1.3 Developments during 2024
Impact assessment of geopolitical and economic developments
In 2024, geopolitical and macroeconomic developments continued to have its impact on society as a whole. Higher inflation, starting in 2021/2022, still affected consumer confidence and consumer spending. Although overall volumes at Parcels grew by 7.2% in 2024, Parcels saw as underlying trends primarily a higher share of international e-commerce volumes and modest growth in domestic e-commerce volumes further concentrated at the larger Dutch e-tailers, both of which had a negative impact on our average price and margin. Rising inflation also led to further cost increases for PostNL, specifically resulting in even higher labour costs, which could not be fully absorbed by regular price increases. At the same time, the tight labour market is still making it difficult for companies across a range of sectors, including ours, to fill vacancies. These issues also affected our customers, partners and suppliers.
For our mail business, the underlying trends of volume decline, the shift to within two day delivery and cost increases continue. With a normalised EBIT result of only €19 million at Mail in the Netherlands for 2024 (2023: €50 million), there is an urgent need to transform the current unsustainable business model. It is essential that the legal duty of the universal service obligation (USO) is not loss-making. 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.
Management assessed the impact of the current developments on all material assets and liabilities. We performed a review for impairment triggers on goodwill and other intangibles, PP&E, right-of-use assets and financial fixed assets. We also analysed the trade accounts receivable position and customers' payment behaviour. Finally, we assessed the need to make adjustments to the fair value accounted financial assets and balance sheet positions related to our non-current assets held for sale. The assessment showed no need for significant negative adjustments to the accounts stated in and at year-end 2024. Management does note that the goodwill impairment test of the cash generating unit Mail in the Netherlands shows limited available headroom, which is logically related to the circumstances described in the previous paragraph.
Impact assessment of climate related risks
Climate change may impact PostNL’s operations and valuation of its non-current assets. Management evaluated the potential impacts of climate-related physical risks. In relation to the financial statements, management concluded that these risks have no current impact on the valuation of the non-current assets.