Dutch postal group PostNL today announced it will remain in the German mail market and invest in its Postcon subsidiary following a financial turnaround.
After last year selling off its British mail subsidiary Whistl but deciding to retain the Italian business Nexive following a strategic review of its international activities, PostNL said it has decided to continue to invest in its German operations (Postcon), based on the improved performance of the business.
PostNL expects Postcon to be break-even in 2016 and to contribute to its cash profitability in the years thereafter. The German company, with 2,700 employees (2,100 FTEs), has turnover of €494 million and delivers one billion letters a year for more than 4,000 clients to more than 20 million households across the country.
Postcon, which is the main challenger to Deutsche Post and has its own final-mile delivery operation, “has growth potential in the German mail market”, according to the Dutch group.
PostNL said it supports the local management and expects that it will be able to improve Postcon’s profitability by growing its market share through expanding its customer base, by improving pricing and implementing further cost reductions.
In order to fully realise this growth potential, PostNL said it has decided to sell the last-mile operations in Frankfurt and buy out the minority shareholder of Postcon National. Both transactions are subject to the approval from the relevant authorities.
This decision will not impact the 2016 outlook for PostNL’s underlying cash operating income. The ambition for 2020 will be adjusted to between €285 million – €355 million, compared to €265 million – €335 million excluding the German activities.
