2.4 Net profit and earnings per share
2.4.1 Net financial expense/(income)
Accounting policies
Interest income and expense are recognised on a time-proportionate basis using the effective interest method. All borrowing costs are recognised in profit or loss using the effective interest method, except to the extent that they can be capitalised as cost of a qualifying asset.
PostNL Net financial expense/(income) in € million
2023, 2024
| Year ended at 31 December | 2023 | 2024 |
|---|---|---|
| Interest expenses on long-term borrowings | 9 | 16 |
| Interest on leases | 9 | 10 |
| Interest on taxes | 0 | 1 |
| Other | 4 | 3 |
| Interest and similar expense | 22 | 31 |
| Other interest and similar income | (20) | (23) |
| Net financial expense/(income) | 2 | 8 |
Interest expenses on long-term borrowings increased mainly due to a new bond as of June 2024, which replaced a bond with a lower interest rate that was repaid in November 2024. The increase of other interest and similar income of €3 million mainly relates to higher interest on cash and cash equivalents.
2.4.2 Income taxes
Accounting policies
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised directly in other comprehensive income. The amount of income tax included in the income statement is determined in accordance with tax rules and legislation, based on which income taxes are payable or recoverable.
When interest or a penalty is a separately identifiable financing charge or an operating expense, then it is measured at the amount the entity would be required to pay to settle the obligation at the reporting date. The liability is discounted if the effect of the time value of money is material.
PostNL Income taxes in € million
2023, 2024
| Year ended at 31 December | 2023 | 2024 |
|---|---|---|
| Current tax expense | 20 | 13 |
| Changes in deferred taxes | 4 | (7) |
| Total income tax expense | 24 | 6 |
| Income taxes paid | 35 | 31 |
The difference between the total income taxes in the income statement and the current tax expense is due to temporary differences. These differences are recognised as deferred tax assets or deferred tax liabilities, except for the tax effect on the change in pension accounting classification. See note 3.7 Deferred income tax assets and liabilities to the Consolidated financial statements for more information.
The tax position includes an uncertain tax position with respect to the deductibility of (anticipated) liquidation losses which PostNL considers deductible. In PostNL's view, it is probable that PostNL's tax treatment will prevail. Due to the uncertainty involved, there is a possibility that the outcome is different from the amounts currently recognised in current and deferred tax.
In 2024, the income taxes paid relate mainly to income taxes paid in the Netherlands regarding prior years and Belgium regarding current year. The payments in the Netherlands are regarding prior year uncertain tax positions and are predominantly done in order to mitigate the levied tax interest. The income tax paid regarding the uncertain tax positions are presented on the balance sheet as income tax receivable (€28 million) and the related interest is presented under prepayments and accrued income (€7 million).
The 2024 difference between the total income tax expense (€6 million) and the income taxes paid (€31 million) can mainly be explained by the 2024 movements of the net income tax payable position (€18 million) and by changes in deferred taxes (€7 million).
PostNL Effective income tax rate in %
2023, 2024
| Year ended at 31 December | 2023 | 2024 |
|---|---|---|
| Dutch statutory income tax rate | 25.8 | 25.8 |
| Adjustment regarding statutory income tax rates other countries | (0.2) | (0.7) |
| Weighted average statutory tax rate | 25.6 | 25.1 |
| Tax effects of: | ||
| Non and partly deductible costs | 3.9 | 17.1 |
| Exempt income | 0.3 | 1.7 |
| Other | 0.8 | (18.7) |
| Effective income tax rate | 30.6 | 25.2 |
The effective income tax rate is 25.2%. This effective income tax rate, being lower compared to the Dutch statutory tax rate (25.8%), can be explained as follows:
The line ‘Non and partly deductible costs’ mainly relates to the so-called mixed expenses (e.g. meals, entertainment), claim-related costs and the non-deductible treatment of our share-based payments. The line ‘Exempt income’ relates to the non-taxable treatment of our (negative) results from (former) participations. The line ‘Other’ consists in 2024 mainly of the impact of the movement of deferred tax positions on tax losses, more specific the recognition of previously unrecognised tax losses in various countries (-18.8%), as well as updates of our prior year tax positions in the Netherlands (-0.4%) and several smaller effects (0.5%).
Pillar Two
On 19 December 2023, the government of the Netherlands enacted the Pillar Two income taxes legislation effective from 31 December 2023. PostNL NV is the ultimate parent company (UPE in Pillar Two terms) and has been incorporated in the Netherlands. Under the Pillar Two legislation, the UPE will be responsible for the payment of top-up tax on profits of group entities that are taxed at an effective tax rate of less than 15% according to the Pillar Two legislation. The main jurisdictions in which material Pillar Two exposures may arise for PostNL are the Netherlands and Belgium.
Based on the analysis made, PostNL will be able to make use of the transitional country-by-country safe harbour regime during 2024 for its most material countries and therefore no material top-up tax is expected. This information is based on the PostNL Group’s consolidated financial statements and CbCR report of 2024. For 2025 PostNL will continue to monitor the impact of the Pillar Two legislation.
2.4.3 Earnings per ordinary share: 3.4 eurocents (2023: 11.3 eurocents)
Accounting policies
PostNL presents (diluted) earnings per share (EPS) for its ordinary shares. EPS is calculated by dividing the profit or loss attributable to the equity holders of the parent by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is calculated by dividing the profit or loss attributable to the equity holders of the parent by the weighted average number of ordinary shares outstanding, including the effects for dilution of ordinary shares following the obligations to employees under existing share plans.
The following table summarises the outstanding shares for PostNL’s calculation related to earnings per share.
PostNL (Average) number of outstanding ordinary shares in shares
2023, 2024
| Year averages and numbers at 31 December | 2023 | 2024 |
|---|---|---|
| Number of issued and outstanding ordinary shares | 494,207,248 | 502,111,291 |
| Shares held by the company to cover share plans | 0 | 0 |
| Average number of ordinary shares per year | 490,686,943 | 498,332,152 |
| Diluted number of ordinary shares per year | 1,097,685 | 824,393 |
| Average number of ordinary shares per year on a fully diluted basis | 491,784,628 | 499,156,545 |
At 31 December 2024, PostNL had potential obligations under share plans to deliver 824,393 shares (2023: 1,097,685 shares), calculated based on the share price of €1.042 as at 31 December 2024 (31 December 2023: €1.413).