very successful. It does contribute positively to gross and net EBIT, but the overall contribution has been impacted by the same market circumstances that we've talked about. Mm-hmm. I think that is important to understand. We truly believe that process of further digitalization is fundamental as part of our strategy. It will allow us to create more efficiencies to offset, also those high inflationary costs that we just talked about, and it will help us to remain, to have that competitive edge in our key customer journeys. So we'll continue down that road, but of course, also be disciplined on where we spend money, how we spend it, and in what kind of flow we spend it in relation to the market development or lack of market development that we see. And if I may add to that, Henk, we saw each other at the Webwinkel Vakdagen, of course, last Tuesday, where I gave a presentation on how we look into future of e-commerce and trends in the market. I think what is important is that the speeding of digitization is of course going on, and there lies lots of opportunities for PostNL, exactly as Pim is saying. And therefore we do think it's a crucial element when it comes to our strategy in maintaining a market leader, delivering, of course, distinctive services to our customers. Digitization of our change is crucially important. We did share over the last quarters, and we will do as well, of course, end of February, some insight into financials, but also more insight in examples where we see that the digitization help us to be all more efficient or bring new services to customers, et cetera, et cetera. In my view, crucial, and in our view, a crucial element to our strategy. Yeah, I think that will be extremely helpful, Henk. We’ve heard a lot about this EUR 80 million incremental spend on IT. I would consider it very useful to have some broader insight in it. So, any additional information you could provide later on this year will be very helpful. Thank you. Thank you. We will now move to the next question. One moment, please. Your next question comes from the line of Pauls Kirjanovs from Bank of America. Please go ahead. Hi, good morning. Pauls Kirjanovs from Bank of America. Two questions from me, please. How has the competitive environment developed in the period? What are the overall trends you're seeing in the overall market? And then for my second question, can you split out parcel volume developments between domestic and cross-border, please? Thank you. Thank you, Pauls. Well, I think competitive environment and no fundamental changes there. It's really market driven, what we see. Still the same and fierce competition, but no big deviations in market shares, if that's the background of the question. Going into the split domestic and cross-border, we saw a decline in domestic and a significant double-digit growth in cross-border. And if you look at roughly the volume, you need to, of course, understand that in the relative size of things, international volumes are maybe 10%-15% of the total, and they have grown double-digit, whilst the remaining part has deteriorated in the low single digits figures. I think by heart, we've distributed roughly 95 million parcels in the quarter, and roughly, I would say, around about nine to 10 million being international parcels. With total volume growth, 0.9% for the quarter- Yeah. To wrap up. Great, thank you. Thank you. We'll now go to the next question. Your next question comes from the line of David Kerstens from Jefferies. Please go ahead. Hi. Good morning, Pim. I had a question on the EUR 6 million addition to the provision for payments to employees who are ill for more than 24 months. What exactly is this for, and how long do you need to keep those people on the payroll? I think if I would be sick for more than two years, I'd probably been fired more than a year ago. How does it work at PostNL? Yeah, that's a good question. That is something quite specific in the Netherlands, and that is, we are kind of... Now, I'm afraid I will struggle maybe with the translation. We have kind of our own risk on long-term illness. So you can make different choices. Either you get, let's say, invoices from the UWV in case their premiums start to increase because you have higher long-term illness, or you can take that risk yourself, which means that you, in these circumstances, after 22 years, have to pay for the illness directly towards the UWV. 24 months. 24 months, sorry. And this provision is a function of not only the people that you already know are ill for longer than 24 months, but also given the composition and the level of illness that we see, you need to recalculate also the expected outflow from people that are not yet 24 months ill, but might have been ill already for 12 months, 18 months, what have you. And those combinations have led to a higher provision for that future potential payments to be made. That only does not relate to people that are still on your payroll, but also relate to people that were ill when they left your payroll through single year contracts or payroll-type contracts, and which are more difficult to follow. So it's a combination of very many different elements that have led to this step-up in provision. To add to that, David, you're not allowed in the Netherlands, of course, not of course, you're not allowed in the Netherlands to fire people when they're ill, when they have an unlimited contract. If they have a limited time contract, then that contract ends, but you still remain to be responsible for their illness, and that's, that's what this is. Yeah. No, that's very good, of course. And do you know roughly how many people are involved under that provision? That explains the six million number. I will. If you don't mind, I'll park this question for the 26th. I've got a number in my head, but I'm not completely sure, so let's reflect on it and come back. All right, fair enough. Thank you very much. Thank you. We will now go to the next question. Your next question comes from the line of Marco Limite from Barclays. Please go ahead. Hi, thanks for taking my follow-up question. I've got just one more. So, you have announced 8% stamp price increase for 2024. I'm just wondering whether you have completed, let's say, your round of price increases for parcel for 2024, and you are able to disclose ballpark number for the net price increase for next year. Is that number close to the 8% that we've seen for letters? Thank you. Well, the price increase you refer to is the price increase in letters. On the e-commerce side, of course, the contract round has been finalized. We're positive on the results of that, both in terms of conversion towards price increases and of course, more importantly, on maintaining the customers at the level they are. So all in all, a good contract round. And I said, growth is much more a function of market growth than of market share gains and losses. So yeah, so far, so good. What it will all mean for the entire year, 2024, and the balance between total inflationary cost and price increases is certainly something we'll get back to on the 26th of February. And what helped us in this contract round is the fact that we had a very good operational performance on our parcel side. That's also what we, of course, said in the press release, but that's what truly helped us. Thank you. Thank you. Once again, if you would like to ask a question, please press star one and one on your telephone keypad. That is star one and one to ask a question. Apologies, our next question was just withdrawn, and the person has just come back. One moment, please. We will now take the next question, and the question comes from the line of Marc Zwartsenberg from ING. Please go ahead. Yeah, thank you. A follow-up question on the parcel price increases. We didn't have the update indeed on the negotiated contracts, but I thought that on the USO sort of parcels, the price increases were almost zero. Can you give us maybe a bit of feel on the price increase? 'Cause my perception was that the price increases were quite minimal. And I can also imagine that with the cross-border flows being up double digits and probably the likes of bol.com being down, that they also need to find a way to compensate for that and therefore might be very price sensitive. Can you give me maybe a bit, give a bit of color on that? A little bit, and that is indeed on single items, price increases might not be that much, but that is also because of kind of the spread between the lower average prices and the higher. So, but in terms of total price, of course, the big volume is with our biggest clients and the customer segments below. On those categories, we have converted in contract price increases. As we discussed before, quite often also a function of an index, which is called the NEA i ndex. And we've converted, well, somewhere, I would say somewhere around about the 70%-80% of NEI Index increases into our individual price points. That's not to say that revenue will also increase with just those numbers because of mix effects. And what we see is that cross-border is growing. Those are very big clients with on average lower average prices than the average domestic prices in the Netherlands, given the composition of the customer base in the Netherlands being significantly different. So it's thousands of clients, of course, 10 very big ones, but then also a long tail of mid-market clients that have price points that are significantly higher than the biggest clients we serve. Cross-border is a function of a few very big clients. So the different composition, the different relative size, leads to different average prices, and that leads to the negative mix. Whilst at the same time, individual price points are definitely in individual contracts moved up. Yeah, and how big is that single items in the mix? In volume terms, small. I don't have a number for you now. We've not or don't have all the reconciliations of the different product categories already ready. But it's really the single items element is really small in comparison to the overall 344 million that we've done in volumes in this year. Okay. Then maybe on your comment on Q4, you said, "Okay, we have this fixed capacity." Every year, of course, you need to plan for something. You have your capacity set, and then it disappoints, but the bill goes completely to personnel. Is that something you're looking into for maybe 2024, to see how you can split that bill a bit between clients and yourself, or how can you deal with that to make it a bit less risky for you to plan on the season? 'Cause you plan on the expected volumes from the big volume vendors. In the end, they don't come through. They can't help it, of course, but still, the bill is completely for you 'cause you keep your capacity in place. Can you do a markup like we had in Corona, that you had this EUR 0.25 or so extra for peak deliveries? Is there anything you can do there? Yeah, well, we are definitely looking ways to kind of, let's say, try to get to a better split of this bill, but this is not kind of a very easy fix for it. So there's a couple of elements. We are changing some of our pricing strategies. We're, of course, making clear that deviation from volumes will impact kind of the sequence and the delivery performances if clients are significantly off. We try to get a more equal flow in week and in peak periods, so that the ramp-up is not gonna be as steep as it was last time around. We, of course, seek ways to work together with clients to improve on the quality of the volume expectation from them. We try to find ways to make our own ramp-up decisions more flexible or later. So it needs to come from the combination of these elements. But as Herna also said, operationally, that's kind of the, yeah, the two sides of a same coin. Of course, financially, we're not happy with the performance. Customer-wise, operational-wise, it has been very successful. We've really helped our biggest clients in also for them, difficult periods, and that has led to very high customer satisfaction rates on how we've performed during peak, and I think that is helpful for our longer-term ambition. That's very supportive for what we want to achieve strategically. But yeah, you're right, we need to find ways to create more balance on how we split the bill, to use that word. But it's not one single solution that will resolve this. For sure. Yeah. And then maybe on the final one, if I may. You mentioned the ramp-up was very good in the first 6 weeks, and then the last 6 weeks was a lot slower. Do you believe that's more a phasing that people said, "Okay, we do more here on Black Friday, and we do less on Christmas?" Should we take that then also as a sort of an indication going forward? 'Cause I can imagine that December then was down, say, 4%-5%, if you start off the quarter with six, seven or so. Is that just a phasing effect, or is it just a phenomenon of the microenvironment getting weaker and weaker into January as well? Yeah, it was, of course, not only phasing, because at the end of the day, there was less volume than anticipated. I think there's a couple of elements here, again, that come into play. Remember that we came from relatively low numbers after the summer holidays, so being low in third quarter automatically meant a very steep ramp-up towards Black Friday, and steeper than normally would have been the case if Q3 would have been stronger. If you go back to comparisons, in previous years, that ramp-up just from Q3 towards peak was less steep. And I think also the weeks, the days in those periods, didn't show every day the same profile. So it was on certain days up, significantly up, and then down. So it was a less predictable pattern also in the days of the weeks, and the weeks of this period. But we all really saw it also to tail off quickly after the big campaigns of the Amazon's, the bol.com's, the Ali's in peak disappeared, and it was kind of back to normal again. Of course, picking up a bit for Christmas, but the period in between, I saw a really pretty steep decline. Whether or not this is the new pattern or the new profile is very difficult to predict at this point in time. Yeah. Well, that is very helpful. Thank you, Pim. Those are my questions. Thank you. I will now hand the call back to Ms. Inge Laudy for closing remarks. Yeah, thank you all for joining, and we speak again on the 26th of February. Thank you. Thank you. Thank you. This concludes today's conference call. Thank you for participating. 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