2.5 Cash flow performance

Accounting policies

The consolidated statement of cash flows is prepared in accordance with IAS 7 using the indirect method. Cash flows in foreign currencies are translated at average exchange rates. Receipts and payments with respect to taxation on profits and interest payments are included in the cash flow from operating activities. Interest receipts and the cost of acquisition of subsidiaries, associates and investments, insofar as it was paid for in cash, are included in cash flows from investing activities. Acquisitions of subsidiaries are presented net of cash balances acquired. Cash flows from derivatives are recognised in the statement of cash flows in the same category as those of the hedged item.

2.5.1 Net cash (used in)/from operating activities

In 2024, net cash from operating activities of €168 million (2023: €222 million) resulted from €227 million of cash generated from operations (2023: €277 million) reduced by €31 million income tax paid (2023: €35 million) and €28 million interest paid (2023: €20 million).

Cash generated from operations

The decrease in cash generated from operations of €50 million is explained by €31 million lower profit before income tax adjusted for non-cash items and investment income, a lower change in working capital of €24 million, partly offset by a higher change in other provisions of €7 million.

PostNL Cash generated from operations in million
2023, 2024

Year ended at 31 December20232024
Total profit before tax adjusted for non cash items and investment income255224
Additions to/releases from provisions2431
Withdrawals(9)(11)
Change in other provisions1421
Changes in working capital7(17)
Total cash generated from operations277227

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For the changes in provisions, reference is made to note 3.5 Other provisions. The higher investments in working capital mainly related to higher trade receivables and lower trade payables within Parcels and Mail in the Netherlands, partly offset by an increase in accruals for terminal dues and in social security contributions payable.

Interest paid

The interest paid is explained as follows:

PostNL Interest paid in million
2023, 2024

Year ended at 31 December20232024
Interest on long-term borrowings89
Interest on leases910
Interest on taxes 7
Bank charges and other33
Total2028

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Income taxes received/(paid)

The income taxes paid of €31 million (2023: €35 million) and the interest on taxes of €7 million mainly related to income taxes paid in the Netherlands related to prior years.

2.5.2 Net cash (used in)/from investing activities

PostNL Net cash investing activities in million
2023, 2024

Year ended at 31 December20232024
Capital expenditure on intangible assets and property, plant and equipment(126)(99)
Proceeds from sale of property, plant and equipment116
Interest received2321
Changes in other loans receivable22
Other(2)(0)
Net cash (used in)/from investing activities(102)(61)

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Capital expenditure on intangible assets and property, plant and equipment

In 2024, capital expenditures on intangible assets of €69 million (2023: €74 million) mostly related to software, including prepayments for software. Capital expenditures on property, plant and equipment of €31 million (2023: €52 million) mainly related to the sorting and delivery centres within Parcels and to various other equipment. Capital expenditures are funded primarily by cash generated from operations and are part of strict cash control and review.

Proceeds from sale of property, plant and equipment

In 2024, proceeds from the sale of property, plant and equipment amounted to €16 million (2023: €1 million) and mainly related to the sale of real estate in the Netherlands.

Interest received

In 2024, interest received decreased by €2 million mainly due to the settlement of interest rate swaps in 2023 (€4 million).

Changes in other loans receivable

In 2024, changes in other loans receivable mainly related to proceeds from a lessor loan relating to the lease of a sorting machine by Bol.com.

Other

In 2024, an amount of €1 million is included for the disposal of CB Healthcare, an associated company (2023: €(1) million for the acquisition of 2.6% of the shares of Machool Technologies Inc., a financial asset at fair value through OCI).

2.5.3 Net cash (used in)/from financing activities

PostNL Net cash financing activities in million
2023, 2024

Year ended at 31 December20232024
Dividends paid(29)(22)
Changes related to non-controlling interests(0)(1)
Net cash from debt financing activities(32)(67)
Repayments of leases/incentives(81)(84)
Net cash (used in)/from financing activities(142)(173)

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In 2024, net cash from financing activities of €(173) million (2023: €(142) million) mainly related to the final 2023 and interim 2024 cash dividend paid of €22 million (2023: €29 million related to the final 2022 and interim 2023 cash dividend), the proceeds of a new eurobond loan of €297 million, the repayment of a eurobond loan of €353 million (2023: the buyback of a eurobond loan of €47 million) and the repayments of leases of €84 million (2023: €81 million). In 2023, the net cash from debt financing activities included an amount of €18 million for new (legal) lease loans relating to two Parcels' sorting centres and sorting machines. In 2024, the repayment of these (legal) lease loans amounted to €10 million (2023: €4 million). Refer to note 3.4 for further information on leases. Reference is also made to note 4.1 Net debt and note 4.5 Financial instruments.

2.5.4 Cash transfers relating to discontinued operations

Accounting policies

Discontinued operations

A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:
• Represents a separate major line of business or geographical area of operations
• Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations, or
• Is a subsidiary acquired exclusively with a view to resale.

Discontinued operations are excluded from the results and cash flows of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the income statement and as cash transfers relating to discontinued operations in the statement of cash flows.

In 2023, cash flow related to discontinued operations of €(16) million mainly reflected the financial impact of a settlement reached between PostNL and the Italian tax authorities relating to a VAT dispute of a divested entity previously classified under discontinued operations. The cash outflow included a payment due to the Italian tax authorities of €30 million partially offset by VAT receivables from former customers of €17 million. At 31 December 2024, a total of €20 million has been received from former customers, of which €2 million in 2024. Cash flow from discontinued operations of €1 million (2023: €(16) million) is considered as operational cashflow.