Earnings Call: Q1 2021

May 10, 2021

Thank you. Good morning, everyone. Thank you for joining us for the Q1 results presentation. With me in the room, Herna Verhagen, our CEO and Pim Birense, our CFO. Pim, over to you, please. Thank you, Jochim, and welcome to you all. Thank you for joining us today. And while the Q1 of this year has been an exceptional one for We have been able to deliver 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 1 quarter with 108,000,000 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 26,000,000 pieces, The underlying volume growth is still 23%, which around about that number is also our full year expectation of volume growth at Parcels. Forms 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 Fusion continues was roughly 6%, but is more favorable than the 8% to 10% volume decline that we indicated before. This resulted in revenue that was up €261,000,000 to €9 €62,000,000 for the quarter. Normalized EBIT coming in at €130,000,000 €150,000,000 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 CO2 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 €250,000,000 for the year and free cash flow to come in above €225,000,000 On Slide 4, If we look at the €130,000,000 we're going to look closer at the non recurring COVID-nineteen effects. Within the quarter, we assume around EUR 42,000,000 of non recurring COVID contribution. Non recurring impact for Parcels is assumed to be SEK 17,000,000 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 €7,000,000 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 €80,000,000 is 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 to ensure that we were able to keep their stores open, which was €15,000,000 in the quarter, roughly split €11,000,000 in Parcels €4,000,000 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 parcel 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 I said, if you take out the 26,000,000 non recurring COVID volume within the quarter, that is still a 23% growth rate ex non recurring coffee. 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 our capacity, this resulted in revenues of €662,000,000 which is a €248,000,000 increase versus last year and a normalized EBIT at €92,000,000 which is €67,000,000 higher than last year. As you might have expected, we've seen a higher hit rate and a lower drop duplication. While 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 Q1 at €92,000,000 €67,000,000 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 11,000,000 for Parcels and in other result 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 2 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 5.6% volume growth, 4.5% relates to non recurring COVID volume, 3.8% regular elections and there's 3 more working days in the Q1 that account for 3.4%. Important to note for the quarters to come is that the 3 additional working days will itself reversed itself in the Q4. There we will have 3 working days less. Also performance was significantly impacted by 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 €466,000,000 more than last year and a normalized EBIT of €59,000,000 which is €54,000,000 higher than last year. Now let's look at the bridge, €4,000,000 in the Netherlands from €5,000,000 to €59,000,000 Normalized EBIT in the quarter, you see the volume effect being positive here this quarter, obviously impacted by nonrecurring 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 mill flows. Regular CLA indexation volume dependent cost in line with volume growth. And in other cost here, the plus EUR 22,000,000 you see a benefit of roughly €20,000,000 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 Order 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 Q1, we've realized a free cash flow of €159,000,000 which is an increase compared to the Q1 of 2020 by more than 154,000,000, which is to a large extent driven by higher normalized EBIT, but also here we see the impact of the sale of SandRIS in the Q1 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 is still strong. And In comparison to last year, we're paying taxes in the Q1 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 €224,000,000 The equity increased to €396,000,000 obviously reflected by a net profit of €136,000,000 and a €40,000,000 one for positive impact from pensions net of cash. Total comprehensive income amounted to EUR 149,000,000 Normalized comprehensive income amounted to EUR112,000,000. The delta between those are the normalizations to EBIT relation related to the sale of Sandros as well as profits from discontinued on the back of the sale of Nexive towards Post Iteliana. And that leads to an adjusted net debt position of EUR 224,000,000 compared to EUR 407,000,000 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 will further accelerate digitalization over the next 2 to 3 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 will see the key components, the key value drivers and enablers of the digitalization program, which we expect to spend €80,000,000 on in the years 2021 towards 2024 with obviously the first part being in 2021 which we have accelerated a little bit towards €25,000,000 of spent 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 iReturn and iGet Health, 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 Dutch 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 the day. 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 age checks automatically. These are just a few examples and the first elements we started off with since March 1st. If we look at Slide 15, you see some other indicators That indicate the speeding up of our digital transformation. We had a few interesting figures. The number of online visitors has significantly increased in comparison to last year to 252,000,000. The number of PostNL accounts that are being used has increased by 12%. We currently have 6,200,000 accounts. Talks with chatbot down 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 EUR 250,000,000 based on the strong performance of the Q1 and further improvement of the business performance that we have seen. Starting at the top, the normalized EBIT full year 2020 was €245,000,000 of which €55,000,000 was non recurring COVID-nineteen impact. That was a led to a base of €190,000,000 at the start of the year. And there are 3 components that we've shared with you before that are important to note that is we are opening up new facilities And roughly €10,000,000 of additional costs is expected. For that, there are €20,000,000 higher pension expenses in comparison to last here. And we've introduced Digital Next, which will also have negative cost consequences of NOK 15,000,000 around €15,000,000 I should say within 2020. Then you can add roughly EUR 70,000,000 of non recurring COVID-nineteen impact in 2021. Currently, As per Q1, we're at €42,000,000 We do expect it to grow to €60,000,000 to €70,000,000 And that additional component will materialize itself in the Q2 of 2021. That leads to a subtotal of €205,000,000 to €215,000,000 And given the fact that we've said the full year outlook at least €250,000,000 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 €250,000,000 including €30,000,000 to €35,000,000 for Digital Next and the increase in non Cash pension expense, free cash flow to be at least €2,000,000 to €5,000,000 including €20,000,000 to €25,000,000 for Digital Next. The step up in EBIT is not directly followed by equal step up in free cash flow. We're accelerating a little bit of the digitalization CapEx as before the Mayor will 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 EUR 140,000,000 to EUR 160,000,000 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 €200,000,000 will be at least €225,000,000 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 and dividend proceeds over the book year 2021. On Slide 19, you will find the phasing over the next quarters. And as said, we expect to 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 said, part of the additional COVID-nineteen effect from EUR 42,000,000 to EUR 60,000,000 to EUR 19,000,000 will materialize itself in Q2. For Q3 and Q4, we do expect a lower profit than last year. Obviously, the 4th quarter In 2020 was the biggest quarter where we had the biggest component of non recurring COVID effect in 2020. And as said before, we'll have 3 working days less in the Q4 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 APAC spent in the 2nd part of the year in comparison to the 1st 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 and 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 Q1, we've 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 We now expect fully normalized EBIT to be at least €250,000,000 and free cash flow to come in above €225,000,000 Going forward visibility remains limited. The exact consequences of the changes in the lockdown are that the stores, the non essential stores have reopened is still difficult to predict. On that note, thank you so far. Jochen, back to you, so that we can open up for Q and A. In Kyofim. And let's move to the operator, who will explain how that is going to work. Thank you, sir. Ladies and gentlemen, we're starting the question and answer session now. Our first question is from Mr. David of Jefferies. Go ahead, sir. Your line is open. Good morning, everybody. Three questions, please. First, on the mill on the volume Trent, the 6% underlying substitution in mill, 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 have 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 Q1. I assume that's on an underlying basis. But is that a step up in your guidance? Because I think previously you were guiding for 10% to 12% from a reported basis. I don't think that Gives me exactly the same number, probably about 2%, 3% higher than what you were saying before. Then the second question, on your EBIT guidance of at least €250,000,000 that implies around €120,000,000 for the remainder of the year. And if you then add back the extra costs that you highlighted for pensions, digital next, start up costs for new facilities, you would get to at least €160,000,000 and that compares to around €230,000,000 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 can you And 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 almost €85,000,000 Should we then add around €40,000,000 for normal business performance as you anticipate for 2021? And then additional digital Nexa investments may be 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? Thank you very much. Let me take then question 1, your the question around the underlying substitution within Mail. I think the underlying substitution is driven by the normal substitution we saw we see every year. Reason why it is positive is slightly because of single mail items, so cards, but that's very little, mainly in the Q1 because of the special mailings we did for around vaccinations, but for example, also the fact that elderly people, so 70 plus people in the Netherlands, would vote by mail. For the year 2021, we do That volume decline will be a little bit better than the bandwidth of 8% to 10%. That is not if you think about 2020 2, it's not what we expect going forward. So we do not see, yes, 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 that slightly higher than the reported basis? The answer is yes. Okay. Yes. And maybe on that last point, I didn't say in my mind 23% full year, but around about that number. So I would So 20% to 23% roughly is the indication that I have given there. That's on a normalized basis, right, excluding the one off Parcels in 2020. Yeah. Then your third question was related to the at least EUR250. There's a few components here. I think if you look at the Q1 important to note is that the other results bring in logistic the delta there will not materialize itself in the next quarters in the same way as we've seen in the Q1. Then in the 2nd part of the year in 2021, you see a step 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 €40,000,000 out of the €55,000,000 of non recurring COVID effect. And as you know, we do not expect non recurring COVID effect beyond Q2 of 2021 in our assumptions leading up to the at least 250,000,000 for 2021. You were very quick in your 4th point, David. So I'm trying to What about you doing in 2022? The midpoint between 6070 after at least 250 I'd say that is the starting point of how you will go into 2020. Is that Yes. So 185,000,000 is starting point and then you add the normal business performance, which you're saying is at least €40,000,000 this year. So if you assume Similar type of growth in 2022. You get to €235,000,000 And then, yes, you probably have a little bit of help. The pension effect, At the moment, we have not calculated it, let's say, that the moment in time where we define the non cash Expansion expands is 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've 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. Makes sense. Thank you very much. Our next question is from Mr. Mark Swartzenberger of ING. Go ahead sir. Your line is open. Yes. Good morning, everybody. My first question is around Spring. So on the bridge in 26, well, Spring and Logistics, so to speak, everything outside parcels. There was in the bridge, euros 26,000,000 uplift versus last year. But can you give us an indication 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 a far more irregular increase in volumes with Big holiday season in there. So I assume that there would be far more extra costs temping power put in Q4, then the more gradual volume spread through the quarter in Q1. So is there anything in terms of extra Of course, in Q1, already conditional net or another explanation why the drop through isn't higher. Following up on that, the €17,000,000 indicated as the one off effect from COVID in Q1 in Parcels, It's then indeed the proxy that each month is around EUR 5,000,000, EUR 6,000,000 additional EBIT in parcels and this is 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 the fractionation letter impact you expect Q2 in terms of volumes. And we already discussed, so the mill 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 a bit of a color there? Because I think in Q4 And also at the start of this year, we were probably running at 1500 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. [SPEAKER CARLOS GOMES DA SILVA:] Thank you, Marc. I'm trying to follow the speed of where you can fire off your questions. So I'm almost going at answering them. Happy to repeat that, Pune. Yes, I know, I know. First one, Spring and Logistics, there's not that fundamentally, Let's say, Sprint 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 mill 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 2. 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, being partially to be non recurring. The profit of the Q1 of that together was, oh, I would say 5,000,000 to 7,000,000 plus or something like that. So that is then what it is on your first point. Then On the Sorry to interrupt, Ben. The €5,000,000 to €7,000,000 was last year. Is that what you're saying? Yes, Q1 2020. Around €5,000,000,000, €6,000,000 Yes. Then The €17,000,000 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 €17,000,000 is of course influenced by the €11,000,000 additional compensation to non essential retail stores and also some additional cost to cater for the additional volume and that is the way to look at it. So from 'seventeen you need to add back from non essential compensation or as a compensation to non essential stores and then divide it by 3 if you want to end up with a proxy of what 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 Q1, Marc. And 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 clause, which we did have in Q1 and to a bigger extent, Of course, then in Q4. Yes. And that explains the gap I need. Thank you. Yes. Then the next one was 3% and 4% 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 I said, let's say from the EUR42,000,000 to EUR60,000,000 to EUR70,000,000 non recurring COVID effect, The delta from 42% to 60% to 70% is expected to materialize in Q2. And part of that Relates to the vaccination programs where we do expect roundabout €8,000,000 of pieces to be distributed for this purpose in the Q2. And that's also together with roughly €1,500,000 which is already in the Q1, the amount of volume we now currently expect for the total vaccination program into our full year expectation. Yes. Thank you very much. So we do not expect additional vaccination mail in Q3 and Q4? Hopefully not. Yes, indeed. For many reasons. Then you ask kind of the run rate of April for Parcels. Yes, well, let's say, I would say not materially different Then 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 material impact of Click and Collect on the volume developments, But it's still too early guys 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 or the implications of opening up the stores will be for our growth rates. But yes, run rate not materially different than in the Q1. Okay. Well, that is all we did. I'll remember. Thank you very much. Thanks, Marak. Thanks, Marc. Take your day. Our next questions are from Lotte Timmermans of ABN AMRO Two questions from me. First, on the nonrecurring items in Parcels, could you help me understand how you identified them as nonrecurring. I think we discussed a couple of quarters previously About the computer, mouse and other working from home equipments, how do you identify them now because that seems somewhat more difficult currently? 2nd question is on your balance sheet. My view, very healthy. I know you don't publish it on a quarterly basis, 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? Thanks. On your first one, the nonrecurring parcel items, the way you think about it is, of course, you had Full lockdown in the Q1 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 a store and you had to order online. So It's relatively easy, to be honest, to define what nonrecurring is and what not. 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 Alderoo people in the Netherlands. Can I ask a follow-up on that one? So basically, if the store is closed, so say H and M is closed, then all the parcels No. What we do is like we've done in last time, Raj, You take the normal growth rate of the market, there's different lenses you can look at. Let's look at the overall growth rate in the market. One other lens is the client's expectations and then you see a step up in these 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 also be that it be a shift towards e commerce in total as well, should it 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 offline. That is a structural component. And then from 10% to 12% because of lockdown is what we call non recurring profit in this example. 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 2. I don't want to be too close to 2, but yes, I would say somewhere between 1,500,000,000 is what I would say healthy. If you remember the capital allocation slide that we discussed on March 1, 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 Parcel 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 we'll 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. Thanks, Klier. Thanks, In the meantime, our next question is from Mr. Ivar Bill Volok Kelly of UBS. Go ahead please. Your line is open. Good morning. First of all, I'll link it to Lotta's question in a way. But are you intending to 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 $108,000,000 parcels that you disclosed for the parcel division? Or does that actually allow for incremental parcels over and above that? And last one, I appreciate this is probably very early and it's 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? Thank you. Yeah. Interim dividend, yes, part of our dividend policy is interim dividend and that is normally at more normally That is 1 third of the dividend of the previous book year and that is expected of always done in August and will not deviate from that policy. On the second question, the e commerce Elements within mail are not part of the 108,000,000 parcels should also not be added on to that because it's a totally different product. It's a product that fits through the letterbox. It does not have track and trace, So you cannot compare the 2. 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 letterbox without track and trace. So but don't add them to the €108,000,000 because it's Truly a different product. 3rd one was on how big We expect the incremental contribution of DigitalNEXT 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 €80,000,000 to €100,000,000 of profit fifty-fifty 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. That's great. Thank you very much. Next question is from Mr. Henk Slotboom of the idea. Go ahead. Your line is open. Good morning, all. Very simple question. The rules has been said about metal underlying volumes already. You mentioned the e commerce part of it. Has there already been an improvement in direct mail? Because last year in the 2nd quarter, you got absolutely hammered because of the yes, call it, the standstill in direct mail. You see slight improvement, Henk. And we did a few big mailings in the Q1, but were not yet fully recovered. But fortunately, you do see recovery. Perhaps, I'll follow-up to that one. If I look at The quantities you're referring to in terms of vaccination mail, estimated €8,000,000 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, now with volumes again in on a reported basis in the current quarter. Look, I do think that if you Looking to the presentation Tim gave, then you have to take into account that the positive in the Q1 were also caused by 3 extra working days, which was more than 3% of volume with, of course, the normal election mail, Stempasa, normal election mail, which was also almost 3.5 percent. So there were more positive elements in the Q1, which helped us, of course, to a positive development growth. We do not expect Elections in the Q2 again. And we do not have extra working days in the Q2 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 Q1, Henk. Okay. That's a very clear answer. Thank you. We have no further questions. Please continue. Okay. Thank you very much for joining again. As Tim 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, Bartel Muhle, to go into further details as to what we presented on the 1st 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.