Result for the year

Operating income

Total 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 control of the goods or services are transferred 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 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 products purchased 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 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 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 to the consolidated financial statements.

Revenue from contracts with customers

Revenue from contracts with customers represent revenue from the delivery of goods and 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’s ordinary postal and logistics services and mainly include rental income of temporarily leased-out property and custom clearance income.

The company’s business involves the logistical service of delivering mail, parcels and other consignments. Nearly all of the company’s revenues are represented by a single performance obligation being ‘logistic services’. Revenue is being recognised at a point in time when control is transferred to the customer, generally on delivery of the mail, parcels or other consignments. Other performance obligations within the company’s business comprise the rental of post-boxes (revenue recognition over time), print services (revenue recognition at a point in 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. Refer to note 2.5 for the segment information of the other revenue and eliminations.

PostNL Revenue from contracts with customers in million
2018, 2019

Year ended at 31 December

2018

2019

Parcels

1,547

1,663

Mail in the Netherlands

1,672

1,600

PostNL Other

74

81

Eliminations

(535)

(515)

Total

2,758

2,829

Volume and revenue growth within Parcels was partly offset by decreased revenue within Mail in the Netherlands, mainly resulting from the continued volume decline in addressed and unaddressed mail.

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.

PostNL Geographical segmentation in million
2018, 2019

Year ended at 31 December

2018

2019

The Netherlands

2,483

2,541

Rest of Europe

148

158

Europe

2,631

2,699

Rest of the World

127

130

Total

2,758

2,829

Work contracted out and other external expenses

Accounting policies

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

As from 2019, 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.

PostNL Work contracted out and other external expenses in million
2018, 2019

Year ended at 31 December

2018

2019

Parcels

655

691

Mail in the Netherlands

383

395

PostNL Other

33

63

Work contracted out

1,071

1,149

Rent & lease expenses

67

16

External temporary staff

170

165

Total

1,308

1,330

Costs of work contracted out and other external expenses increased by €22 million in 2019 mainly due to increased volumes and service expansion within Parcels, partly offset by the decrease of rent & lease expenses resulting from the adoption of IFRS 16.

Salaries, pensions and social security contributions

PostNL Salaries, pensions and social security contribution in million
2018, 2019

Year ended at 31 December

2018

2019

Salaries

756

786

Social security charges

115

127

Salaries and social security charges

871

913

   

Defined benefit plans

114

107

Defined contribution plans

12

12

Pension charges

126

119

   

Net addition to restructuring provisions

3

26

Share-based payments

3

1

   

Total

1,003

1,059

In 2019, pension charges decreased by €7 million, resulting from lower regular defined benefit charges. More detailed information on pensions is included in note 3.5. For the net additions to restructuring provisions reference is made to note 3.6 Other provisions.

PostNL Labour force as indicated
2018, 2019

1

2018

2019

Headcount

  

Parcels

5,722

7,027

Mail in the Netherlands

30,753

37,966

PostNL Other

1,310

1,310

Total at year end

37,785

46,303

External agency staff at year end

7,309

6,702

   

Full-time equivalents (FTEs)

  

Parcels

4,664

5,653

Mail in the Netherlands

14,547

17,075

PostNL Other

1,210

1,245

Total year average

20,421

23,973

  • 1 Including temporary personnel on our payroll; the external agency staff are additional.

The total headcount of PostNL increased by 8,518 employees, which mainly relates to the acquisition of Sandd and an increase within Parcels due to growth in parcel volumes, partly offset by the reduction within Mail in the Netherlands due to the impact of volume decline and cost savings initiatives. The labour force is also measured in FTEs based on the hours worked divided by the local standard. In 2019, the average number of FTEs increased by 3,552 FTEs compared to 2018. The average number of employees working in the Netherlands was 23,315 FTEs (2018: 19,827) and outside the Netherlands was 658 FTEs (2018: 594).

Depreciation, amortisation and impairments

PostNL Depreciation, amortisation and impairments in million
2018, 2019

Year ended at 31 December

2018

2019

Amortisation of intangible assets

25

34

Impairment of intangible assets

 

4

Depreciation property, plant and equipment

53

59

Impairment of property, plant and equipment

5

2

Depreciation right-of-use assets

 

77

Impairment of assets held for sale

 

4

Total

83

180

In 2019, depreciation and amortisation include €25 million of accelerated write-down of assets from Sandd, mainly related to right-of-use assets. A large part of Sandd's assets will only be used until February 2020 and are therefore depreciated in 3 months as of the acquisition date.

In 2019, amortisation of intangible assets related to software for €31 million (2018: €22 million) and other intangibles for €3 million (2018: €3 million). The increase in amortisation of software relate to increased investments in IT projects and the acquisition of Sandd. The impairment of intangible assets of €4 million, recorded within PostNL Other, partly related to software from Stockon.

In 2019, the impairment of assets held for sale of €4 million relates to a fair value impairment of Spotta, within Mail in the Netherlands, that is classified as held for sale per 31 December 2019. The impairment of property, plant and equipment of €2 million is recorded within Mail in the Netherlands and mainly concerns the impairment of real-estate related assets used by Spotta.

In 2018, the impairment of property, plant and equipment of €5 million, recorded within Mail in the Netherlands, mainly related to the demolition of a building of which the land is used to build a new parcel sorting centre.

Other operating expenses

The other operating expenses of €101 million (2018: €151 million) consist of IT, communication, office, travel, consulting and training expenses and other shared services costs. The decrease in 2019 includes the benefit of the review of the methodology for calculating non-deductible VAT charges, with application as from the year 2018.

In 2019, total incurred EY audit fees amounted to €2.6 million (2018: €2.2 million).

PostNL Audit fees in million
2018, 2019

Year ended at 31 December

2018

2019

Audit fees

1.3

1.7

Audit-related fees

0.9

0.7

Tax advisory fees

0.0

0.0

Other non-audit services

0.0

0.2

Total

2.2

2.6

Audit fees include fees from the audit of the financial statements. Audit-related services include fees from assurance engagements related to the corporate responsibility information, regulatory reporting obligations, employee benefit plan data and other assurance engagements for the benefit of third parties. Other non-audit services include fees from, amongst others, consent and comfort letters to security offering and agreed upon procedures.

In accordance with Dutch legislation, article 2:382a of the Dutch Civil Code, the total audit and audit-related fees charged by the auditor EY based in the Netherlands amounted to €2.3 million (2018: €1.7 million), subdivided into audit services of €1.4 million, audit-related services of €0.7 million and other non-audit services of €0.2 million.

Net profit and earnings per share

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 million
2018, 2019

Year ended at 31 December

2018

2019

Interest expenses on long-term borrowings

14

5

Interest on net defined benefit pension liabilities

8

6

Interest on leases

0

3

Other

5

5

Interest and similar expense

27

19

   

Other interest and similar income

(3)

(3)

   

Net financial expense/(income)

24

16

In 2019, interest expenses on long-term borrowings decreased mainly as a result of the repayment of a bond in August 2018, which was replaced by a new bond with a lower interest rate.

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 million
2018, 2019

Year ended at 31 December

2018

2019

Current tax expense

45

39

Changes in deferred taxes

(11)

(8)

Total income tax expense

34

31

   

Income taxes paid

39

34

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, see note 3.8 to the consolidated financial statements.

In 2019, the income taxes paid relate almost completely to income taxes paid in the Netherlands and include payments and refunds related to prior years. The 2019 difference between the total income taxes (€31 million) and the income taxes paid (€34 million) can mainly be explained by the changes in deferred taxes (€8 million) and the 2019 movements of the net income tax payable position (€(6) million).

PostNL Effective income tax rate in %
2018, 2019

Year ended at 31 December

2018

2019

Dutch statutory income tax rate

25.0

25.0

Adjustment regarding statutory income tax rates other countries

(0.4)

0.0

Weighted average statutory tax rate

24.6

25.0

Tax effects of:

  

Non and partly deductible costs

1.5

4.0

Exempt income

(0.3)

(0.2)

Other

(4.7)

1.3

Effective income tax rate

21.1

30.1

The line ‘Non and partly deductible costs’ mainly relates to non deductible costs relating to the Sandd acquisition, the so-called mixed expenses (e.g., meals, entertainment) and the non deductible treatment of our share based payments. The line ‘Exempt income’ relates to the non taxable treatment of our results from (former) participations. The line ‘Other’ consists mainly of the impact of tax rate changes in the Netherlands on our deferred tax positions going forward (1.7%; 2018: -3.9%), updates of our prior year tax positions in the Netherlands (-1.7%), expiration of tax carry forwards in the Netherlands (1.2%) and several smaller effects (0.1%).

Earnings per ordinary share: 0.8 eurocents (2018: 7.1 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’s calculation related to earnings per share.

PostNL (Average) number of outstanding ordinary shares in shares
2018, 2019

Year averages and numbers at 31 December

2018

2019

Number of issued and outstanding ordinary shares

469,199,776

493,952,586

Shares held by the company to cover share plans

0

0

   

Average number of ordinary shares per year

462,015,866

482,577,917

Diluted number of ordinary shares per year

1,163,235

906,369

Average number of ordinary shares per year on a fully diluted basis

463,179,101

483,484,286

At 31 December 2019, PostNL had potential obligations under share plans to deliver 906,369 shares (2018: 1,163,235 shares), calculated based on the share price of €2.012 as at 31 December 2019 (31 December 2018: €1.997).

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.

Net cash (used in)/from operating activities

In 2019, net cash from operating activities of €210 million (2018: €29 million) resulted from €258 million of cash generated from operations (2018: €94 million) reduced by €14 million interest paid (2018: €26 million) and €34 million income tax paid (2018: €39 million).

Cash generated from operations

The increase in cash generated from operations of €164 million is explained by €36 million higher profit before income tax adjusted for non-cash items and investment income, a change in working capital of €87 million and a higher change in other provisions of €44 million, partly offset by a lower change in pension liabilities of €3 million. The increase in profit before income tax adjusted for non-cash items and investment income was mainly due to the adoption of IFRS 16 which causes a shift from net cash from operating activities to net cash used in financing activities (repayments of lease liabilities).

PostNL Cash generated from operations in million
2018, 2019

Year ended at 31 December

2018

2019

Total profit before tax adjusted for non cash items and investment income

252

288

   

Pension expense defined benefit plans

114

107

Cash contributions defined benefit plans

(103)

(99)

Payment unconditional funding obligation

(33)

(33)

Change in pension liabilities

(22)

(25)

   

Additions to/releases from provisions

9

44

Withdrawals

(23)

(14)

Change in other provisions

(14)

30

   

Changes in working capital

(122)

(35)

   

Total cash generated from operations

94

258

For the changes in provisions, reference is made to note 3.5 Provisions for pension liabilities and to note 3.6 Other provisions. The lower investments in working capital mainly related to lower trade accounts receivable within Parcels and within Mail in the Netherlands.

Interest paid

The interest paid is explained as follows:

PostNL Interest paid in million
2018, 2019

Year ended at 31 December

2018

2019

Interest on long-term borrowings

20

4

Interest on leases

0

5

Bank charges and other

6

5

Total

26

14

The interest paid on long-term borrowings decreased mainly as a result of the repayment of a bond in 2018, which was replaced by a new bond with a lower interest rate.

Income taxes paid

The income taxes paid of €34 million (2018: €39 million) mainly related to income taxes paid in the Netherlands and include payments and refunds related to prior years.

Net cash (used in)/from investing activities

PostNL Net cash investing activities in million
2018, 2019

Year ended at 31 December

2018

2019

Acquisition of subsidiaries (net of cash)

 

(65)

Capital expenditure on intangible assets and property, plant and equipment

(95)

(66)

Proceeds from sale of property, plant and equipment

46

14

Changes in other loans receivable

1

0

Other

0

11

Net cash (used in)/from investing activities

(48)

(106)

Acquisitions

In 2019, cash outflow net of cash for acquisitions related to the acquisition of Sandd (€64 million) and the acquisition of Mostert Verkerk (€1 million). Reference is made to note 5.3 Business combinations.

Capital expenditure on intangible assets and property, plant and equipment

In 2019, capital expenditures on intangible assets of €32 million (2018: €40 million) mostly related to software including prepayments for software. The capital expenditures on property, plant and equipment amounting to €34 million (2018: €55 million) mainly related to the sorting equipment for the small parcel sorting centre 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 2019, proceeds from the sale of property, plant and equipment amounted to €14 million (2018: €46 million) and mainly related to the sale of several buildings.

Other

In 2019, other includes an amount of €6 million received for the reduction of our stake in Whistl, a financial asset at fair value through OCI. In the consolidated statement of cash flows, the amount is included in 'Other changes in (financial) fixed assets'. Further, 'Other' includes €3 million net cash received for the sale of PostNL Communicatie Services, a subsidiary from Mail in the Netherlands. The book profit on the sale of PostNL Communicatie Services of €5 million is included in other income in the consolidated income statement. An additional amount of €7 million from the sale will be received in 2020.

Net cash (used in)/from financing activities

PostNL Net cash financing activities in million
2018, 2019

Year ended at 31 December

2018

2019

Dividends paid

(63)

(71)

Net cash from debt financing activities

(220)

232

Repayments of leases

(2)

(62)

Net cash (used in)/from financing activities

(285)

99

In 2019, net cash from financing activities of €99 million (2018: €(285) million) related to the final 2018 and interim 2019 cash dividend paid of €71 million (2018: €63 million), the proceeds of a new eurobond of €296 million partly offset by the repayment of short-term borrowings of Sandd of €64 million (2018: €223 million repayment of a eurobond) and the repayments of leases of €62 million (2018: €2 million). 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.

Other comprehensive income and equity development

The decrease of total equity from €49 million on 31 December 2018 to €(18) million on 31 December 2019 is mainly explained by net profit for the year of €4 million, partly offset by the payment of cash dividends of €71 million in total and other comprehensive income of €(1) million. Other comprehensive income mainly consisted of a negative impact from pensions of €5 million and the increase in value of the investment in Whistl by €3 million.

Equity attributable to the equity holders of PostNL consisted of the following items:

Issued share capital and Additional paid-in-capital

As at 31 December 2019, issued share capital amounted to €40 million (2018: €38 million) and additional paid-in-capital amounted to €160 million (2018: €160 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 million
2018, 2019

 

Currency translation reserve

Hedge reserve

Financial assets at fair value OCI

Other reserves

Total other reserves

Balance at 1 January 2018

0

(1)

0

74

73

      

Total comprehensive income

0

1

11

27

39

Appropriation of net income

   

(48)

(48)

Share-based compensation

   

1

1

      

Balance at 31 December 2018

0

0

11

54

65

      

Total comprehensive income

0

(2)

3

(2)

(1)

Appropriation of net income

   

(166)

(166)

Share-based compensation

   

(1)

(1)

      

Balance at 31 December 2019

0

(2)

14

(115)

(103)

Currency translation reserve

As at 31 December 2019, the translation reserve amounted to €0 million (2018: €0 million), mainly reflecting the movement in exchange rate differences on converting subsidiaries of Spring within Parcels into euros.

Hedge reserve

As at 31 December 2019, the hedge reserve amounted to €(2) million (2018: €0 million). The tax impact on the cash flow hedges included in the hedge reserve as at 31 December 2019 is €0 million (2018: €0 million). For more information, see note 4.5 to the consolidated financial statements.

Financial assets at fair value through OCI

As at 31 December 2019, the reserve related to the financial assets at fair value through OCI amounted to €14 million (2018: €11 million). The increase in 2019 related to the increase in value of the investment in Whistl by €3 million (2018: €11 million). For more information, see note 4.2 to the consolidated financial statements.

Other reserves

As at 31 December 2019, the other reserves amounted to €(115) million (2018: €54 million). In 2019, the other reserves decreased by €169 million mainly resulting from the appropriation of net income from 2018 of €(166) million and a negative pension effect within other comprehensive income (net of tax) of €5 million. For details on pensions, reference is made to note 3.5.

Retained earnings

As at 31 December 2019, retained earnings amounted to €(118) million (2018: €(217) million). In 2019, retained earnings increased by €99 million due to the appropriation of net income from 2018 of €166 million and total profit for the year of €4 million in 2019, partly offset by the payment of cash dividends of €71 million in total.

The Board of Management has proposed not to make an amount available for distribution of dividend. Refer to note 6.5 for more details of this proposal.

Segment information

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.

The following table presents the reconciliation of the 2019 segment information relating to the income statement of the reportable segments. Segment information relating to the balance sheet is reported in note 3.11.

PostNL Segmentation in million
2018, 2019

Year ended at 31 December 2019

Parcels

Mail in NL

PostNL Other

Eliminations

Total

Revenue from contracts with customers

1,473

1,356

0

 

2,829

Intercompany sales

190

244

81

(515)

 

Other operating revenue

9

6

  

15

Total operating revenue

1,672

1,606

81

(515)

2,844

Other income

0

12

0

 

12

Depreciation/impairment PP&E

(24)

(32)

(5)

 

(61)

Amortisation/impairment intangibles

(9)

(17)

(12)

 

(38)

Depreciation/impairment right-of-use assets

(31)

(32)

(14)

 

(77)

Impairment assets held for sale

 

(4)

  

(4)

Total operating income

120

25

(26)

 

119

Net financial income/(expense)

    

(16)

Results from investments in JVs/associates

    

0

Income taxes

    

(31)

Profit/(loss) from discontinued operations

    

(68)

Profit for the year

    

4

      

Underlying cash operating income

121

76

(21)

 

176

The key financial performance indicator for management is underlying cash operating income. The underlying cash operating performance focuses on the underlying cash earnings performance, which is the basis for the dividend policy. In the analysis of the underlying cash operating performance, adjustments are made for exceptional items as well as adjustments for non-cash costs for pensions and provisions. For pensions, the IFRS-based defined benefit plan pension expenses are replaced by the non-IFRS measure of the actual cash contributions for such plans. For the other provisions, the IFRS-based net charges are replaced by the related cash outflows. Underlying cash operating income is reported on a monthly basis to the chief operating decision-makers.

The following table presents the reconciliation from reported operating income to underlying operating income and underlying cash operating income.

PostNL From reported to underlying (cash) operating income in million
2019

Year ended at 31 December

Reported operating income

Restruc-turing related charges

Payment uncond. funding obligation pensions

Accelerated write-down of Sandd assets

Project costs and other

Underlying operating income

Changes in provisions

Changes in pension liabilities

Underlying cash operating income

Parcels

120

2

2

 

(2)

122

2

(3)

121

Mail in NL

25

25

27

25

(25)

77

6

(7)

76

PostNL Other

(26)

 

(29)

 

18

(37)

(2)

18

(21)

Total 2019

119

27

0

25

(9)

162

6

8

176

From reported to underlying operating income

In 2019, underlying operating income totalled €162 million (2018: €209 million). Underlying operating income excludes exceptional items, which amounted to €43 million in 2019 (2018: €24 million). In 2019, the normalisation for project costs and other of €(9) million related to non-deductible VAT 2018 (€(20) million), compensation for transitional payments (€(8) million), fair value impairments of Stockon and Spotta (€9 million), book profit on the sale of PostNL Communicatie Services (€(5) million), regulatory-related advisory costs and Sandd-related transaction and integration costs (€14 million) and the consolidation effect of discontinued operations (€1 million). In 2019, the fifth and last instalment of the unconditional funding obligation to the pension fund of €33 million was paid. The segments Parcels, Mail in the Netherlands and PostNL Other record the unconditional funding obligation paid as expenses. As these payments do not represent IFRS-based pension expenses, PostNL Other records the reverse effect.

From underlying operating income to underlying cash operating income

In 2019, underlying cash operating income totalled €176 million (2018: €188 million). The changes in provisions of €6 million in 2019 (2018: €(32) million) represent the difference between the underlying net addition for restructuring and other provisions of €17 million (2018: €4 million) and the underlying cash payments of €11 million (2018: €36 million). The changes in pension liabilities of €8 million in 2019 (2018: €11 million) represent the difference between the recorded underlying pension expenses of €119 million (2018: €126 million), and the underlying cash payments of €111 million (2018: €115 million), which excludes the fifth and last instalment of the unconditional funding obligation of €33 million (2018: €33 million). The decrease of €12 million in underlying cash operating income comprised lower results at Mail in the Netherlands (€(17) million), partly offset by a higher result in Parcels (€4 million) and PostNL Other (€1 million).

The following tables present the reconciliation of the 2018 segment information relating to the income statement of the reportable segments. The figures have been represented for adjusted segment reporting and the impact of the discontinued operations. Segment information relating to the balance sheet is reported in note 3.11.

PostNL Segmentation in million
2018

Year ended at 31 December 2018

Parcels

Mail in NL

PostNL Other

Eliminations

Total

Revenue from contracts with customers

1,342

1,415

1

 

2,758

Intercompany sales

205

257

73

(535)

 

Other operating revenue

8

6

  

14

Total operating revenue

1,555

1,678

74

(535)

2,772

Other income

1

19

1

 

21

Depreciation/impairment PP&E

(21)

(31)

(6)

 

(58)

Amortisation/impairment intangibles

(9)

(11)

(5)

 

(25)

Total operating income

119

100

(34)

 

185

Net financial income/(expense)

    

(24)

Results from investments in JVs/associates

    

0

Income taxes

    

(34)

Profit/(loss) from discontinued operations

    

(94)

Profit for the year

    

33

      

Underlying cash operating income

117

93

(22)

 

188

PostNL From reported to underlying (cash) operating income in million
2018

Year ended at 31 December

Reported operating income

Project costs and other

Impair- ment building

Restruc- turing related charges

Payment uncond. funding obligation pensions

Underlying operating income

Changes in provisions

Changes in pension liabilities

Underlying cash operating income

Parcels

119

   

2

121

(1)

(3)

117

Mail in NL

100

 

4

3

26

133

(27)

(13)

93

PostNL Other

(34)

17

  

(28)

(45)

(4)

27

(22)

Total 2018

185

17

4

3

0

209

(32)

11

188