3.3 Intangible fixed assets
Accounting policies
Goodwill
Goodwill represents the excess of the cost of acquisition over the fair value of PostNL’s share of the identifiable net assets acquired. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of joint ventures and associates is included in investments in joint ventures/associates and is not separately recognised or tested for impairment. Gains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Separately-recognised goodwill arising on acquisitions is capitalised and subject to an annual impairment review. Goodwill is carried at cost less accumulated impairment losses.
Other intangible fixed assets
Costs related to the development and installation of software for internal use are capitalised at historical cost and amortised over the estimated useful life. Other intangible assets acquired in a business combination are recognised at fair value at the acquisition date.
An asset under construction is transferred to its respective intangible asset category at the moment it is ready for use and is amortised using the straight-line method over its estimated useful life. Other intangible assets are valued at the lower of historical cost less amortisation and impairment. The asset’s residual value and useful life is reviewed on an annual basis and, if necessary, changes are accounted for prospectively.
For the accounting policy concerning impairments of goodwill and other intangible fixed assets, reference is made to note 5.4.
PostNL Intangible fixed assets in € million
2023
| Goodwill | Software | Other | Total | |
|---|---|---|---|---|
| Amortisation percentage | 20%- 35% | 0%- 35% | ||
| Historical cost | 243 | 297 | 52 | 593 |
| Accumulated amortisation and impairments | (36) | (150) | (17) | (204) |
| Balance at 1 January 2023 | 207 | 147 | 35 | 389 |
| Additions | 56 | 18 | 75 | |
| Internal transfers/reclassifications | 20 | (20) | ||
| Amortisation | (52) | (4) | (55) | |
| Impairments | (1) | (1) | ||
| Total changes | 0 | 23 | (5) | 18 |
| Historical cost | 243 | 340 | 49 | 633 |
| Accumulated amortisation and impairments | (36) | (170) | (20) | (226) |
| Balance at 31 December 2023 | 207 | 171 | 29 | 407 |
PostNL Intangible fixed assets in € million
2024
| Goodwill | Software | Other | Total | |
|---|---|---|---|---|
| Amortisation percentage | 20%- 35% | 0%- 35% | ||
| Historical cost | 243 | 340 | 49 | 633 |
| Accumulated amortisation and impairments | (36) | (170) | (20) | (226) |
| Balance at 1 January 2024 | 207 | 171 | 29 | 407 |
| Additions | 68 | 69 | ||
| Amortisation | (59) | (3) | (62) | |
| Total changes | 0 | 10 | (3) | 7 |
| Historical cost | 243 | 408 | 50 | 700 |
| Accumulated amortisation and impairments | (36) | (227) | (23) | (287) |
| Balance at 31 December 2024 | 207 | 180 | 26 | 414 |
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. The CGU Parcels relates to our e-commerce and logistic services activities in the Benelux. The CGU Spring relates to our cross-border mail and parcels activities.
Compared to 2023, the CGU structure has had one change with a relevant impact. As of 1 January 2024, the financial results and positions of PostNL Data Solutions are included in the CGU Parcels. Previously, the entity was part of the CGU Mail in the Netherlands. A proportionate share of goodwill was transferred accordingly.
PostNL Goodwill per CGU in € million
2023, 2024
| Year ended at 31 December | 2023 | 2024 |
|---|---|---|
| Parcels | 32 | 64 |
| Mail in the Netherlands | 174 | 143 |
| Spring | 1 | |
| Total | 207 | 207 |
Based on the 2024 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 of each CGU is determined based on the value in use. The value in use has been calculated on the basis of the present value of estimated future net cash flows.
The estimated future net cash flows are based on a five-year (2023: 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. PostNL has determined the budgeted gross margin based on past performance and its expectations for market and regulatory development. The cash flow projections have been approved by management.
Key assumptions used to determine the recoverable values for each individual CGU are the following:
- The discount rate to be applied following the nature of the underlying cash flows and foreign currency and inflation-related risks.
- The (long-term) growth rate to be applied following the maturity of the underlying market, regulatory developments, market share and volume development.
- The implementation of our strategic roadmap for Mail, including anticipated changes to postal regulations to support, among others, the adjustment of the service level for standard USO mail from next-day delivery to delivery within 2 days as of 2026, moving towards within 3 days over time, to create necessary cost savings.
The pre-tax discount rate used was around 11.0% (2023: around 11.5%) for the CGU Parcels (post-tax: around 8.5% for both 2024 and 2023) and around 10.5% (2023: around 9.0%) for the CGU Mail in the Netherlands (post-tax: around 6.5% for both 2024 and 2023). The growth rate used was based on a long-term assumed inflation rate of 2.0% (2023: 2.0%) for all CGUs, with a downward adjustment of 5.0% (2023: 5.0%) for the CGU Mail in the Netherlands to reflect the assumed long-term mail volume decline.
Management has carried out an impairment test for each individual CGU and concluded that the recoverable amount of the individual CGUs of Parcels and Spring are significantly higher than their carrying amounts. Management has also assessed that a reasonably possible change in key assumptions, being discount rate and growth rate, would not cause the carrying amount of any of these CGUs to exceed the recoverable amount.
For the CGU Mail in the Netherlands, with a positive difference of €16 million, management concluded that the recoverable amount is only slightly higher than its carrying amount. Urgent action to adjust the Dutch USO as well as a financial contribution from the Dutch government are inevitable to safeguard a future-proof and financially viable postal service that ensures predictable delivery for everyone in the Netherlands, while also providing job security to tens of thousands of people. Management is continuing to make every effort to address this situation, and has already taken additional measures. As recent examples, management decided to migrate non-USO mail to a standard service level of ‘within 2 days’ and adjust the mailbox collection process. Management’s commitment to cost savings initiatives remains strong. Management will sustain these efforts also when adjusting the service level.
In view of the resulting limited headroom, management notes that the estimated recoverable amount of the CGU Mail in the Netherlands excludes any compensation by means of a financial contribution from the Dutch government and/or further than currently anticipated changes to postal regulations. The Postal Act is clear in its objective that a designated postal operator must be able to perform the USO profitable. For management, the offsetting interaction between, and thus the sum of, all the elements included and not yet included must continue to allow a reasonable return on PostNL's postal services.
Precisely this last aspect is of importance when assessing the financial impact of a reasonably possible negative change in one or more key assumptions on the resulting outcome of the impairment analysis. More specifically, any negative gross financial impact due to an unfavorable impact on the discount rate, expected volume trends and/or anticipated changes to postal regulations will (have to) be offset to result in a long-term net impact of zero. The disclosure of the following gross financial sensitivity impacts should thus adequately take this context into account.
- If the post-tax discount rate would increase by 1.0%, from 6.5% to 7.5%, this would negatively impact the current recoverable amount of the CGU Mail in the Netherlands by around €10 million.
- If the long-term expected volume decline would increase by 1.0%, from 5.0% to 6.0%, this would negatively impact the current recoverable amount of the CGU Mail in the Netherlands by around €25 million.
- If the anticipated legislative adjustment of the service level for standard USO mail from next-day delivery to delivery within 2 days would be postponed with one year, from 2026 to 2027, this would negatively impact the current recoverable amount of the CGU Mail in the Netherlands by around €10 million.
As a concluding remark, management notes that a request for a financial contribution towards the USO costs of €30 million in 2025 and €38 million in 2026 was submitted to the Dutch government on 21 February 2025.
Software and other intangibles
The closing balance of software and other intangibles is built up as follows:
PostNL Software and other intangibles in € million
2023, 2024
| Year ended at 31 December | 2023 | 2024 |
|---|---|---|
| Internally-generated software | 169 | 180 |
| Purchased software | 1 | 1 |
| Customer lists | 29 | 26 |
| Total | 200 | 206 |
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, 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:
- 2025: €63 million,
- 2026: €53 million,
- 2027: €39 million, and
- thereafter: €51 million.
Software and other intangible assets include an amount of €3 million (2023: €3 million) of capitalised development costs.