Independent auditor's report

Report on the audit of the financial statements 2023 included in the Annual Report

Our opinion

In our opinion:

• the accompanying consolidated primary statements give a true and fair view of the financial position of PostNL N.V. (hereafter: PostNL or the Company) as at 31 December 2023 and of its result and its cash flows for the year then ended, in accordance with IFRS Accounting Standards as endorsed by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code;
• the accompanying corporate financial statements give a true and fair view of the financial position of PostNL as at 31 December 2023 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

What we have audited

We have audited the financial statements 2023 of PostNL based in The Hague, the Netherlands. The financial statements include the consolidated primary statements and the corporate financial statements.

The consolidated primary statements comprise:

• the consolidated statement of financial position as at 31 December 2023;
• the following consolidated statements for 2023: profit or loss, comprehensive income, changes in equity and cash flows; and
• the notes comprising a summary of the material accounting policy information and other explanatory information.

The corporate financial statements comprise:

• the corporate statement of financial position as 31 December 2023;
• the corporate statement of profit and loss for 2023; and
• the notes comprising a summary of the accounting policies and other explanatory information.

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the financial statements’ section of our report.

We are independent of PostNL in accordance with the ‘Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).

We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The information in respect of going concern, fraud and non-compliance with laws and regulations, climate and the key audit matters was addressed in this context, and we do not provide a separate opinion or conclusion on these matters.

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Information in support of our opinion

Summary

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Materiality

Based on our professional judgement we determined the materiality for the financial statements as a whole at €16 million (2022: €15 million). The materiality for the financial statements is determined with reference to revenues (0.5%). We consider revenues as the most appropriate benchmark because it is the most appropriate earnings-based measure which is also relative stable in comparison to operating income and profit before income taxes. We have also taken into account misstatements and/or possible misstatements that in our opinion are material for the users of the consolidated and corporate financial statements for qualitative reasons.

We agreed with the Supervisory Board that misstatements identified during our audit in excess of €0.75 million would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds.

Scope of the group audit

PostNL is at the head of a group of components. The financial information of this group is included in the financial statements of PostNL.

We have determined the nature and extent of the audit procedures to be carried out for components reporting for group audit purposes. Our group audit mainly focused on significant components within the segments Parcels and Mail in the Netherlands and PostNL Other (including finance and real-estate components). Based on their significance and/or our risk assessment we performed an audit of the complete reporting package or audit of specific items on the 26 (2022: 23) group entities within those segments.

For the entities in scope, except for Spring Hong Kong, the group engagement team performed the aforementioned audit procedures itself. For Spring Hong Kong we used KPMG auditors from Hong Kong (component auditors). We sent detailed instructions to the component auditor, covering the significant areas that should be addressed and set out the information required to be reported to us. We interacted regularly with the component team where appropriate during various stages of the audit, reviewed the reporting deliverables and were responsible for the scope and direction of the audit process.

This resulted in a coverage of 86% of total revenue and 91% of total assets. The remaining 14% of total revenue and 9% of total assets is represented by a significant number of components (‘remaining components’), none of which individually represent more than 2% of total revenue and 1% of total assets.

For these remaining components we performed central procedures, among others analytical procedures, to validate our assessment that there are no risks of material misstatement within these components.

PostNL Revenues

PostNL Total assets

The group audit team has set materiality levels for the components, which ranged from €1.6 million to €10 million, based on the mix of size and risk profile of the respective components.

By performing the procedures mentioned above at group components, together with additional procedures at group level, we have been able to obtain sufficient and appropriate audit evidence about the group’s financial information to provide an opinion about the financial statements.

Audit response to going concern

The Board of Management has performed its going concern assessment and has not identified any going concern risks. To assess the Board of Management’s assessment, we have performed, among other things, the following procedures:

• we considered whether the Board of Management’s assessment of the going concern risks includes all relevant information of which we are aware as a result of our audit;
• we analysed the Company’s financial position as at year-end and compared it to the previous financial year in terms of indicators that could identify going concern risks;
• based on the net total current liabilities as at 31 December 2023 and/or macro-economic circumstances (including high inflation, tight labour market and rising wages) we evaluated the key assumptions and the sensitivity analyses used by the Board of Management for the cash-flow forecasts to determine the cash need.

The outcome of our risk assessment procedures did not give reason to perform additional audit procedures on management’s going concern assessment.

Audit response to the risk of fraud and non-compliance with laws and regulations

In chapter 11 ‘Risk and opportunity management’ of the Annual Report the Board of Management describes its compliance risk assessment and in Chapter 14 ‘Corporate Governance’ its regulatory compliance management and fraud risk management.

As part of our audit, we have gained insights into the Company and its business environment, and assessed the design and implementation of the Company’s risk management in relation to fraud and non-compliance. Our procedures included, among other things, assessing the Company’s code of conduct, whistleblowing procedures and the integrity committee reports. Furthermore, we performed relevant inquiries with the Board of Management, those charged with governance and other relevant functions, such as Audit & Security and Legal. We have also incorporated elements of unpredictability in our audit, such as extending our data analysis of high-risk journal entries in response to risk of management override of controls to 5 remaining components.

As a result from our risk assessment, we identified the following laws and regulations as those most likely to have a material effect on the financial statements in case of non-compliance:

• National and International Postal legislation including Postal Degree 2009;
• The Dutch Postal market is regulated via the ACM and the Ministery of Economic Affairs, including oversight on competition legislation and the USO regulation;
• Social and labour legislation reflecting PostNL’s significant work force and outsourced work;
• Data protection and privacy laws such as General Data Protection Regulation (GDPR);
• Environmental laws.

Apart from the presumed fraud risk on revenue recognition terminal dues, we assessed the presumed fraud risk on revenue recognition on other recorded revenues as not significant, because the individual transactions are single type of simple revenues transactions.

Based on the above and on the auditing standards, we identified the following fraud risks and non-compliance risks that are relevant to our audit and responded as follows:

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Our evaluation of procedures performed related to fraud and non-compliance with laws and regulations did not result in a key audit matter.

We communicated our risk assessment, audit responses and results to the Board of Management and the Supervisory Board.

Our audit procedures did not reveal other indications and/or reasonable suspicion of fraud and non-compliance that are considered material for our audit.

Audit response to climate-related risks

The Company has set out its targets relating to climate change in chapter 8 ‘Environmental value’ of the Annual Report. PostNL has the ambition to become net-zero by 2050 and to significantly reduce GHG emissions from PostNL’s own operations as well as outsourced activities towards 2030. The target is to deliver all parcels and mail emissions-free in the last mile across the Benelux by 2030.  

Management has assessed, against the background of the Company’s business and operations, in detail how climate-related risks and opportunities and the Company’s own targets could have a significant impact on its business or could impose the need to adapt its strategy and operations. Management has considered the impact of both transition and physical risks on the financial statements in accordance with the applicable financial reporting framework, more specifically in relation to valuation of non-current assets, cost increase and demand for the Company's services as described in chapter 11 ‘Risk and opportunity management’ of the Annual Report.  

Management prepared the financial statements, including considering whether the implications from climate-related risks and targets have been appropriately accounted for and disclosed. As part of our audit we performed a risk assessment of the impact of climate-related risks and the targets set by the Company in respect of climate change on the financial statements and our audit approach. In doing this we performed the following: 

• understanding management's processes: we made inquiries with management and the Audit Committee of the Supervisory Board on the climate risk assessment integrated in the structural risk management approach of the Company;
• assessing management’s strategic plan and 2024 business plan which both incorporate targets and strategic actions relating to climate change;
• evaluation of potential climate related fraud risk factors such as the long-term incentive for the Board of Management and have not identified fraud risks relating to climate-related risks for the current year’s financial statements;
• as part of our risk assessment procedures we also challenged management on the valuation of non-current assets as at 31 December 2023, including inquiry on timing of replacement investments needed to meet the climate targets in comparison to the remaining estimated useful life of the assets.

Based on the above risk assessment procedures performed we concur with management that climate related risks have no material impact on the financial statements, including on the valuation of non-current assets, under the requirements of EU-IFRS.  

Furthermore we have read the ‘Other information’ with respect to climate-related risks as included in the annual report and considered whether such information contains material inconsistencies with the financial statements or our knowledge obtained through the audit, in particular as described above and our knowledge obtained otherwise.

Our key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements. We have communicated the key audit matters to the Supervisory Board. The key audit matters are not a comprehensive reflection of all matters discussed.

Compared to last year we do no longer consider ‘Compliance delivery partners in Belgium’ as a key audit matter, instead this is incorporated in our audit response to the risk of fraud and non-compliance with laws and regulations. The key audit matter ‘Change from defined benefit to defined contribution pension accounting’ was a non-recurring transaction in last year. The key audit matter ‘Change in accounting framework for the corporate primary statements’ is new. As a result of the change in accounting framework, the key audit matter ‘Valuation of investments in subsidiaries (corporate statements)’ is no longer applicable.

Report on other information included in the Annual Report

In addition to the financial statements and our auditor’s report thereon, the Annual Report contains other information.

Based on the following procedures performed, we conclude that the other information:

• is consistent with the financial statements and does not contain material misstatements; and
• contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the management report and other information.

We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less than the scope of those performed in our audit of the financial statements.

The Board of Management is responsible for the preparation of the other information, including the information as required by Part 9 of Book 2 of the Dutch Civil Code.

Report on other legal and regulatory requirements and ESEF

Engagement

We were initially appointed by the annual general meeting of shareholders as statutory auditor of PostNL on 19 April 2021, as of the audit for the year 2022.

No prohibited non-audit services

We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements regarding statutory audits of public-interest entities.

European Single Electronic Reporting Format (ESEF)

PostNL has prepared its Annual Report in ESEF. The requirements for this are set out in the Delegated Regulation (EU) 2019/815 with regard to regulatory technical standards on the specification of a single electronic reporting format (hereinafter: the RTS on ESEF).

In our opinion the Annual Report prepared in XHTML format, including the (partly) marked-up consolidated financial statements as included in the reporting package by PostNL, complies in all material respects with the RTS on ESEF.

Management of the Company is responsible for preparing the Annual Report including the financial statements in accordance with the RTS on ESEF, whereby management of PostNL combines the various components into one single reporting package.

Our responsibility is to obtain reasonable assurance for our opinion whether the Annual Report in this reporting package complies with the RTS on ESEF. We performed our examination in accordance with Dutch law, including Dutch Standard 3950N ’Assurance-opdrachten inzake het voldoen aan de criteria voor het opstellen van een digitaal verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for digital reporting). Our examination included among others:

• obtaining an understanding of the entity's financial reporting process, including the preparation of the reporting package;
• identifying and assessing the risks that the Annual Report does not comply in all material respects with the RTS on ESEF and designing and performing further assurance procedures responsive to those risks to provide a basis for our opinion, including:
  • obtaining the reporting package and performing validations to determine whether the reporting package containing the Inline XBRL instance document and the XBRL extension taxonomy files have been prepared in accordance with the technical specifications as included in the RTS on ESEF;
  • examining the information related to the consolidated financial statements in the reporting package to determine whether all required mark-ups have been applied and whether these are in accordance with the RTS on ESEF.

Description of responsibilities for the financial statements

Responsibilities of the Board of Management and the Supervisory Board for the financial statements

The Board of Management is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Board of Management is responsible for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. In that respect the Board of Management under supervision of the Supervisory Board, is responsible for the prevention and detection of fraud and non-compliance with laws and regulations, including determining measures to resolve the consequences of it and to prevent recurrence.

As part of the preparation of the financial statements, the Board of Management is responsible for assessing PostNL’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, the Board of Management should prepare the financial statements using the going concern basis of accounting unless the Board of Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Management should disclose events and circumstances that may cast significant doubt on the Company’s ability to continue as a going concern in the financial statements. 

The Supervisory Board is responsible for overseeing the Company’s financial reporting process.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.

We have exercised professional judgement and have maintained professional scepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included among others:

• identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than the risk resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
• obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control;
• evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Management;
• concluding on the appropriateness of the Board of Management’s use of the going concern basis of accounting, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company to cease to continue as a going concern;
• evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and
• evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We are solely responsible for the opinion and therefore responsible to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the financial statements. In this respect we are also responsible for directing, supervising and performing the group audit.

We communicate with the Supervisory Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit. In this respect we also submit an additional report to the Audit Committee of the Supervisory Board in accordance with Article 11 of the EU Regulation on specific requirements regarding statutory audits of public-interest entities. The information included in this additional report is consistent with our audit opinion in this auditor’s report.

We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Supervisory Board, we determine the key audit matters: those matters that were of most significance in the audit of the financial statements. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.

The Hague, 26 February 2024

KPMG Accountants N.V.

R.R.J. Smeets RA