PostNL N.V.

Thank you. Good morning, everyone.

Thank you for joining us for the first quarter results presentation. With me in the room, Herna Verhagen, our CEO; and Pim Berendsen, our CFO.

Pim, over to you, please.

Thank you, Jochem, and welcome to you all. Thank you for joining us today.

Well, the first quarter of this year has been an exceptional one for PostNL. And again, we’ve continued the strong momentum that we’ve seen over the last quarters.

Thanks to the hard work of our people and the resilience of our business, we have been able to deliver a record number of parcels in the quarter. Also, performance at Spring and Logistics as well as Mail in the Netherlands have been very strong.

While underlying performance is strong, part of the Q1 performance was related to lockdown that lasted longer than originally anticipated, at least by us, and some other one-off effects. And I’ll dive into those a little bit later.

If we then go to Slide number 3, to look at the high-level Q1 results, which we already communicated in the trading update of April 26, you see a very strong performance. As mentioned, we delivered a record number of parcels in one quarter, with 108 million parcels delivered, which is a volume growth of nearly 62% across all segments and products.

If we were to exclude the non-recurring COVID impact out of that volume, roughly 26 million pieces, the underlying volume growth is still 23%, which around about that number is also our full year expectation of volume growth at Parcels. Performance at Mail in the Netherlands was strong as well, mainly due to the impact of some non-recurring mailings like elections, vaccination programs and a very favorable price/mix development.

The underlying volume decline due to substitution continues was roughly 6%, but is more favorable than the 8% to 10% volume decline that we indicated before. The result – this resulted in revenue that was up €261 million to €962 million for the quarter.

Normalized EBIT coming in at €130 million, €150 million more than last year. Last, but definitely not least, we continue to work hard towards our long-term objectives of emission-free last-mile delivery in the Benelux.

With greater use of renewable fuels and further electrification of our fleet, we’ve improved our CO1 emission index by 7% in the quarter. And based on this strong performance in the quarter, we raised our outlook for 2021 on April 26, with now normalized EBIT expected to be at least €250 million for the year and free cash flow to come in above €225 million.

On Slide 4, if we look at the €130 million, we’re going to look closer at the non-recurring COVID-19 effects. Within the quarter, we assume around €42 million of non-recurring contribution.

Non-recurring impact for parcels is assumed to be €70 million, which is on a like-for-like basis calculated as the 2020 COVID impact, which is driven by additional volumes due to the lockdown of non-essential stores and thus take into account also the additional cost to accommodate the additional volume. The other €7 million within the Parcels segment is driven by Spring and Logistics, that is also partially non-recurring related to COVID.

If we then look at the Mail in the Netherlands component of it, which is €80 million, as a result of non-recurring volume and positive price/mix driven by higher single items. These results include the additional costs and investments made to accommodate the additional volumes as well as the incentive payments paid to non-essential retail stores to ensure that they were able to keep their stores open, which was €15 million in the quarter, roughly split €11 million in Parcels and €4 million in Mail.

Now let’s look into a little bit more detail into the performance of each segment. And to begin with on Slide 6.

We see, of course, that Parcels has benefited from strong e-commerce growth and a growth that we believe will remain on a very high pace going forward as well. Parcels reported a growth of more than 61%.

And as said, if you take out the €26 million non-recurring COVID volume within the quarter, that is still a 23% growth rate ex non-recurring profit. Very strong performance of Spring and Logistics, also on the back of strong cross-border e-commerce growth, predominantly driven by growth on the trade lanes from Asia to the Netherlands as well as the e-commerce growth in Europe at large.

Building on our flexible infrastructure and through efficient use of capacity, this resulted in revenues of €662 million, which is a €248 million increase versus last year, and a normalized EBIT at €91 million, which is €67 million higher than last year. As you might have expected, we’ve seen a higher hit rate and a lower drop duplication.

When looking forward, we’re on track by expanding our capacity to capture future growth as planned. We will open new sorting facilities as well as the small parcel sorting center in the second half of the year.

On Slide 7, you’ll find the bridge that is by now pretty familiar, I think, for you, which shows the normalized EBIT for the first quarter at €92 million, a €67 million more than last year. The increase is mainly driven by the volume growth that we already discussed before, then a small negative price/mix effect also in line with what we earlier indicated, regular CLA increases and volume-dependent costs that relate to the volume growth.

And in other costs – the biggest component in other cost is the additional fees paid for the retailers, as said, roughly €11 million for Parcels. And in other results, you see the very good performance of Spring and Logistics.

And on that note, it’s important to understand that we do not expect such a big delta on Spring and Logistics for the quarters to follow, but a very strong performance by these two group companies as well. If we then move over to the Mail business on Slide 8.

Like at Parcels, performance at Mail was very strong. Overall, Mail volumes were up in Q1 2021 compared to last year, which is obviously very special.

The increase is supported by a couple of large non-recurring mailings, for example, voting by mail and invites for the vaccination program. We see the underlying trend in volume decline continue at a substitution rate of around 6% this quarter.

But we also expect, given the original indication, 8% to 10% volume decline to be better than that 8% to 10%. In other words, a slightly lower volume decline number than indicated before.

Important to understand that from that 5% – or 6% volume growth, 4.5% relates to non-recurring COVID volume, 3.8% regular elections. And there’s three more working days in the first quarter that account for 3.4%.

Important to note, for the quarters to come is that the three additional working days will refer itself – reverse itself in the fourth quarter. There, we will have three working days less.

Also performance was significantly impacted by a very positive price/mix effect, favorable shift in product mix, more single items, more e-commerce items and the regular moderate price increases that were partly offset by higher volume-dependent costs. This, as well as the decline in other costs, mainly driven by the integration of Sandd last year and achieved cost savings resulted in revenues at Mail in the Netherlands of €466 million, €72 million more than last year and a normalized EBIT of €59 million, which is €54 million higher than last year.

Now let’s look at the bridge, €54 million in the Netherlands from €5 million to €59 million normalized EBIT in the quarter. You see the volume, in fact, being positive here this quarter obviously impacted by non-recurring COVID volumes, a positive price/mix effect, as said, both in terms of product mix, more single items, e-commerce items, for both domestic and international mail flows, regular CLA indexation of all independent costs in line with volume growth.

And in other costs there, the plus €22 million, you see a benefit of roughly €20 million in comparison to last year related to Sandd integration costs. So also a very strong performance of Mail in the Netherlands this quarter.

On Slide 10, only briefly there, you see the overall performance, including the PostNL other segment. And basically, the point there is that in PostNL other, the delta in comparison to last year is the delta in relation to the pension expense, which will recur in the next quarter like we reported it in this quarter.

Now having covered the normalized EBIT metric, now let’s look at our second key financial metric being the cash flow. And in the first quarter, we’ve realized a free cash flow of €159 million, which is an increase compared to the first quarter of 2020 by more than €154 million, which is, to a large extent, driven by higher normalized EBIT.

But also here, we see the impact of the sale of Cendris in the first quarter of this year. And the book profit is here included in the normalizations.

And the proceeds of the sale are included in the disposables – sorry, disposals at the lower end of this bridge. Working capital still strong in comparison to last year.

We’re paying taxes in the first quarter of 2021, whilst we did not do so in the first quarter of 2020. All in all, a very strong cash performance in the quarter as well.

Obviously, that then helps our balance sheet, which is on Slide 12, and we are looking at a very strong financial position. Adjusted net debt currently at €224 million.

The equity increased to €396 million, obviously reflected by a net profit of €136 million and a €40 million, 1-4 million, positive impact from pensions net of cash. Total comprehensive income amounted to €149 million.

Normalized comprehensive income amounted to €112 million. The delta between those are the normalizations to EBIT relation related to the sale of Cendris as well as profits from discontinued on the back of the sale of Nexive towards Poste Italiane.

Now – and that leads to an adjusted net debt position of €224 million compared to €407 million at the end of 2020. That brings us to Digital Next.

Digitalization is one of our key strategic pillars, and we’ve announced that we’ll further accelerate digitalization over the next two to three years, where we aim to strengthen our competitive position, contribute to our customer satisfaction, reducing our cost base and attracting new customers. If we go to Slide 14, there you’ll see the key components, the key value drivers and enablers of the digitalization program, which we expect to spend €80 million on in the years 2021 versus 2024, with obviously the first part being in 2021, which we have accelerated a little bit towards €25 million of spend in 2021.

If you look at the key components of Digital, it’s about transforming our commercial engine, transforming our core logistical and operational processes and scaling our digital platform. What we have to report on progress is that, since the launch, which was March 1, obviously, we have started up a new journey teams and particularly, we are starting the redesign of our main customer journeys, I return and I get help, which are crucial e-commerce-related journeys.

Furthermore, we’ve rolled out delivery preferences for consumers in specific regions, a feature based on our app that is widely used among the consumers. By filling the specific preferences for delivery, we expect to further improve customer satisfaction, while at the same time, it will also help creating a more efficient delivery process.

We intend to organize a deep-dive session on transforming our commercial engine in June. And invitations for that deep-dive session will follow in the next few days after today.

And as a last example of the many things that we’re doing, we’re currently piloting contactless validation upon delivery. Purpose is to identify the receiver of a parcel by contactless, connecting his or her mobile phone with the device of the deliverer.

This way we can, for example, do necessary eight checks automatically. These are just a few examples, and the first elements we started off with since March 1.

If we look at Slide 15, you see some other indicators that indicate the speeding up of our digital transformation. We have a few interesting figures.

The number of online visitors has significantly increased in comparison to last year to 252 million. The number of PostNL account that are being used has increased by 12%.

We currently have 6.2 million accounts. Talks with chatbot Daan further increased.

And also, our stamp codes keep on growing. So good progress is being made and looking forward to further accelerate this Digital Next program.

Now let’s look at our 2021 outlook and guidance section of the presentation. And I think it’s important to look at Slide 17 by spending a fair amount of time explaining how we look at the performance.

For now, we expect full year 2021 normalized EBIT to amount to at least €250 million based on the strong performance of the first quarter and further improvement of the business performance that we have seen. Starting at the top.

The normalized EBIT full year 2020 was €245 million, of which €55 million was non-recurring COVID-19 impact. That was a – led to a base of €190 million at the start of the year.

And there are three components that we’ve shared with you before that are important to note, that is we are opening up new facilities. And roughly €10 million of additional cost is expected for that.

There’s €20 million higher pension expenses in comparison to last year. And we’ve introduced Digital Next, which will also have negative cost consequences of €15 million – around €50 million, I should say, within 2020.

Then you can add roughly €60 million to €70 million of non-recurring COVID-19 impact in 2021. Currently, as per Q1, we’re at €42 million.

We do expect it to grow to €60 million to €70 million, and that additional component will materialize itself in the second quarter of 2021. That leads to a subtotal of €205 million to €215 million.

And given the fact that we’ve said the full year outlook at, at least €250 million, the difference between those is at least the step-up in business performance that we expect, which will be mainly visible in Parcels. On Slide 18, the outlook slide.

where you see the normalized EBIT at least €250 million, including €30 million to €35 million for the Digital Next and the increase in non-cash pension expense, free cash flow to be at least €2 million to €5 million, including €20 million to €25 million for Digital Next. The step-up in EBIT is not directly followed by a equal step-up in free cash flow.

We’re accelerating a little bit of the digitalization CapExes. Further, we may make a few trade-offs between CapEx and leases, resulting in a slightly higher CapEx for 2021 as well as slightly higher tax effects on the back of higher profits.

On CapEx, the original indication was €140 million to €160 million. And it’s fair to assume that we’ll end up at the high end of this range.

I think also very important to note is that the normalized comprehensive income that we guided before at around €200 million will be at least €225 million. And as you know, the normalized comprehensive income is the basis for our dividend policy, which means that 70% to 90% of that normalized comprehensive income will be the basis for our dividends.

So a step-up of normalized comprehensive income is a positive sign on the expected dividend proceeds over the book year 2021. On Slide 19, you will find the phasing over the next quarters.

And as said, we expect a step-up in normal business performance for 2021, mainly visible in Parcels. If you look at the quarters, Q2 will be more or less comparable to last year as a part of the additional COVID-19 effect from €42 million to €60 million to €90 million will materialize itself in Q2.

Now for Q3 and Q4, we do expect a lower profit than last year. Obviously, the fourth quarter in 2020 was the biggest quarter where we had the biggest component of non-recurring COVID effect in 2020.

And as I said before, we will have three working days less in the fourth quarter of 2021 in comparison to 2020. If we look at cash flow, Q2 is expected to show slightly positive free cash flow.

And while Q3 is expected to be negative, this has to do with the phasing of the EBIT pattern, but also the step-up in CapEx spend in the second part of the year in comparison to the first part of the year. And that brings me to the end of the presentation on Slide 20, maybe with a few concluding remarks before we open up for Q&A.

We truly believe that we’re very well positioned for future growth and aim to deliver an attractive return to our shareholders. This we do by balancing the volume and value strategy at Parcels while expanding our capacity to capture further e-commerce growth through the delivery and capturing of full synergies of the consolidation with Sandd and intensifying our cost-saving projects.

Next to that, the acceleration of our digital transformation will help us grow our business as well. In the first quarter, we have delivered exceptional performance that was partly non-recurring, but also underlying very strong.

Based on this strong quarterly results and the expected improvement in business performance, we now expect fully normalized EBIT to be at least €250 million and free cash flow to come in above €225 million. Going forward, visibility remains limited.

The exact consequences of the changes in the lockdown, now that the stores – the non-essential stores have reopened is still difficult to predict. On that note, thank you so far.

Jochem, back to you so that we can open up for Q&A.

Thank you, Pim. And let’s move to the operator who will explain how that is going to work.

Three questions, please. First, on the Mail on the volume trends, the 6% underlying substitution in Mail, what’s driving that?

Is that partly because there’s still more greeting cards? Or is that seen as a COVID effect?

And do you now see that you’re – seen probably the worst in terms of e-substitution in the Netherlands? Then on Parcels.

I think I heard you say that you are expecting 23% volume growth for the full year, in line with the first quarter. I assume that’s on an underlying basis.

But is that a step-up in your guidance? Because I think, previously, you’re guiding for 10% to 12% from a reported basis.

I don’t think that gives me exactly the same number and probably about 2%,3% higher than what you were saying before. Then the second question, on your EBIT guidance of at least €250 million, that implies around €300 million for the remainder of the year.

And if you then add back the extra cost that you highlighted for Pensions, Digital Next start- up costs for new facilities, you would get to at least €160 million. And that compares to around €230 million in the prior year, down about 30% year-over-year.

That seems quite cautious in comparison to what some of your peers have said last week. And well, can you comment on what the reason is for that?

Is it because you are much more exposed to Parcels and benefited much stronger in 2020 that you expect a much larger step-down for the remainder of the year? And then finally, looking at 2022.

I appreciate the new starting point is €185 million. Should we then add around €40 million for normal business performance as you anticipate for 2021?

And then additional Digital Next investments maybe offset by lower pension expense on the back of a higher discount rate. And can you give an indication of what that impact would be based on today’s discount rates, please?

Let me take then question one, the question around the underlying substitution within Mail. I think the underlying substitution is driven by the normal substitution we saw every year.

Reason why it is positive is slightly because of single mail items as do cards, but that’s very little, mainly in the first quarter, because of the special mailings we did for around vaccinations, but for example, also the fact that elderly people, the 70-plus people in the Netherlands would vote by mail. For the year 2021, we do expect that volume decline will be a little bit better than the bandwidth of 8% to 10%.

That is not – if you think about 2022, it’s not what we expect going forward, so we do not see a breaking point or a point in the substitution level we do see going forward. But for the year 2021, it is slightly more positive.

23% volume growth of Parcels is at a slightly higher than the reported basis? The answer is yes.

Yes. And maybe on that last point, I didn’t say, in my mind, 25% full year, but around about that number.

So I would say 22% to 26% roughly is the indication that I have given there.

And that’s on a normalized basis, right? Excluding the one-off parcels in 2020?

Yes. And your third question was related to the at least €250 million?

There’s a few components here. I think, if you look at the first quarter, important to note that the other results, Spring and Logistics will not materialize itself in the next quarters in the same way as we’ve seen in the first quarter.

Then in the second part of the year in 2021, you see a step-up in the cost base because of the new facilities opening up, Digital Next acceleration. And also, let’s not forget that Q4 2020 had roughly €40 million out of the €50 million of nonrecurring COVID effect.

And as you know, we do not expect non-recurring COVID effects beyond Q2 of 2021 in our assumptions, leading up to the at least €259 million for 2021. You were very quick in your fourth point, David.

So I’m trying to…

Yes.

Yes, the midpoint between €60 million and €70 million of the at least €150 million, say that is the starting point of how you will go into 2020. Is that your question?

Yes. So €185 million as starting point, and then you add the normal business performance, which you’re saying is at least €40 million this year.

So if you assume similar type of growth in 2022, you get to €235 million? And then – yes, you’re probably right…

The pension effect, at the moment, we have not – I’ve not calculated it, let’s say, that at the moment in time where we define the noncash pension expenses always at the end of the year. Discount rates have increased indexation also.

So roughly, you would say that if there is a development, it would be a little bit positive development on the pension expense side, but we have not calculated it. And of course, bear in mind that we’ve indicated before a step-up in Digital Next cost also from 2021 towards 2022 that you need to take into account as well.

Yes. My first question is around Spring.

I saw on the bridge in 26 – Spring and Logistic, so to speak, everything outside parcels. There was in the bridge of €26 million uplift versus last year.

But can you give us an indication of what the EBIT was in Q1 last year? And assuming that it’s a little bit positive, if I then look at the drop-through from revenues to your EBIT, it seems that the drop-through is not different from what we’ve seen in Q4 2020.

Although in 2020, we had far more irregular increase in volumes with the peak holiday season in there. So I assume that there would be far more extra costs, tamping power put in Q4, then the more gradual volume spread through the quarter in Q1.

So is there anything in terms of extra cost in Q1 already from Digital Next or another explanation why the drop- through isn’t higher? Following up on that, the €70 million indicated as the one-off effect from COVID in Q1, in Parcels, is it then indeed the proxy that each month is around at €5 million, €6 million additional EBIT in Parcels?

And this then also the number we should use for Q2 for the month of April? And then on Mail, could you give us a bit more feel for vaccination letter impact you expect for Q2 in terms of volumes?

And we already discussed the Mail guidance, slightly better than the minus 8% to 10%. Is that assuming in these – what kind of assumption of the vaccination letter impact is in that number?

And then lastly, yes, the volumes for Parcels in April on a working day basis, can you give us a bit more – bit of color there? Because I think in Q4 and also started this year, we were probably running at 1,000 a day.

I think we had seen the press release in Q4. Is that still the same sort of number for April during the COVID lockdown?

Thank you, Marc. Am trying to follow, yes, the speed of where you can fire off your question.

So I’m almost going at answering them.

Yes.

No. I know, I know.

First one, Spring and Logistics. There’s not that, fundamentally, let’s say, Spring and Logistics have, of course, different volume patterns than our domestic networks, per se.

So not all spring volumes hit our domestic networks because they are cross- border mail, but also in between European countries and from Asia to other destinations than the Netherlands. So there’s not that much of a fundamental difference in valuation and volume development between those two.

If you look at the actual contribution in the quarter, we have seen from Spring also driven by COVID additional volume on several trade lanes on particularly big foreign e-commerce web shops like, for instance, AliExpress and Joom and what have you, which we like, we’ve looked at it from a domestic point of view, deemed partially to be non-recurring. The profit of the first quarter of that together was – I would say, €5 million to €7 million plus or something like that.

So that has been what it is on your first point. Then on the…

Sorry to interrupt, Pim. €5 million to €7 million last year?

Is that what you’re saying?

Yes. Around €5 plus million, €6 million.

Yes. Then this €17 million in Parcels, that is the impact of, let’s say, not within the Parcels segment, but what we would now call, let’s say, our domestic parcel business.

That €17 million is, of course, influenced by the €11 million additional compensation to nonessential retail stores and also some additional costs to cater for the additional volume. And that is the way to look at it.

So from €17 million, you need to add back some nonessential compensation or as a compensation to nonessential stores and then divide it by 3, if you want to end up with a proxy of a roughly an additional month of COVID contributes.

And then take into account as well that, of course, the opening of stores changed a little bit over the month in the first quarter, Marc. I think the retail cost mentioned by Pim are one of – because your question was also the drop-through of revenue to EBIT is not equal.

One of the reasons is the retail cost, which we did have in Q1 into a bigger extent, of course, than in Q4.

Thank you.

Then the next one was three and four related to the vaccination impact, both in terms of Q2 as well as on the full year guidance on volume decline. Yes, what we – as said, let’s say, from the 40 million to 60 million to 70 million nonrecurring COVID effect, the delta from 40 million to 60 million to 70 million is expected to materialize in Q2.

And part of that relates to the vaccination programs where we do expect around about 8 million of pieces to be distributed for this purpose in the second quarter. And that’s also together with roughly 1.5 million, which is already in the first quarter the amount of volume we now currently expect for the total vaccination program into our full year expectation.

We do not expect additional vaccination mail in Q3 and Q4.

For many reasons

Then you – as kind of the run rate of April for Parcels, yes, well, that’s, I would say, not materially different than the run rate in Q1. We yet have to see the impact from the opening up of the stores again.

As we discussed before, we didn’t see a material impact of click and collect on the volume developments, but it’s still too early days to say anything about the volume development since the stores are opened up. Also, in the fact that it is May holiday season and there are some bank holidays in it as well.

So We have to wait and see a bit throughout the second quarter what the implications of opening up the stores will be for our growth rates. But yes, run rate not materially different than in the first quarter.

Thanks very much. I need or remembered.

Two questions from me. First, on the nonrecurring items in Parcels, could you help me understand how you identify them as non-recurring?

I think we discussed a couple of quarters previously about the computer margin and other working-from-home equipment. How do you in fact identify them now?

Because that seems somewhat more difficult currently. Second question is on your balance sheet.

My view, very healthy. And I know you don’t publish it on a quarterly basis, but could you say something about the leverage ratio?

And additionally, on this question as well, the maximum leverage ratio is 2, but what would you see as a healthy leverage ratio to identify additional excess cash?

On your first one and the nonrecurring parcel items, the way you think about it is, of course, you had a full lockdown in the first quarter of this year. And that means that lots of the volume for which you normally go to a store you were not able to buy in store and you had to order online.

So it’s relatively easy, to be honest, to define what non-recurring is and whatnot. And that has to do with the fact that you exactly do know which shops are closed.

And that’s how we identified it. And when it comes to mail items, it is, of course, closely related to COVID, when it comes to vaccination mailings and also when it comes to the voting material for the elderly people in the Netherlands.

Can I ask a follow-up on that one? So basically, if the stores close, so say, H&M is closed, then all the process

Now what we do is like we’ve done in last time around, you take the normal growth rate of the market. There are different lenses you can look at.

Let’s look at the overall growth rate in the market. One of our lense is the clients’ expectations and then you see a step-up in the growth rates at lockdown.

But let’s assume, for an argument’s sake, that it’s 10% growth. You see a step- up from 10% to 12% on the back of a lockdown.

What we then say is the 10% to 12% step-up is what we say is non-recurring.

Okay. That’s clear.

But this could then also be that it be a shift towards e-commerce in total as well, so that’s structural.

Yes. But that is let’s say – to simplify it again, let’s say, 8% growth to 10% because of the fact that online has gained market share from off-line.

That is a structural component. And then from 10% to 12% because of lockdown is what we call nonrecurring profit, as an example.

That’s clear.

And on your second question, the balance sheet. I must admit that I have not calculated the leverage ratio.

I would have then looked at the LTM numbers, but certainly below one. How does a healthy ratio look like?

Well, as you know, not exceeding two. I don’t want to be too close to two.

But yes, I would say somewhere between 2.5 and 2 is what I would say healthy. If you remember the capital allocation slide that we discussed on March 1st, we’ll go through the motions by identifying investment opportunities that can further strengthen our competitive position.

There will be a little bit of working capital investment required given the fact that Parcels growth will explore bolt-on acquisitions if and when they truly contribute to the value story of PostNL. And then over time, we’ll assess what – if and to what extent we believe will have excess cash.

And at that moment in time, we’ll determine what to do with it. So it’s a bit too early for that if you were to ask me.

First of all, I’ll link it to Lotte’s question in a way. But are you intending to pay interim dividend this year?

And if so, what would the timing of that be? And then secondly, you mentioned that your mail and retail benefited from e-commerce as well.

I mean, does that take into account the 100 million parcels that you disclosed for the Parcels division? Or does that actually allow for incremental parcels over and above that?

And last one. I appreciate this is probably very early and – far early for you to comment, but I’ll try anyway.

If you were in a position where you had your Digital Next program fully up and running, what sort of incremental EBIT would you have expected to have seen?

Interim dividend, yes, part of our dividend policy is interim dividend. And that is normally – and more normally, that is 1/3 of the dividend of the previous book year, and that is expected always done in August, and we’ll not deviate from that policy.

On the second question, the e-commerce parcel, the e-commerce elements within Mail are not part of the 100 million parcels, should also not be added on to that because it’s a totally different product. It’s a product that fits through the letter box.

It does not have track and trace. So you cannot compare the two.

But what we do see is that smaller shops also use the, of course, also use the possibility to have thicker envelopes, which fit through the letter box without track and trace. So – but don’t add on to the 208 million because it’s truly a different product.

Third one was on how big we expect the incremental contribution of Digital Next to be. If you look at the guidance we’ve given on this point, on March 1st, we basically said, over time, we do expect to add €80 million to €100 million of profit, 5050 split between business performance predominantly from parcels compensating for the additional pension expenses.

And the other half is going to be a step-up in profit driven by our Digital Next program.

Pretty simple questions. Lots has been said about Mail underlying volumes already.

You mentioned the e-commerce part of it. This has already been an improvement in target mail because last year in the second quarter you got absolutely hammered because of the, call it, the standstill in Direct Mail.

You see slight improvement, Henk, and we did a few big mailings in the first quarter, but we’re not yet fully recovered. But fortunately, you do see a recovery.

Perhaps a follow-up to that one. If I look at the quantities you’re referring to in terms of the vaccination mail, estimated 1 million you said.

And now that the stores have reopened again, normally speaking, it should lead to higher direct mail volumes as well. Is it strange to expect another increase in volumes again, many volumes again in – on a reported basis in the current quarter?

No, I do think that if you look into the presentation Pim gave, then you have to take into account that the positive in the first quarter were also caused by three extra working days, which was more than 6% of volume with, of course, the normal election mail, stem of the normal election mail, which was also almost 3.5, so there were more positive elements in the first quarter, which helped us, of course, to a positive development growth. We do not expect elections in the second quarter.

Again, we do not have extra working days in the second quarter again. And we also do not have the voting mail for the elderly.

So you will have some positives around vaccination, but absolutely not to the extent we’ve seen them in the first quarter, Henk.

Okay. Thank very much for joining again.

As Pim already said a moment ago, on June 7, we will organize a deep-dive webcast to look further into the acceleration of our Digital Next program. You can expect our Chief Digital Officer, Bart Delmulle, to go into further details as to what we presented on the first of March, and we will also talk about a number of business examples to explain how we plan to accelerate digitalization.

We hope you can all join. Invitations will come your way shortly.

Again, thank you very much, and you know where to find us in case you have further questions. Thanks very much.

See you next time.