2.3 Operating expense
2.3.1 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
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
2022, 2023
| Year ended at 31 December | 2022 | 2023 |
|---|---|---|
| Parcels | 983 | 1,066 |
| Mail in the Netherlands | 333 | 281 |
| PostNL Other | 71 | 61 |
| Work contracted out | 1,388 | 1,408 |
| Rent & lease expenses | 12 | 13 |
| External temporary staff | 170 | 171 |
| Total | 1,570 | 1,592 |
Costs of work contracted out and other external expenses increased by €22 million in 2023 mainly due to cost increases caused by inflation and service expansion within Parcels.
2.3.2 Salaries, pensions and social security contributions
PostNL Salaries, pensions and social security contributions in € million
2022, 2023
| Year ended at 31 December | 2022 | 2023 |
|---|---|---|
| Salaries | 867 | 890 |
| Social security charges | 129 | 135 |
| Salaries and social security charges | 997 | 1,024 |
| Defined benefit plans | 160 | 0 |
| Defined contribution plans | 12 | 92 |
| Regular pension charges | 172 | 92 |
| Impact change in accounting classification of main pension plan | 1,354 | |
| Total pension charges | 1,526 | 92 |
| Net additions/(releases) from restructuring provisions | (1) | 5 |
| Share-based payments | 2 | 2 |
| Gross salaries, pensions and social security contributions | 2,523 | 1,125 |
| Capitalised salaries, pensions and social security contributions | (19) | (24) |
| Total | 2,504 | 1,100 |
In 2023, pension charges decreased by €1,434 million, mainly resulting from the expenses related to the change in accounting classification of our main pension plan in 2022. See note 3.5 Provisions for pension liabilities for more information on pensions, note 3.6 Other provisions for the net additions from restructuring provisions and note 3.3 Intangible fixed assets for the capitalised salary costs, pensions and social security contributions related to IT investments.
PostNL Workforce as indicated
2022, 2023
| 1 | 2022 | 2023 |
|---|---|---|
| Headcount | ||
| Parcels | 8,300 | 8,786 |
| Mail in the Netherlands | 25,725 | 23,091 |
| PostNL Other | 1,622 | 1,611 |
| Total at year end | 35,647 | 33,488 |
| Full-time equivalents (FTEs) | ||
| Parcels | 7,146 | 7,555 |
| Mail in the Netherlands | 13,055 | 11,706 |
| PostNL Other | 1,514 | 1,590 |
| Total year average | 21,715 | 20,851 |
| External temporary staff year average | 2,647 | 2,623 |
- Including temporary personnel on our payroll; the external temporary staff are additional.
The total headcount of PostNL decreased by 2,159 employees. The decrease within Mail in the Netherlands mainly relates to the impact of volume decline and cost savings initiatives. In addition, staffing at Mail in the Netherlands was affected by an ongoing tight labor market. The increase in the number of employees at Parcels was due to greater use of own employees instead of delivery partners. In addition, around 350 retail and customer care employees were transferred from Mail in the Netherlands to Parcels. The workforce is also measured in FTEs based on the hours worked divided by the local standard. In 2023, the average number of FTEs decreased by 864 FTEs compared to 2022. The average number of employees working in the Netherlands was 19,913 FTEs (2022: 20,772) and outside the Netherlands was 938 FTEs (2022: 943).
2.3.3 Depreciation, amortisation and impairments
PostNL Depreciation, amortisation and impairments in € million
2022, 2023
| Year ended at 31 December | 2022 | 2023 |
|---|---|---|
| Amortisation of intangible assets | 44 | 55 |
| Impairment of intangible assets | 1 | |
| Depreciation property, plant and equipment | 46 | 49 |
| Depreciation right-of-use assets | 66 | 72 |
| Total | 156 | 177 |
In 2023, amortisation of intangible assets related to software for €52 million (2022: €41 million) and other intangibles for €4 million (2022: €3 million). The increase in amortisation of software relates to increased investments in IT projects.
2.3.4 Other operating expenses
The other operating expenses of €130 million (2022: €128 million) consist of IT, communication, office, travel, consulting and training expenses and other shared services costs.
In 2023, total incurred KPMG audit fees amounted to €2.2 million (2022: €2.1 million).
PostNL Audit fees in € million
2022, 2023
| Year ended at 31 December | 2022 | 2023 |
|---|---|---|
| Audit fees | 1.6 | 1.5 |
| Audit-related fees | 0.5 | 0.7 |
| Tax advisory fees | 0.0 | 0.0 |
| Other non-audit services | 0.0 | 0.0 |
| Total | 2.1 | 2.2 |
Audit fees include fees from the audit of the financial statements. Audit-related services include fees from assurance engagements related to the non-financial information, regulatory reporting obligations, employee benefit plan data, Green Bond report and legal demergers.
In accordance with Dutch legislation, article 2:382a of the Dutch Civil Code, the total audit and audit-related fees charged by the auditor KPMG based in the Netherlands amounted to €2.1 million (2022: €2.0 million), subdivided into audit services of €1.4 million and audit-related services of €0.7 million.