3 Operating assets and liabilities

3.1 Working capital

3.1.1 Accounts receivable

PostNL Accounts receivable in € million
2020, 2021

Trade accounts receivable are non-interest bearing and are generally on terms of 3 to 30 days.

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 increase of trade accounts receivable-total from €346 million on 31 December 2020 to €360 million on 31 December 2021 is mainly explained by higher revenue in 2021. The trade accounts receivable past due increased from €89 million on 31 December 2020 to €125 million on 31 December 2021 (see table expected credit losses at the next page).

The top 10 trade accounts receivable accounted for 19% of the outstanding balance as at 31 December 2021 (2020: 19%). The concentration of the trade accounts receivable portfolio over the different regions can be summarised as follows:

• Netherlands €311 million (2020: €290 million),

• rest of Europe €32 million (2020: €26 million), and

• the rest of the world €10 million (2020: €20 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 € million
2020, 2021

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 € million
2020, 2021

3.1.2 Other current liabilities

PostNL Other current liabilities in € million
2020, 2021

The VAT payable decreased by €12 million. This is mainly caused by a decrease in Dutch revenue and a lower amount of foreign supplies, both in the fourth quarter of 2021 compared to the fourth quarter of 2020.

Other current liabilities decreased by €20 million which is explained by the cash funding liabilities in 2020 related to the sale of Nexive to Mutares.

3.1.3 Contract liabilities

PostNL Contract liabilities in € million
2020, 2021

In 2021, decreased stamp inventory at retailers mainly caused the decrease in deferred revenue from unused stamps. As of 2021, management assumes that special stamps sold by retailers are consumed equal to regular stamps. The increase in other amounts received in advance from customers mainly related to an increase in pre-billed contracted services by Prime Vision. We expect to perform almost all services related to the outstanding contract liabilities at 31 December 2021 within one year. However, note that within one year we expect outstanding contract liabilities more or less in line with the amounts currently reported.

3.1.4 Accrued current liabilities

PostNL Accrued current liabilities in € million
2020, 2021

Main items within the expenses to be paid to third parties included payables to business partners of €24 million (2020: €19 million), claims of €6 million (2020: €9 million) and various other expenses to be paid.

Expenses to be paid to personnel included accrued wages and salaries of €24 million (2020: €26 million) and accruals for employee profit-sharing of €14 million(2020: €20 million).

The accrual for terminal dues relates to payables to foreign postal operators relating to the years 2021 and before, partly consisting of positions in SDR currency. The net payable position, including the receivable for terminal dues of €12 million (2020: €26 million) included in prepayments and accrued income, amounted to €192 million (2020: €143 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.

3.2 Property, plant and equipment

PostNL Property, plant and equipment in € million
2020

PostNL Property, plant and equipment in € million
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 2021 are above the level of 2020. Investments were made in the new sorting and delivery centres within Parcels, the new head office and in various other equipment. The reclassifications from construction in progress mainly relate to the finalisation of the small parcels sorting centre and the new head office.

In 2020, the disposals related for €36 million to the sale-and-leaseback transaction of four mail sorting centres and the international sorting centre. The remaining disposals related to the sale of other real estate in the Netherlands. The book profit from these sales are included in other income in the consolidated income statement. For further information on the sale-and-leaseback transaction, reference is made to note 2.1.2 Other income.

In 2021, the transfers to assets held for sale of €3 million related to buildings in the Netherlands. In 2020, the transfers to assets held for sale related for €6 million to buildings in the Netherlands and for €2 million to equipment from Cendris that was classified as held for sale per 31 December 2020.

The property, plant and equipment 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 2021, 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 €38 million at 31 December 2021) and corresponding (legal) lease loans, and right-of-use assets (3 locations) and corresponding lease liabilities have been recorded.

3.3 Intangible fixed assets

PostNL Intangible fixed assets in € million
2020

PostNL Intangible fixed assets in € million
2021

In 2020, the transfers to assets held for sale of €15 million related to Cendris, which was classified as held for sale at 31 December 2020.

Goodwill

Goodwill is allocated to the Group’s 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 2020, the CGU structure has not changed.

In 2020, the addition to goodwill of €1.4 million resulted from the preliminary purchase price allocation of the acquisition of MyParcel.com and is allocated to the CGU Spring. In 2021, finalisation of this analyses resulted in concluding goodwill of €0.6 million. In 2020, the disposal of goodwill of €3 million related to the sale of Adeptiv (CGU Mail in the Netherlands).

PostNL Goodwill per CGU in € million
2020, 2021

Based on the 2021 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 (2020: 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 pre-tax discount rate used in the CGU valuations varies around 10.0% (2020: 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 € million
2020, 2021

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:

• 2022: €40 million,

• 2023: €32 million,

• 2024: €26 million, and

• thereafter: €49 million.

Software and other intangible assets include an amount of €1 million (2020: €2 million) of capitalised research and development costs.

3.4 Leases

PostNL Right-of-use assets in € million
2020

PostNL Right-of-use assets in € million
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.

The new leases of €117 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 2020, the new leases included €21 million of the sale-and-leaseback transaction of four mail sorting centres and the international sorting centre (for further information refer to note 2.1.2 Other income). In 2021, the lease modifications/reassessments of €12 million mainly reflect changes to the lease payments and lease terms.

In 2021, the disposals of €3 million related to disposed and subleased contracts from buildings from Sandd (2020: €8 million). In 2020, the disposals further related to leasehold assets included in the sale-and-leaseback transaction (€7 million). In 2020, the depreciation includes €9 million of accelerated depreciation of assets from Sandd and the transfers to assets held for sale of €5 million related to rented buildings from Cendris that was classified as held for sale at 31 December 2020.

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 2021, 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 €38 million at 31 December 2021) and corresponding (legal) lease loans, and right-of-use assets (3 locations) and corresponding lease liabilities have been recorded.

PostNL Lease liabilities in € million
2020, 2021

In 2021, the lease liabilities increased by €39 million, mainly caused by the new sorting and delivery centres within Parcels and the new head office. The total cash outflow from leases amounted to €82 million (2020: €93 million) and related for €74 million to repayments of lease liabilities (2020: €79 million), partly offset by €5 million of incentives received, and for €13 million to rent and lease expenses (2020: €14 million). Refer to note 4.1 for further information on the lease liabilities.

In 2021, rent and lease expenses of €13 million (2020: €14 million) relate for €11 million (2020: €12 million) to short-term leases and for €2 million (2020: €2 million) to leases for which the underlying asset is of low value. The interest expenses on lease liabilities amounted to €7 million (2020: €4 million).

3.5 Provisions for pension liabilities

PostNL’s main Dutch defined benefit average pay pension plan (main plan) covers the employees subject to PostNL’s collective labour agreement and staff with a personal labour agreement in the Netherlands. The main plan is externally funded in ‘Stichting Pensioenfonds PostNL’ (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.

Main developments during 2021

The coverage ratio of the main fund increased substantially in 2021. By the end of 2021, the month-end coverage ratio amounted 126.2% (2020: 111.1%). The increased coverage ratio is mainly explained by a positive effect from an increase of the interest rate and a positive return on plan assets. The 12-months average coverage ratio of the main fund amounted 121.4% per 31 December 2021 (2020: 104.4%).

In 2021 PostNL paid the first out of five annual instalments of €16 million related to the unconditional funding obligation of €80 million as agreed upon with the pension fund in 2020. At 31 December 2021, the outstanding funding obligation amounted to €64 million, which will be paid in 4 equal instalments during the years 2022-2025. The deferred payment is accounted for as a minimum funding requirement.

Further details of the main plan

The main plan is 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 €112,189 (level 2021), minus a state pension offset.

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 2021 and 2022 has been set at 1.783% and 1.826% of the pensionable base.

When the 12 months average coverage ratio will be below the minimum required funding level of 104.0% a 5-year recovery period will start, in which top-up payments of at most 1.25% of the fund’s plan obligations per year might apply. In determining the top-up payment obligation, the resilience of the pension fund will be taken into account. The requirement to supplement a deficit will be determined on the basis of the ‘beleidsdekkingsgraad’ (i.e. the 12-months average coverage ratio). Based on our projections we currently do not anticipate any top-up payments.

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’s own financial instruments through indirect holdings by mutual funds. Around 71% 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.

PostNL Asset mix/return of main pension plan in %
2020, 2021

Statement of changes in provision for defined benefit plans

The following table presents an overview of the movement of the provision for post-employment benefit plans during 2021.

PostNL Statement of changes in provision for defined benefit plans in € million
2021

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.

PostNL Details on cost, cash, gains and losses, and adjustments in € million
2020, 2021

The actuarial loss of €3 million (2020: gain of €18 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. Given the current low interest rates and the applicable financing agreements, it is expected that the benefit accrual rate will be lower than the basis level of 1.875% for the coming years.

The negative adjustment of €735 million is the consequence of the increase in the main fund’s funded status (on the basis of IAS 19 accounting) during 2021, triggering an asset ceiling adjustment of €752 million, and the decrease of the minimum funding requirement by €16 million following the first instalment paid.

For 2022, we expect total cash contributions of around €111 million including the second instalment of one fifth of the unconditional funding obligation of €80 million (2021: €108 million including the first instalment of one fifth of the unconditional funding obligation of €80 million).

For 2022, we expect total employer pension costs within operating income of around €172 million (2021: €161 million). The increase is mainly explained by an increase of staff. As the net liability of the main pension plan is limited to the outstanding funding obligation, we expect an actuarial gain of around €79 million recorded in other comprehensive income.

Detailed reconciliation of the opening and closing balances

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.

PostNL Detailed overview of changes in consolidated defined benefit plans in € million
2020, 2021

Key assumptions

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 18 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 2020' taking into account experience rates based on postal areas, as applied by the main fund.

Sensitivity analysis of the defined benefit obligation

The table below shows the sensitivity of the defined benefit obligation at year-end 2021 to deviations in key assumptions, with all other assumptions held unchanged. The percentages presented exclude any impact from applying a liability ceiling, nor is the impact on plan assets, asset ceiling and/or minimum funding requirement included. The sensitivity to life expectancy of +1/-1 year is measured by assuming all plan participants 1 year younger/older.

PostNL Sensitivity defined benefit obligation as indicated
2021

3.6 Other provisions

The following table presents the changes in the short-term and long-term provisions.

PostNL Other long-term and short-term provisions in € million
2021

The estimated utilisation of the other provisions in 2022 is €21 million, in 2023 €17 million, in 2024 €2 million and in 2025 and thereafter €10 million.

Other employee benefit obligations

As at 31 December 2021, the other employee benefit obligations mainly related to a provision for jubilee benefits of €12 million (2020: €13 million), expected costs related to continued salary payments during illness of €6 million (2020: €7 million) and expected disability costs for the WGA benefits, following the decision to become self-insured (in Dutch: “eigenrisicodrager”) as from 1 January 2021, of €6 million (2020: not applicable).

Restructuring

The additions in restructuring provision of €2 million mainly related to the restructuring programmes within operations Mail Netherlands. The withdrawals of €3 million concerned severance payments under the cost saving programmes. The release of €4 million mainly related to the restructuring programme within operations Mail Netherlands, resulting from reduced redundancies and periodical reassessments of the expected cash costs.

Claims and indemnities

The provision for claims and indemnities includes provisions for claims from third parties with respect to PostNL’s ordinary business activities, including the ACM fine of €2 million related to Mail in the Netherlands’ delivery quality of 2019, as well as indemnities and disputes related to business disposals. Within Sandd, the disputes mainly related to discussions on the remuneration (including pensions) of employed and contracted people. More detailed information relating to these provisions is not provided, as such information could prejudice the company’s position with respect to these claims and indemnities.

Other

The release in other provisions of €3 million mainly related to anticipated customs clearance costs.

3.7 Investments in joint ventures and associates

The following table presents the changes in the carrying value of the investments in joint ventures and associates.

PostNL Investments in joint ventures and associates in € million
2020, 2021

As at 31 December 2021, the investments in associates mainly related to minority shareholdings in Roamler Care, CB Healthcare and VersTrade Nederland within Parcels. There were no material joint ventures.

In 2021, the additions of €3 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.

In 2020, the addition of €1 million related to the acquisition of 40% of the shares of CB Healthcare and an additional capital contribution in Roamler Care. CB Healthcare is a specialist in warehousing, fulfilment and other services in the media and healthcare sector.

In 2020, an additional 20% equity stake in MyParcel.com was acquired, totalling PostNLs stake at 60% of the shares. PostNL obtained control and the entity has been included in the consolidated figures of PostNL as of 1 July 2020.

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 €0 million (2020: €0 million). The profit/(loss) of all immaterial investments in associates amounted to €1 million (2020: €0 million).

3.8 Deferred income tax assets and liabilities

The following table shows the movements in deferred taxes in 2021:

PostNL Statement of changes deferred taxes in € million
2021

Of the deferred tax assets at 31 December 2021, before offsetting, €53 million (2020: €48 million) is to be recovered within 12 months and €77 million (2020: €72 million) after 12 months. Of the deferred tax liabilities at 31 December 2021, before offsetting, an amount of €37 million (2020: €30 million) is to be settled within 12 months and an amount of €119 million (2020: €103 million) after 12 months.

The changes via other comprehensive income of €(18) million fully relate to taxes on OCI from pensions.

The other changes of €(4) million (2020: €15 million) represent an adjustment of the Dutch deferred tax asset position in connection with the anticipated liquidation of the former Nexive entities, mainly due to the sales transaction with Poste Italiane and the tax rate change in the Netherlands.

The total accumulated losses available for carry forward at 31 December 2021 amounted to €97 million (2020: €106 million). With these losses carried forward, future tax benefits of €25 million could be recognised (2020: €27 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 €15 million (2020: €18 million) of the potential future tax benefits and has recorded deferred tax assets of €10 million at 31 December 2021 (2020: €9 million).

The expiration of total accumulated losses is as follows:

• 2022: €3 million,

• 2023: €1 million,

• 2024: €1 million,

• 2025: €1 million

• 2026 and thereafter: €19 million, and

• Indefinite: €72 million.

The following table shows the movements in deferred taxes in 2020:

PostNL Statement of changes deferred taxes in € million
2020

3.9 Assets classified as held for sale

As at 31 December 2021, assets classified as held for sale amounted to €11 million (2020: €55 million) and related to buildings held for sale in the Netherlands (2020: €14 million related to buildings, €41 million to Cendris and €0 million to the minority interest of 20% in Nexive). In 2020, the liabilities related to assets classified as held for sale of €25 million related to Cendris.

Sale of Nexive

On 1 July 2020, PostNL completed the sale of 80% of the activities of Nexive to Mutares. On 29 January 2021, PostNL and Mutares closed the sale of Nexive to Poste Italiane, whereby PostNL divested its retained minority interest of 20% in the entity acquiring the Nexive business. PostNL also terminated the joint venture agreement with Mutares, which resulted in the release of the remaining part of the related committed cash contributions. The transaction resulted in a net result of €24 million (including final settlement) and cash proceeds of €27 million. The net result is part of the Profit/(loss) from discontinued operations in the income statement and the cash proceeds are part of the Cash transfers relating to discontinued operations in the cash flow statement.

The following table presents the financial performance and cash flow information for the discontinued operations in the years 2020 and 2021. In 2020, the figures include the business results of Nexive until 1 July 2020.

PostNL discontinued operations Financial performance and cash flow in € million
2020, 2021

Income taxes of €8 million in 2021 related for €6 million to tax losses connected to the liquidation of our former German entities recorded as current tax receivables and for €2 million to the update of the deferred tax position connected to the anticipated liquidation losses of our Italian Nexive entities. The net result related to the sales transaction with Poste Italiane of €24 million includes a negative tax effect of €6 million.

As a specific contingent tax liability, at the end of December 2021 a tax dispute exists relating to the years 2012, 2013, 2014 and 2015 which can be estimated, using a probability-weighted assessment, at €15 million. Although we believe that this risk is in the possible range (20%-30%), supported by external advice, the outcome of the matter will depend upon the result of any negotiations with the relevant tax authorities and the outcome of related litigation. The outcome hereof will also determine whether additional tax notices for the years 2016 onwards may follow.

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 €16 million recorded within other income and net cash proceeds of €44 million.

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 income statement. The following table presents the movements of the balance sheet positions during 2021 and 2020.

PostNL Property, plant and equipment in € million
2020, 2021

3.10 Commitments and contingencies

PostNL Off balance sheet commitments in € million
2020, 2021

As at 31 December 2021, €153 million of the commitments indicated above are of a short-term nature (2020: €118 million).

Short-term leases and leases of low-value assets

In 2021, 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.

Leases, not commenced

As at 31 December 2021, commitments in connection with leases not commenced amounted to €12 million (2020: €84 million). These commitments mainly relate to vans and cars. In 2020 the leases not commenced primarily relate to the new head office (€60 million).

Capital expenditure

As at 31 December 2021, commitments in connection with capital expenditure amounted to €49 million (2020: €39 million) and are related to property, plant and equipment. These commitments primarily relate to the new sorting centres of Parcels.

Purchase commitments

As at 31 December 2021, PostNL had unconditional purchase commitments of €155 million (2020: €140 million), primarily related to various service and maintenance contracts for information technology, security, salary registration and cleaning.

Other commitments

As at 31 December 2021, other commitments related to parking lots for the new head office.

Contingent tax assets and liabilities

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’s position and the resulting chance of income or risk of loss.

Guarantees

As at 31 December 2021, 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.

Contingent legal liabilities

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 €1 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, a regional Belgian labour inspectorate in 2021 filed a case against PostNL Belgium regarding alleged breaches of social and labour law. 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 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’s 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.

Separation agreement PostNL and TNT Express

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 pensions, litigation, such as claims and litigation handling, non-allocated and non-anticipated claims and release of provisions. As a consequence of actions taken by TNT Express and the TNT Express pension fund in 2021, the pension-related guarantees provided for by PostNL have become void.

As at 31 December 2021, no events had occurred that triggered disclosure of a significant contingent asset or liability following the aforementioned agreement with TNT Express.

3.11 Segment information

Balance sheet information

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 2.5.

PostNL Segmentation - balance sheet and capital expenditures in € million
2021

A reconciliation of the segment information relating to the balance sheet of the reportable segments as at 31 December 2020 is presented in the following table. The 2020 figures have been restated for the impact of the change in accounting policy (refer to note 1.4).

PostNL Segmentation - balance sheet and capital expenditures in € million
2020 restated

PostNL Geographical segmentation - assets in € million
2020 restated, 2021

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.