Generate sustainable growth and cash flow
The challenging macroeconomic and geopolitical environment continued to impact the company. The uncertainty surrounding macroeconomic developments and client behaviour makes it difficult to determine short-term developments in the e-commerce market, where volume projections are becoming increasingly volatile, both for our customers and thus for us. At the same time, the company continues to deal with further cost pressure, mainly related to our main financial risk of total cost of labour, due to a tight labour market, high levels of sick leave, and rising wages.
The effect of severe inflationary pressure, as main explanation for organic cost increases of €137 million, was largely offset through €129 million in price increases. PostNL is taking all necessary adaptive measures and is focusing on strict cost control in the near term. In 2024, we announced additional cost-saving measures. Some measures were implemented immediately but most of them will contribute to our results in 2025. €41 million of cost savings for PostNL were achieved in 2024. Thanks to well-executed cash and balance sheet management, we achieved our outlook for free cash flow and normalised comprehensive income.
In current challenging circumstances, we put in relentless effort on adapting our operations and offerings with ongoing attention for our customers, while improving efficiency and capacity utilisation. Nevertheless, as a response to the financial performance and changing market dynamics we will adjust elements of our strategy.
We aim to capture value through smart yield management, for example by driving value through smart services and delivery options, enhancing pricing strategies based on data and insights, and balancing volumes and value for effective margin management.
We continue to invest in the performance of our operations, both in terms of network capacity, synergies and digitalisation, while enhancing cost efficiency and delivering high-quality services. At Parcels, we worked to balance volume, value and capacity.
At Mail in the Netherlands, the sharp decline in result compared to 2023 underlines that, if we want to keep mail reliable, accessible and affordable for everyone in the Netherlands, we need to look at changes to the current service framework, and both the universal service obligation (USO) and the entire mail business need to evolve with this. More information on this, including PostNL’s request for temporary government financial support under the Dutch General Administrative Law Act to cover net USO costs for 2025 and 2026, can be found in the Future of Mail box in the Our operating context chapter.
Our goal remains to provide short- and long-term financial value to allocate our financial resources to optimise our value creation model and to enable our financial stakeholders to obtain an attractive return.
Throughout this chapter we provide detailed insights into how we performed on our strategic objective to generate sustainable growth and cash flow in 2024.