In accordance with our dividend policy, adopted at 21 February 2020, PostNL aims to pay a dividend that develops substantially in line with operational performance. Dividend distribution is conditional on being properly financed in accordance with PostNL’s financial framework. PostNL is steering for a solid balance sheet with a positive consolidated equity, aiming at a leverage ratio (adjusted net debt/EBITDA) not exceeding 2.0 and applying strict cash flow management. The dividend pay-out ratio will be around 70% - 90% of normalised comprehensive income. Shareholders are offered a choice to opt for cash or shares. Dividend will be distributed twice a year, with interim dividend set at ~ 1/3 of dividend over prior year.

In financing the transaction with Sandd in 2019 and the additional integration costs, PostNL expected to temporarily exceed the leverage ratio target. In line with its dividend policy, PostNL did not pay dividend during the integration period and as long as the leverage ratio exceeded ~2. PostNL aimed to reduce the leverage ratio below the 2.0x target in 12 to maximum 24 months and to resume paying dividends thereafter.

Due to the strong financial performance in 2020 and the strengthening of the financial position, the leverage ratio at the end of 2020 amounted to 1.0x. This allows PostNL, earlier than anticipated, to propose a dividend of €0.28 per ordinary share for 2020 (2019: €0.08), based on normalised comprehensive income of €197 million for 2020 and a pay-out ratio of 70%, to be fully paid as a final dividend. This will be proposed to the Annual General Meeting of Shareholders to be held on 20 April 2021.

The current dividend policy is to be applied on any profits over the financial year 2020 and subsequent years thereafter (until adjusted). This policy is available on PostNL’s corporate website.